[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]









   STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                                  2017

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FOURTEENTH CONGRESS

                              SECOND SESSION

                                 _________

     SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS

                      KAY GRANGER, Texas, Chairwoman

  MARIO DIAZ-BALART, Florida          NITA M. LOWEY, New York
  CHARLES W. DENT, Pennsylvania       BARBARA LEE, California    
  ANDER CRENSHAW, Florida             C.A. DUTCH RUPPERSBERGER, Maryland    
  THOMAS J. ROONEY, Florida           DEBBIE WASSERMAN SCHULTZ, Florida        
  JEFF FORTENBERRY, Nebraska          JOSE E. SERRANO, New York     
  CHRIS STEWART, Utah                  


  NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

            Anne Marie Chotvacs, Craig Higgins, Alice Hogans,
            Susan Adams, David Bortnick, and Clelia Alvarado,
                             Staff Assistants

                                 _________

                                  PART 5

                                                                   Page
  Assistance to Combat Wildlife Trafficking......................     1
  United States Engagement in Central America....................    61
  Department of State and Foreign Assistance.....................   175
  Department of the Treasury International Programs..............   341
  United States Agency for International Development.............   413

                                 _________

          Printed for the use of the Committee on Appropriations

                                 _________

                    U.S. GOVERNMENT PUBLISHING OFFICE

  21-440                    WASHINGTON : 2016


















                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
                   HAROLD ROGERS, Kentucky, Chairman


  RODNEY P. FRELINGHUYSEN, New Jersey        NITA M. LOWEY, New York 
  ROBERT B. ADERHOLT, Alabama                MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                         PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho                  JOSE E. SERRANO, New York   
  JOHN ABNEY CULBERSON, Texas                ROSA L. DeLAURO, Connecticut            
  ANDER CRENSHAW, Florida                    DAVID E. PRICE, North Carolina  
  JOHN R. CARTER, Texas                      LUCILLE ROYBAL-ALLARD, California      
  KEN CALVERT, California                    SAM FARR, California             
  TOM COLE, Oklahoma                         CHAKA FATTAH, Pennsylvania      
  MARIO DIAZ-BALART, Florida                 SANFORD D. BISHOP, Jr., Georgia          
  CHARLES W. DENT, Pennsylvania              BARBARA LEE, California            
  TOM GRAVES, Georgia                        MICHAEL M. HONDA, California                                
  KEVIN YODER, Kansas                        BETTY McCOLLUM, Minnesota     
  STEVE WOMACK, Arkansas                     STEVE ISRAEL, New York            
  JEFF FORTENBERRY, Nebraska                 TIM RYAN, Ohio        
  THOMAS J. ROONEY, Florida                  C.A. DUTCH RUPPERSBERGER, Maryland                 
  CHARLES J. FLEISCHMANN, Tennessee          DEBBIE WASSERMAN SCHULTZ, Florida             
  JAIME HERRERA BEUTLER, Washington          HENRY CUELLAR, Texas               
  DAVID P. JOYCE, Ohio                       CHELLIE PINGREE, Maine      
  DAVID G. VALADAO, California               MIKE QUIGLEY, Illinois         
  ANDY HARRIS, Maryland                      DEREK KILMER, Washington        
  MARTHA ROBY, Alabama                                                       
  MARK E. AMODEI, Nevada                                
  CHRIS STEWART, Utah                             
  E. SCOTT RIGELL, Virginia                          
  DAVID W. JOLLY, Florida                    
  DAVID YOUNG, Iowa                            
  EVAN H. JENKINS, West Virginia                       
  STEVEN M. PALAZZO, Mississippi                

                William E. Smith, Clerk and Staff Director

                                   (ii)
 
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2017

                              ----------                              

                                       Wednesday, February 3, 2016.

      OVERSIGHT HEARING--ASSISTANCE TO COMBAT WILDLIFE TRAFFICKING

                               WITNESSES

HON. WILLIAM R. BROWNFIELD, ASSISTANT SECRETARY, BUREAU OF 
    INTERNATIONAL NARCOTICS CONTROL AND LAW ENFORCEMENT AFFAIRS, 
    DEPARTMENT OF STATE
HON. ERIC G. POSTEL, ASSOCIATE ADMINISTRATOR, U.S. AGENCY FOR 
    INTERNATIONAL DEVELOPMENT

                Opening Statement of Chairwoman Granger

    Ms. Granger. The Subcommittee on State, Foreign Operations, 
and Related Programs will come to order.
    Today's hearing is on oversight of assistance to combat 
wildlife trafficking. I would like to welcome our two 
witnesses, Ambassador William Brownfield, Assistant Secretary 
of the Bureau of Narcotics Control and Law Enforcement Affairs, 
Department of State; and Mr. Eric Postel, Associate 
Administrator, U.S. Agency for International Development.
    This hearing will address an issue we have followed closely 
for several years--international wildlife trafficking. This is 
a crisis and we must address it in an urgent manner. We can't 
afford to do business as usual.
    Not only are unique species at risk, but the continued 
surge in wildlife trafficking threatens international security 
and stability.
    The numbers are staggering: Over 120,000 African elephants 
were killed between 2010 and 2013. The current population is 
estimated at 400,000 to 600,000, down from 1.2 million in 1980.
    In South Africa, a record 1,214 rhinos were poached in 
2014. Just 7 years earlier, that number was 13. Again, 7 years 
ago it was 13. Then, in 2014, 2015. Last week, South Africa 
released numbers for 2015 that showed a small decrease for the 
first time since 2007, but we know that rhino poaching has 
increased substantially in neighboring countries. These are 
just a few examples, but there are many other species that are 
suffering the same fate.
    There is also a human toll. We know that hundreds of park 
rangers have been killed by poachers, and just earlier this 
week there were news reports of a conservationist being shot 
while working to protect wildlife in Tanzania.
    Extremely sophisticated criminal networks, some with links 
to terrorists, are profiting from poaching. The illegal trade 
in wildlife is estimated at $8 billion to $10 billion annually. 
We can't afford to sit and think about what to do. We have to 
act.
    From fiscal year 2014 through fiscal year 2016, the 
subcommittee appropriated $180 million for wildlife 
trafficking. We want to hear about how this funding is being 
used to combat poaching and trafficking of wildlife, as well as 
to reduce demand for illegal wildlife products.
    There is a greater awareness of the problem today, but 
there is still so much work that must be done. The President 
issued an executive order in 2013 that we have a national 
strategy in place. There is a lot of talk about plans, but the 
subcommittee needs to hear about actions.
    A common complaint is that there is very little information 
publicly available on what the U.S. Government is doing to 
address the crisis. The subcommittee needs an update on how 
much of the funding has been spent, what has been achieved so 
far, how you evaluate programs, and what you plan to focus on 
going forward that will turn this tide and help bring an end to 
the illegal killing of these animals.
    Corruption is one of the main challenges we face in 
countries where wildlife trafficking is most prevalent. The 
funding we provide around the world must address this issue 
also.
    It is going to take a serious and sustained effort across 
the U.S. Government to make a real difference, and I hope you 
will be able to share with the subcommittee how the Department 
of State and USAID are doing just that.
    I will now turn to my ranking member, Mrs. Lowey, for her 
opening remarks.
    [The information follows:]
    
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                    Opening Statement of Mrs. Lowey

    Mrs. Lowey. Thank you very much, Madam Chairwoman, for 
calling this hearing.
    And welcome, Assistant Secretary Brownfield and Associate 
Administrator Postel. I join Chairwoman Granger in welcoming 
you and thanking you for your service.
    I also want to thank the chairwoman for convening this 
hearing on a topic of critical national security importance. 
Not only does illegal wildlife trafficking destroy some of the 
world's most treasured wildlife species for future generations, 
this criminal enterprise finances terrorist groups and 
militias, especially in Sub-Saharan Africa.
    Groups like Al Shabaab, Joseph Kony's Lord's Resistance 
Army, and the Sudanese Janjaweed have turned poaching and the 
illicit trade in endangered and threatened wildlife into one of 
the most lucrative criminal activities worldwide, estimated by 
the U.N. Environmental Programme between $50 billion and $150 
billion annually.
    With the prospect of such large financial gain, poachers 
and traffickers have taken advantage of weak governments, law 
enforcement, porous borders, corrupt officials, and decimated 
elephant and rhinoceros populations. It is staggering that the 
elephant population in Africa has been reduced by one-half to 
two-thirds since 1980 and that rhino poaching increased by 
7,000 percent between 2007 and 2014.
    In order to stop fueling the ruthless destruction of 
African wildlife and thwart a major financing source for 
terrorists, it is clear that our efforts must be better 
coordinated across a wide spectrum of actors: Law enforcement, 
port and border security, environment experts, NGOs, the 
private sector, multilateral institutions, and the leaders of 
countries where the demand for elephant tusk and rhino horn is 
most insatiable.
    In short, we need to focus on turning wildlife crime from a 
low-risk, high-reward enterprise to one of high risk and low 
reward.
    The administration's 2014 National Strategy to Combat 
Wildlife Trafficking was an important step in helping to 
prioritize and coordinate our considerable domestic and 
international response. I am interested to hear from you about 
its implementation and whether we are making progress. 
Specifically, are there gaps in our response that need to be 
addressed?
    I hope you will also update the subcommittee on China's 
level of cooperation as well as the other East Asian countries 
fueling this crisis. What progress has China made on its 
commitment to ban ivory imports and exports? How much pressure 
is the administration placing on other countries to do the 
same?
    Wildlife trafficking undermines much of the development 
progress we have made in Africa. It destroys livelihoods for 
impoverished communities, decimates landscapes, undermines 
security in the rule of law. That is why this subcommittee 
allocated $80 million in last year's omnibus for your agencies' 
efforts to combat poaching, a significant increase over fiscal 
year 2015.
    While there is broad bipartisan support for this funding, I 
hope you will assure members of this subcommittee that these 
funds are being put to good use and we are making appreciable 
gains. I look forward to your testimony.
    Thank you, Madam Chair.
    Ms. Granger. I now call the witnesses to give their opening 
statements. I would encourage each of you to summarize your 
remarks so we can leave enough time for questions and answers. 
The entire committee, all the members, are very interested in 
this issue. Your full written statements will be placed in the 
record.
    We will begin with Assistant Secretary Brownfield.

               Opening Statement of Ambassador Brownfield

    Mr. Brownfield. Thank you, Madam Chairwoman, Ranking Member 
Lowey, members of the subcommittee. Thank you for the 
opportunity to appear before you today.
    My thanks as well to the gentleman seated two rows behind 
me, to my right, for the loan of these reading glasses, 
permitting me to sound stupid on the basis of what I actually 
say and not due to blindness.
    I am here, members of the subcommittee, to discuss INL's 
efforts against wildlife trafficking. Had I appeared 4 years 
ago, I would have described a program budget of less than 
$100,000. I would have lauded the noble work of USAID, the U.S. 
Fish and Wildlife Service, and the conservation community in 
protecting endangered species.
    I would have spoken little of law enforcement. And I would 
have been wrong, because wildlife trafficking is organized 
criminal trafficking. And whether drugs, people, firearms, 
contraband, or slaughtered wildlife, countertrafficking 
strategies are similar.
    We attack traffickers at the source, where the product is 
created or the animals butchered. We attack traffickers in 
transit at chokepoints along border crossings, airports, and 
seaports. We attack traffickers' distribution systems at market 
destination, and we attack their financial systems at every 
stop along the way.
    In 2012, following a robust kick in the pants by this 
subcommittee, Federal law enforcement joined U.S. Fish and 
Wildlife colleagues in combatting wildlife trafficking. The 
President issued an executive order in 2013, followed by a 
government-wide national strategy in 2014, and the interagency 
community promulgated an implementation roadmap last year.
    INL pursues an international strategy built around four 
pillars. First, we develop legislative frameworks against 
wildlife trafficking. Law enforcement cannot combat trafficking 
if it is not a crime. Second, we build capacity to investigate 
and capture traffickers. This is normally a combination of 
equipment and training. Third, we strengthen capability to 
prosecute and convict traffickers. Law enforcement accomplishes 
little if traffickers are not tried and punished. And finally, 
we facilitate regional and global cooperation in both 
international organizations and cross-border cooperation.
    Congress, and this subcommittee in particular, have been 
generous in supporting this effort, appropriating nearly $100 
million for these international efforts since 2013. You have 
every right to ask what this investment has produced.
    Today, INL manages more than $50 million in wildlife 
trafficking programs in 30 countries. Last year, we trained 
more than 1,000 law enforcement and justice officials in 50 
sessions around the world. This year, we will train at all of 
our ILEAs and not just those in Africa and Southeast Asia.
    Last year, the Kenya, Uganda, Tanzania Operation Worthy II 
led to the arrest of 376 criminals, seizure of 4.4 tons of 
ivory and rhino horn, and dismantling of several trafficking 
networks. We developed a pilot K-9 detection program in key 
ports in Uganda, Tanzania, and Kenya. The dogs deployed to 
Kenyatta International Airport, and four seizures were made 
during the very first week.
    There are operational Wildlife Enforcement Networks in 
Southeast Asia, South Asia, North America, and Central America 
providing coordination, cooperation, and intelligence exchange. 
New WENs are getting underway elsewhere in Africa and Asia.
    We placed wildlife trafficking on the agenda of U.N. 
organizations. In 2015, the U.N. General Assembly passed a 
resolution calling on all member states to make wildlife 
trafficking involving organized criminal groups a serious 
crime.
    You will tell me, Madam Chairwoman, correctly, that much 
more needs to be done, and I will agree. We are still behind in 
this race to prevent extermination of some of the noblest 
species on the planet. But I would like to think that the 
traffickers can hear our footsteps approaching from behind.
    I thank the committee, and I look forward to your questions 
and comments.
    [The information follows:]
    
    
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                    Opening Statement of Mr. Postel

    Ms. Granger. Thank you.
    Mr. Postel, you are now recognized.
    Mr. Postel. Good morning, Chairwoman Granger, Ranking 
Member Lowey, and distinguished members of the subcommittee. I 
would like to thank you for holding this hearing and giving me 
the opportunity to testify.
    The United States Agency for International Development 
continues to be deeply concerned by the current poaching and 
illegal fishing crisis. Like my State Department colleagues 
here today, we strongly believe that the slaughter of thousands 
of animals and the murder of park rangers trying to protect 
these species must be stopped.
    Protecting wildlife is also critically important to USAID's 
mission to end extreme poverty. The rural poor often 
disproportionately depend on natural resources for their 
survival. The illegal wildlife trade threatens tourism that 
sustains developing economies. It fosters corruption, as you 
mentioned, undermines the rule of law, and discourages foreign 
investment.
    USAID is dedicated to building on our longstanding 
commitment to protect wildlife by both continuing to invest in 
strategies that work and testing new, innovative approaches. In 
accordance with the President's National Strategy for 
Combatting Wildlife Trafficking, our approach is focused on the 
entire chain involved in this, deploying a combination of 
tactics to address the complex problem.
    With your generous support, we have increased our 
investment to fight wildlife trafficking from $13 million in 
fiscal year 2012 to more than $55 million in fiscal year 2014. 
We have launched 35 new programs in the last 2 years, in 
addition to 30 that were already underway. The results are 
modestly encouraging, but much, much remains to be done.
    Last year, in addition to the work that INL is doing, we 
worked with another about 1,000 people across Asia and Africa 
to train them and help them use the skills they gained to 
contribute to the arrest of more than 500 poachers and 
traffickers.
    In the Philippines, an anonymous hotline generated more 
than 3,000 reports of illegal fishing that led to 25 arrests in 
6 months. That model is now being deployed in seven more marine 
areas in the Philippines.
    Sustained long-term investment in community conservation in 
Nepal has resulted in the third consecutive year with no tigers 
or rhinos being poached in the country. And where this model 
can and is replicated, such as in northern Kenya, we are seeing 
some similar results.
    To dry up the market for illegal wildlife products, we also 
have supported demand reduction campaigns that reach more than 
740 million people in Asia. We are optimistic that our efforts, 
in combination with the efforts of others in our government and 
around the world and many different organizations, are 
contributing to a downward trend in ivory consumption in the 
last year or so, as new research seems to be suggesting.
    In all cases, partnerships with government, partnerships 
with the private sector, with NGOs and civil society, are 
critically important. Our latest one involves working with 
representatives from key transportation and logistics companies 
and associations to address the role of transport companies in 
ending the illegal wildlife trade.
    And technology has an important potential to help us scale 
the reach and the impact of these interventions. Our Wildlife 
Crime Tech Challenge, which we did in partnership with National 
Geographic, the Smithsonian, and an NGO named TRAFFIC, recently 
announced 16 winners from around the world. These extraordinary 
innovators propose solutions that will help contribute to 
shutting down transit routes, strengthening evidence on the 
forensic side, reducing demand, or combating corruption.
    But despite these modest successes, the illegal wildlife 
trade, as you eloquently described, continues at unacceptable 
levels. Enormous challenges remain. Widespread corruption 
obstructs progress and many governments lack enough training 
and resources and, most importantly, the will to respond 
effectively.
    USAID will continue to respond aggressively to the crisis, 
strengthened by cooperation with new partners and counterparts 
in Congress and across the United States executive branch. Our 
response will require we pay attention to the whole problem, 
supporting law enforcement efforts on the ground, addressing 
the root cause of demand, supporting effective and accountable 
institutions, and investing in communities to end extreme 
poverty and enable them to have alternatives to poaching.
    Thank you all for your interest and strong leadership on 
this topic. I look forward to your questions and to your 
counsel.
    [The information follows:]
    
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    Ms. Granger. Thank you very much.
    I want to follow up on what you talked about in hearing 
from people and what they are doing around the world, because 
we really, as I said earlier, we can't conduct business as 
usual with this situation.
    The subcommittee held a series of roundtable discussions 
with conservation groups working in the field, and last year we 
heard from Tsavo Conservation Group that uses unique strategies 
to address wildlife poaching. Nontraditional partners like 
Tsavo sometimes have a difficult time being successful in 
receiving USAID funds. So what can USAID do to ensure funds are 
available to organizations doing important work, even though 
they have not had experience working with USAID in the past?
    Mr. Postel. Thank you for the question.
    As somebody who in my own business 20 years ago encountered 
some of the challenges of learning how to work with the Federal 
Government, I am very attuned to this, and under two successive 
administrators we have been working hard to be more open and to 
help people understand what is involved.
    I am very pleased that in Kenya one of the most recent 
procurements had, out of the six partners that are involved, 
five are new, one is an existing one. And we are trying, both 
on the level of the countries as well as in Washington, to have 
a lot more openness about what is coming, what are the 
opportunities.
    And also we know that some organizations need help with 
their capacity. So in a recent posting of a new grant 
opportunity in Kenya, they built into that the ability that 
some of the funds would be used--of course the bulk of it for 
working on this issue--but a very modest amount to help the 
organizations themselves improve their capacity.
    And similarly, in Washington, for instance, in the E3 
Bureau, semiannually we do what we call an open house, and we 
publicize it through FedBizOpps and all kinds of other ways. We 
had 600 people there last week, more than half were new. And 
literally, every office director and their team is required to 
be there so that people can have a two-way dialogue, not only 
about opportunities directly to work with us, but to give us 
feedback on how to improve.
    So we are not in the perfect place, but I think we are 
making progress. The SBA seems to think so because we went from 
a C grade a few years ago to an A last year. So we have to keep 
working this. There are more improvements to be made. But we 
are definitely trying to be much better on that score.
    Ms. Granger. Thank you. As a former schoolteacher, I 
appreciate going to the A's.
    Ambassador Brownfield, we have heard from rangers and other 
law enforcement about the equipment they need to address 
poaching. In 2014, I asked you about the equipment and you said 
you wanted to focus on training first. So now that several 
years have passed, could you give us an update on equipment and 
how that has been provided and what additional equipment you 
might need?
    Mr. Brownfield. Sure. Madam Chairwoman, our thought process 
remains the same as when we started, which is to say our first 
focus is capacity building and training, and then as they 
develop the capabilities to make use of the equipment, then we 
phase the equipment in.
    In the course of the past year we have done some basic 
equipment provisions to both Tanzania and South African law 
enforcement, overwhelming rangers or those that are involved in 
ranger activity. Some of it has been gear that allows them to 
operate in wilderness-type environments. Some of it has been 
more specialized.
    For example, I believe, last week, if not this week, 
Secretary Jewell is in South Africa, and she was able to 
participate in a donation ceremony of night vision goggles for 
South African park rangers in the expectation that they will be 
used in their efforts to locate, identify, and take steps 
against poachers as part of their regular work and their 
regular activity.
    I suppose I would change what I said to you in 2014 when I 
said we will be overwhelmingly training now, to suggest that 
2016 is the point where we should be seeing--and you have every 
right to expect to see--greater provision of equipment as the 
thousand or so a year that we train come online and are in a 
position to use them.
    At the same time, I feel it only fair to tell the 
committee, our approach in INL is to defer substantially to the 
judgment of our chiefs of mission in those countries and their 
country teams to tell us when these units, when these policing 
or law enforcement organizations are capable of making good use 
of the equipment.
    What we don't want to do is come back and report to you 
that we have provided millions of dollars of equipment and 
cannot at this time account for it or tell you where it has 
gone. I predict that by the time you summon me here by the end 
of this year, I will be in a position to talk much more than 
just Tanzania and South Africa as recipients of equipment from 
INL.
    Ms. Granger. And I hope you will be.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Madam Chair.
    There has been a great deal of discussion this morning on 
the enforcement efforts to combat wildlife crime. And this is a 
serious part of the problem and one we all take very seriously.
    But with a challenge this varied and involving so many 
players, I hope the approach of the U.S. Government is balanced 
and broad. For example, we all know that the lack of economic 
prospects often drives communities to become complicit in 
poaching or resistant to enforcement of antipoaching laws.
    So from encouraging community conservation to reducing 
demand and the economic benefits of poaching, how does our 
approach ensure that every angle of this problem is tackled? 
You can each decide who goes first.
    Mr. Postel. Thank you for your question.
    You are exactly right, there are all of these dimensions to 
it. And, of course, what happens is some in Washington, some 
in-country, where under the lead of our chief of mission they 
work with the government to look at what are the situations. 
And then also on the Washington side, we are looking and 
discussing with the whole interagency what are the situations 
in different countries.
    The demand side is especially but not exclusively focused 
on Asia. We are the second biggest--our own country is the 
second largest source for illegal products--so obviously Fish 
and Wildlife, Department of Justice, and others are focusing on 
that part of the problem. And we are working in Asia on a 
number of demand reduction projects to help reduce the 
underlying demand.
    And as you said, another big part is the community, so that 
people have alternative livelihoods. That is one of the areas 
where there has been a long track record. And in some countries 
where all the pieces of the puzzle come together there has been 
strong success; in Nepal and Namibia, in some spots in northern 
Kenya, and so forth.
    One of the things that has changed, as evidenced by the 
numbers that Representative Granger was mentioning, is that you 
have new players, and it is tied to very organized or 
sophisticated folks with heavy-duty weapons that are not local 
folks and have their own night vision goggles or whatever.
    So that is why we have got to work on all three, because 
sometimes they are overwhelming the community's ability to do 
this. So we have to work on all three, you are exactly right.
    Mr. Brownfield. And, Congresswoman, if I could just add two 
quick points. Part of the answer to your question as to how do 
we ensure that there is some degree of balance between what I 
would call the social and economic development side, which is 
to say, how to give communities in these vulnerable areas a 
stake in doing something other than poaching and butchering 
wildlife, connecting or balancing that with the law enforcement 
approach.
    By the way, a lesson that we have learned over 50 years in 
the counternarcotics area, and the lesson is there must be some 
degree of balance between the so-called soft side and the hard 
side.
    First, you are talking to two-thirds of the organizations 
that are responsible for managing this in our programs 
overseas: USAID, which obviously has a natural tilt towards the 
economic and social development side; INL, and the L of INL 
stands for law enforcement, which speaks for itself; and 
missing from this group is Fish and Wildlife Service. We are 
the three who are in a sense trying to coordinate these 
programs and projects specifically overseas.
    Back here in Washington, we do it through the task force 
that was established as a result of the U.S. National Strategy. 
And the task force that focuses on this is driven by the State 
Department, the Department of Justice, and the Department of 
the Interior, co-chaired by the three of them.
    Our objective in each case is to talk these issues 
through--and we do talk. In fact, even when you will find that, 
say, USAID and INL are working with the same international 
partner, we are doing it with a different focus in each case as 
to what that partner would be responsible for doing.
    Because your fundamental assumption is right: If we do 
nothing but law enforcement, all that we are doing is driving 
these communities deeper underground to continue to do the same 
thing. And I would suggest the opposite is true as well. If all 
we do is community development and alternative development for 
them with no consequences for wildlife poaching, they will 
continue to do it on their own time.
    Mrs. Lowey. Thank you very much.
    Ms. Granger. Thank you.
    I want to remind members that you have 5 minutes for your 
question and the responses from the witnesses also. Pay 
attention to that one. A yellow light on your timer or this 
timer right here will appear when you have 2 minutes remaining, 
and if time permits we will have a second round.
    I will call on Mr. Diaz-Balart first.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    Administrator Postel, you mentioned the use of technology 
in fighting illegal trafficking and poaching. Do we have an 
idea of how successful that has been? And do you have an idea 
of what is working and what isn't working? So in other words, 
are there bright spots and not-so-bright spots, and how do you 
do that?
    And if I may, let me just throw out the other question to 
Secretary Brownfield, which is, what is the connection between 
the trades of poached animals or animal parts, unfortunately, 
and, for example the drug trafficking or human trafficking 
networks? Are they not in many cases some of the same networks? 
And what is our approach to then go after that in more of a 
holistic fashion?
    So with that, I will yield to both of you.
    Mr. Postel. Thank you for your question and your support of 
many of these foreign assistance programs and humanitarian 
programs.
    The technology area is still evolving in a lot of 
organizations. It is not just Federal agencies, but NGOs and 
many other people are working and experimenting with different 
things.
    You might have seen Bryan Christy's article, an 
investigative piece looking at trafficking in East Africa, 
where they used a lot of technology, a tracking device, 
satellites, and other things to actually track the path of 
illegal parts into hands that really shouldn't be involved in 
this.
    So you see things like that. There are innovative data 
systems in place. We have supported several. There is one you 
can put right on your cell phone, and if any American or 
anybody is in Asia and they are in a market, they see 
something, or a policeman, they answer about six questions, and 
it will immediately show them pictures of things that it could 
come from and then guides them, this is illegal and a protected 
species and this isn't.
    So it is an evolutionary process. There are some things 
that clearly work. Some people have successfully used DNA to 
try to get a sense of from where the animal parts originated. 
But I think there is room for a lot more innovation. That is 
why we do the Tech Challenge and a lot more monitoring 
evaluation, to really see what is going to scale and what is 
going to work.
    Thank you.
    Mr. Brownfield. Congressman, while it is not my question to 
answer, I would mention one additional technological issue, 
which is kind of cool and I want to make sure that you all are 
aware of it.
    And that is, beginning about 2 years ago, a professor at 
the University of Washington in Seattle worked on a project, a 
program that was designed to determine whether DNA taken from 
ivory, seized at final market somewhere in the United States, 
could actually be backtracked to determine where that elephant 
or those elephants originally came from.
    And then if he had enough of a survey to be able to study, 
to be able to then identify the hot spots where elephants were, 
in fact, being poached in large numbers and to be able to 
vector the law enforcement community into those areas. We are 
at the 2-year mark. And while it is still too soon to say 
whether this is, in fact, tactically a useful piece of 
technology, it is one of the coolest new ideas that have come 
out in our time.
    Drugs and wildlife trafficking. You make an obvious and 
correct point. Criminal trafficking organizations are criminal 
trafficking organizations. More often than not they corrupt and 
penetrate the same government officials, the same 
organizations. They have to move their product, whether it is 
firearms, drugs, people, or trafficked wildlife, through the 
same airports, the same seaports, the same border crossings, 
and quite often the same organization is involved in doing the 
same thing.
    Are we drawing together the larger Federal law enforcement 
community to working the issue? Yes, we are. But it is 
happening more on a country-by-country basis.
    Some of them, in fact, are quite advanced. Tanzania right 
now has a monthly wildlife trafficking meeting of the country 
team members who are involved in this line of work. And they 
coordinate, so that, they determine if one particular Federal 
law enforcement agency and its counterpart through a judicial 
wire intercept program has developed information that perhaps 
was designed to collect on drugs, but, in fact, revealed 
something related to wildlife trafficking, they make that known 
and made available to the Fish and Wildlife Service 
representative or whoever may be responsible for wildlife 
trafficking.
    I see more of that today than I would have seen 2 or 3 
years ago, and at the end of the day it is becoming 
increasingly holistic, which is why I concluded my statement 
saying I actually think we are making progress in winning this 
race.
    Ms. Granger. Thank you.
    Mr. Ruppersberger.
    Mr. Ruppersberger. One of the issues as far as getting on 
top of the issue is that you need intelligence to find out who 
the people are, what they are using, what their resources are, 
and that is extremely important. The first question is, are you 
working or getting enough intelligence in these areas to deal 
with that?
    But the second thing, and I think this is really important, 
I think, to be used in the right way, and could be a little bit 
expensive, but maybe there is a way that costs could be spread 
out, and that is using drones. Because these individuals don't 
have geographical boundaries. And I know drones have been 
mentioned in your field. But I think one of the first issues 
might be the cost, but there are ways to deal with that cost.
    And do you have people on your team, on your staff that are 
working with the intelligence agencies to try to get as much as 
you can in that regard?
    Mr. Brownfield. Congressman, let me take the two questions 
in the order that you offered them. Intelligence. Writ large, 
you are correct. One, intelligence is absolutely essential. 
Lord knows we have learned that lesson in the counternarcotics 
field for the last 50 years.
    And second, we still need to make progress. When we got our 
first global intelligence assessment, a little bit less than 3 
years ago, of where kind of the world is on the wildlife 
trafficking issue, my observation at that time was this is a 
starting point, but it is a pretty basic starting point. A lot 
of work still needs to be done there.
    Where we have a much better story to tell, I believe, 
Congressman, is on a country-by-country basis where the U.S. 
Embassy has determined that this will be a priority. Countries 
like Kenya, Tanzania, South Africa, countries like Thailand, 
where the United States Embassy has said, for us this is a 
priority issue, bringing in then the law enforcement and 
intelligence community members and actually making them work 
together on this issue, there I think you do see very good 
local or countrywide progress.
    UAVs. I have been wrestling with UAVs generally on behalf 
of INL now for about a year and a half. A little over a year 
ago, we purchased three systems by the INL Air Wing, and we are 
in the process of testing them. But when I say testing, 
Congressman, I want you to understand, at this stage it is just 
figuring out how could we operate them, how many people would 
we need to deploy if we are going to deploy a UAV system, in 
what conditions can they fly, can they operate over water, must 
they be over land.
    We are still, in my opinion, which is not that of my Air 
Wing director, but we still have a few more of those questions 
to answer. This is, however, exactly the sort of thing where I 
would like to put UAVs against should we get to the position 
where we believe these are good, workable systems.
    But meanwhile, as you well know, a UAV system as a 
reconnaissance or intelligence collection system will work only 
so well as we are able then to get local host country law 
enforcement to react to the intelligence. It does little good 
to know that there is a poaching party at this specific 
location if we then cannot get a reaction to it.
    So we have two sets of issues. The first one I am going to 
solve and I intend to have solved before we have reached 
springtime in Washington, DC. The second one requires continued 
working with rangers and host country law enforcement.
    Mr. Ruppersberger. Just one suggestion. You don't need to 
reinvent the wheel. And I would think that we have a lot of 
successes in the intelligence field that use drones on a 
regular basis. You might want to reach out to those agencies to 
help you deal with that.
    Mr. Brownfield. Agreed. Agreed.
    Ms. Granger. Mr. Crenshaw.
    Mr. Crenshaw. Thank you, Madam Chairwoman.
    And thank you all.
    A couple questions. One is, you mentioned we have 35 new 
programs on top of 30 programs we already had. Maybe you could 
give us one or two real world examples of what those new 
programs are doing. There is a lot of money involved, and this 
is a serious problem. I want to know about our comprehensive 
programs. We know there is the demand side, we know there is 
the very highly profitable production side, and we know there 
are weak local institutions.
    So of those 65 programs you have now, how much time and 
energy do you spend making sure you coordinate those so that 
they are not each running off on their own little plan? On 
those three big areas of demand, production, and weak 
institutions, where do you think the priority of those 65 
programs is?
    Mr. Postel. Thank you for your question, and also thank you 
for your focus and leadership on making sure that foreign 
assistance is very effective.
    So in terms of the new programs and the distribution and 
everything, so first of all let me describe from a couple 
different ways to slice the pie. So basically about two-thirds 
of them are focused on Africa, about 25 percent on Asia, with 
the rest Latin America and central programs like that transport 
partnership that I mentioned.
    Looking at it another way, about 65 percent involves 
enforcement work, 25 to 30 percent on community-based work, and 
about 7 percent on demand. That is by the dollars, but that can 
be deceptive, because, for instance, demand is not as 
financially intensive as some other activities. You are not 
necessarily buying equipment and things like that. So you can 
stretch the dollars further for the results. So it can be 
deceptive strictly by counting the dollars.
    Some examples. There is new work going out now in Asia on 
the demand side. For instance, in Vietnam one of the issues is 
that someone got the wrong idea that rhino horn would cure 
cancer. So the work there is focused on trying to correct those 
misconceptions. And there are other programs like that on the 
demand side. You heard about the hotline that I mentioned in 
terms of the fisheries in the Philippines.
    In Africa, in some cases it is a shift of geographies. As 
the chairwoman mentioned, in Tanzania there has been this huge 
increase in the elephant slaughter. The situation within the 
country varies. In other words, up north where mainly the 
iconic parks are and things, that is not the area. That is a 
big traditional area where the activities were. That is not the 
big increase for the killing. The killing is down south. So 
some of the new programs are focused on that in terms of both 
trying to stop it on the enforcement and the policy side and 
also some work on trying to increase investment so the tourists 
not only go up north, but south.
    So those are a couple of quick examples. And in all of 
this, both our ambassadors lead on a country level the 
coordination across the agencies to make sure there is not 
duplication, as well as with the other people. The British are 
active in a number of countries, other donors. So we have to 
make sure that and the NGOs, it is all well coordinated, we 
don't duplicate.
    And then of course, as the Ambassador and I both described, 
there are a lot of things done under the task force to make 
sure that there is no duplication or anything like that. I hope 
that gives a flavor of it.
    Mr. Crenshaw. Thank you.
    Ms. Granger. Mr. Serrano.
    Mr. Serrano. Thank you, Madam Chair.
    And thank you to our guests.
    It is interesting how things change and for the better. 
Fifteen years ago this kind of a hearing there would have been 
the conservationists and the environmentalists against or aside 
from the group that feels the development gets too involved in 
everything, and yet we now realize that this is a bigger issue 
than we thought. This is not just about preserving wildlife; it 
is about keeping money out of terrorists' hands. And so 
terrorists, being who they are, find any possible way to look 
for money.
    I just did a Google search, and all I did was ``wildlife 
trafficking images.'' And no matter how many times you see 
this, you can't get used to it, the hundreds and hundreds and 
hundreds of photographs of just lions' heads and elephants torn 
to pieces and just for the sake of making money, you know, as 
if they were not part of our Earth and our land. And it is a 
scary thought, but it is just something that we deal with.
    Let me deviate from my original questions here to ask you a 
question that someone might have asked but I missed. We always 
think of Africa, we think of Asia, but this also happens in 
Latin America, doesn't it? Can you comment on that, please?
    Mr. Postel. Thank you for your question and your 
longstanding interest in Africa and other areas.
    So it is absolutely also a problem in Latin America in a 
number of areas. Obviously, there is the whole illegal logging 
that goes on throughout the Amazon, and there are many species 
all through the Amazon Basin. So there is a lot of work to be 
done there as well.
    Mr. Serrano. And the logging then affects the species also, 
is that what you are saying?
    Mr. Postel. Yes. I mean, if people are wholesale cutting 
down the forest and destroying the entire ecosystem, all the 
different species have nowhere to go, nowhere to feed, and so 
forth. So there are linkages. And also it is just another form 
of the same criminality and these chains of people that work on 
all different forms of contraband.
    Mr. Brownfield. Congressman, if I might add from the law 
enforcement perspective.
    Mr. Serrano. Sure.
    Mr. Brownfield. One of the lessons that we have learned, 
and this kind of builds on Congressman Diaz-Balart's question 
earlier on, is that the trafficking organizations do actually 
overlap and connect. And it is not just drugs and wildlife. We 
have also learned that illegal logging, illegal mining, and the 
organizations that traffic that product are, in fact, tied in, 
in places, to wildlife trafficking as well.
    And we have also learned that with certain governments, it 
is easier to get their buy-in, their enthusiasm, their support 
for efforts to counter and combat wildlife trafficking if we 
tie it to something that from their perspective is a money 
loser for them.
    Peru, as an example, Peru is a country which believes it is 
suffering from a serious illegal mining and illegal logging 
problem. When we tie what we want to do on wildlife trafficking 
to that, we get much more support and enthusiasm from them, and 
we are able to train law enforcement organizations basically as 
antitrafficking organizations.
    If I could add to what you were saying and what the good 
Dr. Postel was saying in terms of our thinking for the future, 
when we got our fiscal year 2016 appropriation and we began to 
think of where the directions we would be moving on wildlife 
trafficking--and you will know if I get some of these wrong if 
someone behind me hits me in the back of the head--I said: So 
where should we be expanding or moving beyond our basic East 
and Southern Africa base and Southeast Asia base?
    My thinking is to expand more into Africa, up to and 
including West Africa; expand into Latin America, where you 
correctly note there are serious wildlife trafficking issues in 
Latin America, particularly South America; and expand into 
other areas, particularly in the financial systems and money-
laundering processes of the wildlife trafficking organizations.
    When next summoned up here, I look forward to describing 
our thinking in terms of where we will be adding and increasing 
our efforts in this calendar year.
    Mr. Serrano. Thank you.
    Ms. Granger. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chair.
    Thank you, gentlemen, for your testimony today.
    Ms. Granger. Just a second.
    Mr. Serrano. I just wanted to make a quick ending comment. 
While it is important for us, as we always do, to criticize our 
own efforts and the efforts of the State Department and other 
groups, it is interesting to note that on this particular issue 
our government has been way ahead.
    Years ago--and this is something Mr. Diaz-Balart may be 
aware of--years ago, before we even thought of having any kind 
of getting close to Cuba, there was work between the Bronx Zoo, 
the Wildlife Conservation Society, and Cuban authorities, not 
in the government but in the civil society, on preservation of 
species and so on. So in that area we were probably way ahead 
of ourselves, but we still have to catch up with this new wave 
now.
    Ms. Granger. Thank you.
    Mr. Diaz-Balart. If the gentlewoman will yield for 5 
seconds. It has always been clear that the Cuban regime treats 
animals much better than they treat their own people. I agree 
with you.
    Mr. Serrano. Boy, did I leave myself open for that.
    Mr. Fortenberry. Thank you, Madam Chair.
    To Mr. Serrano's comment, this is one of these issues, 
these concerns, problems that transcends boundaries. 
Conservation is the most conservative ideal, it is a 
progressive ideal. There is significant unity around the 
dynamic of not watching or sitting by idly while majestic 
animals are slaughtered for no reason, and then the 
connectedness that we have to not only international 
trafficking and the money flows that go to nefarious 
activities, but also the tie to the loss of a vision of 
sustainable-type development for other peoples.
    To that end, I appreciated your comments that there is this 
balance here between enforcement and community development. An 
overemphasis on either one is going to undermine the 
interdependency that is necessary between those two entities to 
actually achieve the goals. I think that is a thoughtful 
comment.
    In this regard, a number of us met last year, late last 
year, with several CEOs of major corporations, including Wal-
Mart, and Harrison Ford, Han Solo, was there as well. Anyway, 
big investment on their part in trying to petition us to think 
creatively about conservation in a bipartisan fashion.
    One of the things I pointed out--the comments were 
particularly directed to the head of Wal-Mart--is that you do 
significant business in China, major, major manufacturing 
integration into China. Now, you look at us as government 
officials as having the ability to create the narratives for 
societal governance, but you may have potentially more power 
than we do.
    Given that China is one of the largest places for demand 
for illegal ivory, and I noted that you pointed out in your 
testimony that President Obama and the Chinese President 
apparently agreed that China would stop importing and exporting 
this, I would like you to unpack that further, because I don't 
think that is very well known.
    And then the second part of the question would be the role 
that international business can play in trying to again 
recreate a narrative, as we have done around many other 
important social initiatives, that this must be stopped.
    Mr. Brownfield. If I may start, Dr. Postel.
    First, Congressman, I could not agree with you or every 
other member of this subcommittee, because you have all 
referred to this directly or indirectly in your comments, that 
it is absolutely essential that we have partners, partners 
being other governments, partners being international 
organizations, partners being NGOs, whether they are global in 
nature or regional in nature, partners being the international 
or the U.S. business community.
    If we are not working with those partners, we are at a 
minimum--at a minimum--failing to make use of a very effective 
means to multiply the impact of whatever we are doing. And that 
would at least be stupid. And I would hate to be accused of 
stupidity unless I truly was intending to be stupid, which if 
you listen to my wife, happens at least 10 or 15 times a day.
    Second, China, and thank you for waiting until well into 
this hearing before we move into the issue, which I would call 
the 800-pound gorilla, who is actually not in the room but that 
is very much at play here.
    Working with the Chinese on this issue, something that I 
have been doing now for nearly 4 years, is a slow process. We 
work with them through their law enforcement organizations and 
institutions.
    My own summary would be, in 4 years we have moved from 
something that they are not willing to talk about at all to 
something that they are willing to acknowledge is an issue and 
that they have taken some ownership of.
    Mr. Fortenberry. What about this--I am sorry, the time is 
running out--what about this agreement? What level of agreement 
was reached? Would you explain that?
    Mr. Brownfield. In September of last year, during President 
Xi's visit, President Obama and President Xi agreed that they 
would take steps to eliminate the commercial trafficking in 
ivory. Important because China today is overwhelmingly the 
largest market for ivory in the world. And, as Mr. Postel has 
pointed out, we are not blameless in this regard as well.
    Two months later, at something called the U.S.-China Joint 
Liaison Group on Law Enforcement, which I co-chair, we got the 
Chinese--this is their Ministry of Public Security and their 
Customs Service--to agree that we would form a working group to 
develop details on how we would work to make this happen.
    Now, with many countries in the world you would say this 
sounds laughably little to have accomplished. With China it is, 
I would say, a step in the right direction. Also in the course 
of last year, for the first time they did a public ivory crush, 
where they, in public, before the media, with hundreds of 
people watching, did destroy beyond possibility of reuse a 
substantial amount of ivory.
    Does that stop the problem? No. Is it symbolic and 
therefore has at least some potential impact on their own 
officials and their own criminal elements? Yes.
    I would describe the Chinese issue as a work in progress. 
It is moving in the right direction. It is by no means moving 
as fast as we wish it would, and we still have a lot of work to 
do before we are both going to be in a position to say we are 
satisfied with where we are with China.
    Ms. Granger. Thank you.
    Mr. Stewart.
    Mr. Stewart. Thank you, Madam Chairwoman.
    And to the witnesses, for many years of service. It is 
something that I think many of us feel important but 
underappreciate it, which has been said here a number of times. 
I actually want to take just a second and tell you why I am 
interested particularly on the subject. One of them is I am 
just a recent convert to this, the beauty and really 
magnificence of these animals in this area.
    My wife and I spent, I don't know, 8 or 9 days in Africa 
last summer. It was a life-changing experience, particularly 
for my wife.
    I also sit on the Intelligence Committee. Africa is my area 
of assigned responsibility. I spend a lot of time in Africa, 
not, obviously, dealing with this issue, but with some of the 
more troubling aspects that that continent is dealing with in 
Al Shabaab and Boko Haram and others.
    Which leads me to my question.
    Ms. Granger. Can you just hold just a second? We are having 
a hard time hearing. Could you turn the mike up?
    Mr. Stewart. Yes. Well, I have such a big, booming voice.
    Ms. Granger. Ok. Would you speak a little bit louder?
    Mr. Stewart. Yes, ma'am, I will.
    Ms. Granger. We don't want to miss any of the words.
    Mr. Stewart. OK. Thank you. Is that a little better?
    I was there last spring and saw some operations against Al 
Shabaab and also Boko Haram, and the numbers of this are fairly 
startling. You know, what an animal is worth--and I will use Al 
Shabaab and some of the information that we have here from 
other sources, not provided by either of you--but they may 
receive something between $200,000 or $400,000 or maybe 
$600,000 a month on illegal ivory alone.
    Let's use the middle figure, $400,000. They pay their 
soldiers about $300 a month, which in the scale of things is 
actually fairly high. ISIS is paying their soldiers about $150 
a month or something like that. But using that $400,000 a month 
figure, you are paying for something like 1,300 soldiers, full-
time soldiers to fight in your army. It is a meaningful 
national security consideration, and we haven't talked about 
that much.
    Would you be able to respond quickly to two questions. 
Number one, because of this, Congress has considered 
withdrawing or withholding military aid to countries who we 
believe are not being our partner in trying to minimize or 
eliminate this trafficking. Is that a good idea or does that 
make it worse? And would you also address are there other 
terrorist organizations that we know are profiting from this as 
well and give us a sense of how much it means to them?
    Mr. Brownfield. Why don't I take a quick bite at that, 
Congressman.
    I would say, first, you have vectored in on one of the two 
organizations that are listed under our Foreign Terrorist 
Organizations proscribed list that we are confident and say 
publicly are engaged in wildlife trafficking. That is Al 
Shabaab. The other, by the way, is the Lord's Resistance Army 
further down to the south in the African continent.
    Mr. Stewart. So that answers my second question. You think 
it is only those two organizations?
    Mr. Brownfield. But I want to be careful that I have stated 
it in a way that makes sense. Those are the two that we are 
prepared to say are, in our judgment, unquestionably involved 
in this.
    Are there other organizations that may be? Yes, there are. 
My problem is I don't want to ring alarm bells if I can't then 
offer clear evidence as to why it is that we believe these 
other organizations, some in Africa, some elsewhere, are 
involved.
    Mr. Stewart. Mr. Ambassador, I have to tell you that I 
believe that there are. And in another setting I think you and 
I would agree that there is strong evidence.
    Mr. Brownfield. I believe it is possible as well. And, in 
fact, that is why I wanted to choose my words carefully.
    Mr. Stewart. I understand.
    Mr. Brownfield. And what Al Shabaab does, by the way, which 
is very similar to what the FARC used to do in Colombia on 
drugs, and that is it taxes. It taxes the trafficking 
organizations as they move the product through their territory, 
particularly through seaports and border crossings where they 
have some degree of influence and control. And they do make a 
substantial amount of money out there.
    Mr. Stewart. Very effective middleman.
    I am running short on time. Do you believe we should 
withdraw aid?
    Mr. Brownfield. And sanctions is a good question. You all 
pay me the big bucks to offer you my own judgment in terms of 
how we can accomplish what we want to accomplish 
internationally. Here is my judgment. I believe we already have 
some sanctions tools related to terrorism and support for or 
accepting the presence of terrorist organizations that are 
probably adequate to the task.
    My concern on unilateral sanctions tied to wildlife 
trafficking is that it will, as happens with sanctions on 
trafficking in persons, sanctions on drugs, turn a chunk of the 
international consensus that we have against us.
    I have no objection to sanctions of governments that are 
clearly tolerating and complicit in this. What I would want, 
however, is a tool that allows us to be very selective and very 
careful on how we apply those sanctions. I would like to have a 
broader conversation on this when we have another option.
    Mr. Stewart. Well, and maybe I will conclude by saying 
thank you. And I would like to follow up with you on that, 
because I recognize sanctions are a two-edged sword, that many 
times there are unintended consequences that come from that. 
But I think it might be a tool that we may be forced to 
implement here in a more aggressive way. But, again, Mr. 
Ambassador, I would like your thoughts at another time if we 
could.
    Madam Chairwoman, I yield back.
    Ms. Granger. Thank you.
    Mr. Dent.
    Mr. Dent. Thanks, Madam Chair. I apologize for being in and 
out of this meeting. I had some pressing business.
    But it is encouraging to hear about all your efforts to 
build capacity and to provide training and equipment to law 
enforcement engaged in combatting wildlife trafficking.
    Can you point to any specific law enforcement operations 
that have been especially impactful?
    Mr. Brownfield. In fact, Congressman, I can, and I would 
like to offer you four specific examples of operations that 
have actually produced measurable and concrete results.
    First, and we did the first of these in the year 2013, an 
international operation that involves more than 20 different 
governments called Operation Cobra. And you will be stunned to 
learn that it goes Cobra I, Cobra II, Cobra III, and Cobra IV.
    Each one has generated, up to this point, I think we are 
probably well over 400 individuals arrested. I have lost track 
of the number of tons of illicit product or animals that have 
been seized and the number of individuals and organizations 
that have been arrested for prosecution. That, by the way, is 
Asia, Africa, Europe, and the United States.
    A second operation is one that has been working only in the 
course of the past year and is Africa based, and it is called 
Operation Worthy. This particular operation has involved 
Uganda, Tanzania, and Kenya. And it, in fact, has produced 
nearly 400 arrests, 4.4 tons seized, and a good number of 
organizations taken down.
    A third operation, which is U.S. focused and U.S. internal, 
although focused on international organizations, is called 
Operation Crash, that is led by the Department of Justice and 
the U.S. Fish and Wildlife Service. And it also has nailed in 
the course of this past year more than 20 successful 
prosecutions and more than $5.5 million worth of assets seized.
    And finally, something that they have done themselves but 
they have done it with our equipment, our training, and our 
organizations created, the Philippine maritime service, in the 
course of 2015, has conducted operations vectored on wildlife 
trafficking; that is to say product being moved in or out. They 
have seized 23 vessels and they have seized more than $2.2 
million worth of assets.
    Four specific operations that we can point to and say these 
are, at least to some extent, the result of our support and our 
training, assistance, and equipment.
    Mr. Dent. Most law enforcement actions you mentioned, I 
think you said Tanzania, Uganda, and Kenya, what are the other 
major countries where you have had these law enforcement 
operations?
    Mr. Brownfield. The Operation Cobra originally started as 
an operation focused on East Asia and Southeast Asia. It 
expanded to include parts of Central--I guess we call it 
Central Asia, Nepal. And, in fact, as the pipelines and the 
logistical lines passed through both Europe and Africa, we 
expanded into some of the source countries in Africa, such as 
South Africa, such as Kenya, such as Tanzania.
    And on the U.S. and the North America side, of course, we 
are dealing with the markets.
    Mr. Dent. My time has expired. I appreciate it. And I just 
have to tell you, you have got a great voice for radio. You 
must do voice-overs. You don't have to answer a question.
    Thank you.
    Mr. Brownfield. Make me an offer, Congressman.
    Ms. Granger. Thank you. We have time for a short round.
    And, Mr. Ambassador, if you will see that light right 
there, it will tell you when the time is up.
    I just have one short question because it was mentioned 
earlier about when we have huge amounts of ivory and the 
decision to destroy all that ivory. What was the result of 
that? It was confusing to me because I would think if we have 
all this ivory then it could slow down the need because the 
ivory is already there. They said, no, the intention, what 
happens is when you destroy it, it helps stop the poaching. And 
I didn't understand that.
    Is it successful? You mentioned one in China, but there 
have been several that are just enormous.
    Mr. Brownfield. Yeah. Madam Chairwoman, there have, in 
fact, been several here in the United States of America as 
well. I will give you the law enforcement theory behind the 
ivory crush, and that is, if you take ivory completely out of 
any commercial value whatsoever, you have the impact of 
discouraging the criminal networks from continuing to poach and 
acquire additional ivory.
    Now, there is a counterargument to that, and you hear this 
frequently in the conservation community, by governments who 
say the ivory has already been poached and by destroying it we 
are merely creating a requirement for more ivory.
    My own view, based upon my experience on working the drug 
issue, is hit the network at every point in the chain, 
including eliminating the product at market, because it sends a 
clear and unequivocal message to everyone, from the initial 
poacher up to the person who is selling the ivory illegally on 
the streets of New York, that, in fact, they will be stopped 
wherever they are on the chain.
    Ms. Granger. Thank you.
    Just something you would like to add to that?
    Mrs. Lowey.
    Mrs. Lowey. Thank you very much.
    I just wanted to follow up. We have talked a little bit 
about what China is doing in the big crush. I think it was in 
September that the Chinese President was here and they 
announced their commitment to a nearly complete ban on ivory 
import and export.
    If either of you would just focus on that for a minute. I 
was interested in what specific steps have been taken since 
that announcement, and are there examples domestically or on 
the part of the Chinese Government that indicate whether this 
pledge is being taken seriously? And what about other markets, 
especially in Asia?
    So I would like to hear some more about the Chinese 
enforcement, the cooperation with China, other than the big 
crush that happened, if you could.
    Mr. Postel. I will start it. Thank you for the question.
    We have seen work going on there both on the official side 
as well as by civil society, and I think both are equally 
important.
    One thing that can't be attributed strictly to the crush, 
but there seems to be some evidence that progress is being 
made, because the price of ivory in the illegal market in China 
has fallen 50 percent in the last 18 months.
    And some of that is just getting consumers to understand 
that. A lot of Chinese don't even know where the ivory comes 
from. That is why there are so many on the civilian side, so 
many efforts, whether it is Chinese actresses tweeting a 
picture of a butchered elephant, so people understand.
    I don't know if you will see it, but this is a picture of 
Yao Ming in the Bangkok airport in Mandarin sponsored by us as 
part of a whole campaign where the point is to tell the 
tourists, you know, that this is not a good thing to be done.
    So the government is pledging some things, and, of course, 
there is ivory, but also the government pledged in other areas. 
They have banned shark's fin soup from all their official 
government banquets. And there is a whole range of species on 
which we have to work with them.
    So there are concrete steps. But as the Ambassador said, it 
is a grind. It is slow. But, fortunately, sometimes they are 
wanting to follow what we are doing. So they were very pleased 
to brag about their crush, having matched our crush. And so 
sometimes our actions are another goad for them.
    Mr. Brownfield. Congresswoman, you asked specifically what 
have they done since the September announcement by the two 
Presidents. I would offer three things. First, the crush that 
we have talked about. In their defense, they did it publicly 
and it is something they have never done before. Second, 2 
months later they did agree to establishing with us a bilateral 
working group among law enforcement officials to work this 
issue and put more flesh on the commitment that they made at 
the Presidential level. And third, they have not yet 
promulgated but released for circulation and consideration a 
new wildlife trafficking law.
    It has been reviewed by many people of the entire 
conservation community. I will not speak for everyone. What I 
would describe the law, as I have read it and understood it so 
far, is it moves in the right direction in some ways, in the 
wrong direction in some ways, and it unquestionably does not go 
as far as we wish it would go.
    Mrs. Lowey. Just one last comment, because I have seen many 
working groups being established. Anything specific coming out 
of it, or are they going to take a year to study it again?
    Mr. Brownfield. It is joint, Congresswoman, so my guess is 
we will be able to push it to a certain extent. The question 
will be how far are they willing to go. What I will commit to 
you is we will push them as far as we can push them and we will 
see how far they are willing to go to comply with their own 
President's commitments on this issue.
    Mrs. Lowey. Well, since it is almost the red light, so I 
guess you are not convinced of the seriousness of their 
commitment. And I know we both look forward to following up on 
this issue, and I thank you.
    Thank you, Madam Chair.
    Ms. Granger. Thank you.
    Mr. Fortenberry.
    Mr. Fortenberry. One quick follow-up as well. You talked 
about the necessity of ongoing partnerships, NGOs, business, 
and otherwise. But what other governments are engaged in this 
with resource assistance? You said the British. Are there other 
nations that have elevated this problem and have put resources 
to it, other than the ones where the problem exists?
    Mr. Brownfield. Congressman, I would give you lists in two 
categories. First, obviously, are the partner nations that are 
actually the source nations themselves. And the cooperation 
there is us trying to facilitate, build capacity, train or 
equip, and they would be--
    Mr. Fortenberry. Yes. I don't think source nation is the 
right word. Beyond the source nations.
    Mr. Brownfield. You are talking about donors, others who 
are prepared to participate in this as members of the 
international community.
    The European Union as a whole participates in this. The 
British are in the lead in terms of who within the European 
Union are most focused on it. However, I am prepared to say 
good things--to a degree--about the French, about the Germans, 
about the Spanish, and about the Italians in terms of having 
stepped up to the plate to some extent.
    Canada is playing a useful role, and in some specific areas 
Japan. We bump into issues on Japan because in one area, 
whaling, they clearly are not participating in a helpful 
manner; in other areas they are. And in Southeast Asia, I have 
found at least one government--and probably two--and that is 
Thailand and Indonesia are playing both a helpful and energetic 
role putting some money, but more than that being willing to 
cooperate with NGOs, other governments, and international 
organizations that are trying to address the problem.
    Mr. Fortenberry. And where is this momentum coming from? Is 
it coming from us?
    Mr. Brownfield. I would suggest, first, I want to give the 
conservation community full credit. And since the era, I guess, 
of Theodore Roosevelt, they have, in fact, been doing 
exceptionally good work. There is no one on the planet who does 
not respect the conservation community and there is a reason 
for that. So I give them credit.
    Mr. Fortenberry. But it does seem like all of these 
initiatives are very new, government-to-government initiatives 
and NGO initiatives are new. So momentum for this is being 
driven somewhere.
    Mr. Brownfield. Yes. And I don't disagree with your 
assessment that the momentum is probably coming more by pushing 
from us than from any other identifiable government or 
organization. I just don't want to dismiss the efforts of 
others because at the end of the day we need them.
    Mr. Fortenberry. No, I am just looking for information. It 
is not some sort of judgment. I am just curious as to how this 
is happening and for the potential of what you have talked 
about in terms of problem solving and partnership with others. 
Because that is going to be obviously a necessary outcome in 
order to correct this problem.
    Mr. Brownfield. Because part of the solution--and I will do 
this in only 15 seconds--is we do have to keep the 
international community and specifically the United Nations 
engaged. If we can get through collective action certain 
activities to be made criminal around the world so that 
wherever you are doing it you are in violation of the law, it 
is going to make it a lot easier for us to get all governments 
of the world to cooperate.
    Mr. Fortenberry. Thank you.
    Thank you, Madam Chair.
    Mr. Postel. Just to supplement two quick things. One other 
group that is pivoting is the Global Environmental Fund, and 
they traditionally didn't work in that area and they are 
pivoting.
    And I think the other driver, in addition to everybody who 
was mentioned, is simply because of the connection on the 
security side, which is you have new voices coming to the table 
and saying, you know, this was important not just for 
conservation but for other reasons. And that is another driver 
that is affecting the British and ourselves and others.
    Ms. Granger. I thank the witnesses for appearing before the 
subcommittee today. Members may submit any additional questions 
for the record.
    The Subcommittee on State, Foreign Operations, and Related 
Programs stands adjourned.


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                                      Thursday, February 11, 2016

              UNITED STATES ENGAGEMENT IN CENTRAL AMERICA

                               WITNESSES

HON. WILLIAM BROWNFIELD, ASSISTANT SECRETARY OF STATE, BUREAU OF 
    INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS
ELIZABETH HOGAN, ACTING ASSISTANT ADMINISTRATOR, LATIN AMERICA AND 
    CARIBBEAN BUREAU
FRANCISCO PALMIERI, DEPUTY ASSISTANT SECRETARY OF STATE, CENTRAL 
    AMERICAN AND CARIBBEAN BUREAU OF WESTERN HEMISPHERE

                Opening Statement of Chairwoman Granger

    Ms. Granger. The Subcommittee on State and Foreign 
Operations and Related Programs will come to order. I want to 
welcome our witnesses. Thank you for appearing here today for 
this oversight hearing on U.S. engagement in Central America. 
For many years, this subcommittee has provided funds for our 
partners throughout Latin America. Without question, we know 
that what happens in these countries has an impact on the 
United States; our economies, our security, and even our health 
are closely linked.
    The latest example of this is the outbreak of the Zika 
virus, which is spreading explosively in the hemisphere, 
according to the World Health Organization. We want to hear 
from our witnesses about what the administration is doing to 
address the Zika virus in the region.
    Our countries are also connected because of migration. This 
spring will mark 2 years since the crisis at our southern 
border reached historic proportions. Members of this committee 
and a task force I led for the Speaker took notice. We worked 
together to address the unprecedented number of unaccompanied 
children arriving from Central America. But we know more needs 
to be done.
    According to the Department of Homeland Security, more than 
68,000 unaccompanied minors were apprehended in 2014. More than 
three-quarters of them are from El Salvador, Guatemala, and 
Honduras. Another 40,000 more were apprehended last year. One 
reason these numbers decreased last year is because Mexico 
stepped up its efforts to apprehend minors from Central America 
before they reached the United States. In fiscal year 2015, 
more than 16,000 were detained by Mexico, and 13,000 were 
returned. Compare that to less than 2,000 removed by the U.S. 
Immigration and Customs Enforcement over the same period.
    Mexico's increased border security, which the United States 
has long supported through funds in our bill, is making a 
difference. While a total number of unaccompanied children 
arriving at the southwest border went down in fiscal year 2015, 
there has been a disturbing spike in the last few months. 
Administration officials have pointed to recent enforcement 
actions that may help reverse this trend, yet the number of 
children apprehended in January was still significantly higher 
than the same month last year. We must do more to address this 
problem where it starts.
    I have heard firsthand from leaders in Central American 
countries that they want their children back. We need to 
continue to work with these governments to return these 
children safely, and to keep more from making the extremely 
dangerous journey to the United States.
    The Central American countries have already taken a number 
of steps on their own. Guatemala passed a law increasing 
penalties on human smuggling. Honduras continued to crack down 
on drug traffickers and extradite fugitives to the United 
States. El Salvador, which is one of the most violent countries 
in the world, has started to implement a broad security plan in 
its most dangerous cities. These are steps in the right 
direction, but they require follow-through.
    The fiscal year 2016 State and Foreign Operations bill, 
provided $750 million in assistance to Central America; there 
are tough conditions on this aid. The countries must show they 
are improving border security, addressing corruption, and 
countering gangs, drug traffickers and organized crime.
    The fiscal year 2017 budget request includes $750 million 
in this subcommittee's jurisdiction for Central America. Before 
additional funds will be considered, the administration must 
demonstrate how the funds already provided will address the 
violence; the lack of opportunity contributing to the migration 
problem, and that these countries are meeting the conditions in 
our bill.
    Congress and the American people are expecting results. 
While the United States has a critical role to play in Central 
America's success, we should not do this alone. Other countries 
in the region have expertise, such as Colombia and Mexico. We 
should continue to encourage partnerships between these 
countries and El Salvador, Guatemala, and Honduras. We also 
need to ensure that other countries in the region facing their 
own security challenges, such as Costa Rica, receive our help. 
I look forward to hearing from our witnesses today on these 
very important issues, and I will now turn to the ranking 
member and my good friend, Mrs. Lowey, for her opening remarks.

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                    Opening Statement of Mrs. Lowey

    Mrs. Lowey. Thank you, Madam Chair. Assistant Secretary 
Brownfield, Deputy Assistant Secretary Palmieri, Acting 
Assistant Administrator Hogan, I join Chairman Granger in 
welcoming you today.
    The news is often dominated by the devastating war in Syria 
and the resulting refugee crisis engulfing the Middle East and 
much of Europe. At the same time, but with less attention, we 
face another deplorable humanitarian tragedy in our own 
hemisphere. Horrific levels of violence, abject poverty, weak 
government, plague the countries of Central America. Half of 
the populations live in poverty and 30 to 40 percent is 
underemployed.
    Last year, El Salvador surpassed Honduras with the world's 
highest homicide rate: a 70 percent increase over 2014 levels. 
It has the highest concentration of gang members per capita in 
the region.
    In Honduras, the military police continue to eclipse 
civilian police in most law enforcement operations despite a 
long history of impunity and abuse by the military against 
civilians.
    In Guatemala, a shameless tax fraud scandal robbed the 
Guatemalan people of millions of dollars, and, finally, led to 
the President's resignation. Yet, the country is now led by an 
inexperienced former comedian with questionable ties to ex-
military officials.
    It is little wonder that more than 70,000 unaccompanied 
minors tried to flee these three countries and cross into the 
U.S. during the summer of 2014, and why the numbers of children 
and families apprehended at our southwest border increased this 
past fall and winter, a time when numbers typically decrease.
    Until the underlying conditions driving migration change, I 
fear desperate Central Americans will continue to believe that 
fleeing to the United States is not any more dangerous or 
uncertain than staying home. That is why we have a clear, 
national security interest as well as a moral obligation to 
address this crisis. There was broad bipartisan support for 
substantially increasing assistance to the region in last year 
omnibus, which is an important first step.
    Now, we must allocate the resources wisely and prioritize 
good governance, the rule of law, education, job creation, and 
citizen security. Our response cannot rely solely on U.S. 
immigration enforcement efforts or those by our Mexican 
partners. I hope your testimonies will detail how the U.S. will 
scale up programs in the region and address what can 
realistically be accomplished this year.
    Additionally, I hope you will comment on what progress the 
three countries have made since announcing their Alliance for 
Prosperity plan. When will we see measurable results on 
security, justice reform, corruption, and tax collection? I 
also hope you will address deeply concerning accounts by human 
rights groups and local media of corruption, human trafficking, 
and other abuses against those apprehended and deported.
    To what extent are you working with the Mexican Government 
to increase humanitarian assistance and migrant protection? Are 
your efforts including rehabilitation services in the three 
countries? This refugee crisis is caused by dehumanizing levels 
of poverty, violence, gang activity, and failed governance. 
Congress and the administration must work together in a 
bipartisan manner to build partners on the ground, empower 
civil society, protect human rights, and defeat criminals. I do 
believe this can be achieved, but it is going to take 
leadership, vigilance, and wise allocation of resources. I look 
forward to your testimony.
    Ms. Granger. Are there other opening statements? I will now 
call on the witnesses to give their opening statements. All 
right. Ambassador Brownfield.

               Opening Statement of Ambassador Brownfield

    Mr. Brownfield. Sure thing, Madam Chairwoman. And I will be 
excruciatingly brief. Madam Chairwoman, Ranking Member Lowey, 
members of the subcommittee, thank you for this opportunity.
    I will skip the first page of my remarks by saying we all 
understand basically the nature of the challenges that are 
before us from Central America. We, from INL on the security 
front, believe we have developed a three-part strategy to 
address those challenges: a bottom-up approach to create 
greater community policing; a top-down approach to produce 
reforms and professionalization in the rule of law and law 
enforcement institutions; and operational support for law 
enforcement in the region.
    We believe we have programs now that address those issues; 
the place-based strategy in the 25 sites that are currently 
underway; what we are working with the Colombia assistance 
program; the CAPRI police training program based in Panama; 
regional border police training; Justice Department's regional 
legal advisers; COMPSTAT policing in Costa Rica and in Panama; 
and vetted units through all of the major problem countries in 
Central America. We believe they are producing results.
    Madam Chairwoman, I would suggest that we have, in our 
opinion, a strategy, programs to deliver on that strategy, and 
results which we can discuss in this hearing. I thank you very 
much, and I look forward to your questions.
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                   Opening Statement of Mr. Palmieri

    Ms. Granger. Mr. Palmieri, please.
    Mr. Palmieri. Thank you, Madam Chairwoman, Mrs. Lowey, and 
the members of the committee for the support that you have 
given to our shared efforts in Central America to address these 
underlying conditions. Today's discussion is an essential part 
in achieving the security governance and economic progress that 
we all collectively hope to see in Central America. The U.S. 
strategy for engagement in Central America focuses on three 
pillars of action: security, governance, and prosperity. We 
designed it as a multiyear strategy that complements the four 
strategic lines of action of the Alliance for Prosperity, the 
plan of the Northern Triangle governments.
    The $750 million appropriated by Congress in fiscal year 
2016 demonstrates the commitment and efforts we have to work 
with the Northern Triangle leaders to address these systemic 
challenges. At the same time, we have a responsibility to the 
U.S. Congress to fulfill the 2016 criteria outlined in the 
appropriations law.
    We began work already with the three governments on an 
ambitious and concrete plan for 2016, which will help us ensure 
we meet the conditions for the continued support of the U.S. 
Congress for the strategy in the Alliance for Prosperity. I 
look forward to answering your questions.
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    Ms. Granger. Thank you. Ms. Hogan, you are now recognized.

                     Opening Statement of Ms. Hogan

    Ms. Hogan. Thank you, Madam Chairwoman, Ranking Member 
Lowey, and distinguished members of the subcommittee. Thank you 
for the invitation to testify today. I am grateful for your 
support of USAID's work in Latin America and the Caribbean, and 
I am pleased to update you on our efforts in Central America.
    I would like to focus on what USAID is doing to help 
address the challenges the region faces. We see prosperity, 
improved governance and security, which are the objectives of 
the strategy for engagement in Central America as 
interdependent. We know that opening doors to employment and 
education for citizens, especially youths at risk of gang 
recruitment, crime, and violence, will bolster our efforts in 
security and lead to freer and more prosperous societies. That 
is why our prosperity programs include efforts to support small 
businesses and entrepreneurs, encourage private investment, 
train youths in marketable job skills, and improve agricultural 
productivity. In El Salvador, for example, we have helped 
10,000 small- and medium-sized companies exceed $100 million in 
domestic sales and exports and create over 15,000 new jobs, 49 
percent of which have gone to women.
    And in Honduras, our Feed the Future investments resulted 
in a 55 percent increase in incomes for more than 180,000 of 
the program's beneficiaries, some of the country's poorest 
people. These efforts to foster prosperity are only sustainable 
in an environment where democratic values and institutions 
flourish, where citizens can depend on basic social services, 
where impunity is reduced and civil society and the media can 
play their rightful roles. To that end, USAID governance 
programs include help to reform institutions to root out 
corruption, strengthen civil society's ability to hold 
governments accountable, improve financial transparency.
    For example, in Guatemala, we have supported the National 
Forensics Institute since its inception in 2007. This body is 
playing an instrumental role in collecting and analyzing the 
evidence that led to the indictment of the former president and 
vice president on corruption charges.
    Ultimately, none of our efforts in prosperity in governance 
will take root in societies that are plagued by insecurity. As 
you have heard, the heart of our security work is youth-
focused, as we invest in programs that reach those that are 
most at risk of gang recruitment, crime, and violence. We are 
using tested approaches in the most violent-prone communities 
to create safe community spaces, provide job and life-skill 
training, and build trusts between police and residents.
    Already, we are seeing results of our crime prevention 
activities in El Salvador, where our initial analysis points to 
a 66 percent drop in homicide in the 76 communities where USAID 
targets its programming. This is all the more remarkable, given 
the country's 70 percent increase in homicides over the same 
period. To extend the impact of USAID's investments, we are 
forming partnerships with the private sector.
    We currently have 60 private-sector partners in the 
Northern Triangle from whom we have leveraged $150 million in 
support of our work with at-risk youth and our efforts to 
increase food security and grow incomes. USAID is well-prepared 
to implement the new strategy, and we are committed to 
efficient, effective, and transparent oversight of our 
programs. We use a full range of monitoring and evaluation 
tools. We are commissioning external impact studies to better 
inform our development work and we have established 5-year 
strategic plans in each of our field offices.
    In short, we are collecting hard data to inform our future 
programming so that we can take advantage of what works, and 
introduce new evidence-based programs.
    In conclusion, we believe that with policy reforms and 
increased investments on the part of the Northern Triangle 
governments, coupled with our new and innovative programming, 
the U.S. Government is well poised to achieve success.
    Thank you, Chairwoman Granger and the committee, for your 
support and leadership on the U.S. engagement in the Northern 
Triangle and I look forward to your questions.
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    Ms. Granger. Thank you very much. Would you go back to your 
statement to what you said about El Salvador and the violence 
that was happening there, specifically the numbers?
    Ms. Hogan. Right. Last year, El Salvador saw a 70 percent 
increase in homicides nationwide. National police statistics 
that have been provided to USAID indicate that in the 76 
communities where we have active community-level programs for 
crime and violence prevention, we have seen a 66 percent drop 
in homicide in those communities.
    Ms. Granger. Thank you. I just want to make sure that I 
understood that. Of course, we are very concerned about what is 
happening and very hopeful about the plans for the Northern 
Alliance and what is going on there. This is a very active 
subcommittee, and they are very involved in what we are dealing 
with.
    So I don't want to hear from you a year from now. I want us 
to have regular reports. We can do it in a very informal way 
but this subcommittee, like I said, is very anxious to help, 
and can help. And so I would hope that you would take that to 
heart.
    With regard to recent enforcement actions by the Department 
of Homeland Security, how is the administration deciding who is 
subject to removal procedures and what factors are considered? 
How are these funds involved, what are you doing with the 
children who have come across our southern border. In that big 
rush for 2 years what is happening with them, and how you are 
addressing that?
    Ms. Hogan. Do you want to start? And then I will talk about 
reintegration?
    Mr. Palmieri. Sure. We would--the strategy for engagement 
in Central America looks at getting at the underlying 
conditions in the region in the three countries of the Northern 
Triangle, but also to promote greater regional economic 
integration so we can create the economic opportunities that 
will keep people in their home communities.
    And so the program will work in those areas and in those 
communities that are most vulnerable, both to the violence, and 
to the lack of economic opportunity, so that these young people 
can stay at home in their home communities.
    With regard to the enforcement actions at the border, I 
would have to defer to the Department of Homeland Security for 
an answer on that issue.
    Ms. Granger. Yes, I am going to limit my questions, and 
hope that we can have another round of questions. I know those 
on this subcommittee also have hearings on other committees, so 
we can do that, and then we will have more rounds of questions. 
Mrs. Lowey.
    Mrs. Lowey. Well, I want to thank you very much for your 
testimony, and Ms. Hogan, you really answered my questions. And 
I think it is so important that we keep hearing your answers--I 
don't want to question your statistics. I do want to say I wish 
we could hear more success stories, but I constantly ask the 
question: How do we break away from the cyclical phenomenon of 
lack of security, lack of prosperity, lack of rule of law, 
nonsustainable governance? And to what extent have the Northern 
Triangle countries improved their governments, reducing levels 
of corruption, so we give the American people greater 
confidence that additional funds will be put to good use?
    What about police reform? Stabilizing neighborhoods? 
Degrading transnational criminal networks? I mean, we have a 
responsibility to ensure that our assistance promotes more 
efficient and sustainable energy, trade facilitation, 
transport, customs and border integration.
    Let me just stop at that because you mentioned some 
successes. Can you talk about all of the things that we really 
want to do, and give me confidence that some progress is being 
made?
    Ms. Hogan. Certainly, I would be happy to.
    Mrs. Lowey. Start with corruption in government.
    Ms. Hogan. Okay, great. Well, we will start with the fact 
that we saw what happened when civil society was supported to 
demonstrate peacefully in Guatemala which changed the 
administration with, not only the president and vice president, 
but half of the cabinet now sitting in jail and waiting, 
already been indicted and waiting for their trials. The fact 
that the incoming president has already agreed to the extension 
of CICIG, the U.N. agency that is responsible for investigating 
corruption, I think is a sign that there is that commitment 
there to really change things on the ground.
    And in Honduras also, we have seen the government there put 
forward something that would provide increase investigative 
abilities towards corruption charges. So that is a sign of 
change. The fact that they have come up with their own Alliance 
for Prosperity and have invested $2.6 billion in the 
implementation of that plan, is another sign of real 
commitment. And within USAID programming, we have been able to 
help governments establish better oversight of their financial 
management systems.
    For example, in El Salvador, we had a financial management 
program that helped to provide greater transparency on budget 
execution, also to develop an e-Procurement system that gives 
eyes on all of government procurements that people can actually 
see and hold governments accountable for.
    Going forward, we know that it isn't just government taking 
the right steps, but it is also empowering civil society to 
hold their governments accountable, which is why, under the new 
strategy, we will have the resources available to provide the 
kind of support that civil society needs in order to gain that 
kind of traction to hold governments accountable and to be able 
to report on abuses when they see them.
    Mrs. Lowey. I will take your advice and move on. Just let 
me say, I love to hear success stories, and I hope they 
continue.
    Ms. Hogan. We have got many more to share with you.
    Mrs. Lowey. Thank you, Madam Chair.
    Ms. Granger. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman. Just a couple 
of points, first, reiterating what the chairwoman said. It is 
really important that you all let us know, specifically, what 
is working and what isn't, so we can work together to try to 
move in the right direction. I really have two questions right 
now, Madam Chairwoman. One of them is, you all talked, and I 
think rightfully so, about security being such a priority. And 
without that, Ambassador, I think you cited what President 
Uribe was saying that you have to first have security, and then 
you can have a tipping point where you can go on to other 
necessary area such as development, et cetera.
    When the chairwoman was chairing this task force dealing 
with unaccompanied children, she led a group of us to Honduras 
and Guatemala. At the time, Honduras was the murder capital, I 
think, of the world, right? Now, El Salvador has been 
backsliding. It has hit 6,600 murders and it has the highest 
concentration of gang members per capita. El Salvador now is 
pretty much at the same situation where it was during the civil 
wars in the 1980s and 1990s. And so why? What has happened to 
El Salvador--and again, you have talked about some good success 
stories in certain areas, but overall, the numbers are 
alarming. So what is the major cause and what is it that we 
should be doing to try to see how we can reverse that?
    Mr. Brownfield. Congressman, let me take a first crack at 
this and let Paco add to or detract from as he wishes. I speak 
to you as a man who actually spent the years 1981 to 1983 in El 
Salvador, I guess, in the middle of their civil war. First, 
success story, Mrs. Lowey. Honduras' homicide rate is down, 
depending upon whose assessment you use, between 25 and 30 
percent over the last 2 years. And we will not claim full 
credit for that, but I will insist that we get at least some 
acknowledgment and recognition.
    El Salvador has been moving in exactly the opposite 
direction, Congressman. One theory as to why is that several 
years ago, the previous government of El Salvador reached an 
accord with the organized gangs of the big cities of El 
Salvador, specifically San Salvador. It produced short-term 
results and a dramatic drop in violent crime and homicides. The 
truce no longer is in operation. It has surged. Skeptics at 
that time suggested that what the gangs were doing was using a 
period to rearm, reorganize, and recruit. I won't take a 
position on that. I offer that as a possible explanation as to 
why El Salvador and not the others.
    Mr. Palmieri. Sir, I would just add that the Salvadorean 
Government itself has developed this Seguro, Plan Seguro, which 
identifies the 50 most violent communities and the 11 priority 
communities where they are going to be investing resources. And 
we are aligning the assistance that we are receiving to try to 
make an immediate impact on that homicide level in those 11 
priority communities.
    Mr. Diaz-Balart. Madam Chairwoman, just very briefly too, 
in the Appropriations Act, and this is a different issue, we 
establish conditions on aid to Central America, and we also 
require further reporting on economic investment conditions and 
commercial disputes between the United States.
    But I am particularly interested in these provisions about 
these disputes, because I am aware of the number of U.S. 
citizens with claims against, for example, specifically the 
government of Honduras. One of those companies, a cement plant, 
CEMAR in Honduras, which was expropriated by the government of 
Honduras, and they have been seeking remediation for many 
years. And it has been, frankly, met with relentless 
bureaucratic dead ends. So, I really would like to know how the 
Department of State and USAID intend to assist them and other 
U.S. citizens to resolve such disputes, and how you are 
monitoring what is going on, et cetera, because it continues to 
be a serious issue.
    Mr. Palmieri. We agree. We have to be active in protecting 
U.S. American commercial interests in these countries. And we 
are. Under the CAFTA process, there is a dispute resolution 
process that is available to investors. And in Honduras, 
specifically, we also have a bilateral investment treaty that 
they can avail themselves.
    With regard to the specific case that you have raised, the 
United States cannot insert itself directly into the judicial 
process of Honduras. However, we do continue to vigorously 
advocate for those interests of U.S. businesses in Honduras, 
and in the specific case, we have encouraged Mr. Cerna to avail 
himself of the arbitration, and dispute settlement mechanisms 
that are available to him.
    Mr. Diaz-Balart. My time is up. Madam Chairwoman, Thank 
you.
    Ms. Granger. Thank you very much. Ms. Lee.
    Ms. Lee. Thank you, Madam Chair and Ranking Member, for 
this very important hearing. And thank you all for being here. 
I wanted to follow up on a couple of things as it relates to 
the Northern Triangle. Last year, some of us visited Panama. We 
were with the President at the Summits of the Americas. It was 
a bipartisan delegation. We had the opportunity to meet with 
primarily all of the heads of state from Central America, and 
barring none, they thought that normalizing relations with Cuba 
and engagement with Cuba would help our overall efforts in 
Central America. So I wanted to ask you, has it helped, and if 
so, how?
    Secondly, with regard to the United Nations, the U.N. high 
commissioner for refugees, indicated that 82 percent of women 
and girls that the U.S. Government interviewed in 2015 from El 
Salvador, Honduras, Guatemala, and Mexico for expedited removal 
were able to prove that they have a significant possibility of 
gaining asylum and protection under international law as a 
result of the threats they received--they face in their home 
country; specifically, sexual assault.
    We, I guess, appropriated some funding to address sexual 
violence, narcotics, all of the issues that we need to really 
focus on, and one had to do with Guatemala in terms of their 
policy of creating sexual assault units. And so I am wondering, 
do we know much about these sexual assault units? Has there 
been progress addressing sexual assault? And if so, good. How 
is it working? If not, what do we need to do to make sure it is 
dealt with?
    Ms. Hogan. Thank you very much for your question. In fact, 
USAID has invested quite heavily in gender-based violence 
reduction in El Salvador. We have 22 centers for victims of 
gender-based violence where they can receive psychosocial 
support, legal assistance, alternative dispute resolution, and 
even job-skill training. We also have 12 centers for the 
prevention of gender-based violence, because we know that it is 
one of the lead causes of violence in the home in terms of 
youth then going on to perpetrate violence in crime outside of 
the home.
    In Guatemala, I worked there in the early 1990s, and then 
we were just starting to transition from the old system of 
justice to the new oral transparent system of justice. I was 
able to go back and visit just last year and now we have a 24-
hour court that is established with a special center there for 
domestic violence crimes. And in that center, again, 24 hours a 
day, they have investigators, prosecutors, and a judge on site 
in addition to a full medical team and social service 
providers. That model has now been recreated eight times over 
in Guatemala, and so throughout the country, women are now 
getting access to immediate support from government when they 
are victims of crime.
    Ms. Lee. Has Cuba shifted dynamics in terms of our 
relationship with Central America countries?
    Mr. Palmieri. It is clear that the countries of Central 
America viewed the President's decision in a favorable light. 
However, for them, they have focused on their relationship with 
the United States, in particular, the efforts we are making to 
work with them to address these underlying conditions that spur 
undocumented migration from their countries toward our 
southwest border. And in that respect, their priority is a 
close, productive, and strong relationship with the U.S. 
Government, and they do plan to work with us to meet the 
specific conditions that are outlined in the legislation.
    Ms. Lee. Thank you.
    Ms. Granger. Thank you. Mr. Dent.
    Mr. Dent. Thanks, Madam Chair, and good morning. Over the 
past several years, my district and many others around the 
country have seen a dramatic spike in heroin use. In fact, my 
local law enforcement has told me, they told me this at a 
hearing I held, or a briefing I held several months ago, that 
the heroin they seized, most of which is being brought in from 
Mexico and Central America, is of increasingly higher potency 
and being sold at lower and lower prices. In fact, they even 
told me that the heroin they have seen in eastern Pennsylvania 
is the most potent they have seen anywhere in the country.
    What factors can you point to that would explain the 
significant increase in heroin supply and how the State 
Department is responding to those particular factors, and maybe 
Mr. Brownfield?
    Mr. Brownfield. Let me take a bite at that one, 
Congressman. And half of my answer is a matter of domestics, 
domestic politics, domestic law, domestic enforcement, but it 
all makes sense. In this case, supply is following demand. The 
argument, which I believe is a good one, is that over the last 
20 years, we created the demand by overuse of prescription 
opioids, largely pain killers, which developed a dependency or 
an addiction which produced a demand for the opioid, and now 
the heroin market is meeting that demand at a cheaper cost than 
it would be for the users; whether in Pennsylvania, Florida, or 
Texas, they can get a heroin dosage at about one-quarter of the 
cost as it would be from--
    Mr. Dent. That is entirely true where I live.
    Mr. Brownfield. So that is the starting point. Then what I 
assess, and we can have a conversation about this, is that the 
overwhelming majority of the heroin that is now entering the 
United States is coming from Mexico; not from Colombia, and for 
the most part, not from further down in Central America. 
Therefore, the impact is much more at our southwest border, 
much less in Central America itself.
    That said, is there heroin that is being produced in 
Guatemala? Yes, a small percentage of what you see in Mexico, 
but some. And is there heroin still being produced in Colombia? 
Yes, and it must transit the Central America corridor to get 
there. But the percentage is tiny compared to what is coming in 
from Mexico.
    And to conclude, early next month, I hope to join a group 
that will be led by the Director of National Drug Control 
Policy of the United States, Mr. Boticelli, to talk to the 
Mexican Government on next steps and what further we can do to 
address this crisis.
    Mr. Dent. Yes, thank you, because it is obviously a 
national issue. It is everywhere, and all of the deaths in my 
district in recent months did a drug overdose of either heroin 
or synthetic drugs. I mean, that is virtually 100 percent of 
the deaths.
    My second question is this: Many of us on the subcommittee 
are watching, with cautious optimism, the mission to support 
the fight against corruption and impunity in Honduras, and I 
don't know what that acronym is----
    Mr. Brownfield. MACCIH.
    Mr. Dent. MACCIH, okay. It begins its work investigating 
corruption and impunity in the country. So while we hope this 
new organization will be as effective as the CICIG, that has 
been very successful, in Guatemala, there are obviously some 
different challenges in Honduras. What are some of the primary 
obstacles facing MACCIH, and how can the United States help 
them be successful in bringing real reform to Honduras, 
particularly regarding the illegal expropriation of private 
property?
    Mr. Palmieri. Thank you, MACCIH will--first, it is an 
agreement between the Honduran Government and the Organization 
of American States. We and other international partners will 
need to support it with funding, and we look to be able to do 
that. But the critical elements for its success is, it must 
have independence to operate with its partners inside Honduras. 
It must have the ability to signal and highlight cases that are 
not moving forward and should move forward. And the Honduran 
Government has pledged itself to working in a constructive 
manner with MACCIH in that area.
    Mr. Brownfield. I will add just one additional comment, 
Congressman. The head of CICIG, Ivan Velasquez, is in town 
right now. I have had a recent conversation with him. I won't 
be surprised if several others around this table have as well. 
What Velasquez has said is that there are two keys to success 
of a CICIG or MACCIH-type organization. One is independence 
from the government, which is to say, he gets to pick his own 
personnel, make his own decisions in terms of cases to 
investigate; and second, the authority to actually proceed on 
cases. In other words, he does not have--the government does 
not make the ultimate decision. And what he has said to me is, 
examine those two issues as you figure how we will work with 
MACCIH in Honduras in the months and years to come.
    Mr. Dent. Thank you. I see my time has expired.
    Ms. Granger. Thank you. Mr. Ruppersberger.
    Mr. Ruppersberger. I think last time I saw you, you were 
the Ambassador in Venezuela with Chavez who was giving you a 
hard time, or wouldn't talk to you, or what was----
    Mr. Brownfield. The greatest 3 years of my life.
    Mr. Ruppersberger. Well, I see you survived and now you are 
Assistant Secretary, so it was all worth it, I guess.
    First, I want to make a statement. I think that our country 
has really not focused on two areas of South America and 
Central America and the crime and drug situation there. We put 
so such emphasis in other parts of the world, especially the 
Middle East, and it is amazing that you have been able to do 
what you have been able to do. All of the organizations, and 
that includes DEA, also who has very little resources.
    Now, one of the issues I do want to talk about is the issue 
of corruption, police corruption, and the corruption within--in 
politics and extortion. And it is my understanding there is a 
newspaper in, I think it was Honduras, that said that the 
corruption paid by the government to these gangs, organized 
crime, mostly drugs, were close to $300,000 a year sometimes. I 
mean, $300 million a year. I am wondering if that is a true 
statement and do we have the government itself--we know there 
is corruption dealing with that.
    The other part of my question will be the special group, I 
think you referred to, the special anticorruption group that is 
in different parts of, I think, Honduras, I assume Guatemala. 
And if you could just talk about those two issues: the crime, 
the extortion, what we are doing about it, and is it still 
pervasive there? Because in the end, unless the public have 
confidence in our elected officials and our police, especially 
our police, you are going to have that atmosphere if there is 
not a lot of trust.
    Mr. Brownfield. Congressman, here is my 30-second 
assessment. There are two driving factors that are creating a 
vast amount of corruption in Honduras and, quite frankly, 
throughout the Northern Triangle. First are the organized--the 
transnational criminal organizations, largely drug trafficking. 
They are professional criminals and their objectives are 
economic in nature. And the second are the criminal gangs. And 
in fact, the gangs that you see in El Salvador, Honduras, and 
Guatemala are the same gangs that--many of the same gangs that 
you see up here in the United States of America. There is no 
question whatsoever, that those two criminal institutions are 
penetrating and corrupting all three of the governments of the 
Northern Triangle. I am not going to parse words in terms of 
how many dollars are represented in terms of that corruption. I 
acknowledge that in all three of the governments, it is 
substantial at many different levels.
    What they are doing now to address them in both Guatemala, 
and, more recently, in Honduras, is establishing an 
organization, CICIG or MACCIH, to both investigate and bring 
cases against those in government who have been corrupted. They 
are also developing law enforcement organizations to both 
investigate and prosecute those crimes. There are TAG, or anti-
gang units in all three of the countries, and there are, in 
fact, law enforcement units that are vectored on corruption.
    My conclusion would be to suggest to you that it has taken 
the region decades, if not centuries, to get into this 
situation and we have to acknowledge it is going to take some 
time to get out of it.
    Mr. Ruppersberger. My time is almost up, but I do want to 
say that you know how successful the program has been with the 
FARC in Colombia, and you were an Ambassador in Colombia also. 
What did you learn in Colombia that you might be able to use in 
this area?
    Mr. Brownfield. Yeah, if I had 10 hours I could probably 
fill them all. Let me offer three or four of the biggest hits. 
I come from west Texas, Madam Chairwoman. We have very few 
people out there so we talk a great deal. First, you have to 
concentrate on your law enforcement organization. In Colombia, 
that was the CNP. And literally, during a 10-year period, they 
expelled thousands of officers for corruption. There has to be 
an internal mechanism that purifies your own institutions.
    Second, you have to have programs that are in it for the 
long term. You cannot hold them to a standard of eliminating 
corruption in 3 months, 6 months, or even 3 years, or 6 years. 
You have to assume that it is going to take time.
    Third, you have to have consensus within the government and 
that means all three branches of government, legislative, 
executive, and judicial, that in fact, you will spend the 
resources and the time to accomplish it. Those are three that 
would come right off the top in terms of how to make long-term 
progress against corruption and impunity.
    Mr. Ruppersberger. And do you need resources and money?
    Mr. Brownfield. Without a doubt.
    Mr. Palmieri. If I could just add on that point, the 
Honduran Government itself, modeled after the Colombia 
experience, has put in place a security tax so that they can 
raise the resources that they need to undertake some of these 
reforms. And as part of the Alliance for Prosperity, as Ms. 
Hogan mentioned previously, there are the three governments 
investing $2.6 billion of their own money in 2016 to match the 
$750 million you so generously appropriated in the 2016 budget.
    Ms. Granger. Thank you. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chair. I believe it was 
you, Ms. Hogan, who testified that there was a turning point. 
Have we seen a turning point--in Colombia, governance in the 
Northern Triangle, in those three countries, whereby we can 
anticipate--have we seen a turning point whereby we can 
anticipate a stability of governance that will manifest itself 
in measures of societal wellbeing, decrease in violence, 
economic opportunity, decrease in migration?
    Ms. Hogan. Thank you for your question. I am an optimist, I 
think you have to be to work in this field of development. But 
I truly believe that this is a historic moment in Central 
America, whereby these governments are standing up and taking 
responsibility for their problems, investing their own 
resources, and trying to address these problems, and looking to 
the United States, and other donors for strategic partnerships.
    Mr. Fortenberry. Okay. How does that happen? Is it through 
an awakened leadership? Is it fatigued with the violence? Is it 
our input? Is it other bilateral partners' input? Tell me how--
why this trajectory is coming about right now.
    Ms. Hogan. I think that--well, I would say yes to all----
    Mr. Fortenberry. Do you think the trajectory is real?
    Ms. Hogan. I would say yes to all of those points. I think 
the tipping point is what we saw happen in Guatemala, where 
through these this independent investigative unit called CICIG, 
they were able to bring cases to the public's attention that 
were so egregious that civil society stood up and said we will 
not tolerate this any longer, and that coupled with hard 
evidence by CICIG, and additionally, an empowered public 
prosecutor's office, as well a special high-impact court that 
oversees these trials, again, which were the beneficiaries of 
U.S. Government assistance, I think that was the tipping point. 
And I think Honduras sat next door and said, we see this wave 
is coming towards us. We want to get ahead of it. And then 
they, in fact, established their own similar investigative 
process.
    Mr. Fortenberry. What are your projections in regards to 
how we are going to see real measurements of outcome in this 
regard? It is murky right now. The violence is still very high. 
There is migration waves still coming even though they are 
lesser, and the economic problems are not clearly resolved. So 
do you have a timeline if this trajectory continues?
    Ms. Hogan. It is hard to give a timeline. As my colleague 
said, it is not going to happen overnight. But one of the 
things that we have seen is that when we have all hands on deck 
in a community that is very violent, and we help these 
communities take back their communities where they, frankly, 
haven't had any safe space in which to operate, it is street by 
street, block by block, and community by community. It is very 
labor intensive. But because we have been able to show success 
in the communities where we are working in terms of the 
reduction of violence, these governments have said, we see what 
is working. We want to invest our resources in scaling that up. 
And that is what Plan Seguro is in El Salvador. It is taking 
that model and bringing it to the 10 most violent 
municipalities to scale up our interventions.
    Mr. Fortenberry. Let me tell a quick story. I had the 
chance to visit in Guatemala, as well as Honduras rather 
recently. There is a little town called Dos Caminos, two 
pathways, where there is a project underwritten by the 
International Agricultural Corporation, Cargill, which provided 
the seed capital for the formation of a bakery that is run by 
women. The organization CARE, along with, I believe it is some 
shepherding through the Feed the Future Program, provided the 
ongoing technical assistance. It is an amazing transformation 
to see this bakery flourishing. The women who are involved, 
excited.
    Just years before they would have had a subsistence, not in 
starvation, but in what I call a benign poverty. One of the 
women had lost her husband 3 weeks earlier to the violence, but 
all committed to this vision of empowerment through this small 
little economic project. It was very encouraging to see, and 
obviously, this is the type of thing we want to scale that 
involves the full partnership of the private sector which 
ultimately has to be the longer-term solution here. But my time 
is nearing to be completed, but are we going to have another 
round, Madam Chair.
    Ms. Granger. Mr. Stewart.
    Mr. Stewart. Thank you, Madam Chair, and to the witnesses, 
thank you. It is an important issue. I would like to come to 
something that my friend, Mr. Diaz-Balart mentioned, and I want 
to go through this quickly. But it is worth, I think, 
emphasizing and using this as an illustration of a concern that 
many of us have, and that is this individual, Mr. Cerna, who 
some of you mentioned. The challenges down there are 
meaningful. We get that. There is drugs, there is violence, 
there is kidnapping, there is gangs. And how anyone would have 
economic opportunity in that environment is remarkable at all.
    But the only hope for the individuals there, for the 
families, is if there is some economic activity. They have to 
have hope of a job and some type of future. This is an 
environment that is very violent and very difficult to do, but 
it is much more difficult if the Federal Government is making 
it worse instead of better in some circumstances. And in some 
circumstances, they are.
    And I think that this individual is an example of that. You 
will not have foreign investment if the investors don't feel 
like there is respect for the rule of law. If they don't 
believe that they can go in there and protect their investment, 
and in this case, it was meaningful investment as is in many 
circumstances, tens of millions of dollars. And the Federal 
Government there essentially acted as, well, they are using 
their power to expropriate this business from this individual 
as they have in other circumstances. Essentially using, you 
know, their power to tax, and their power to threaten 
prosecution.
    I wish any of you, if you would, could you assure us that 
you are doing everything you can? You can't sway the gangs down 
there, but you can have influence over the Federal officials. 
And I just need some assurance that you are doing everything in 
your power to create that rule of law in an environment that 
would allow people to go down there and to try to make 
investments that will help the people down there.
    Mr. Palmieri. Yes, Mr. Stewart. The top priority, one of 
the top priorities for every U.S. Embassy is to assist the 
American citizens and to protect American investment overseas. 
Our embassy has been engaged in Mr. Cerna's case since 2002. It 
has a long judicial process that it has been subject to.
    Mr. Stewart. That is, indeed, very long, because that is 
going on 15 years now, 14, 15 years.
    Mr. Palmieri. Yes, it is. There are arbitration proceedings 
that are available for the settlement of that dispute, which 
the Honduran Government has offered to Mr. Cerna in the past. 
But more importantly, in the specific case, as part of the 
conditions in the legislation, we are working with the 
government to ensure that they are working toward resolving 
commercial business disputes and putting in place new 
strengthened rule of law procedures to protect foreign 
investment.
    Mr. Stewart. Well, and they just have to. I mean, this 
example, 14, 15 years now into it, and it is arbitration which 
is going to result in not a fair deal, in my mind. I mean, no 
one would look at that and say, well, that is good. I will go 
down there and investment $30 million in a business, and the 
government may take that from me. And 15 years later I may be 
in arbitration. I mean, no one is going to look at that and say 
that is a good place to go down and be. And once again, I don't 
mean to lecture because I know you know this, if there is no 
economic viability, there is no hope for this region. They have 
to feel like there is hope for their kids to get a job where 
they can sustain a family and you can't do that without capital 
investments.
    Mr. Palmieri. And that is exactly right. They have to 
create the conditions for foreign investment.
    Mr. Stewart. That is right, and that is true anywhere in 
the world. And if I could very quickly--in the few seconds I 
have. There is a bit of a talk about a kind of Central American 
spring, if you will, the protests in some of these countries 
where people are actually beginning to push back. Very quickly, 
are you optimistic? Is there something there we can look at and 
say this is good, you know, this might help?
    Mr. Palmieri. I think what we saw in Guatemala was 
historic. It was youth, students, private sector, civil society 
coming together, using social media platform, and using this 
external entity to really demand accountability. And it was 
successful in Guatemala. I think it is not just a wave in 
Central America. I think it is throughout the Americas that we 
are seeing this. And I do think it will continue to yield 
results. And in Honduras, the agreement with the OAS to 
establish MACCIH reflects the need for some external help to 
get and move forward on these corruption and transparency 
issues.
    Mr. Stewart. Well, and let's hope so, and let's facilitate 
that if we can, and encourage, and support those people because 
they are in a very difficult circumstance, but showing 
remarkable courage, in my opinion, so thank you.
    Ms. Granger. I will start a second round and say I 
appreciate all the members of the subcommittee for staying. I 
know you are very busy, and we are using the time very wisely.
    I want to ask you about the $750 million that Congress 
funded for fiscal year 2016 for this three-country alliance 
that has come together. I am very concerned because I worked on 
Plan Colombia, and it took years. Everyone knows it would take 
years there was that sort of commitment. Seven hundred fifty 
million dollars in 1 year, how is it going to be used? Where 
does it go? We said from the very beginning, this will be a 
multiyear effort and I am concerned about that enormous amount 
of money in 1 year, and how can it be used effectively? Thank 
you.
    Ms. Hogan. I would like to begin to answer that question 
for you, Madam Chairwoman. We did not wait for the 
appropriation to get started in planning on how we would use 
those resources. In fact, as early as the fall of 2014, after 
we saw the spike and we knew that the administration was going 
to ask for increased resources for Central America, USAID got 
started. And so we have been designing programs over the last 
year to 18 months in anticipation of these resources. And in 
fact, we have a very aggressive procurement schedule this year. 
We expect to obligate up to $490 million in new activities 
across the three pillars of the strategy before the end of this 
fiscal year. And our goal is to live within the pipeline 
standards of our agency so that we are good stewards of those 
resources. We spend them wisely, but we spend them quickly 
because the need is so great, and we think we have got the 
right procurement instruments in which to put those resources.
    Ms. Granger. Thank you.
    Mr. Brownfield. And if I can add, Madam Chairwoman, on the 
INCLE side of the House, and you will recall, of that $750 
million, we come out to about $1 for every 2, 2\1/2\ that went 
to the USAID accounts. So what we are looking at this year is 
somewhere in the vicinity of $170 million, which was our 2015 
appropriation now coming online for us. I would say the same 
thing as Beth. We are starting on programs that are already 
there. We are not starting at point zero. We have been involved 
in CARSI now 6, going on 7 years. We want to reinforce some of 
the justice sector, police reform, and border security programs 
that we believe are delivering value and have been for more 
than 5 years.
    We also want to do something new, which I can use 15 
seconds to say is the place-based strategy, where in an 
unprecedented historical manner, USAID and INL are working 
together, community by community, barrio by barrio, in terms of 
developing an objectives-driven comprehensive approach in the 
hardest, toughest areas in the region. And I would hope, Madam 
Chairwoman, to be able to deliver you clear evidence of 
results, positive, I hope; if negative, then we will figure 
what we need to change.
    Ms. Granger. Thank you very much. I am going to change to 
Costa Rica now. I just got back from Costa Rica a very short 
time ago. I looked at the security challenges of that country 
because of the number of Cubans that were going through Costa 
Rica, primarily from Cuba to Ecuador. The fiscal year 2016 
appropriations bill provided for increased funding for Central 
America, the regional security initiative. Some of those funds 
should be used for Costa Rica.
    Assistant Secretary Brownfield, how is the State Department 
planning on supporting Costa Rica, and specifically, what can 
be done to help their coast guard, which is very limited, to 
help them with drug interdiction at sea and the security forces 
to increase border patrols? They said a light has been shined 
on Costa Rica due to Cuban migration through that country, but 
they were much more concerned about human trafficking and drug 
trafficking that is going through Costa Rica, and how their 
limited Coast Guard, and our Coast Guard can address those 
challenges.
    Mr. Brownfield. Madam Chairwoman, your assessment and our 
assessment are not at all surprising. Exactly the same. First, 
our approach in terms of the total Central America INCLE budget 
for the last 5 years has been about two-thirds, 60 to 65 
percent goes to the Northern Triangle three; the remaining one-
third to two-fifths goes to the remainder of Central America, 
frankly, three of the four remainders in Central America. We 
have almost no program at all in Nicaragua.
    That would remain the same, but we have surged, as you well 
know, since you approved it, the amount--the total amount of 
funding available for Central America. I am therefore, hopeful, 
in fact, I am not hopeful, I am certain that we are going to 
increase by nearly 100 percent the amount of program INCLE 
funding available for Costa Rica. What do we propose to do with 
it? First, we want to reinforce some programs that are working. 
COMPSTAT, which is the computer-driven statistics that allow 
the Costa Rican police to put their personnel where they are 
most needed is a winner.
    Supporting, training, and developing border guard 
capability, which, in turn, controls, to some extent, the 
movement of other populations across their southern and 
northern borders has been a winner. The CAPRI police training 
program which is headquartered in Panama, but in fact, provides 
regional training to, among others, the Costa Rican national 
police is something we want to support. Their anti-gang program 
called GREAT is worth some effort. Maritime is the area that is 
going to be new in this coming year. I have had several 
conversations with the coast guard. The coast guard is prepared 
to put assets there. We are prepared to support them in terms 
of maintenance support, and building docks to help them control 
and use those assets. I hope to have a good story, which I will 
tell you as often as you are patient enough to hear in the 
course of this year on Costa Rica.
    Ms. Granger. I am not particularly patient, but I will 
listen. I am a former teacher, so I give you an A on that 
answer. Mrs. Lowey.
    Mrs. Lowey. I am not a former teacher, but as you can see, 
and our chairwoman has said this many times, we have on this 
committee people who are really committed to the work you are 
doing, and I couldn't help but think, Mr. Fortenberry, when you 
talked about this enterprise that was empowering women, I 
remember seeing this in many places in the world, and I still 
get excited after 25 years of seeing some of the success 
stories. And I must say, Madam Chair, when we have the caliber 
of people such as this, it gives me hope in-between the times 
that I am very depressed that we can't move more quickly in 
solving these problems. But I do want to thank you for your 
years of service, and I would hope that we can see more success 
stories such as that.
    And it is interesting, because I can remember them. I 
remember one I saw in Arusha, Tanzania, Land of Lakes, a 
wonderful project where they were empowering women and how the 
women stand taller, feel empowered, take charge, work and raise 
their families. However, I want to ask a question that is not 
related to all of these good comments we are telling you.
    If you could explain the administration's decision, on the 
one hand, to expand the number of Central American refugees 
permitted in the country recognizing the dire conditions in the 
Northern Triangle, while at the same time, increasing 
deportations of families. You may tell me that is someone 
else's job, but I would like to hear your response to it, and 
if you have any input.
    Mr. Palmieri. Yeah, excuse me. The administration's effort 
in Central America is to ensure that there is safe, legal, and 
orderly migration from the region. Undocumented migration 
through the region, through Mexico, leads people to being 
exploited, potentially trafficked, assaulted in many different 
ways. The administration has set up a Central America minors 
program in the region that allows minors to apply for refugee 
resettlement to the United States if they have a legal 
relationship with a person who can apply for them, sponsor them 
in the United States.
    With regard to the removals, the Department of Homeland 
Security has stated that those removal orders are based on 
final orders of removal after individuals have exhausted all of 
their claims for credible, fair, and refugee status.
    Mrs. Lowey. Well, I just want to say, it is causing 
tremendous turbulence in our communities, and that is probably 
not your direct role. I just thought I would get it out there. 
So thank you again for your service. We all look forward to 
hearing more success stories, understanding how challenging, 
tremendously challenging this is. Thank you.
    Ms. Granger. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you. Thank you very much, Madam 
Chairwoman. As you all, I am sure, know and have seen, this 
subcommittee chaired by Mrs. Granger is very, very, very good 
at asking for specifics. And frankly, less concerned about 
rhetoric and speeches. Let me just throw out one specific 
first, because the question came up about Cuba. Since the 
establishment of the relations there has been about almost a 90 
percent increase in Cubans fleeing the island and coming to the 
United States, based on the increased repression. And it has 
been particularly difficult on Costa Rica. I want to thank you, 
Madam Chairwoman, for going there, and for meeting and seeing 
that firsthand. Those are some facts which obviously are not in 
dispute.
    So, Ambassador Brownfield, you mentioned that you think 
about 100 percent increase in what you can--of INCLE assistance 
to Costa Rica. I think it would be important if you keep us 
informed as to specifically how you are doing, what you are 
doing, and how whatever it is what you are doing is working, 
because Costa Rica has this additional challenge of not having 
a national military, per se, though they obviously have a 
national police. So if you could just keep us informed as much 
as you can on that, I think that would be helpful.
    Mr. Brownfield. Will do. I make that commitment, 
Congressman. And you are correct in your assessment. Costa Rica 
has always been perceived in Central America as the exception 
to the rule, kind of the Switzerland located in a difficult 
neighborhood. And the truth of the matter is, they are now 
encountering many of the same concerns, problem, and threats 
that the rest of the region is.
    Mr. Diaz-Balart. Secretary Palmieri, going back to the 
issue of the CEMAR issue in Honduras. As Mr. Stewart mentioned 
in response to you talking about, you know, the Embassy has 
been involved for 15 years. That is a pretty good example of 
something that hasn't worked. In other words, if, for 15 years, 
the U.S. Embassy has been trying to help and it hasn't worked, 
we have got a problem. So I would tell you, and again, going to 
how this subcommittee works, let me tell you what I expect, and 
I think what most of us expect.
    Right now, this subcommittee has put forward almost $1 
billion. We expect the U.S. Government to exert leverage when 
it is time to stand up for the interests of the United States 
and also for property rights of American citizens. So I would 
tell you, with all due respect, that the issue of, you know, 
the Embassy forwarding, referring these individuals to a 
process, this has been going on for 15 years. So what I would 
ask specifically from you, sir, is I think all of us would ask, 
and you seem to think there is great interest, we are talking 
about property rights issues here. And again, if you don't 
solve that, you can kiss all of the $750 million good-bye. So 
if you could please get back to us, not on, you know, 
bureaucratic answers about, well, we have referred them to--no, 
no, what specifically, how can we exert--now that we should 
have additional leverage to make sure that our interests and 
that property rights' interests are actually followed?
    So what I would respectfully ask of you is, tell you that, 
answering that the same stuff that we have been doing for 15 
years, is just not acceptable. And so how are you going to use 
that leverage? I don't want an answer from you right now, but I 
expect an answer, a specific answer as to how we are going to 
exert leverage, and, particularly, additional leverage to 
protect the interests of Americans and property rights, et 
cetera, if you would.
    Mr. Palmieri. I am very happy to do so.
    Mr. Diaz-Balart. Thank you. Thank you, Madam Chairwoman.
    Ms. Granger. Thank you. Ms. Lee.
    Ms. Lee. Thank you very much. Let me just comment with 
regard to Cuba. I think we have seen, and my colleague and I 
disagree. I think we have seen over 50 years of a non-
engagement policy with Cuba. That hasn't changed one thing. So 
it is time to at least have normal relations and dialogue in 
the embargo. Perhaps through normal diplomatic relations, some 
of my colleagues' goals could be accomplished.
    Let me just say to Ambassador Brownfield, I, too, come from 
the southwest, El Paso, Texas.
    Mr. Brownfield. As did my mother.
    Ms. Lee. Born and raised there; my mother born and raised 
there; my grandfather, first African American letter carriers, 
spoke fluent Spanish. Border town of Juarez, and we know what 
has been happening in Juarez for many, many years now. I don't 
know if you would consider the decrease in murders and 
kidnappings a success story, or a partial success story, but 
could you kind of tell us how you see what is taking place in 
Juarez?
    Second, and as it relates to El Paso, because I know El 
Paso was one of the safest cities in the country in the United 
States, yet Juarez was one of the most violent, and so it was a 
very interesting period where those, the most violent and the 
safest city were side by side.
    Third, just with regard to the drug crimes and the drug 
trafficking, unfortunately, the African American community has 
been dealing with drug issues, and not the lack of 
rehabilitation and drug treatment services for many, many, many 
decades. You remember Iran Contra? I remember mass 
incarceration, and so it is unfortunate now that other 
communities are dealing with the drug epidemic. But I am glad 
to see a shift finally from locking people up, you know, 
because they use drugs, or deal drugs, to finding some sort of 
rehabilitation alternatives, because we don't want any 
community to experience what the black community has 
experienced, which has wreaked havoc in our lives. And we know 
where it started. And so the drug interdiction and dealing with 
these drug gangs in Central America is extremely important, and 
so I would like to just kind of know how you see now versus 20, 
30 years ago, your efforts to try to stop this drug trade?
    Mr. Brownfield. Let me offer a couple of comments on both 
of your points, Congresswoman. First, Juarez, I am delighted to 
talk about Juarez because in a sense, it represents an example 
of what USAID and INL, what Beth Hogan and I are trying to 
accomplish with what we call the place-based strategy in 
Central America.
    Five or 6 years ago, I mean, I will be quite clear with 
you. There was a period of time where Juarez had a homicide 
rate of about 180 per 100,000, and 200 yards across the river, 
El Paso had a homicide rate that was under four. So a distance 
of maybe 200 yards, one was suffering 180 per 100,000, and the 
other something like 3.7 or something along those lines.
    Now, Juarez has become now, I mean, I won't call it the 
safest city in the world, but I believe they have brought their 
homicide rate down to somewhere in the 30s, and that is an 
astonishing accomplishment over 5 years. How have they done it? 
They did it with a version of what Beth and I would call the 
place-based strategy. Juarez city leaders and the Federal 
Government, in essence, did a grid of the map of Juarez, and in 
those troubled areas where the most homicides were occurring, 
they concentrated resources; not just police, although a lot of 
them were concentrated there, but also city and social 
services, employment generation, education, community centers. 
And in 5 years, Juarez has converted, I mean, it has literally 
been a complete turnaround. We would like to see that happening 
in San Salvador, in Guatemala City, in Tegucigalpa, and other 
cities in Central America as well.
    Drugs, writ large, you know as well as I do, particularly 
coming from the El Paso area, it is a complicated issue. It is 
a supply issue and a demand issue. It is where the drugs are 
produced, which tends to be south of the border, and where they 
are consumed, which is north of the border. And then there is a 
variation: bad news on heroin, it is surging. Cocaine, on the 
other hand, has dropped more than 50 percent in the United 
States of America. Is there a connection? Yes, there probably 
is. You are correct that in April of this year, all of the 
governments of the world will meet in New York for a special 
session of the U.N. General Assembly, where we will address 
where the world wants to go on drug policy for the next 20 
years. And I, for one, am looking forward to a good 
conversation talking about realistic, pragmatic, logical steps 
that we could take that actually would bridge the gap between 
those who say legalize everything, and the other extreme who 
say prohibit everything.
    Ms. Lee. Thank you very much, Madam Chair. I just want to 
say, it is about time because we have lost in the black 
community a whole generation, maybe two generations of young 
African Americans as it relates to the lack of involvement and 
concern about the drug trafficking trade until, you know, 
unfortunately, now too many other people are being victimized 
and hit by it. So I am glad we are finally on it. Thank you.
    Ms. Granger. Thank you. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chair. I want to share a 
story with you which will become a quick admonishment, and then 
I want to turn to a question about gangs. Last year, we had a 
very lovely dinner hosted by the Ambassadors from Guatemala, 
Honduras, and El Salvador. And it was just a regularized 
attempt to create more ongoing relations between us and the 
diplomatic community. However, the dinner happened to be timed 
with the announcement from the administration that these 
countries were going to get $1 billion. So we walk into a very 
awkward situation of being thanked for something that we had 
not done, had not heard of, had not been briefed on. The point 
being, a lot of places in the world, when the President says 
something, when the Congress says something, that means it is. 
And so we were put in a very awkward position of gently working 
ourselves through that and saying, wait, wait, wait, time out. 
This has to be approved by Congress, and we want to know more 
details of the plan.
    So the admonishment is, expectations can get created by 
things that are said that may not translate into reality 
because we have the job of actually coming up with the law that 
would mandate or dictate what you all do. So I put that on the 
table for your consideration.
    But it was fine. It was a lovely evening, and I think we 
got through this.
    Second, I want to know, give me your insights into gang 
culture. We throw the word ``gangs'' around. The mobility of 
this culture, where it primarily emanates from, clearly, it is 
attached to drug trades, ungoverned space, corruption, habits 
of being, residual effects of past structures. I would like 
more insights into this.
    Ms. Hogan. Thank you very much for your question. I would 
like to start to answer that by saying that one of the things 
that we have benefited from while addressing gang culture is 
the work in the United States, particularly in Los Angeles and 
Chicago, where they have had great success in reducing gang 
violence. And one of the things that we have adapted from Los 
Angeles, is something that is called the YSET model and it is a 
series of indicators that helps one identify who are those 
children that are most at risk for joining gangs. And those are 
the kids that we are trying to focus on. We have a statistic 
that says that roughly 0.5 percent of people are responsible 
for 75 percent of crime.
    Mr. Fortenberry. Yes--I am glad you brought that up, 
because in a sense, this is a narrow band of persons who then 
seize the conditions that are ripe for manipulating others.
    Ms. Hogan. Right.
    Mr. Fortenberry. And getting to the heart of that I think, 
is the question for solving this. I'm sorry.
    Ms. Hogan. And so a couple of those indicators are things 
like, who are the kids who may have a family member in a gang? 
Who are the kids that are coming from broken homes? Who are the 
kids that have no parents at home after school and therefore 
are susceptible?
    Mr. Fortenberry. But those are U.S. measures, and these 
places----
    Ms. Hogan. We are using those in Central America as well, 
and those are the kids that we are going after and why we have 
these community outreach centers is to give a safe place for 
these kids to go after school where they can get vocational 
training, they can have recreational training, they can get 
tutoring, and they have mentors watching over them and giving 
them adult supervision that they don't otherwise have. And so 
we are seeing a reduction in the number of kids who go into 
gangs as well as people coming out of gangs, because it is not 
a happy place to be. I mean, this is a very dangerous 
proposition for them.
    And so we have had example after example of kids who are 
maybe low-level members, maybe watch-outs, you know, lookouts, 
and they have turned around to come to our centers because they 
don't want to fall in the footsteps of their brother, cousin, 
uncle, who have been killed as a result of gang violence.
    And so I think, you know, we are using a model that has 
been effective in the United States and it is proving effective 
in Central America as well.
    Mr. Fortenberry. Thank you.
    Ms. Granger. I am hearing what you are saying. I also had 
concern because we were going in being congratulated for 
something we had not heard of. And before that happened, in 
meeting with the presidents of the three countries after we had 
the situation with the unaccompanied children, we said, we want 
to help you. The last thing we want is to take your children I 
said I asked the question of each president in the country, do 
you want your children back? Because if they had not said yes, 
adamantly, then our plan would have been different. But we said 
then, we are going to help you conquer the problems that would 
cause a parent to say, ``I am going to give you my child to 
take to another country. And all I am doing is paying you.''
    It was a horrible thing as a parent to even consider. But 
when meeting with the presidents of those three countries. What 
concerned me is how unrealistic they were about what they 
wanted to do. Because they started with, we are going to have 
these Fortune 500 companies come to our country and that will 
put people to work. I said, not if they can't walk down the 
streets safely.
    So I was very pleased to hear that you had already started, 
done so much there. Also, we have to work with the governments 
of those countries to say, we are going to help but there is 
going to have to be a lot of work on your end, patience, and 
realistic expectations.
    Mr. Palmieri. And if I could just add, I think that 
intervention, the dinner, your engagement when the presidents 
came up in July of 2014, I think that helped catalyze their 
thinking that they needed a more comprehensive approach, and it 
led through the efforts of the Inter-American Development Bank 
to this creation of the Alliance for Prosperity. And the 
Alliance for Prosperity in Central America, really is an 
historic-opportunity moment for the United States because it is 
the first time, really, that Guatemalans and Salvadorans, and 
Hondurans agreed around the same set of circumstances and what 
the possible solutions could be.
    And the U.S., Congress' support in the fiscal year 2016 
bill to provide $750 million just doesn't make the United 
States a partner to this effort. It sends a signal to other 
partners in the hemisphere and around the world that this plan 
has a chance. And we will work with you, the Congress, on those 
conditions and help those countries live up to the commitments 
they have made in the Alliance for Prosperity.
    Ms. Granger. Thank you. Mr. Ruppersberger, you may have the 
last question.
    Mr. Ruppersberger. Thank you. I want to talk about Zika, 
and the situation is becoming serious throughout the whole 
hemisphere. In your roles, all three of your roles, we, as a 
Congress, have to decide how we are going to focus, how we are 
going to fund it. There is already a debate whether we are 
spending too much money or not.
    In your role in the region we are talking about today, it 
seems to me that you have to be involved in a lot of health 
issues. But this is something that is growing. And yet, you 
have situations where I am sure your health workers were being 
threatened and intimidated by gangs, so if you could talk about 
generally how your role will be in dealing with the issue of 
Zika, what you need from us, and what you would like to see 
from us if you could get that?
    Mr. Palmieri. Yes, I will quickly give you the overview of 
how the Department is approaching it. First, there is a whole 
of government, U.S. Government approach to the Zika challenge 
writ large. In the region, the State Department is leading the 
diplomatic engagement, and we are working with organizations 
like the World Health Organization, the Pan American Health 
Organization, and Health and Human Services, and the Center for 
Disease Control to make sure that we are getting information 
out to American citizens in the region, taking care of our 
employees at embassies who could be vulnerable to the virus, 
and working closely with the regional governments.
    And then finally, we are also working to ensure that there 
is the appropriate scientific exchange as we work to address 
this, and I will turn to my AID colleague to talk about the 
programmatic elements.
    Ms. Hogan. Thank you very much for your question, and of 
course, it is of very grave concern for us as it impacts Latin 
America so directly. We have been working with our counterparts 
in the region, in the Ministries of Health, and elsewhere to 
help identify what their needs are concurrently with what we 
might be able to provide. And certainly, we can provide them 
with existing resources, help in developing public education 
campaigns on how to avoid contracting the disease, and 
protective measures that people can take, particularly pregnant 
women can take, in order to lessen their vulnerability to this.
    We have only had one request for assistance thus far from 
the region. It came from Jamaica to help them improve their 
diagnostic testing, and that has been responded to through our 
support through the Pan American Health Organization. With 
additional resources, there is much more that needs to be done 
that we are poised to do. Simulating private sector research 
and development of better diagnostic tools, as well as a 
vaccine; supporting the training of health workers in the 
community to help affected countries with information about 
best practices and supporting children with microcephaly; to 
support pregnant women's health, in particular, including 
helping them access repellent to protect them against 
mosquitos. As I mentioned, establishing education campaigns 
that will empower communities to take control of their 
actions--for example, limiting the amount of collected water 
that is a breeding ground for mosquitos; and then potentially 
issuing a grant challenge with something that we do as a call 
to the world basically to provide innovative ideas for new ways 
in which they can, and improved ways in which we can develop 
diagnostics, control personal protection, et cetera.
    It was through a similar--through a grant challenge that we 
were able to develop the new Ebola suit that was something that 
was an innovation in the treatment for that disease, so this 
has that same potential as well going forward.
    Mr. Ruppersberger. Thank you.
    Ms. Hogan. Thank you.
    Ms. Granger. Following that up, let me ask a question, and 
it is to Mr. Palmieri. Does the administration plan to use 
unobligated balances from Ebola to address Zika?
    Mr. Palmieri. I know that there is a presentation that has 
been made on the administration's response to this Zika virus 
and the budget request. If I could get you the specific 
response to that question, I will have that for you by the end 
of the day.
    Ms. Granger. Yes, that would be great. I thank the 
witnesses for appearing before the subcommittee today. Members 
may submit any additional questions for the record. The 
Subcommittee on State, Foreign Operations and Related Programs 
stands adjourned.


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                                      Wednesday, February 24, 2016.

               DEPARTMENT OF STATE AND FOREIGN ASSISTANCE

                                WITNESS

HON. JOHN F. KERRY, SECRETARY, DEPARTMENT OF STATE

                Opening Statement of Chairwoman Granger

    Ms. Granger. The Committee on State, Foreign Operations, 
and Related Programs will come to order.
    Mr. Secretary, I want to welcome you back to the 
subcommittee. We are looking forward to your statement.
    You recently noted that while funding for international 
programs represents just 1 percent of the total Federal budget, 
it may well define the majority of the history written about 
our era. Members of this subcommittee certainly understand the 
importance of these programs.
    The United States continues to show leadership in areas 
such as reducing poverty, fighting the AIDS virus, and stopping 
preventable deaths of mothers and children. However, there are 
countless security challenges around the world that grab the 
headlines every day.
    At the top of the list is the crisis in Syria and the 
surrounding region, which is being fueled by the Assad regime, 
ISIL, and other terrorist groups. This situation has grown more 
complicated due to Russia's increased involvement, and we want 
to hear your thoughts about the situation on the ground.
    We also are concerned that our allies and partners in the 
fight against terrorism, such as Egypt, Jordan, and the Kurds 
in Iraq, are not receiving the assistance they need. While 
there has been some improvement since I raised this issue with 
you last year, I want to reiterate that there is no excuse for 
bureaucratic delays.
    It is critical that our policies promote our national 
security interest and not undermine them. I question why the 
administration plans to phase out the cashflow financing 
arrangement from military sales in Egypt, which is one of the 
most reliable partners of ours in the Middle East.
    We must demonstrate our steadfast support to help Israel 
address the threats posed by Iran and its proxies. Now that a 
nuclear agreement is in place, we are all closely watching 
Iran's actions.
    You have said that some of the funds freed up from the 
sanctions relief could end up in the hands of terrorists. The 
threat to Israel is very serious. As you negotiate another 
long-term memorandum of understanding, it must be made clear 
that U.S. support for Israel's security is unequivocal.
    Another troubling development is the increased violence in 
Israel and the Palestinian territories over the last several 
months. We want to hear your thoughts about the prospects for 
getting the parties back to the negotiating table. We also want 
to hear what the United States can do to help stop harmful 
rhetoric and incitement.
    I want to turn next to Russia's aggressive actions against 
its neighbors. Many of us don't understand why Ukraine has not 
received lethal military aid or why the State Department budget 
proposes to reduce assistance to Ukraine by 55 percent from 
last year's level. We also see China asserting itself against 
the United States and our friends and allies in the Asia-
Pacific region. We want to hear how this budget supports 
countries willing to stand up to China when their territory is 
threatened.
    We also watch with great concern as North Korea continues 
to defy international sanctions. We want to hear your thoughts 
on what more can be done to stop this rogue nation from its 
nuclear pursuits.
    In Afghanistan, a resurgent Taliban and a growing number of 
foreign fighters continue to threaten the country's security. 
We question how the $1.2 billion of foreign assistance 
requested can be effectively programmed in this environment.
    In the Americas, we see drug and gang violence, human 
trafficking, and lack of economic opportunity continuing to 
drive migration to the United States. The subcommittee held a 
hearing 2 weeks ago on assistance to Central America where we 
looked at these issues. We must see results before new funds 
can be considered.
    We are monitoring the new public health threat from the 
Zika virus spreading in this hemisphere and received a 
supplemental request on Monday. This committee has provided 
significant funding and the flexibility to address global 
health threats, and we want to hear how the administration will 
immediately address the Zika outbreak.
    We have additional questions about the administration's 
budget request for the State Department and foreign assistance 
programs. The total funding requested is roughly last year's 
level, but you propose to cut programs that have bipartisan 
support such as security assistance and humanitarian programs. 
At the same time, we see an increase is requested for 
administration priorities such as funding to combat climate 
change.
    One area that we all agree is a priority is preserving the 
safety and security of our Nation's diplomats and development 
officers. This subcommittee must be sure that funds provided 
will keep our people safe.
    In closing, I want to thank you and the men and women of 
the State Department and USAID for your work in promoting 
American interests abroad. We may not always agree on the 
policy or the means to achieve these goals, but the members of 
this subcommittee understand the need to engage with all the 
tools we have available.
    It is now my turn to turn to my ranking member and friend, 
Mrs. Lowey, for her opening remarks.
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                     Opening Statment of Mrs. Lowey

    Mrs. Lowey. Thank you, Madam Chair.
    And, Secretary Kerry, it is a pleasure to welcome you 
before our subcommittee.
    Since you were sworn into office, the world has witnessed 
unprecedented levels of turmoil, requiring strong U.S. 
leadership on many fronts. Chief among them is the Middle East, 
and I do commend your attempts to bring about a cease-fire in 
Syria. However, as recent events prove, this requires the 
cooperation of Russia and Iran.
    I look forward to hearing your estimation of what it will 
take for both countries to work with the international 
community to end the senseless bloodshed and atrocities of the 
Assad regime, and specifically whether we have the leverage to 
end the conflict.
    To continue on Iran, despite differing opinions on the 
Joint Comprehensive Plan of Action, it must be vigilantly 
enforced, in combination with other sustained efforts to 
prevent Iran from ever developing nuclear weapons. The 
international community must have mechanisms in place to thwart 
Iran's destabilizing behavior in the region, particularly its 
ability to fund terrorists and export weapons to various 
proxies.
    It is critical this committee understand how the 
Administration will address these concerns and meet its 
commitment to bolster the security of our allies in the region, 
particularly Israel. These concerns are heightened with recent 
sanctions relief for the regime and on the heels of the first 
shipment in 3 years of Iranian oil to Europe last week.
    In addition to threats from Iran, Israel is threatened by 
radical extremism on several borders and combats almost-daily 
terrorist attacks by Palestinians. President Abbas has yet to 
condemn the shootings, car rammings, stabbings against innocent 
Israelis, yet he meets with terrorist families. Such behavior 
only incites more violence and makes the goal of two states for 
two people even more difficult to achieve.
    It has also been reported in the media that there have been 
talks between Fatah and Hamas to establish a new unity 
government. American support is predicated upon the Palestinian 
leader's commitment to resolving all outstanding issues through 
direct negotiations, which cannot progress if one party refuses 
to abide by the Oslo conditions of recognizing Israel, 
renouncing violence, and abiding by previous commitments. A 
unity government with an unreformed Hamas would be an 
unacceptable impediment to peace.
    As intractable as the conflict may be, I want to thank you 
for your efforts in trying to bring the parties together for a 
two-state solution, and I hope you will reassure us that the 
administration will maintain its indispensable role of mediator 
and veto any resolution before the United Nations in keeping 
with longstanding policy to defend Israel at the U.N.
    With regard to the Fiscal Year 2017 Budget Request, I am 
pleased it includes strong economic and security assistance for 
Eastern Europe to combat Russian aggression and for Central 
America to address the root causes of child and family 
migration. Continuing our investments to combat climate change, 
poverty, and disease is critical, yet the request reduces 
humanitarian and disaster assistance by more than $1 billion.
    With unprecedented human suffering and humanitarian needs 
around the world, I want to hear your rationale for such a 
reduction.
    Mr. Secretary, I share your concern that much of the 
Department's core programs are currently funded through 
overseas contingency operations, or OCO, which inaccurately 
reflects our commitment to key partners, international 
organizations, and humanitarian operations. Diplomacy and 
development are critical components of our national security. 
Diplomatic failure increases the risk of conflict or failed 
states and makes populations more vulnerable to radicalization. 
Congress must find a more responsible budgeting method to 
provide the resources to meet these challenges today, tomorrow, 
and into the future.
    And finally, I must state, yet again, my deep frustration 
with the administration's failure to prioritize international 
basic education. With more than 120 million children and 
adolescents currently out of school, the administration's 
proposed cut of 240 million from the amount appropriated by 
Congress makes zero sense. We cannot make sustained progress on 
any of our development goals, from health, to growing 
economies, food security, to building democratic institutions, 
if generations of children grow up without basic literacy 
skills. In fact, the White House's own initiative, Let Girls 
Learn, will be impossible to implement with this unacceptably 
low funding request.
    Mr. Secretary, I want to thank you again for your service 
to our country, thank you for your testimony here today, and 
your stalwart efforts to advance American priorities around the 
world. Thank you.
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    Ms. Granger. I will now yield to Chairman Rogers for his 
opening statement.

                  Opening Statement of Chairman Rogers

    The Chairman. Thank you, Madam Chair.
    Mr. Secretary, good to see you. Thank you for being here to 
justify your budget request for FY 2017, for the Department of 
State and foreign operations.
    The importance of U.S. leadership in global affairs could 
never be more pronounced than now. Your job to promote American 
interests abroad, to pursue peace in regions bought by hundreds 
of years of historical and cultural strife; your job to ensure 
the safety of our people, our citizens living here and abroad, 
all of this of paramount importance at a time when the world 
could not be more insecure.
    I echo the concerns our leaders have just voiced about 
ISIS, and our need for a comprehensive plan to dismantle this 
merciless terrorist organization who have senselessly killed 
thousands of innocent women and children in horrible, horrific 
examples of hate and prejudice. They will stop at nothing to 
infiltrate this country and its allies. We need to provide the 
American people with a degree of comfort that the tragic events 
that transpired in San Bernardino cannot and will not be 
repeated on our soil, and the State Department needs to play a 
role in that effort.
    On the international level, the President has rightfully 
solicited the support of other nations in dismantling ISIS. 
Coordination will be key to defeating this shared foe, and the 
U.S. must support our allies in this effort.
    I echo the chairwoman's sentiment that any assistance to 
our friends must be delivered in due haste. I fear that 
countries like Russia are all too eager to fill a perceived 
vacuum in American leadership, and I hope you can address that 
concern here today, particularly as Russia continues to pursue 
aggressive maneuvers against its neighbors.
    With that in mind, let me echo the chair's support for 
Ukraine. The U.S. should support Ukraine during these tough 
economic times and continue to assist in efforts to protect 
their sovereignty, and we must provide, Mr. Secretary, the 
legal, lethal military aid this Congress has supported, and yet 
we see it being withheld. We want to ask you why.
    Turning to issues that concern our closest ally in the 
Middle East, Israel, first, we must maintain strong oversight 
over the nuclear agreement with Iran. Stability in the region, 
which is tenuous on a good day, depends on holding Iran 
accountable for its actions. I think most people in this room 
would agree that taking our soldiers hostage and testing a 
ballistic missile immediately after the Joint Comprehensive 
Plan of Agreement went into effect, was a bad start, to say the 
least.
    I hope you will provide us with an update today about the 
administration's efforts to make sure Iran lives up to its side 
of the agreement and what tools we have at our disposal if they 
don't. And I would remind the Secretary that just as this 
committee and the Congress controls the power of the purse, the 
Secretary has a purse to control as well around the world, and 
we hope that that leverage is properly used.
    Another matter that troubles our friends in Israel is the 
spike in violence and harmful rhetoric. We know you have very 
close relationships with leaders in the region. We want to know 
what you are personally doing to dial back this incitement and 
restore some measure of peace in this troubled territory. No 
aid should go directly to the Palestinian Authority unless the 
matter of incitement that is in our bill is addressed.
    Finally, Mr. Secretary, let me talk a moment about Zika. I 
have shared these thoughts with OMB Director Donovan yesterday 
and others involved, but they bear repeating somewhat here. I 
am very disappointed, Mr. Secretary, that the administration 
didn't take our committee's recommendation to use unobligated 
funds, laying there unused, for the immediate response to Zika.
    Now, you have asked for a supplemental request, and we are 
prepared to look at it carefully. But in the meantime, as an 
emergency measure, you have got moneys laying there. Go ahead 
and use it. You have our authority and our permission and 
hopefully our direction to go ahead and use, at least 
temporarily, the funds laying there that are not being used for 
Zika. When we authorized and appropriated the funds for Ebola a 
couple of years ago, we purposefully left the ability to use 
those funds for other diseases as well. And so we have another 
disease, Zika. Let's go ahead and use the funds that you have. 
And then if that proves to be inadequate, we can always go back 
to a supplemental.
    So can we talk?
    Thank you, Mr. Secretary.
    Ms. Granger. Secretary Kerry, please proceed with your 
opening remarks. There is a full panel of the members here 
today, and they have a lot of issues they would like to discuss 
with you, so I would encourage you to summarize your remarks so 
we have time to address all of their questions.
    A yellow light on your timer will appear when you have two 
minutes left.

                  Opening Statement of Secretary Kerry

    Secretary Kerry. Well, thank you, Madam Chairman and 
Ranking Member Lowey and Chairman Rogers of the full committee, 
all the members. Thank you very much. My apologies for being 
late. I had a phone call that came in that I had to take at the 
last minute, and I apologize for keeping any of you waiting.
    Look, I want to just start by saying we really appreciate 
your tremendous work with us last year on a bipartisan basis to 
approve a budget that really does reflect our core national 
security needs. And I really look forward, this is the last 
budget of the Obama administration, and I look forward to a 
collaborative effort again this year because, as the chairwoman 
said and as Chairman Rogers said, we have got this vast array 
of challenges, unprecedented in terms of time.
    I must say I blanched a little when you said: Since you 
have been sworn in there has been an unprecedented amount of 
turmoil. I hope you weren't referring that that was because I 
was sworn in. But obviously we are facing challenges, needless 
to say.
    Let me just say that $50 billion is the total request when 
you add the OCO and the core elements and the AID. It is equal 
to about 1 percent of the Federal budget, and it is, frankly, 
the minimum price of leadership at a time when America is 
diplomatically engaged more deeply than at any time, I think, 
in history in more places at the same time.
    The scope of our engagement is absolutely essential in 
order to protect American interests, protect our communities, 
keep our citizens safe. We are confronted by perils that are as 
old as nationalist aggression and as new as cyber warfare; by 
dictators who run roughshod of global norms and some who change 
their constitutions at the last minute to stay in office beyond 
the requisite periods of time and cause violence by doing so; 
by violent extremists who combine modern media with medieval 
thinking to wage war on civilization itself.
    And despite the dangers, I believe deeply that we have 
many, many reasons for confidence as Americans. In recent 
years, our economy has added more jobs than the rest of the 
industrialized world combined. Our Armed Forces are second to 
none, and it is not even close. Our alliances in Europe and 
Asia are vigilant and strong and growing stronger with the 
passage of the TPP. And our citizens are unmatched in the 
generosity of their commitment to humanitarian causes and civil 
society. We are the largest donor in the world to the crisis of 
Syrian refugees, over 5.1 billion. We can be proud of that.
    We see and hear a lot of handwringing today, but I have to 
tell you, with all of my affection and the relationships for 
many of my colleagues and the relationships I have built around 
the world and my respect for the jobs that they do, I wouldn't 
switch places with one foreign minister in the world. Nor would 
I, frankly, retreat to some illusionary sense of a golden age 
of the past.
    There are so many things that are happening in the world 
that are positive and constructive, massive numbers of people 
brought into the middle class, diseases being defeated, on the 
brink of, because of our efforts, a generation being born free 
of AIDS in Africa. I mean, this is extraordinary. And there are 
great opportunities staring us in the face in terms of the 
energy future and other possibilities, the largest market in 
the world, frankly.
    In the past year, we reached a historic multilateral accord 
with Iran that has cut off each of that country's pathways to a 
nuclear weapon, thereby immediately making the world safer for 
our allies and for us. And I will note that the general in 
charge of the Israeli Defense Forces, General Eisenkot, just 
the other day made a speech in which he said that the 
existential threat to Israel from Iran has been eliminated. 
That is the chief of the IDF in Israel saying that himself.
    In Paris, in December, we joined governments from more than 
190 nations. No easy task to get 190 nations to agree on 
something. But they approved a comprehensive agreement to curb 
greenhouse gas emissions and limit the most harmful 
consequences of climate change. Now we are determined to 
implement that accord and do everything possible to reduce the 
carbon pollution and grow economies at the same time, and we 
believe it is not a choice between one or the other.
    Just this month we officially signed a Trans-Pacific 
Partnership to ensure a level playing field for American 
businesses and workers, to reassert U.S. leadership in a region 
that is vital to our interests, and it will cut over 18,000 
taxes on American goods that move into that region. We are 
asking Congress to approve that this year so we can begin to 
accrue its benefits as quickly as possible.
    In Europe, we are increasing support for our Security 
Reassurance Initiative. We are increasing it fourfold and 
giving Russia a clear choice between continued sanctions or 
meeting its obligations to a sovereign and democratic Ukraine.
    In our hemisphere, we are helping Colombia to end the 
globe's longest-running civil conflict, and we are aiding or 
partners in Central America to implement reforms and reduce 
pressures for illegal migration. In Asia, we are standing with 
our allies in opposition to threats posed by belligerent North 
Korea, and we are on the brink of achieving a strong United 
Nations Security Council resolution, which is now in both in 
Beijing and Washington for approval.
    We are working with Afghanistan and Pakistan to counter 
violent extremism, deepening our strategic dialogue with India, 
supporting democratic gains in Sri Lanka and Burma, and 
encouraging the peaceful resolution of competing maritime 
claims in the South China Sea.
    And with friends in fast-growing Africa, we have embarked 
on initiatives to combat hunger, to increase connectivity, to 
empower women, to train future leaders, and fight back against 
such terrorist groups as Al Shabaab and Boko Haram.
    Of course, we recognize that the threat posed by violent 
extremism extends far beyond any one region. You mentioned, 
Madam Chair and Ranking Member, the issue of education. And it 
is not going to be solved primarily by military means. So the 
approach we have adopted is comprehensive, and it is long term. 
Diplomatically, we are striving to end conflicts that fuel 
extremism, such as those of Libya and Yemen. We are deeply 
involved in trying to resolve both.
    But we also work with partners more broadly to share 
intelligence, to tighten border security, improve governance, 
expand access to education, and promote job training and 
development. And we have forged a 66-member coalition, an 
international coalition to defeat the terrorist group Daesh, 
and I am absolutely confident we are going to do that.
    Ms. Granger. If you could close down soon.
    Secretary Kerry. Well, let me just say quickly that the 
most critical thing, obviously, on the table at this moment in 
terms of this conflict resolution is the effort with Russia and 
Syria. We can talk about it a little bit in our questions, I am 
sure. But I talked this morning, the reason I am late, I was 
talking with Foreign Minister Lavrov, and we have a team that 
will be meeting in the next day or so, the task force for the 
cease-fire, cessation of hostilities. I am not here to vouch 
that it is absolutely going to work, but I am telling you this 
is the one way that we can end this war.
    The alternative is that the war gets worse, that Syria 
might be totally destroyed, not able to be put back together 
again. Everybody has said you have got to have a diplomatic 
solution at some point in time. The question will be, is it 
ripe, will Russia work in good faith, will Iran work in good 
faith to try to bring about the political transition that the 
Geneva Communique calls for.
    I just want to close by saying to everybody that I have 
been profoundly privileged to have the chance to work with all 
of you in support of an agenda that I believe reflects not only 
the most fundamental values and aspirations of the American 
people, but also carries with it, I am absolutely confident, 
the hopes of the world. That is the responsibility that you all 
have. That is what we are going to be talking about this 
morning. And I thank you very much for your forbearance, Madam 
Chair.
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    Ms. Granger. Thank you very much.
    I am going to start the questions, and I would like to 
return to one of the topics I raised in my opening statement 
concerning the delays in delivery of the U.S. security 
assistance. The administration has asked our friends and allies 
to step up and play a greater role in the fight against ISIL, 
yet we need to do more to deliver our commitments to support 
them.
    The current foreign military financing and sale processes 
are cumbersome and are bogged down by bureaucracy, and the 
problems continue. I hear complaints about equipment delays to 
our partners, for example, Bahrain, Kuwait, and Egypt. That is 
why the fiscal year 2016 appropriations bill directed the 
Government Accountability Office to review this process and 
make recommendations.
    Mr. Secretary, what are you doing to expedite the delivery 
of important equipment to our friends and allies fighting ISIL, 
and what more needs to be done to this system?
    Secretary Kerry. Well, the whole procurement system could 
be sped up, and that is a huge challenge for the appropriations 
committees, and, frankly, the Pentagon and procurement process 
itself, together with the State Department and the White House. 
We try to move it as fast as we can, I can assure you. Over the 
past year, we have seen unprecedented stress put on our 
security assistance mechanisms, and, frankly, we have seen them 
respond pretty efficiently and pretty quickly.
    We are currently providing expedited assistance to Iraq, 
Jordan, Lebanon, Saudi Arabia, UAE, and other counter-ISIL 
coalition members, and I can go through a long list. We have 
provided the Peshmerga with more than 65 million rounds of 
rifle ammunition, 41,000 grenades, 115,000 mortar rounds, 
60,000 antitank rounds, including 1,000 AT4s, more than 56,000 
RPG rounds, 35,000 weapons, including rifles, antitank systems, 
heavy-caliber machine guns, counter-IED equipment, more than 
150 vehicles, ambulances, mine-resistant vehicles. Additional 
equipment is on the way, 5 million rounds of more rifle 
ammunition. That is just the Kurds.
    In terms of Jordan, we continue to expedite it. We have 
delivered over--I just want to point out that we are in a 
massive process of providing materials.
    Now, we have created a special task force with the GCC 
countries, and I have met with them on three occasions now, I 
think, and we are going to be meeting again in the next weeks, 
and we have set up a special office within the State Department 
for the specific purposes of expediting materials to our allies 
and coalition partners precisely to be able to respond to any 
activities by other countries in the region, Iran or otherwise, 
but also to help them in terms of their coalition efforts.
    So I just have to tell you, everybody is cranking full 
speed. We are doing what we can. But as you know, we do have 
some budget limitations.
    Ms. Granger. You were speaking of the Kurds. The two that I 
hear the most from is Ukraine and their request for weapons to 
defend themselves, and then the Kurds. But the Kurds, the 
situation right now, the immediate crisis has to do with the 
price of oil and the flood of refugees. And it is a crisis, 
from everything that we have been told.
    What can we do to help them stabilize their economy and get 
them the equipment they need to fight ISIL? I still hear 
continually that the aid for the Kurds has to go through Iraq, 
that 17 percent that is meant for the Kurds just doesn't get 
there, and the small amount that does get there doesn't get 
there in time to be helpful. So what else can we do?
    Secretary Kerry. I have heard that, Madam Chair, about the 
question of some siphoning off. I don't know, I don't have 
specific evidence of it, but I have heard these allegations. 
And we have a team working, the Embassy in Baghdad is working 
very, very closely.
    It is a fact, indeed, that U.S. military assistance has to 
go through the central government, and that is required both by 
Iraqi law and by international law. And the reason for that is 
that part of our policy has been to try to strengthen the 
central government of Iraq and not to encourage a breakoff or 
the belief that the independent entities within the country can 
deal directly with the United States or other countries.
    So in order to strengthen Iraq, that has been the rule. But 
I will tell you that massive amount of effort now is getting to 
the Kurds.
    And the Kurds, frankly, have been quite extraordinary in 
their efforts to help fight ISIL.
    Ms. Granger. They have.
    Secretary Kerry. We need to say thank you to them. And we 
are training and working with them right now with respect to 
the preparations for Mosul, and that will continue.
    Ms. Granger. Thank you.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Madam Chair.
    And welcome again. And with appreciation, we thank you for 
all your hard work.
    Mr. Secretary, I know how hard you have been working and 
how many hours you have spent on the Israel-Palestinian peace 
process, and I share your deep frustration that the two sides 
are not sitting down face to face. Just last week, the 
Palestinian Authority Foreign Minister Riyad al-Malki said, 
quote: ``We will never go back and sit again in a direct 
Israeli-Palestinian negotiation.''
    And now, once again, we see the international community 
attempt to step in and impose a solution on the parties, with 
the French proposal that includes a stipulation that if the 
talks fail, it will result in full recognition of a Palestinian 
state.
    I won't repeat all the terms of Oslo. You know them inside 
and out. So a few quick questions. I don't know how quick, 
we'll see.
    What is our position on the French proposal? What are you 
doing to oppose such one-sided actions by international actors? 
If the Palestinians believe that the international community 
will pressure Israel for them, what incentive do the 
Palestinians have to negotiate with Israel and engage in 
compromise? And what is the administration doing to convince 
the PA that they cannot refuse direct face-to-face negotiations 
and disavow them of the notion that the international community 
will impose a Palestinian state on Israel? Do we have any 
influence with the PA leadership at this point?
    Secretary Kerry. Well, I like to think some, but I think it 
is very difficult right now on all sides, to be honest with 
you.
    I think that, first of all, we do oppose unilateral 
efforts, but what is happening now is there is a multilateral 
movement that is growing that is concerned about any number of 
things. And I was just in Amman a couple of days ago. I met 
with President Abbas and encouraged him, obviously, to, first 
of all, make sure that the incitement is being addressed most 
directly, and we are working very directly with him with 
respect to any aspects of incitement. I have called him on 
occasion to encourage him to condemn acts of violence. He has 
on occasion, but not with consistency, regrettably.
    But, you know, it takes two sides to come to the table, and 
both sides have to really begin to offer something and begin to 
talk about the modality of doing that. I don't think that the 
situation is helped by additional settlement construction and 
building, and I think that we know we need to see measures 
taken on both sides to indicate a readiness and willingness to 
try to proceed forward and reduce the violence.
    There is no question. I mean, the average Israeli is living 
with day-to-day threats on life that could come from anywhere, 
whether it is a scissors attack or a drive-by of somebody in an 
automobile. But I will call to everybody's attention that there 
were news reports just 2 days ago of the chief of the 
intelligence in Israel submitting a report to the government, 
and the headline of the report that I read out of the Israeli 
newspapers was that unless there is a peace process there will 
be increased violence.
    So my hope is that everybody will take note of that, not as 
a threat, but as a sort of sense of reality about the downward 
spiral that comes if there isn't an active process, which is 
genuine, by the way. And I think that requires a slightly 
different formula than has existed previously.
    I believe that Prime Minister Netanyahu is preparing some 
major initiatives with respect to economics and some changes on 
certain relationship components of the security relationship in 
the West Bank and other things.
    But I have been very clear that, and I think everybody 
believes, there has to be some kind of political horizon that 
both sides can understand, a reduction and elimination of the 
violence and a real readiness to move forward in real ways that 
people can grab onto and understand with respect to the 
creation of a state. If that can happen, then I think it is 
possible to have progress. But it is not in our hands.
    Now, with respect to the French proposal, we are evaluating 
it. We don't have all the details. We are trying to get some 
details about exactly what it would seek to achieve and how and 
what the rules of the road would be. But I think it is a 
reflection of the frustration that the international community 
feels that what is happening in the region, without blame, 
without pointing fingers, without anything, just what is 
happening, contributes to the overall instability and turmoil 
that you referred to earlier.
    So that is why it is urgent, and that is why we remain 
committed to Israel, committed to Israel's security, committed 
also, however, to trying to move the process forward and bring 
the parties to the table.
    Mrs. Lowey. Let me just say, because my time is up, I 
appreciate your efforts, and I know how much time you have 
spent on them, and I am pleased to hear your commitment that 
the parties have to come to the table. As a result of Oslo, 
that is the only way that we can have two states, two people.
    And I want to express my appreciation. And I hope that 
means that you could not support a French proposal which would 
impose a solution on the parties through the United Nations.
    Secretary Kerry. Yeah, I don't know what their proposal is, 
but we have never supported something that is unfair to Israel 
or out of balance. That has never been the policy of our 
country.
    Ms. Granger. Chairman Rogers.
    The Chairman. Ukraine. In your budget request, you would 
slash funding for Ukraine activities by 55 percent, from $363 
million down to $295 million. In the meantime, the National 
Defense Authorization Act of 2016 authorized 50 million for 
certain defensive lethal assistance. And so far, the only 
equipment that we have sent them has been nonlethal, and many 
people say that it is used in not very effective equipment at 
that.
    In the meantime, the government that we support in Ukraine, 
is teetering. The Prime Minister just survived a no-confidence 
vote in Parliament. A lot of political turmoil, mainly due in 
part, I am told, to the austerity reforms being implemented 
that have lowered standard of livings for the average 
Ukrainian.
    The IMF has not disbursed funds from its loan package since 
August. We can't get information out of the State Department. 
The budget request for FY 2016 included $275 million for a 
third billion-dollar loan guarantee to the government of 
Ukraine. But the administration has not answered this 
subcommittee's questions about when it will be finalized.
    Can you help us?
    Secretary Kerry. Yes. I can't speak to the lack of an 
answer as to when it would be finalized, but let me just speak 
to--
    The Chairman. Perhaps someone in the room that is with your 
staff could help us with that.
    Secretary Kerry. As to when it is going to be finalized? I 
don't think the loan guarantee is currently under negotiation. 
It is the third loan guarantee that we have given. We put 2 
billion on the table already in loan guarantees, and we are 
negotiating the third.
    But the uncertainties in the negotiation, Mr. Chairman, 
frankly, I don't think they can be laid at our doorstep. The 
reason the IMF has not been able to make a disbursement, and if 
you look at what Christine Lagarde sent, a 10-point requirement 
to the government in Kiev requiring them to move forward on 
their reforms, that is partly the reason for some of the 
turmoil that is going on. There is a significant amount of 
political disquiet.
    We have been addressing that very directly. Vice President 
Biden and I met with President Poroshenko in Switzerland a few 
weeks ago. We had further meetings in Munich. We have been 
pushing very hard to try to get the reforms in place that are, 
frankly, also required--some of the steps that are required as 
part of the Minsk Process. So we are pushing on it.
    But the request of USAID assistance is 294.8 million, which 
is actually an increase of 103.4 million over the 2015 amount. 
You are right, it is less than 2016, but it is more than 2015, 
and it is calibrated to what can be absorbed and put to good 
use in the context of where they are.
    But they have probably a $20 billion gap overall. What we 
are looking at is a situation where we need to have a 
significant reform effort, passage of laws, the Rada has to 
grab the bull by the horns here, President Poroshenko has to 
push these reforms through, and then there is a chance that 
this money will, in fact, reach the right people and do the 
right things.
    The Chairman. Well, I hope I am wrong in this, but I judge, 
perceive, that we are not doing all we need to do in Ukraine. 
And if that is so, it makes me wonder whether or not we are 
taking that position as a quid pro quo for Russia's assistance 
to us in Syria. Is that a possible angle here?
    Secretary Kerry. No, I think--look, we are very involved. 
We have had a series of conversations. President Obama raises 
the issue of Ukraine with President Putin in every conversation 
that he has had. I met with President Putin a few months ago. 
We talked significantly about Ukraine. We talked about it when 
we met at the U.N. last September. This has been a constant 
effort to try to move that process forward.
    Now, it is principally negotiated in the Normandy format 
between the French, Germans, and the Russians, and we weigh in 
and we are involved in an advisory fashion in that regard. So 
it is not appropriate for us to suddenly try to link the two, 
and I think it would be a mistake to do so.
    But, Mr. Chairman, let me just say to you, I am ready to 
defend anywhere the amount of work that our Department has 
done, Victoria Nuland and our team. Geoff Pyatt, our 
Ambassador, is superb and has done an extraordinary job working 
day to day to help move things forward. We actually were there 
present for days helping the Rada to be able to get the votes 
to pass some of the things that needed to be passed.
    So we are deeply, I mean, involved in ways that remain 
appropriate and sufficiently respecting the independence and 
sovereignty of the country, but we are pushing them and pushing 
them. We have elevated the fight against corruption. We are 
pushing the reform of the criminal justice system. We are 
enhancing their energy security by getting them to rely less on 
Russia. We have been strengthening their civil society. We have 
been working on their, very frankly, corrupt and difficult 
health system in order to transition it to a more effective 
model. We have taken huge defense reforms to modernize their 
military and security services.
    I mean, we are deeply involved in helping them--with other 
countries, I might add--to develop the capacity of governance 
necessary for the task that they face. And it is difficult. It 
is difficult ferreting out some of the levels of corruption 
that existed there previously. That is part of the challenge 
for President Poroshenko. That is part of the challenge that 
was put to, and very directly, by the IMF. And the point the 
IMF is making is they are not going to make a loan that is just 
going to be wasted and squandered by virtue of a corrupt 
process.
    So this challenge is complex, but it is being tackled very, 
very directly by our very dedicated and, frankly, very invested 
diplomats who want this to succeed
    The Chairman. Mr. Secretary, thank you for your service to 
your country.
    Secretary Kerry. Thank you.
    Ms. Granger. Thank you.
    Ms. Lee.
    Ms. Lee. Thank you. I want to thank you, Madam Chair and 
our ranking member, for this important hearing.
    I also want to thank Secretary Kerry. I want to thank you 
for being here today. And as we considered the President's last 
budget of his tenure, I want to just take a moment of personal 
privilege to thank you for your phenomenal work as our 
Secretary of State. It has really been a pleasure to work with 
you on so many issues, HIV and AIDS, Cuba, Iran.
    I think your leadership has really demonstrated the fact 
that our international affairs budget really is a reflection of 
our values and ideals as a country, and you have really put 
that forward to the entire world. So thank you very much.
    Secretary Kerry. Thank you very much. Thank you.
    Ms. Lee. On Cuba, I was delighted to attend the reopening 
of the Cuban Embassy in Havana with you. As you know, and this 
committee knows, I have been a strong advocate for ending the 
50 years of failed policy with Cuba, and I am also pleased to 
co-chair our bipartisan Cuba Working Group here in the House.
    How has the opening of diplomatic ties with Cuba changed 
the perception of the United States? And how has that impacted 
our ability to advance our agenda, for instance, with CARICOM 
and in the Western Hemisphere and throughout the world?
    Also, along those lines, I just want to ask you, in terms 
of our democracy programs--in this committee and USAID, they 
know that I have been asking these questions since the 
incarceration of Alan Gross. How are these democracy programs 
now ensuring that contractors and subcontractors who work on 
them know what the laws are. Whether we agree or not with the 
country's laws, that they could be, unfortunately, arrested if, 
in fact, they engage in these programs, so that they know up 
front what risks they are taking in their participation with 
this, i.e., what happened with Alan Gross? And thank you for 
helping to make sure Alan Gross got out.
    Secretary Kerry. Thank you. No, I appreciate that. Thank 
you very much, Congresswoman Lee. I really appreciate your 
support in this effort. I know that some people disagreed with 
it, obviously, but I have to say that it is already creating 
change. You can see the transformation.
    There have been more than 50 delegations, congressional and 
Cabinet, that have traveled now to Cuba in the last year. 
People have seen for themselves there are regulatory changes 
that have taken place that have opened new opportunities for 
U.S. firms to export certain goods and services to Cuba.
    There have been agricultural delegations that have traveled 
there to explore how we could eventually, if the embargo is 
lifted, begin to change life for the Cuban people through 
better agricultural practices, better goods, actually sell 
American goods there, which we would like to do.
    We signed off on a pilot program for direct transportation 
and mail, which ought to begin soon. We just signed a--
reestablished scheduled air service between the United States 
and Cuba for the first time in more than 50 years.
    And we have actually empowered a Cuban private sector that 
now employs one in four Cubans. A private sector is emerging. 
And people in the United States can now send unlimited 
remittances to support private businesses and private 
microfinance and entrepreneurial training activities and a 
broad range of tools, materials, and supplies for Cuban 
entrepreneurs.
    I happen to believe, as does President Obama--and also the 
Cuban government has expressed its intent to expand development 
of communications in Internet on the island, to have a target 
of 50 percent of its households connected to the Internet by 
2020, and we obviously endorse that. And the Cuban government 
recently opened 35 public WiFi spots, hotspots.
    So things are changing. It is not going to happen 
overnight. We always said that. President Obama was very clear, 
the transition will take time.
    We are not happy with the movement in some regard on areas 
of human rights. There have been some political challenges, 
obviously, and we are going to continue to press those issues. 
The President will speak to those things directly when he goes 
to Cuba.
    But we feel very, very strongly that this policy was geared 
to address the hopes and aspirations of the people of Cuba, and 
that is what it is beginning, in fact, to do, to take hold. And 
we believe nothing would speak to the Cuban people's 
aspirations and needs more than lifting the embargo so that we 
can not have to wrestle with everything that we are trying to 
do, but just let it happen.
    And I think what has happened in Eastern Europe is the 
greatest witness to what happens when you open up and allow the 
world to come in. And there are other places that respect that 
too. Myanmar and other people have been on a transition to 
democracy.
    Our Embassy is taking great care to make sure that people 
understand the rules, aren't stepping over any lines. One of 
the things we negotiated was an ability to increase the number 
of diplomats in Cuba, and we are in the process of doing that 
with this budget. We have asked you for the additional slots 
and funding for that.
    Ms. Granger. Thank you so much.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    Mr. Secretary, good to see you, sir.
    Secretary Kerry. Thank you.
    Mr. Diaz-Balart. I was taken aback that you mentioned as a 
success the U.S. ag sales and independent business licenses, 
when both numbers are actually down. So it is an interesting 
thing that that would be the success of that story.
    Today is the 20th anniversary of the murder of three 
Americans and one American resident in international airspace 
ordered, according to himself, he, himself, has said it, by 
Castro. Just days before that, the President announced that he 
could be traveling to Cuba.
    Now, in December 2015, the President said that any trip of 
his to Cuba would be conditioned on improvement of human rights 
on the island. You, yourself, just said that that has been an 
area where things have not looked good.
    Facts. Let me put some facts on the table. Last year there 
were 8,616 political documented arrests in Cuba, a huge 
increase. Several political prisoners on the Obama-Castro list 
of 53 have since been rearrested. Cuba remains as the only 
country in the Americas to be classified as not free by Freedom 
House.
    Mr. Secretary, by any objective measure, the Castro regime 
has not improved its human rights records. If anything, it has 
gotten worse.
    So, again, facts. Please reassure us and show us, give us 
some facts of where the human rights situation has improved to 
reassure us that President Obama is not breaking his word of 
December 2015 when he said that he would not visit Cuba if 
human rights conditions had not improved. Where specifically, 
Mr. Secretary, have the human rights conditions in Cuba on the 
island improved?
    Secretary Kerry. Well, the agreement required a large 
number of people to be released, as you know, it was about 
fifty--
    Mr. Diaz-Balart. Fifty-three, and a number of them, Mr. 
Secretary, have been rearrested.
    Secretary Kerry. Correct, and we believe they will be 
released, as is appropriate, and that signifies some listening, 
some movement. The fact that 50 of them were released--
    Mr. Diaz-Balart. And rearrested.
    Secretary Kerry. Yes. We were disappointed that four--I 
think it was four or five. We have registered that. We were 
very disappointed in that.
    Mr. Diaz-Balart. Where specifically have human rights 
conditions improved?
    Secretary Kerry. But the President and we always said that 
component is not going to change as rapidly as other 
components, but it is changing. And you have to look at other 
countries that have gone through--and are going through--these 
kinds of transitions.
    I mean, we still, we deal with China. China is probably our 
biggest--I think it holds the most debt of the United States, 
one of the largest traders with the United States, and we 
disagree with China on human rights.
    Mr. Diaz-Balart. Mr. Secretary, I hate to--time is of 
essence. Where specifically have human rights improved? I would 
like you to reassure us that the President is not breaking his 
word when in December 2015 he said he would not go unless human 
rights conditions improved. I just want you to reassure me. 
Please, give me some facts.
    Secretary Kerry. Well, I just told you, they have improved 
in the sense that 53 prisoners who were in jail for political 
reasons were released. And I believe these others will be 
released. And the President is going to engage in this human 
rights discussion. I am engaging in this discussion.
    We just met with the Finance Minister of Cuba the other 
day. I talk to my colleague on a regular basis about this. I 
may be going down there before the President to have this 
discussion to some degree. So we are continuing to push on it.
    But like many----
    Mr. Diaz-Balart. I don't hear any facts here, Mr. 
Secretary. You mentioned, for example, as a success, ag, but we 
know that the facts show that ag sales are down. Again, you 
keep mentioning, which I appreciate, that there were 53 
prisoners released. A number of them have been rearrested. 
There were over, I just mentioned the number, 8,000 arrests, 
political arrests, not to mention 200 arrests every Sunday of 
the Ladies in White, along with the beatings of these women who 
are just trying to go to church on Sundays.
    So I am just trying to see, I don't want to be 
argumentative, I just want to see if you can give us some facts 
of where----
    Secretary Kerry. I gave you facts.
    Mr. Diaz-Balart. So you are telling me that with 8,000 
arrests--
    Secretary Kerry. And people are engaged, one in four people 
in the country are now engaged in the private sector.
    Mr. Diaz-Balart. And the licenses are down. The licenses 
are down.
    Secretary Kerry. Beg your pardon?
    Mr. Diaz-Balart. The licenses of these so-called private 
independent businesses, the numbers have decreased.
    Secretary Kerry. No, there are an increased number of 
private businesses. There is a capacity to provide finance. 
There are people who are now able to open businesses who 
weren't before.
    Mr. Diaz-Balart. Do you have any of those numbers, because, 
again, the numbers that we have--
    Secretary Kerry. I will get the specific numbers for you. I 
don't have the--
    Mr. Diaz-Balart. Well, I just want you to reassure us, 
because, again, I just keep hearing in platitude.
    Secretary Kerry. I am trying to reassure you, but you don't 
want to be reassured.
    Mr. Diaz-Balart. Mr. Secretary, you are not giving me any 
numbers.
    Secretary Kerry. Well, I will get the numbers to you. We 
will get you the numbers.
    Mr. Diaz-Balart. So you have no numbers. And so, again, 
please reassure me. The President said he would not visit 
unless human rights improved. You are mentioning 53 political 
prisoners, out of which a number of them have been rearrested.
    When there have been over 8,000 arrests, in anybody's math, 
fuzzy math or not, that is not a pretty good ratio when you 
have 8,000 arrests, 53 supposedly released, and a number of 
them have been rearrested. Again, please, if you could get back 
to us, reassure us that the President is not breaking this red 
line when he said he would not visit until there was a 
substantial increased improvement in human rights, sir. We have 
not yet to see it.
    Secretary Kerry. I am happy to get you the details on it, 
Congressman.
    Mr. Diaz-Balart. Our time is up. Thank you, Mr. Secretary. 
I appreciate it.
    Ms. Granger. Thank you.
    Before I call on Mr. Ruppersberger, between Christmas and 
New Years, I traveled to Costa Rica because I kept reading the 
stories of the Cubans that were going from Cuba to Ecuador and 
then from Ecuador to Costa Rica. I went to see them and to ask 
them why they were leaving. And the answer that I got, 
personally, was that there had been such a clampdown in Cuba 
since the deal was made with the United States that they felt 
like the only time they could leave was now. That was my 
experience. And I am going to go back.
    Mr. Ruppersberger, please.
    Mr. Ruppersberger. Mr. Secretary, thank you for being here. 
And I believe right now that this is one of the most dangerous 
periods for the United States throughout the world, whether the 
China-Russia threat, terrorism threat, Iran, all these 
different issues.
    I want to get into the issue of Iran. We had a lot of 
debate, and the agreement went forward with Iran. I think the 
focus, the focal point of the agreement, which a lot of people 
didn't see it this way, was to stop Iran from having nuclear 
weapons. It would have changed the Middle East, the makeup of 
the Middle East, and it could have been very dangerous. And, as 
we know, Israel is one of our most important and closest 
allies, and their security is very important to us, and we 
stand behind them.
    Now, I am going to ask two questions. According to the 
State Department, Iran continues to still be the world's 
leading state sponsor of terrorism in its quest to dominate the 
Middle East, expel our influence, that kind of thing. They are 
very active in Iran, in Iraq, in Bahrain, Yemen, Lebanon, 
Palestine, Central America. Quds Force is very active in a lot 
of these areas.
    The two questions I am going to ask--number one is what is 
the status after we have the agreement as far as the focal 
point of, number one, the issue of nuclear weapons? Where are 
we? Do we feel secure that the goal has been reached? We have 
independent examination; we want to make sure those 
examinations continue to move forward.
    And the second question is the issue of exporting 
terrorism. Can you talk about other sanctions? I think it is 
important that we understand that the United States still has, 
through the United Nations, we have a lot of sanctions on Iran 
as we speak now, as it relates to their exporting of terrorism. 
And I think it is important that you discuss those, what they 
are. An example: If Iran transfers money to Hezbollah, to the 
benefit of Hezbollah, would the U.S. immediately sanction the 
bank that did that? Those type of issues.
    Those are the two issues: status of the agreement, where we 
are now; and, secondly, what we are doing as far as Iran 
exporting terrorism and the sanctions that exist there.
    Secretary Kerry. Okay.
    Well, Congressman, Iran is compliant with the requirements 
of the JCPOA to date. There have been a couple of issues of 
interpretation of one thing or another that we have worked 
through in the mechanism that we set up to work it through, and 
it has been resolved.
    And they have taken some 19,000 centrifuges and reduced 
them to 5,060. They have taken their 12,000 kilograms of 
stockpile and reduced it to the requisite 300 kilograms that 
cannot be enriched above 3.67 percent.
    They have taken the calandria, which is the core of the 
plutonium reactor which was being built, not yet commissioned, 
they have taken it out and destroyed it, filled it with 
concrete. IAEA inspected--dried concrete. It is destroyed, 
cannot be used again.
    They have ceased all fissionable enrichment process at 
Fordow, stored the appropriate centrifuges in the appropriate 
places, allowed the inspections to take place. And so, in 
effect, they have moved the heavy water out, and it is on the 
market for sale. They have moved their enriched uranium out. 
The ship is now in Russia. Russians took that, where the highly 
enriched uranium--so every aspect of what we laid out as a 
requirement has been, in fact, carried out, which is why 
implementation day took place appropriately, with the IAEA 
signing off on it.
    Now, we will continue, obviously, very--and this was the 
whole purpose of the agreement. It is what we promised the 
Congress and the American people and the world. There will be 
an ongoing process of extremely intrusive but agreed-upon 
verification of the continued compliance with this agreement. 
And our intel community and Energy Department, which is 
responsible for our own nuclear weapons, have assured us that 
they believe they are capable of knowing exactly what is going 
on and that compliance is taking place.
    Now, with respect to Iran's other activities, we 
purposefully left in place the regimens for other sanctions. So 
sanctions for support of terror, for instance, sanctions for 
missile tests, sanctions for arms embargo, all of those are 
existent--sanctions for human rights. And we continue to 
monitor those.
    In fact, on January 17, we designated some three entities 
and I think eight individuals, seven or eight individuals, for 
violations with respect to the missile launch that had taken 
place previously.
    So we have put Iran on notice that those compliance 
measures will, in fact, be utilized, and we will continue to 
observe.
    Now, the Iranians have--we have intercepted, in fact, one 
dhow ship, a boat, a large boat, that was taking arms, we 
believe, to Yemen. And we also turned away a convoy very close 
to the period when we were completing the agreement, and that 
convoy turned back because we singled it out and said this 
would be a violation. So it wasn't violated because it went 
back, and they never did, in fact, send the arms, but the 
effort was attempted.
    So that shows how acutely we are watching it and how we 
have been able to actually have an impact.
    Mr. Ruppersberger. Thank you.
    Ms. Granger. Thank you.
    Mr. Dent.
    Mr. Dent. Thank you, Madam Chair.
    Good morning, Mr. Secretary.
    Secretary Kerry. Good morning.
    Mr. Dent. I am not expecting an answer to this question, 
but maybe one of your folks after the meeting can help me with 
this. It has to do with Colombian truck scrapping, believe it 
or not.
    American truck manufacturers, including some up in my 
district, recently welcomed the news that Colombia may be 
eliminating its one-for-one truck scrapping requirement, which 
requires an old truck to be scrapped for every new truck 
purchased. However, we have heard that this change may include 
a caveat that the requirement would only be eliminated for 
certain types of trucks, which would still pose a problem for 
many American manufacturers. And, obviously, we have a 
Colombian trade agreement, and this is a real source of concern 
for many.
    So the question I have is, what specific actions does the 
administration intend to take if Colombia continues to restrict 
its market for American-made trucks? I don't expect you to have 
an answer at this moment, but I would like somebody to at least 
be able to get back to me, unless you do have an answer.
    Secretary Kerry. No, Congressman, your expectation is going 
to be met. But I promise you we will get back to you very 
quickly.
    Mr. Dent. And the second question deals with Syria. As this 
committee considers the administration's request for funding to 
aid in the fight against ISIS, I have to ask, what do you see 
as our end game in this region, as it appears now that the 
Russians have successfully shored up the Assad regime and 
simultaneously increased their own clout in the Middle East?
    We have also seen Hezbollah in Iran, Iranian fighters 
increasingly engaged in that conflict, as well, on the side of 
Damascus.
    Meanwhile, Turkey appears to be using the conflict as an 
excuse to wage war against the Kurds, many of whom are actively 
fighting against ISIS. And you know the whole drill there. And, 
of course, the Turks are more interested in taking down Assad, 
it seems, at the moment, than fighting ISIS.
    A very complicated, convoluted situation. And, you know, I 
guess the issue for me is, what is our end game in Syria 
diplomatically? And just as importantly, is there a viable 
Sunni political infrastructure in Syria that is not radical and 
that could actually govern in the event we ever reached an 
agreement?
    Secretary Kerry. Well, the answer to your last question is, 
yes, there are Sunni who are extremely capable and moderate and 
very qualified businesspeople, very capable potential 
contributors to a resolution. But we don't want to divide this 
thing up or talk about it in a context of Sunni, Shia, Alawite, 
whatever. And it is up to the Syrians. I mean, the Syrians have 
got to make that kind of decision, which is why we are so 
supportive of the political process.
    Now, you ask what is the end game. The end game is actually 
shared--or, at least in statements and positions publicly put 
forward, the end game is stated by Iran, by Russia, by the 
United States, by the European community, and by the Arab 
countries. All share the notion of a Syria that is united, 
whole, stable, peaceful, protecting all minorities, in which 
you have the ability of the Syrian people through an election 
to choose their leadership free of coercion and of interference 
and free of foreign fighters and free of Daesh and so forth.
    Now, how do you get there?
    And, by the way, the Iranians and the Russians have signed 
on to that in the context of U.N. Security Council Resolution 
2254. And they have also issued two communiques in the context 
of the Vienna meetings where they have embraced exactly what I 
just described--a whole, unified Syria in which the Syrian 
people decide the future.
    Now, Russia has long supported Assad. This is not a 
surprise to anybody, that Russia is supporting Assad. Russia 
also has a very specific interest in preventing terrorists from 
coming back to Russian soil. There are probably more than 
2,000--not ``probably''--there are more than 2,000 Chechens 
fighting in Syria as part of the radical extremist elements, 
and Russia doesn't want them coming back and fighting them.
    So part of the Russian--part of the Russian strategy was to 
shore up Assad, who they feared might have been about to fall 
to Daesh and to Nusrah. So their concerns were that this would 
be greatly destabilizing to them.
    Now, they have other ulterior geographic, geostrategic, and 
other interests, and we understand that.
    But while Russia has succeeded in shoring up Assad, that 
doesn't end the process for Russia, because Russia is there and 
on the ground, and holding territory is hard. And if you have a 
persistent and continued insurgency against that government--
and you will if there is no peace--that is a problem for 
Russia.
    So, in the long run, Russia has an interest, we think, in 
working towards a legitimate political transition that can 
provide stability and a change in Syria.
    Mr. Dent. Without Assad? A transition without Assad?
    Secretary Kerry. We believe it cannot happen except without 
Assad. And the reason is that if you have barrel-bombed your 
people and gassed your people and tortured your people and 
starved your people, it is very hard to envision how you can 
take 12 million people who have been displaced, driven out of 
the country, and with over 400,000 killed, and have that guy 
sit there and say, oh, okay, everything's fine, let's go status 
quo ante. It is not going to happen. And Turkey, Qatar, and 
Saudi and others in the opposition have made it very clear war 
will not end if Assad stays.
    So Russia has to confront that. Iran has to confront that. 
And they have signed on, at least, to a structure that begins 
to confront that. The reality will be the test in the next few 
weeks and months, are they really supporting a genuine process 
of transition. And we will know very quickly whether that is 
for real or not.
    But if you really want to end the war, there is no way, it 
seems to me, to be able to ultimately do that without some kind 
of negotiated outcome. And it is going to require some 
compromise.
    So we are going to have to plow ahead. I am not vouching 
for the fact that this ceasefire will absolutely work and take 
place, but it is the one way to get to the discussion of the 
future of Assad and the possibility of a political transition.
    And since Iran and Russia have signed on to the idea of 
this political transition expressed in the Geneva Communique of 
2012, we have to put that to the test. And President Obama is 
deeply committed to exhausting the diplomatic possibilities 
before we have to confront, if we have to, whatever plan B 
might have to be.
    Ms. Granger. Thank you.
    Ms. Wasserman Schultz.
    Ms. Wasserman Schultz. Thank you, Madam Chair.
    Mr. Secretary, it is good to see you.
    I want to first just recognize that next month marks the 
ninth year of anguish for Robert Levinson's family. And as 
heartwarming as it was to see our American citizens come home 
from Iran earlier this year, we still have had, you know, no 
progress on locating his whereabouts or moving towards being 
able to help bring him home and end his family's pain and 
return him to his home in south Florida.
    And so I appreciate your efforts, the efforts of President 
Obama and the administration, but would just underscore how 
important it is to continue to press Iran for their assertion, 
which has no credibility whatsoever, that they have absolutely 
no idea where he is or anything to do with his disappearance.
    And sticking with Iran, obviously, following the Iran 
agreement, which I supported, the most important step we have 
to take now is to make sure that we have a strong MOU, new MOU, 
with Israel that I know we are in the midst of negotiating.
    I had an opportunity to speak with Ambassador Shapiro at 
the end of last week, and we had a good conversation, but could 
you update us on where we are? And I know you can't go into 
excruciating detail here in this setting, but could you update 
us on the progress that we have made on finalizing that MOU 
with Israel?
    Because, obviously, making sure that we can maintain their 
security and continue to make sure that, with the tumult that 
continues to occur all around them, that they have the ability 
to keep their national security interests strong and protect 
their people.
    And, particularly, my concern is that, with the language 
that I am told is being included, that Congress be able to 
maintain our ability to continue to increase the support that 
is essential for Israel to keep her people safe.
    Ms. Granger. Mr. Secretary, before you begin, we have until 
12 o'clock, and I want to make sure we get around to all the 
members.
    Secretary Kerry. Absolutely. I will try to be really quick.
    All right. Just very quickly on Robert Levinson, let me 
just make it clear: There is a process. And, in fact, we wrote 
into the agreement that saw the folks come back the other day a 
very specific inclusion of an ongoing dialogue and process on 
Bob Levinson.
    I met with the family just recently. I know they are 
disappointed. I understand that. I am very sympathetic to that. 
And how can you not be, when you see people come back and you 
are wondering what happened after all these years? But, as I 
told them and we have said publicly, we just have not had a 
proof of life since the last one--I think it was 2007? Am I 
correct? Around 2007 or 2008 or somewhere in there--2010, 
excuse me. And that was the last time.
    And I am pursuing, personally, the obvious questions that 
flow: From the moment of that last proof, what happened? And I 
have raised this very directly with my counterpart. We are 
trying to see if we can trace that back and work on that. So 
there is a process in place. And we are determined, and 
President Obama will not rest easy until we have exhausted 
every possibility. And we are going to try to get him back, if 
that can be done.
    With respect to the MOU, we are negotiating. We have had a 
10-year MOU. It doesn't expire until 2018, but we would like to 
get it done. You all and the United States have given $3.1 
billion a year for 10 years. There will be more, there is no 
doubt, because of the needs and because of the increased 
security process.
    We have done a very strong evaluation of what it is. We are 
taking into account all of the QME issues for Israel. I think 
it is fair to say that the level of cooperation with Israel, 
notwithstanding the disagreement over the Iran agreement, the 
cooperation on a day-to-day basis has really just never been 
higher or better. We have Iron Dome; we have constant 
communication. We are working very closely with Israel.
    And I have no doubt that an MOU will be reached, an MOU 
that will have a larger amount, subject to your judgments, and 
we will continue to provide Israel with the security that it 
needs and help it to be able to defend itself by itself.
    Ms. Wasserman Schultz. And our ability, as Members of 
Congress, to be able to address crises and emergency 
provisions?
    Secretary Kerry. For sure.
    Ms. Wasserman Schultz. And we have always had that, but----
    Secretary Kerry. Yes.
    Ms. Wasserman Schultz. There have been discussions that our 
ability to do that might be restricted in the MOU. And so I 
want to make sure that----
    Secretary Kerry. I am not aware of that detail at this 
point. Let me check on it, Debbie. I will get back to you.
    Ms. Wasserman Schultz. Lastly, you alluded, too, that the 
current MOU expires in 2018. Obviously, the situation--
    Secretary Kerry. Everybody wants this ahead of time for 
planning purposes. I think it----
    Ms. Wasserman Schultz. Yes. Well, and also because the 
circumstances have dramatically shifted, given that we have 
entered into an Iran agreement, which, as I said, I supported 
and I thought it was the appropriate way from Iran getting a 
nuclear weapon, but we also have to address the security 
concerns of that.
    Secretary Kerry. Sure. And they will be.
    Ms. Wasserman Schultz. Thank you.
    Ms. Granger. Mr. Rooney.
    Mr. Rooney. Thank you, Madam Chair.
    Mr. Secretary, last July, I introduced legislation with the 
co-chairs of the South Sudan Caucus, including Congresswoman 
Barbara Lee, requiring the President to submit to Congress a 
strategy to support the U.N. peacekeeping mission in the South 
Sudan, to investigate human rights abuses, and ease the 
intensifying humanitarian crisis.
    The bill also directs the administration to pursue high-
level engagement with regional and like-minded governments in 
order to promote a better environment for the resolution of 
this crisis; to halt the flow of arms from all external 
sources; and to support the creation, implementation, and 
enforcement of the U.N. Security Council arms embargo and 
targeted individual sanctions on all parties to the conflict in 
South Sudan.
    While I was cautiously hopeful about the signing of the 
peace agreement, I felt and still feel strongly that, in order 
for it to succeed, that U.S. leadership and long-term planning 
is obviously critical.
    U.S. officials from the past and current administrations 
have been intimately involved and demonstrated incredible 
leadership to bring an end to the 17-year civil war between the 
north and the south. As you know, 5 years ago, the South 
Sudanese people finally achieved independence, and the U.S. 
gained a strong ally in South Sudan.
    But this civil war is devastating, obviously, and it 
shouldn't deter the U.S. from engaging in aggressive diplomacy 
to prevent another generation from a lifetime of war, the 
impact of which we are seeing manifest itself around the world.
    I commend the U.N. panel of experts for conducting what 
must have been an extremely harrowing investigation in South 
Sudan, and I am hopeful that their work will compel the 
international community to fully recognize the intensity in 
atrocities committed throughout the civil war, ranging from 
systematic rape and mutilation of women and girls to the 
recruitment and exploitation of children soldiers.
    Mr. Secretary, I would like to ask you sort of a long 
question because I might not be able to chime back in. But I 
just wanted to say, as you know, this country is 5 years old, 
and if we can offer any words here today of optimism for their 
future there, specifically with regard to missed deadlines, 
ceasefire violations, attack on humanitarian workers, 
restrictive laws against the press and civil society, NGOs.
    So we can assume that this peace agreement may be deemed a 
failure. What does the U.S. have in plans to facilitate the 
immediate coordination of African leaders, the EU, and other 
UNSC members to impose targeted sanctions on individuals who 
have committed violations of international humanitarian and 
human rights laws and to enact an arms embargo so that we can 
try to save the ceasefire, the peace agreement, and the future 
of the South Sudan?
    Secretary Kerry. Well, Congressman, first of all, let me 
thank you for your focus on this. It is really important. And I 
really appreciate the detail and depth of your concern about 
this.
    The United States is the largest donor in the world, since 
this conflict began, to the challenge of Sudan, South Sudan--
$1.5 billion. And we have been deeply involved. President Obama 
has been personally involved when he went over to Ethiopia. He 
held meetings. He has had personal conversations. I have had 
personal conversations. I traveled to Juba as Secretary and had 
conversations with President Kiir. I can't tell you how many 
phone calls I have had with President Kiir and with Riek 
Machar. And we have pushed very, very hard towards this peace 
process. Ambassador Don Booth has been diligently working away 
as a special envoy under very difficult circumstances.
    I don't think South Sudan has a better friend than the 
United States. And we have pushed very, very hard to have 
compliance with the international community's desire to end the 
conflict.
    They are at a critical stage now. The security forces for 
Riek Machar have now arrived in Juba. He is supposed to go 
there at some point in time to try to fulfill the mission of 
having this unity government as part of the peace process. And 
we have a very real agenda--post-conflict reconstruction, 
criminal justice, transitional justice--as part of the conflict 
resolution. We have committed $5 million to accountability to 
try to help lead in this process, in addition to the aid and 
other things we are doing.
    But the bottom line you raised at the end of your 
question--the sanctions. My message to South Sudan and to the 
leaders of the process is very simple: This takes leadership. 
If President Kiir and the people around him and Riek Machar and 
the people around him don't take on responsibility and deliver 
on this peace agreement, then the international community is 
absolutely prepared to put in place individual sanctions for a 
range of things, ranging from the corruption, to property that 
may be held in other places, to the crimes that may have been 
committed in the course of the war. And we are very serious 
about that.
    This is a critical moment for South Sudan's survival, and 
it is important for people who hold themselves up to be leaders 
to actually lead.
    Mr. Rooney. Thank you.
    Ms. Granger. Thank you.
    Mr. Serrano.
    Mr. Serrano. Thank you, Madam Chair.
    And thank you, Mr. Secretary, for your work, for your 
service to our country in many capacities.
    For many years, we always heard about Latin American 
countries telling us, why do you guys have this policy with 
Cuba, why don't you change it?
    Is it too early to notice whether they appreciate it? Is it 
too early to see a change in what Latin American countries are 
saying about that change we made?
    Secretary Kerry. Not in the least. We have been amazed by 
the receptivity of countries throughout Latin America as a 
result of this. It has changed our relationship with other 
countries in the region. And it has changed their relationship 
with Cuba and even with Venezuela.
    It has established creditability for the United States, in 
terms of our goals and hopes. And it really has opened up--
there is now a dialogue that is opening up that we may be 
taking part in with respect to Venezuela, and the credibility 
we have for that has come out of this transition of Cuba.
    Mr. Serrano. That is great. That is wonderful.
    And I will tell you, it was a special day in Cuba, for 
Barbara Lee, it was a special day for all of us in Washington 
to see that flag go up. I thought I would never see that 
happen, certainly in my time in Congress and maybe in my 
lifetime. So thank you. Thank you for your work.
    On a more mundane-type question, you have to switch now 
from an interest section that used to blare messages to the 
Cuban people and against the government to an embassy that 
behaves in a diplomatic fashion and so on. Physically and 
politically, is the change difficult or is it a transition----
    Secretary Kerry. Well, it is not--I wouldn't call it--I 
wouldn't call it difficult. It has its challenges, yes, because 
we still have some limitations on the amount of equipment that 
we can bring in, but we broke through with an increase that 
haven't had in years so that we can refurbish the embassy, 
improve the equipment, have people be able to do a better job 
of managing the increased numbers of Americans now traveling. 
That is very important.
    We negotiated an increase in the number of diplomats that 
can be there. They are now able to travel throughout Cuba in 
greater numbers, and this will be important to being able to 
ascertain the needs of the Cuban people and being able to help 
us to do good diplomacy.
    So I think that, you know, as we have gone through this 
transition, we are recognizing that it is going to require 
additional funds from the committee. We have asked for that. 
But I think, over the course of time, this will evolve. And 
there is a natural growth.
    There is also some building of trust in the process, as we 
go forward here. They have to see that we are, in fact, 
adhering to the Vienna Convention and engaged in diplomacy and 
not other things. And we to have see that they are, in fact, 
improving human rights and improving the opportunities for 
their people. And that is how you will build the transition 
over a period of time.
    Mr. Serrano. Okay.
    And I will close with this. Is it true you are negotiating 
a Major League Baseball team in Cuba already?
    Secretary Kerry. I think there has been some discussion 
about whether or not there might be a visit at some point in 
time, appropriately, of the team. But I have nothing to do with 
any other negotiations.
    Mr. Serrano. Thank you, Mr. Secretary.
    Ms. Granger. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chair.
    Good morning, Mr. Secretary.
    Secretary Kerry. Good morning.
    Mr. Fortenberry. Thank you for being with us.
    Secretary Kerry. Thanks.
    Mr. Fortenberry. Mr. Secretary, I had the extraordinary 
privilege of being in the room with Pope Francis when he, in a 
very powerful moment, was given a small cross, a Christian 
crucifix. That crucifix had belonged to a young Syrian man who 
had been captured by the jihadists, and he was told to choose: 
convert or die. And he chose his ancient faith tradition; he 
chose Christ. And he was beheaded. His mother was able to 
recovery the body, recover this cross, and bury him. And she 
fled to Austria, which set the stage for this moment which I 
witnessed.
    Mr. Secretary, this is repeating itself over and over and 
over again against Christians, Yazidis, and other religious 
minorities in the region.
    In 2004, Colin Powell, when he was Secretary of State, came 
before the Senate Foreign Relations Committee--and I believe 
you served on that committee at that point--and declared what 
was happening in Darfur to be a genocide.
    There are 200 Members of Congress--in a bipartisan fashion, 
we have put our names on a resolution that is forthcoming that 
declares this genocide. There is a growing international 
consensus in this regard. The European Parliament has passed 
something similar. The U.S Catholic Bishops; Pope Francis has 
spoken out; Hillary Clinton has called it such; Marco Rubio; 
the International Association of Genocide Scholars.
    I want to note, as well, a word of thanks to you and 
President Obama for the quick action on Mount Sinjar that 
actually saved the lives of women and children, countless 
persons, who would have been wiped out and victimized.
    And so what I am urging here today is that you use the 
authority and power of your office to call this genocide; to 
help restore the rich tapestry of the ancient faith traditions 
in the Middle East; to stop this assault on human dignity and 
civilization itself; and to set, potentially, the conditions 
that we are all hoping and praying for that reestablishes 
stability and reintegration of these ancient faith traditions 
into the fabric of the communities and the Middle East 
entirely. I think the stability, the future stability, of the 
entire region depends upon this.
    Secretary Kerry. Well, again, Congressman, thank you for a 
very moving and eloquent description of the problem. And I 
appreciate--you were lucky to be in that room to witness that, 
and I certainly appreciate your reactions to it.
    And I share just a huge sense of revulsion over these acts, 
obviously. None of us have ever seen anything like it in our 
lifetimes, though, obviously, if you go back to the Holocaust, 
the world has seen it.
    We are currently doing what I have to do, which is review 
very carefully the legal standards and precedents for whatever 
judgment is made. I can tell you we are doing that. I have had 
some initial recommendations made to me. I have asked for some 
further evaluation. And I will make a decision on this, and I 
will make a decision on it as soon as I have that additional 
evaluation, and we will proceed forward from there. But I 
understand how compelling it is.
    Christians have been moved in many parts now of the Middle 
East, I might add. This is not just in Syria, but in other 
places there has been an increased forced evacuation and 
displacement, which is equally disturbing, though, you know, 
they aren't killing them in that case, but it is a removal and 
a cleansing, ethnically and religiously, which is deeply 
disturbing.
    So we are very much focused on this, and, as I say, I will 
make a judgment soon.
    Mr. Fortenberry. They have taken the conditions for life, 
as well as life, away from Christians, Yazidis, and religious 
minorities.
    And I bring up the declaration by former Secretary of State 
Colin Powell to demonstrate the power that the declaration 
actually has. Because, in doing so, he helped put a stop to 
that grim reality there in Darfur.
    I know you share deep sympathies in this regard. I just 
urge with you, plead with you, partner with us. There is a 
growing consensus that this is not only true and real but I 
think, again, it sets the condition for whatever future 
settlement we have to have.
    Thank you, Mr. Secretary.
    Secretary Kerry. Thank you. Appreciate it.
    Ms. Granger. Mr. Stewart.
    Mr. Stewart. Thank you, Madam Chair.
    And, Mr. Secretary, thank you for your service.
    And I have to say, I am just a little old Congressman, and 
I really mean that. I don't have the background that you do. 
But we view the world in a very different way. If men are from 
Mars and women are from Venus, we have kind of a whole Mars-
Venus-Pluto thing going on here. And let me give you a couple 
examples, if I could.
    You said in your opening statement that you believe our 
alliance with Europe is strong and getting stronger. As a 
Member of Congress, especially as a member of the Intel 
Committee, I have a chance to travel and talk with world 
leaders, and this is what I hear again and again: Where is the 
United States? We don't know if we can trust you. We don't know 
if you are going to stand by alliances that have been in place 
for generations in some cases. We don't know if you are going 
to stand up to your adversaries.
    And the evidence of that isn't something that I see--it is 
not anecdotal. It is not something that I have read in 
newspapers. It is my own personal experience.
    Another example, if I could. You said that you are 
confident that we would defeat--you said Daesh, but most of us 
refer to ISIS or ISIL. I just don't believe this administration 
has a plan or the will to defeat them, and I am certainly not 
alone in that concern.
    And, with that being said, that we come from this from a 
different view, there are so many questions I would like to ask 
you. It is a target-rich environment. I would like to ask one 
quickly and then turn to Syria.
    Your own State Department has told us that the former 
Secretary has kept more than 1,600 classified emails on an 
unsecured server, of which your State Department classified 29, 
at least, as Top Secret. And recognizing that the definition of 
``Top Secret'' is that their exposure would potentially cause 
exceptionally grave damage to national security, Top Secret is 
not a trifling thing.
    And so I wanted to read these emails. I wanted to know what 
was in them and what had potentially been exposed. And I am 
curious, Mr. Secretary, have you read these emails that were 
classified as Top Secret that were kept on the former 
Secretary's private server?
    Secretary Kerry. So let me answer the questions there that 
I think are relevant to the budget and the policy.
    On Daesh, yes, we have a plan. Let me be clear about that--
--
    Mr. Stewart. Well, Mr. Secretary, I wasn't asking that 
question. I know that we----
    Secretary Kerry. Well, you did ask a question. You said you 
don't think that we have a plan. And I want to make it clear we 
have a plan----
    Mr. Stewart. OK.
    Secretary Kerry. And we are going to defeat--let me just 
finish now.
    Mr. Stewart. Well, actually, Mr. Secretary, this is my 
time, and I didn't ask that question.
    Secretary Kerry. Well, I thought it was your time to ask a 
question.
    Mr. Stewart. And my question was, have you read Secretary 
Clinton's emails that were on her server that have been 
classified as Top Secret?
    Secretary Kerry. No. No. I have not. It is not my job to do 
that. It is being thoroughly vetted through another process, 
and I think you know that.
    Mr. Stewart. Well, like me, though, it is not necessarily 
my job to vet that, but I was curious what was on those emails 
and what would be classified as Top Secret, so I went ahead and 
read them.
    I would encourage you to, sir, because I think that there 
is information on there that, as the Secretary, in your 
position, that you would want to know, I would think, what had 
been potentially been exposed.
    If I could in the last 2 minutes----
    Secretary Kerry. We have appropriate people who are 
managing that through appropriate channels. And I think you 
know that----
    Mr. Stewart. Well, I certainly do.
    Secretary Kerry [continuing]. Congressman. And I don't 
think it is appropriate to be characterizing something that the 
world can't read, which is being taken care of with more than 
50 investigations by 8 or 9 committees. Honestly.
    Mr. Stewart. But, Mr. Secretary, I----
    Secretary Kerry. So let's not fool round here. Let's talk 
about----
    Mr. Stewart. Mr. Secretary, I didn't characterize those. It 
was your own department that characterized----
    Secretary Kerry. No, you just characterized them without--
you said, I read them and I think it is important for people to 
have a sense of whatever. That is a characterization.
    Mr. Stewart. Well, the characterization of being Top Secret 
is not something that I characterized.
    Secretary Kerry. Right. And things get classified after the 
fact. And it happens in the Senate and the House. You folks 
send things on your BlackBerrys, and you send them sometimes 
from a foreign country.
    Mr. Stewart. Yes. But, having read these emails----
    Secretary Kerry. Have they been classified?
    Mr. Stewart. But, having read these emails, I can assure 
you that this isn't a case of being overclassified. Having read 
them, I know that.
    Secretary Kerry. So let's come back to Daesh, because that 
is really important to the American people.
    We have taken back--the Iraqis have taken back 40 percent 
of the territory that they held in Iraq. We have liberated 
Tikrit--they have liberated Tikrit. They have liberated Ramadi. 
They are now moving on Hit. They are going to be doing that in 
Mosul.
    We have cut off the main road between Al-Raqqah and Mosul. 
The secondary roads are being cut off. There have been more 
than 10,000 air strikes. People have been eliminated from the 
battlefield. We are eliminating their money. They have cut 
their money to their fighters by 50 percent, in some cases 
eliminated it. We are taking away their source of revenue.
    And President Obama made it clear at the very beginning 
this was not going to happen over night, it is going to take 
time.
    There are a lot of people in that part of the world who are 
happy to fight to the last American. And the fact is that we 
are trying do this without having the last American on the 
ground, but, rather, getting forces there, training them, 
working them.
    We have special forces on the ground. Americans are in 
Syria; Americans are on the ground in Iraq. We are helping them 
to help themselves. And I think most Americans believe that is 
a pretty good way to get it done.
    I have heard the handwringing. And I referred to the 
handwringing in the beginning of my comments. I hear it. But we 
are making a difference. We have reassured Europe. We are going 
up to $3.4 billion. We have redeployed troops. We rotate troops 
through the forward frontline countries. And, frankly, we do 
more than any other country in the world----
    Mr. Stewart. Well, of course we do more than any other 
country. We are the United States.
    And my time is up, so I will just conclude with this. There 
is no question that we have made some progress there. I 
wouldn't say that that isn't true. I would say--and you call it 
handwringing in a pejorative way, as if, you know, we are 
children who are just sitting with----
    Secretary Kerry. Because it doesn't comport with the facts, 
Congressman.
    Mr. Stewart. There are legitimate concerns----
    Secretary Kerry. The facts are that we are getting these 
things done. The facts are----
    Mr. Stewart. Well, Mr. Secretary----
    Secretary Kerry [continuing]. That we are providing for 
these folks.
    Mr. Stewart [continuing]. We could have an exchange about 
whether we are getting these things done. But it a legitimate 
concern on many of our part whether this administration has the 
will and a plan to move forward on this and to actually defeat 
them. Because I am not the only one who questions whether that 
is the case. And it is not only Americans who question that, as 
well. Many of our allies do.
    Madam Chairman, I apologize for going over. I yield back.
    Ms. Granger. Thank you.
    Secretary Kerry. Can I just say, Madam Chairman----
    Ms. Granger. We have one last question from Mrs. Lowey and 
from me.
    Mrs. Lowey.
    Mrs. Lowey. Madam Chair, I just want to say I think the 
discussion of the emails in this forum, when we have the whole 
world here, seems inappropriate.
    And if I am not mistaken, in all the discussions I have 
heard, that Secretary Colin Powell had the same system in 
place. And, in fact, the emails that were sent to both 
Secretary Powell and Secretary Clinton were not classified at 
the time they were sent.
    Secretary Kerry. That is correct.
    Mrs. Lowey. So I think, in looking at the whole process--
and I am sure you, as the Secretary of State, are looking at 
the whole process. But I don't think this is the appropriate 
forum to deal with it.
    Ms. Granger. But I believe you had a question, didn't you?
    Mrs. Lowey. And I did have another question. Thank you so 
much.
    What I was so concerned about, Secretary Kerry, when you 
were talking about arms shipments outside of the JCPOA being 
turned around--and isn't it wonderful that they were turned 
around?--my reaction was, is this a cat-and-mouse game? Or is 
there a real understanding with Iran that they have a 
responsibility to comply with the U.N. sanctions, the other 
sanctions in place, and they shouldn't be arming other nations 
in the region that are just causing one incident after another 
where people are dying?
    So I am a little puzzled about that and why Iran is not 
complying with the other sanctions that are very clearly in 
place.
    Secretary Kerry. I think, Congresswoman, what you have is--
sometimes independent actions by independent entities is very 
hard to measure. But, as you know, the IRGC opposed the Iran 
agreement bitterly.
    Mrs. Lowey. Right.
    Secretary Kerry. The IRGC wanted to have a nuclear 
umbrella, and the IRGC resented--the IRGC does certain things. 
And so we, in contacting the government, made it clear that we 
would take steps if indeed they were going to deliver anything. 
And since nothing was delivered, there was a response that 
seemed to be appropriate.
    Now, it is not a cat-and-mouse game, no. If we find 
something happening, we are going to respond, as we did on the 
missile launch. But----
    Mrs. Lowey. May I ask you--because I know we are all going 
to be cut off and you have to leave. But, Mr. Secretary, with 
great respect, when you said the IRGC is independent----
    Secretary Kerry. No, I said sometimes things happen. I am 
not saying that.
    We don't know what happened. What we do know is that 
nothing happened; we didn't have a transfer. We don't know for 
sure what was on there. We didn't inspect it. So we saw a 
convoy, and we told them it would be better not to push the 
envelope here, and they didn't. Now, I didn't know specifically 
what was loaded in there or what--I am just saying to you that 
I think you need to have your facts. When we have the facts, 
like the missile launch, we responded, and we will in the 
future.
    We do know, also, that there are weapons that have come out 
of Iran, gone through Damascus, gone to Lebanon. And we have 
made it very clear, very clear, that that is an invitation to 
response, no question about it.
    Mrs. Lowey. Because we are limited on time, I will pursue 
this with Secretary Lew, because I understand these sanctions 
are being overseen by his department. Treasury is responsible 
for this series of sanctions. And I think it has to be made 
very clear that this is unacceptable even if we don't catch 
you.
    Thank you.
    Secretary Kerry. Well, I mean----
    Ms. Granger. Thank you.
    Mrs. Lowey. Thank you for your work.
    Ms. Granger. Mr. Secretary, the committee has given the 
administration significant funding and flexibility to address 
local health threats, including broad authority to use funds to 
address public health emergency of international concern, and, 
of course, that is Zika, which has been declared by the World 
Health Organization.
    Mr. Secretary, to use this authority, you have to declare 
it in the national interest to respond to such emergency. I am 
going to ask a quick question because all I need is one word, 
``yes'' or ``no.'' Do you intend to make this declaration so 
you can access existing funds immediately to fight the Zika 
outbreak?
    Secretary Kerry. You are right, I do have that ability. And 
the Zika virus is still being analyzed and evaluated with 
respect to exactly what it is going to require, how much it is 
going to require.
    We are concerned about it, which is why we have requested 
the additional money. But we are also concerned about Ebola on 
the other side possibly resurging. And, yes, there is some 
money left over in there, but we don't know how much either one 
is really going to demand. So we are loathe to take what has 
already been appropriated for Ebola, with Zika coming down the 
line and yet to be determined how big and how broad it is going 
to be. So it is premature to make that decision.
    I am well aware of the authority, obviously. If it suddenly 
started to move more rapidly and we had a greater sense of 
broad threat to the public which required a more immediate 
response, obviously we would move in an emergency way to take 
from wherever. But right now that is just not the way to deal 
with it, in our judgment. We are trying to keep them on 
separate tracks.
    Ms. Granger. As we conclude the hearing today, I wanted to 
raise an issue that I continue to hear about from my 
constituents and also from Members. So for this one, just 
please provide for the record an update on the refugee 
screening process and highlight what changes have been made to 
the process to better ensure that refugees admitted for 
resettlement in the United States do not pose a threat to our 
country or the community in which they are resettled. That came 
up about the Syrians that we were looking at.
    Secretary Kerry. Yep.
    Ms. Granger. So if you could submit that for the record.
    Ms. Granger. I thank you again for your time, I thank you 
for your energy and all the effort you have given to world 
crises.
    Secretary Kerry. Thanks so much.
    Ms. Granger. Thank you.
    Secretary Kerry. Madam Chairman, again, I just want to say 
to you thank you. You have been terrific. When I have needed to 
call you urgently, you have been available. And, likewise, the 
ranking member. You both have been enormously helpful, and we 
are very grateful for the bipartisan effort. Thank you.
    Ms. Granger. Thank you.
    This concludes today's hearing, and members may submit any 
additional questions for the record.
    The Subcommittee on State, Foreign Operations, and Related 
Programs stands adjourned.

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                                           Tuesday, March 15, 2016.

           DEPARTMENT OF THE TREASURY INTERNATIONAL PROGRAMS

                                WITNESS

HON. JACK LEW, SECRETARY, DEPARTMENT OF THE TREASURY

                Opening Statement of Chairwoman Granger

    Ms. Granger. The Subcommittee on State, Foreign Operations, 
and Related Programs will come to order. I would like to 
welcome Secretary Lew to discuss the fiscal year 2017 budget 
request for the Treasury Department's International Affairs 
programs.
    The funding under review today supports contributions to 
international financial institutions, such as the World Bank 
and regional banks, other contributions to multilateral funds 
and technical assistance programs.
    The budget request totals $2.3 billion, a $5 million 
increase above fiscal year 2016. While this may seem like the 
budget is virtually straight lined from last year, the budget 
includes a number of new requests.
    Turning to the World Bank and the regional development 
banks, I remain concerned about the funds this subcommittee 
provides. I would like to hear from you today about the efforts 
these institutions are making to publicly track funds and 
provide independent evaluations of program effectiveness.
    Additionally, I have been following the growth and 
contributions by USAID and the Department of State to trust 
funds managed by the World Bank and other financial 
institutions. I am concerned about the lack of oversight of 
these taxpayer dollars.
    The 2016 omnibus included a shift in U.S. resources at the 
IMF from emergency fund to the general quota and required a 
number of reforms. I hope you can discuss any recent 
developments.
    Also included in the administration's request is $250 
million for the Green Climate Fund. Mr. Secretary, I don't have 
to remind you of the strong opposition by many members of 
Congress to any funding for this purpose.
    Finally, the United States government is providing an 
increasing number of loan guarantees to foreign governments. I 
will ask you about loans and loan guarantees later. I know you 
have taken a personal interest in boosting economies of our 
allies and partners.
    Secretary Lew, thank you for being here today. You have 
many important topics to discuss.
    And I will now turn to my ranking member, Mrs. Lowey, for 
her opening statement.

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                    Opening Statement of Mrs. Lowey

    Mrs. Lowey. Secretary Lew, I join Chairwoman Granger in 
welcoming you here today. I thank you for your service to our 
country.
    The President's 2017 budget request reflects the importance 
of our continued investments in international financial 
institutions, such as the IMF and the World Bank, which offer a 
cost-effective way to leverage taxpayer dollars and promote our 
own economic and national security interests.
    Additionally, the Treasury Department leads the world in 
disrupting terrorist financing networks, enforcing sanctions 
against violators of international norms and providing 
technical assistance to countries serious about strengthening 
their own financial management and accountability systems.
    Your department plays an essential role in these vital 
efforts, and I look forward to hearing from you on how the 
request would further these important undertakings.
    First, with regard to Ukraine, a U.N. panel reported last 
week that more than 9,000 civilians have been killed since the 
conflict started in April 2014. Given Russia's ongoing 
aggression, I would like to know what effect U.S. and E.U. 
sanctions have had on Putin. Specifically, I would like to know 
if Russia has retaliated economically against us or our allies, 
and if there are additional punitive economic measures we 
should be considering.
    Second, Iran recently gained access to billions of dollars 
in unfrozen assets following implementation of the Joint 
Comprehensive Plan of Action. Please update this subcommittee 
on how the regime has used the money so far and the 
effectiveness of U.S. sanctions on Iran for its financial 
support of terrorism, human rights abuses, export of weapons, 
and ballistic missile testing.
    Third, we should all applaud the climate change commitments 
reached last year in Paris, as well as the announcement last 
week by President Obama and Canadian Prime Minister Trudeau on 
reducing methane emissions.
    Failure to provide the adequate resources to address an 
impending environmental catastrophe risks creating conditions 
for even greater dangers, including failed states and 
populations more vulnerable to conflict and radicalization.
    Instead, U.S. efforts to combat climate change helps 
developing countries increase their own resiliency, mitigate 
instability caused by population displacement, and address 
declines in the global food and water supply.
    That is why it would be very useful to hear specifically 
how the administration's request of $409 million in Treasury 
programs to address climate change, including the Green Climate 
Fund and the Global Environmental Facility, would help protect 
the environment, U.S. national security interests, and job 
creation at home.
    Fourth, faced with limited resources, members of our 
subcommittee constantly weigh funding for bilateral versus 
multilateral programs.
    Unfortunately, last year the House mark eliminated funding 
for several international financial institutions, which would 
have jeopardized the interests of the United States and harmed 
struggling communities abroad.
    I hope we can avoid such divisive and counterproductive 
proposals this year, and instead recognize that U.S. confidence 
in these institutions is paramount.
    I look forward to hearing from you on the administration's 
oversight of the operations of the World Bank and other 
international financial institutions, including for example, 
the ongoing review of the World Bank's environmental and social 
safeguards.
    Finally, Congress approved last year the long-overdue IMF 
quota and governance reforms. I would appreciate hearing how 
these reforms have helped advance U.S. interests in the 
institution and bolster equitable participation in global 
economic decisions.
    And thank you very much for being with us today.
    Ms. Granger. Secretary Lew, please proceed with your 
opening remarks. There are many issues that members want to 
discuss during our time with you today, so I would encourage 
you to summarize your remarks so that we have time for you to 
address questions. The yellow light on your timer will appear 
when you have 2 minutes left.

                   Opening Statement of Secretary Lew

    Secretary Lew. Thank you, Chairman Granger, Ranking Member 
Lowey. It is good to be here to discuss the 2017 Treasury 
budget request.
    Since my testimony last year, our economy has continued its 
record-breaking streak of private sector job creation, which 
has reached 6 consecutive years and more than 14 million jobs. 
Over the last 2 years, we have experienced the strongest job 
creation since the 1990s, and at 4.9 percent, the unemployment 
rate is half its peak in 2009.
    We continue on a sound fiscal path, with the deficit from 
fiscal year 2009 to 2015 falling by almost three-quarters, to 
2.5 percent of Gross Domestic Product.
    With the passage of the omnibus spending bill in December, 
we helped to build on this momentum. It will contribute to our 
economic growth and it will help to rebuild our international 
leadership. As you both noted, the agreement included critical 
IMF quota and governance reforms that have helped to preserve 
the central role of the United States in the international 
economic system and to advance our economic and national 
security objectives.
    The budget agreement also demonstrated that we have the 
capacity to find common ground on difficult issues. It lays the 
foundation for addressing some of our long-term challenges, but 
a lot of work remains. That is why this year's budget includes 
critical investments in our domestic and national security 
priorities.
    Treasury's 2017 budget request builds on a significant year 
for international development, which in addition to IMF quota 
reform, saw the adoption of the Addis Ababa action agenda and 
the 2030 agenda for sustainable development, and culminated in 
a successful Paris climate agreement.
    Our fiscal year 2017 request makes investments in some of 
the most cost-effective ways to reinforce economic growth at 
home and respond to critical international challenges like 
poverty, environmental degradation, and food insecurity. For 
example, the World Bank's International Development Association 
provides a cost-effective means to support the world's poorest 
countries. Every dollar contribution from the United States 
leverages almost $13 in contributions from other donors and the 
World Bank's internal resources.
    Our request also begins to address some of our prior unmet 
commitments to the international community and provides 
additional funding for Treasury's Office of Technical 
Assistance (OTA), to broaden its efforts to build effective 
public financial institutions by advising and training 
government officials in developing countries.
    These investments in multilateral development banks (MDBs) 
like the World Bank and the regional development banks help to 
support our national security objectives, increase economic 
growth, and reduce poverty. The assistance and technical know-
how of the MDBs has nurtured the economic reforms, 
infrastructure and social investments that have driven the 
growth of some of our most strategic trade partners.
    They play an important role in building sustainable and 
transparent economic growth in emerging and developing 
countries, and more and more we have come to see the MDBs as 
vital partners in helping to address national security threats.
    In addition to meeting our current commitments to the MDBs, 
it is urgent that we work with Congress to address our prior 
unmet commitments, which now approach $1.6 billion. At the 
World Bank, this is particularly urgent because failure to meet 
our commitments this year will result in a loss of U.S. 
shareholding that could impact our veto power, damage our 
credibility, and weaken our ability to shape policy priorities.
    When it comes to global challenges like climate change, 
food insecurity and gender imbalances, the world continues to 
rely on multilateral institutions, and strong U.S. leadership 
within them, to help developing countries make concrete 
investments.
    And U.S. contributions to specialized multilateral funds 
leverage resources from other donor countries and the private 
sector, significantly multiplying the impact of American 
taxpayer dollars.
    In particular, I want to focus on two such funds: the 
Global Environmental Facility (GEF) and the Green Climate Fund 
(GCF). The GEF delivers benefits to the United States and 
global community by protecting the environment, including 
preserving the ozone layer, supporting fisheries, combating 
wildlife trafficking, and reducing mercury pollution that can 
contaminate our food supply. As you know, the President pledged 
$3 billion to the GCF, which our budget request supports in 
part.
    The GCF is designed to be a key element of the collective 
global effort to build resilience and reduce carbon pollution. 
The fiscal year 2017 budget request also includes important 
funding for a variety of other programs, including the Central 
American & Caribbean Catastrophe Risk Insurance Program, the 
Global Agriculture and Food Security Program, the International 
Fund for Agricultural Development, and the World Bank Global 
Infrastructure Facility.
    Finally, Treasury is seeking $33.5 million for OTA, an 
increase of $10 million over the fiscal year 2016 enacted 
level. Our request reflects a strong and increasing demand for 
OTA to support U.S. foreign policy, national security, and 
economic priorities in Central America, Africa, Asia, Ukraine 
and other regions.
    The request also supports my commitment at the 2015 
Financing for Development Conference to double OTA's assistance 
and significantly increase U.S. Government support for domestic 
resource mobilization by 2020, helping countries to better 
raise and manage their own financial resources.
    Treasury's international programs are some of the most 
cost-effective ways to reinforce economic growth at home and to 
respond to critical challenges abroad. Specifically, U.S. 
leadership in international financial institutions enables us 
to influence how and where resources are deployed, often on a 
scale that we cannot achieve through our bilateral programs 
alone.
    It is crucial that we continue to have bipartisan support 
for these institutions to ensure that our influence remains as 
strong today as it has been over the past several decades.
    And with that, I look forward to answering your questions.
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    Ms. Granger. We will begin with the questions. I want to 
remind members and the witness that you have 5 minutes for 
questions and the responses. The yellow light on your timer 
will appear when you have 2 minutes remaining, and it will be 
followed by a red light which means you get thrown out of here, 
I think--is that what happens? If time permits, we will have a 
second round of questions.
    I will begin. The fiscal year 2016 appropriations bill 
included funding and authority for a third loan guarantee for 
the government of Ukraine, but this agreement has not been 
finalized by the administration.
    Loan guarantees from the United States have helped boost 
Ukraine's sovereign rating, which was raised last fall. 
However, in fiscal year 2017, there are no funds requested for 
another loan guarantee.
    Mr. Secretary, I am concerned about Ukraine. I know that 
you are concerned. The administration is also concerned about 
Ukraine.
    I know from the press that there has been a lot going on 
with their government. I know they need the U.S. loan 
guarantee, but I think all of us are concerned that we ensure 
that reforms are being implemented by that government. How can 
the United States use its leverage?
    Secretary Lew. Chairman Granger, I think we agree 
completely on the importance of Ukraine, and we have had a 
great working relationship with you and with the subcommittee 
to show united bipartisan support for Ukraine.
    The two loan guarantees that we have put in place have been 
essential as part of an international package to give Ukraine 
the chance to rebuild its economy in the face of terrible 
aggression and to get itself into a place where it has the 
possibility of a successful future. In fact, they have turned 
the corner sooner than expected and had a period of economic 
growth earlier than expected.
    We are working with them on the third loan guarantee. The 
details are still being worked out. One of the conditions of 
each of our loan guarantees is that they meet their fiscal 
commitments and they also meet the commitments to government 
reform. We have been very clear, as has the IMF, that both of 
those commitments are critical, not just to keep the support 
flowing, but for Ukraine to have a viable future.
    I know this is a period of turmoil in Ukraine politically; 
we continue to work with the finance ministry on the terms of 
the loan guarantee.
    Obviously, the situation has to settle down politically for 
them to either form a new government or not. The test will not 
change; the test will be, do they stick to their fiscal 
reforms, both on the spending and the tax side? And do they 
stick to their anti-corruption reforms, which are just as 
critical.
    We have made that, at the highest level, an issue. I invest 
a lot of time personally with the government of Ukraine. They 
value the role that we play; frankly, they value the fact that 
we keep reminding them what they need to do to have a stronger 
future for their country.
    Ms. Granger. I know you and I have discussed that and how 
important it is. I have been there three times, and we all 
agree we would like to help, but they have to help themselves, 
and I appreciate your staying with that.
    The second question I have, Iraq has faced declining 
revenues because of low oil prices, we all know that. The 
government of Iraq has stated that they may raise funds on the 
international capital markets later in the year.
    In the fiscal year 2016 omnibus, authority was included for 
up to $2.7 billion in direct loans for Iraq for military 
purchases. In the fiscal year 2017 budget request, the 
administration is requesting a second loan for Iraq for 
military assistance, as well as a sovereign loan guarantee for 
economic assistance.
    First, what is the timeline for issuing the loan that was 
authorized in fiscal year 2016, and how much funding will be 
needed to subsidize that loan?
    And second, what actions will the government of Iraq need 
to take to receive the second loan for military assistance and 
the new loan guarantee requested in fiscal year 2017?
    Secretary Lew. Chairman Granger, the support for Iraq, we 
believe is critical. Iraq needs to have economic stability if 
it is going to have political stability. We are urging Iraq to 
take very tough actions to counter ISIL and to be a partner in 
that effort. But with the lower price of oil, they are under a 
great deal of economic pressure.
    I think the Foreign Military Financing (FMF) action was an 
important way to make sure that they have the resources they 
need to build their defense, but also to create the cash flow 
for them to manage towards a more stable, economic future.
    We are probably several weeks away from finalizing the 
details of the first FMF loan. The State Department takes a 
lead on that; we are consulting with them. The exact cost of it 
will depend on the terms. I believe that the outer limit is 
$250 million, but it could be less than that, depending on the 
duration and the tenor of it.
    We look forward to working together with you on additional 
provisions for 2017. One of the things that Iraq will have to 
do, not unlike the conversation we just had about Ukraine, is 
put some economic reforms in place. They are in the midst of 
working with the IMF on a standby agreement. That would put in 
place the architecture for reforms that we could build on with 
our loan guarantees.
    I think they understand that it is a package and that they 
need to have those reforms in place.
    It has been a challenge, but that is something that I 
think, again, they need to do it for their own future. And it 
will be something that our ability to enter into the loan 
guarantees is connected to.
    Ms. Granger. Thank you. Just one part about the loan 
guarantees. The dispute between the Kurds, and their regional 
government and Iraqis over oil revenues, the U.S. must use its 
influence to try to resolve this matter.
    I think we have all watched the Kurds and what they have 
tried to do, and the real risks they have taken. So, finding a 
solution to this issue, I think, and I believe it should be a 
condition of Iraq receiving loans and loan guarantees. Do you 
agree with that?
    Secretary Lew. Treasury has consistently encouraged the 
government of Iraq and the Kurdistan Regional Government (KRG) 
to work together to implement the revenue sharing agreement. My 
understanding is that their 2016 budget contains provisions for 
the resumption of the 2015 oil deal. We will continue to work 
with them, because having an orderly resolution of that 
internally would be the best outcome.
    Ms. Granger. Thank you. Mrs. Lowey.
    Mrs. Lowey. Thank you.
    Mr. Secretary, I remain very concerned with how Iran will 
spend billions of dollars of unfrozen assets, which has been 
valued between $50 billion and $150 billion. Just 2 weeks ago, 
Iran's ambassador to Lebanon pledged $7,000 to each of the 
families of Palestinian terrorists who committed acts against 
Israelis.
    In your estimate, exactly how much money has Iran acquired 
since implementation of the JCPOA? What is the administration's 
strategy to combat Iran's funding of terrorist groups and 
supply of weapons, and do you have numbers for how much money 
Iran provides Hezbollah, Hamas, Palestinian, Islamic, jihad and 
Shia militias in Iraq?
    And do you believe these figures are likely to increase as 
a result of sanctions relief?
    Secretary Lew. Congresswoman Lowey, let me answer that 
question as best I can in this room, and we can have a 
conversation in a different setting where we possibly could go 
into some more detail.
    Iran's nuclear commitments have been capped. That is very 
important; it means that Iran is backing out of its pathway to 
a nuclear weapon. We have, pursuant to the agreement, lifted 
only the nuclear sanctions, but we have lifted the nuclear 
sanctions, as we have to--if there is an agreement--that is the 
purpose of sanctions to get the policy changed, and the 
sanctions have to accordingly be reduced.
    We have not lifted sanctions on terrorism, we have not 
lifted sanctions on regional destabilization, we have not 
lifted sanctions on human rights violations. We continue to 
work, as we always do, to identify targets where there are 
actions taken that require designation; we have made a number 
of designations since the agreement was reached, we will 
continue to do so.
    In terms of the total amount of money, it has not changed 
from where we were when we were presenting the agreement over 
the summer. There is roughly $100 billion of resources out 
there, of which only about $50 billion could actually go back 
to Iran, because the others are tied up for reasons that make 
them unavailable. Iran's own estimate is they have, 
theoretically, access to maybe $30 billion.
    We have actually seen a very slow return of those monies to 
Iran. They are having a challenging time dealing with the 
international financial system, but that money will begin to 
flow.
    One of the things that we know is that the backlog of needs 
in Iran is tremendous. The domestic pressure is for spending on 
domestic needs, both human and infrastructure. As I said in 
July, I wish I could say not a penny would go to malign 
purposes, but money is fungible and I cannot say that.
    What I do believe, and what we continue to see, is that the 
activities that Iran funds that we very much want to stop, 
things like the funding of terrorism, are being stressed, which 
means they are not accessing the kinds of sums that would give 
you reason to believe that there is a significant change in the 
shape of what they are doing.
    But I am happy in a different setting to go into whatever 
detail we have.
    Mrs. Lowey. I would like to do that, because I am very 
concerned, obviously, about where the money is going and how 
much more money Iran might receive.
    If you can share with me the status, which has been raised 
here before, of multilateral bank loans to Iran and what steps 
is the department taking to ensure international financial 
institutions are complying with United Nations sanctions on 
Iran?
    And can you assure this subcommittee that the U.S. will 
continue to oppose any World Bank loans to Iran until they are 
in compliance with all bilateral, multilateral sanctions, human 
rights, missile testings, supporting terrorism, et cetera?
    Secretary Lew. We do continue to oppose them. There have 
not been new loans to Iran, there are some old loans out there, 
I believe. I am happy to get back to you with the details. But 
we have made clear that we will continue with the position that 
we have had.
    Mrs. Lowey. I see my yellow--I have a couple more minutes.
    The administration has pledged to strictly enforce existing 
sanctions in Iran, other than those relaxed under the JCPOA, 
and that is why the SFOPS bill last year included a reporting 
requirement on the status of implementation and enforcement of 
bilateral multilateral sanctions against Iran, and actions 
taken by the U.S. and international community to enforce such 
actions.
    Now, if you could quickly--otherwise, we will continue--
what is the status of the report? Beyond the 11 entities 
supporting Iran's missile programs, has the administration 
imposed any sanctions targeting Iran's non-nuclear activities 
since the JCPOA was reached?
    For instance, sanctions for supporting terrorism, 
supporting the Assad regime, human rights violations, and 
supporting Shiite militias in Iraq?
    Secretary Lew. In terms of the report, my understanding is 
the report is due in June or July, and the work is being done 
on it. I am happy to get back to you with details on that. In 
terms of the sanctioning or the designation of entities, we 
have continued; 11 Hezbollah-related targets were sanctioned 
under terrorism authorities for terrorism-related activities 
and a number for missile activities.
    I am happy to get a list to you.
    Mrs. Lowey. Thank you, and I know that the chair and I, and 
this committee are very concerned. We understand that is 
separate from the nuclear agreement.
    Secretary Lew. Yes.
    Mrs. Lowey. But I think it is important that we get 
specifics and the administration is aggressive in making it 
clear to Iran that this is serious and we are going to stop it.
    Secretary Lew. We have been very clear, throughout the 
negotiations and since, that the lifting of nuclear sanctions 
does not take away the sanctions on terrorism, regional 
destabilization or human rights.
    The designation process, as you know, is a very time-
consuming and cumbersome one. We will continue to go through 
it, as we have information, as we have the ability to make 
designations, and it is something that I pay a lot of attention 
to.
    Mrs. Lowey. Thank you very much, Madam Chair.
    And just one other comment, when you are preparing this 
report, I am very interested in the transfer of that $7,000 to 
the Palestinians who are committing terrorist acts.
    Thank you.
    Ms. Granger. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    I want to first thank Mrs. Lowey for that line of 
questioning, and I think we all share your concerns. And I 
would like to be there if you are going to have a classified on 
that.
    Mrs. Lowey. Thank you.
    Mr. Diaz-Balart. Mr. Secretary, good to see you sir. Let me 
stay on the sanctions issue, but in a different part of the 
world.
    You now have more sanctions relief to the Castro regime, 
but we are asking nothing in return. Your new regulations 
effectively authorized the Castro dictatorship to use the U.S. 
financial system as a flow through for their international 
transactions.
    Mr. Secretary, let's be very clear. The Cuban people aren't 
shuffling dollars through Europeans banks or through Panama. It 
is only the Castro regime. Let me give you an opportunity to 
correct me. Do you know what percentage of non-regime players, 
Cubans, are using the international system to--you know, for 
financial ways, how many are using it?
    Is it only the regime, which is 100 percent according to 
the numbers that I have. Do you have different numbers or is it 
100 percent, just the regime that you are facilitating this 
for.
    Secretary Lew. Congressman, I know that we disagree on 
the----
    Mr. Diaz-Balart. I am just trying to get some facts. I am 
trying to get the facts from you.
    Secretary Lew. I am happy to ask for the technical staff to 
come back.
    Mr. Diaz-Balart. Well, you have a number of--you have a 
dozen people here with you.
    Secretary Lew. Well, the purpose of our relief of the Cuban 
sanctions is within the law, not go outside of the bounds of 
the law, but within the law, to try and increase contact 
between the United States and Cuba because the policy of the 
last 50 years has not worked.
    Mr. Diaz-Balart. Mr. Secretary, again, there are a couple 
of things here. It is not Cuba. What you are doing is helping 
and only helping the regime. I want to help Cuba. But you are 
helping--what you are doing is only helping the regime, unless 
you can correct me. That is well--another area, where you are 
only helping the regime.
    Secretary Lew. I am happy to go through the elements of 
what we have done, but we have----
    Mr. Diaz-Balart. Well, I am trying to get some facts from 
you sir.
    Secretary Lew. The facts are what we have tried to do is 
increase people to people contact. We have tried to increase 
the availability of communications for the Cuban people.
    Mr. Diaz-Balart. I am asking you very specifically about 
the financial transactions.
    Secretary Lew. I--the bank accounts----
    Mr. Diaz-Balart. Right. I am hoping that you can prove me 
wrong, but I will bet that you are not going to be able to. 
Moreover sir, this isn't for telecom or ad sales--which, by the 
way, are exempted by law. It is a blanket authorization for all 
of the regime's activities.
    Now, what statutory authority do you perceive to have to 
authorize such transactions which are clearly inconsistent with 
federal law?
    Secretary Lew. Well Congressman, we have complied with all 
of the prohibitions, both in the embargo and in the 
specifically, prohibited financial activities. What we have 
done is we have addressed the sanctions that were put in place 
by executive action, removing those executive actions.
    We have been very careful to stay within the bounds of what 
is not an open space. We have made clear that we would do 
otherwise if we did not have those constraints, but we have 
acted within those constraints.
    Mr. Diaz-Balart. Mr. Secretary, again, what I am asking is 
what statutory authority do you have? Do you perceive that you 
have? Because federal law is very clear that there are 
exemptions for three areas and what this does is way beyond 
that. So, what statutory authority--where is that statutory 
authority?
    Secretary Lew. Well, there are regulations that were put in 
place under the Trading with the Enemy Act by executive action. 
Those are being changed by executive action. None of the 
activities prohibited by the Libertad Act are addressed by the 
changes made. We have obviously made the changes, very 
cognizant of the legal landscape.
    We have worked, within that, to relieve what we can 
relieve, but not that which we cannot.
    Mr. Diaz-Balart. Mr. Secretary, you are aware that General 
Clapper said that when it comes to threats from foreign 
intelligence entities, he said, Russia and China pose the 
greatest threat, followed by Iran and Cuba. You are aware of 
that?
    Secretary Lew. I have not seen that comment, but----
    Mr. Diaz-Balart. All right. Well, you should be aware of 
that. So, again, in this particular area, how are you going 
to--what are you going do to help, make sure that you are not 
helping to finance--since again, these--this part of the new 
reg that I am talking to you about, deals which allow the 
regime access to U.S. financial institutions?
    What steps are you going to take to make sure that it is 
not used in a way to go against our national security 
interests, which again, according to General Clapper, after 
China and Russia, Iran and Cuba are the next greatest threats?
    Secretary Lew. As you know, the embargo still limits very, 
very significantly, what the amount of activity between the 
U.S. and Cuba can be. We have taken the actions we have taken 
in order to open up the ability for commerce, and people-to-
people contact and the financing necessary to support that, but 
not in violation of the provisions that prohibit certain kinds 
of financial activity.
    We have worked in that space because we think the policy of 
the last 50 years has failed. That this is a way to advance the 
cause of change in Cuba and to get to a result which is a--
benefit to the Cuban people.
    Mr. Diaz-Balart. Mr. Secretary, my time is up. Hopefully, 
we will be able to continue the conversation.
    Thank you madam.
    Ms. Granger. Mr. Ruppersberger.
    Mr. Ruppersberger. Secretary, I am going to not leave the 
issue of these sanctions, but I want to get into Iran. First, 
in response to Iran's illegal missile tests, the U.S. imposed 
sanctions on 11 entities and individuals for the provision of 
missile related technology to Iran.
    The Iranians paid for that technology, but no financial 
institution was sanctioned for the transaction. And the 
technology arrived in Iran by either boat or plane and yet no 
shipping line or airline was sanctioned.
    Now my questions are, shouldn't we be going after the 
infrastructure that allows Iran to continue its missile 
program? And, did any financial institution or transportation 
company facilitate a transaction that supported Iran's missile 
program?
    Also, can you commit to sanctioning companies that 
facilitate the provision of support to Iran's illicit 
activities?
    Now, on the recent missile sanctions, Congress was notified 
of the sanctions. And then the administration pulled back the 
sanctions till after implementation day and that was the 
release of American prisoners.
    During the period of delay, were the sanction companies 
able to move assets, such that when the sanctions were issued, 
there were no assets to freeze. And where--were any assets 
belonging to these entities actually frozen? Now, that is a lot 
out there if you want me to resay it, but basically, where are 
we as it relates to the sanctions with Iran?
    Secretary Lew. So Congressman, we have, as you indicated, 
designated the entities that we identified that were involved 
in supporting the missile program in Iran. We continue to 
investigate other entities and can only bring an action when we 
have a fully developed foundation for a designation. We are 
continuing to build additional actions.
    I think that it is premature to talk about entities until 
we reach the stage of designation, but we are looking at a wide 
range of entities involved in supporting the missile program.
    Mr. Ruppersberger. Another issue. I think the public is 
confused about the appeal with Iran as it relates to nuclear. 
And no question, that that did stop Iran from moving forward, 
which really, probably solidified some very serious issues that 
could have occurred with other countries buying nuclear weapons 
if that was not done. And I think it is also important to note, 
that we have still sanctions as it relates to terrorism and 
other issues that you talked about.
    But this is very important we continue moving ahead 
because, in my opinion, Iran is still exporting terrorism and 
that type of thing. I see I still have a green lignt--so I want 
to get into another area very quickly. And that is the issue of 
the China's new Asian infrastructure investment bank. Those of 
us who have been in numerous countries--and I know that I would 
see in Kenya and in Libya and--well, not Libya, but I saw in 
other different countries--what? Yemen, is an example. A lot of 
Chinese buildings. Like I remember having a conversation with 
the former President of Libya, I mean--Yemen.
    I think it is such a tough place now, forget it. In saying, 
the Chinese give us a lot, but we just still don't like them. 
So, I was glad to hear that, but when we are talking about the 
Chinese--going forward with this new infrastructure bank, this 
could have impact on us. How do you think we should deal with 
that?
    Secretary Lew. So our position on the Asian Infrastructure 
Bank (AIB) has been, on the one hand, we think it is a good 
thing that there is more support for international 
infrastructure investment in Asia. But it is very important 
that it be done in a way that is consistent with standards, 
like the standards that we pursue in our multilateral 
development banks that we are involved in.
    We have made that case to all the participants, we have 
made that case to the Chinese, and I think we have had a lot of 
success. They have now adopted operating rules that are very 
much leaning towards observing the kinds of norms that we 
support in the multilateral institutions that we contribute to.
    We are not part of the AIB, so we are not in the inside 
making those rules, but I think our effort on the outside to 
put a bright light on that----
    Mr. Ruppersberger. But my issue there is that could be 
dangerous. A lot of our European allies, a lot of our allies 
are using this fund, which is really buying relationships and 
influence.
    Secretary Lew. But it is an international fund, they will 
have to work on a multilateral basis, not just a bilateral 
basis. I think what you have described is a fair description of 
their bilateral economic activities.
    What we have made clear is that for a multilateral 
institution, they are going to have to operate in a different 
way, where it violates norms that a lot of the countries that 
have signed up to the bank would have to object to.
    The jury is out, they have not made their first loans yet. 
I think that a year ago the discussion of standards in the 
context of the Asian Infrastructure Bank was a soft 
conversation. I think because we have put a bright light on the 
importance of that, it has become a very loud conversation, 
with the right commitments being made.
    But now the question is what will the actions be, and we 
will start to know when they make loans. The more they partner 
with the multilateral institutions that have high standards, 
the more likely they are to operate in a way that is consistent 
with the kinds of norms that are good for a growing, global 
economy, and other values that we pursue in the multinational 
space.
    Mr. Ruppersberger. OK. Thank you.
    Ms. Granger. Mr. Dent.
    Mr. Dent. Thank you, Madam Chair.
    And I would like to follow up on the questions of Mr. 
Ruppersberger and Mrs. Lowey with respect to the Iran 
sanctions. There have been more ballistic missile launches by 
the Iranians, in violation of U.N. resolutions and certainly 
not in the spirit of the nuclear agreement.
    Billions of assets have been unfrozen. Iran, in my view, is 
now in a position to become much more of a regional hegemon. 
Right now, the Russians are up at the U.N. protecting Iran, 
voting with them, protecting them even though the Iranians have 
violated the U.N. resolutions with respect to the ballistic 
missile launches. They have humiliated Ambassador Power, put a 
thumb right in her eye and our country's eye.
    The question I have is: Do you believe that Russia is more 
aligned with the United States or more aligned with Iran when 
it comes to Syria and the broader Middle East crisis?
    Secretary Lew. It is a complicated question to explain what 
Russia's motives are.
    Mr. Dent. It is not so tough--on Iran right now.
    Secretary Lew. Let me explain how I see the Iran agreement 
coming together and the role that the international community 
played.
    Russia was part of the agreement to put sanctions in place 
and to enforce the sanctions. It brought Iran to the table that 
led to a nuclear agreement. The nuclear agreement has real 
important impact. It means that Iran is now out of the process 
of developing a nuclear weapon.
    I totally agree that the missile launches are provocative 
and violate other understandings. We have made clear through 
our efforts to sanction entities and our indication that we are 
going to continue to identify targets as we have the cases to 
do so, and that we will take the appropriate actions.
    But I think the importance of the global community being 
together forcing Iran to the point where it had to back away 
from its nuclear program is a very very significant 
accomplishment.
    Mr. Dent. I can't believe, though, that knowing how the 
Russians are behaving with respect to the missile launch, do we 
think that they would actually ever support us on a snap-back 
sanction in the event the Iranians were to violate the nuclear 
agreement? This does not portend well.
    Secretary Lew. The way the snap-back sanctions were set up, 
we have the ability, unilaterally, to snap back sanctions on 
our own and no party in the security council has the ability to 
block the snap-back. So the snap-back was set up in a way where 
if there is a violation of the nuclear agreement----
    Mr. Dent. But what if they don't impose sanctions 
themselves? I mean, if the--if our partners don't impose--
reimpose sanctions?
    Secretary Lew. Well, first of all, to the extent that there 
are U.S. sanctions, those have consequences beyond the U.S. 
Secondly, to the extent that the international sanctions snap-
back, those have international binding power.
    We cannot force other countries to put bilateral sanctions 
in place, but the agreement set up the snap-back so that both 
U.S. and U.N. Security Council sanctions will snap-back if 
there is a violation.
    There has not been that violation of the nuclear agreement. 
So the fact that these missile launches are being made it not a 
violation of the body of the nuclear agreement. But we are 
taking actions unilaterally in response to that and we are 
working at the U.N. to----
    Mr. Dent. If I may,--it seemed that the Iranian nuclear 
agreement was designed in large part, in the President's words, 
to help Iran get right with the world. It seems to me, based on 
the actions I have seen with the missile launch and their other 
nefarious activities in the Middle East, that they are not 
getting right with the world. Do you think they are getting 
right with the world?
    Secretary Lew. That is not what I think the purpose of the 
nuclear agreement was. The purpose----
    Mr. Dent. That is what the President said.
    Secretary Lew. The purpose of the nuclear agreement was for 
Iran to be forced out of the business of developing a nuclear 
weapon so that they would not have it and they could not 
transfer it to the third party that would destabilize the 
region and the world.
    Having accomplished that is an enormous contribution to 
greater peace and stability. That does not mean that Iran is a 
good actor in other areas. That is why we still have all the 
other sanctions, tools and actions in place.
    Mr. Dent. It just seems to me that because of this 
agreement, we lost all our leverage in that part of the world, 
and it doesn't seem that, in my view, that the Middle East is--
that we are getting Iran to help us in any way diplomatically 
on any issue.
    There is no detente.
    Secretary Lew. There would be a lot more danger in the 
world if Iran was closer to a nuclear weapon. The fact that we 
have reversed that clock, they are farther away, and they are 
not on the path to gain time is an enormous change. That does 
not mean that Iran is a country that we can point to as 
adopting standards or activities that we accept. They do an 
awful lot of things that we consider to be just plain wrong and 
beyond the bounds.
    That is why we have all the other sanctions still in place.
    Mr. Dent. I yield back. It looks like my time is up.
    Ms. Granger. Thank you.
    Ms. Wasserman Schultz.
    Ms. Wasserman Schultz. Thank you very much.
    Mr. Secretary, welcome. It is good to see you.
    I guess it is best to ask my--I will ask my questions all 
at once. And I can help you if you need assistance in what I am 
asking, if you get side-tracked.
    I want to ask you a little bit about the Green Climate 
Fund, because I know that, you know, we have made a significant 
commitment and we have also encountered some challenges, to be 
diplomatic, with the Republicans' willingness to provide the 
initial tranche of funding so that we can be a full 
participant.
    It appears that because we don't have any funding in the 
continuing appropriations act for FY 2016 that we have kind of 
ceded things now to the Green Climate Fund to the Department of 
State. Can you talk a bit about why it is so essential that we 
make sure we provide--that we meet our commitments?
    And, you know,--thank you--I was wondering what that was--
--
    Secretary Lew. I did not know what it was either. 
[Laughter.]
    Ms. Wasserman Schultz. My congressional district is really 
ground zero when it comes to global warming and climate change. 
I mean, we are really at a stage where just yesterday, there 
was news that approximately 30 percent of our population in 
South Florida could either have to drastically alter their 
environment where they live or be engulfed by water. So if you 
could address that.
    Piggy-backing on that question is I would like you to 
address our for the first time participating in the CCRIF, 
which is the catastrophic risk pool, which is shared by a 
variety of countries in our--in our region.
    We have experience with a catastrophic risk pool in 
Florida. Again, being in the midst of, you know, a consistent 
and regular pathway in hurricane alley. And it has proven to 
work. And this one appears to be functioning well. So if you 
could address that.
    And then also, the Global Agriculture and Food Security 
Program is something I have an interest in. And, you know, I 
know we made a challenge pledge. And if you could talk about 
our progress in making sure that we continue our leadership and 
ensure that we can meet our commitments.
    Secretary Lew. Starting with the Green Climate Fund, I 
think what you describe as being the situation in South Florida 
is unusual, but not typical--not atypical. It is happening in 
cities around the United States on the shores. It is happening 
around the world. It is a national security threat as well as 
an economic threat.
    The Green Climate Fund is a way to bring the world 
community together in a multilateral effort where we get 
leverage, where our contribution is supported by other 
countries of the world; and it gives us the ability to see the 
kinds of investments in building resilience that the world 
needs.
    That includes both what happens at shorelines, but it also 
means we are going to be developing energy and environmental 
technologies that reduce the use of fossil fuels; that improve 
the quality of inter-generation efficiency in agriculture and 
forestry.
    In addition to building the security that comes from 
reducing the risk of dramatic climate-related events, it also 
opens new export markets for American products and 
technologies. We are one of the leaders in the world where 
there is an appetite for what we produce, but without financing 
is not an ability to purchase it.
    So I think both from an environmental point of view, an 
economic point of view, and a national security point of view, 
it serves our national interests very well.
    With regard to the Central American & Caribbean Catastrophe 
Relief Insurance Program--we have requested funding for the 
fund, which is a multi-donor trust fund that would support the 
expansion of catastrophe risk insurance in Central America. 
Just like South Florida, the countries in the Caribbean are 
highly vulnerable to natural disasters and catastrophe risk.
    Building fiscal resilience is really important to making 
sure that they can respond when catastrophes occur and maintain 
political stability when catastrophes occur. We have seen too 
often that without there being a risk insurance program, we 
need to go in and bilaterally provide support because there is 
urgent need, and they are our neighbors, and we have a need to 
make sure that there is both an ability to address those 
catastrophic events, but also maintain stability.
    On the GAFSP, continuing to support the pledges we have 
made is very important. We have made real progress on the food 
security front. I am particularly attached to this. I helped 
develop this initiative in a former part of my life when I was 
at the State Department. You go around the world and there is 
an understanding that to feed the people in your own country 
and to feed people around the world, we need to harness both 
technology and we need to harness best practices, and that is 
what these funds do.
    But again, it is on a multilateral basis, where U.S. 
support is leveraged by international partnership. We have made 
a request that would fill in some of the gaps in the funding, 
and I see we are out of time, but I am happy to get back with 
the details.
    Ms. Granger. Thank you.
    Mr. Crenshaw.
    Mr. Crenshaw. Thank you, Madam Chairman.
    Thank you for being here today.
    Let me follow up a little bit on this sanction business, 
because I have a couple of questions. One is: You mentioned 
that we lifted the nuclear sanctions, but we haven't lifted the 
other sanctions. It seems like the only reason that they came 
to the table was due to the nuclear sanctions that really 
wrecked their economy. So they came to the negotiating table.
    Do you think the non-nuclear sanctions, the ones that are 
left there, are they really going to have any kind of impact? 
Because it doesn't seem like they are doing much. We are 
talking about doing things and designating things. But it 
doesn't seem to change the behavior.
    On the snap-back provisions that you talked about, I wonder 
if you really believe those things are going to work. Because 
on one hand, you will have a lot of little, small incremental 
violations that won't trigger the nuclear sanctions, and they 
will nickel-and-dime along the way. All of a sudden the 
international community will wake up and realize it is almost 
too late to stop them.
    The other part of that is: Do you really believe that 
companies believe in these snap-back provisions? Because if you 
really believed that these provisions were going to snap back, 
and you want to do business in Iran, and you knew Iran was in 
the business of doing bad things and violating treaties, et 
cetera, would you really want to go in there and do business 
knowing that these sanctions might come back into play? 
Wouldn't you avoid that in the long run?
    Talk a little bit about those two things.
    Secretary Lew. Congressman Crenshaw, both of those are, I 
think, excellent questions, and I would say that on--with 
regard to the nuclear sanctions versus the other sanctions, 
while we had the toughest nuclear sanctions, the toughest 
sanctions regime that we have ever put in place with the world 
community, Iran was still able to fund terrorism, they were 
still able to fund regional destabilization. So there was 
leakage even with the nuclear sanctions because not everything 
comes through sanctioned entities and not everything can be 
stopped with sanctions.
    Our goal is to make it as hard as possible for them to do 
those activities. I do not believe the shape of the resources 
they have for those activities will change dramatically. But we 
should not kid ourselves, even with the nuclear sanctions, they 
were finding ways to support terrorist activities. So we have 
to keep on it, we have to be attentive to any entity that we 
can make it harder and harder for them to work through.
    But if you look at the nuclear sanctions, it was a case 
where the world community came together and said on some things 
we do not agree, but on the question of whether Iran have a 
nuclear weapon, there was total agreement.
    That was why that sanctions regime was as tough as it was, 
and when Iran agreed to roll back its nuclear program, there 
had to be a rollback of the specific nuclear sanctions. We have 
never rolled back the non-nuclear sanctions and we will 
continue to designate under them.
    On the question you asked about the snap-back and the 
willingness of companies to do business, there is not a rush of 
companies and financial institutions actually executing on 
doing business. We have made it clear where the nuclear 
sanctions were lifted, it would not be keeping our agreement to 
say that it was a violation of our rules, our laws, if things 
that are not sanctioned become the basis for doing business. 
But there has been a reticence in the global community.
    Mr. Crenshaw. You think that is partly the threat of the 
snap-back?
    Secretary Lew. I do not know that it is a threat of the 
snap-back or if it is a threat that because there is enough 
other maligned activity going on that there is more risk with 
Iran or if it is because Iran has conducted its business 
affairs in the world that make it difficult to rebuild those 
normal business relations.
    What I can say is we have an obligation to keep our part of 
the bargain. We have to lift the nuclear sanctions, which we 
have done, we have to make it clear we are not going to take 
action under the nuclear sanctions, and then businesses, 
financial institutions, will have to make their own decisions 
whether they want to be in that market. But I do not think we 
ought to be suggesting that the nuclear sanctions continue to 
be a barrier.
    We have been clear about what sanctions remain in place, we 
have a Web site that is very clear, we answer questions all the 
time. If you believe in sanctions as a tool for effecting 
change of policy, maligned policy, you also have to believe in 
relief from sanctions when those maligned policies change.
    In the case of the nuclear sanctions, they worked. In the 
case of these other things, we have to continue to be on the 
case. When we see entities that are involved in supporting 
terrorism, we have to be willing to continue to act against 
them.
    Mr. Crenshaw. Well, I think it is a great concept if they 
really believe that they are going to snap back. I think we 
need to make sure we are vigilant and don't let them ease along 
and we wake up one day and say----
    Secretary Lew. If they violate the nuclear agreement, the 
snap-back would kick in. They have not yet.
    Mr. Crenshaw. Great. Thank you.
    Ms. Granger. Ms. Lee.
    Ms. Lee. Thank you very much. Good morning, Mr. Secretary. 
First of all, let me say thank you once again for being here 
and for your tremendous leadership at Treasury. As the co-chair 
of the bipartisan Cuba Working Group and as someone who has 
worked on establishing just normal diplomatic relations with 
Cuba for decades, I really want to commend the administration 
for the bold steps it has taken to re-establish diplomatic 
relations with Cuba.
    Now there is bipartisan support for what the administration 
is doing and for even more normalization in terms of passing 
both of our bills ending the travel ban and lifting the 
embargo, but there is also bipartisan opposition to that, as 
you know, even on this committee, so this is truly a bipartisan 
issue both on the pro and con side. But I think the public is 
with those of us who want to see normal relations.
    The announcement this morning is very significant in terms 
of the amendments to the Cuba sanctions regulations, especially 
ahead of the President's historic trip to Cuba. So could you 
sort of lay out what these changes are as it relates to banking 
and finance and people-to-people exchanges? And then second, I 
want to raise--and I have raised this before with regard to 
medical advances--hopefully this is bipartisan--in terms of the 
issue with regard to diabetic foot ulcers.
    Both the House and the members of the Senate have 
communicated with the Treasury Department with regard to the 
fact that first an estimated 25 million Americans are affected 
by diabetes and more than 2 million affected by diabetic foot 
ulcers.
    Now OFAC has previously granted a license for clinical 
trials for Hebropo P treatment which is still unavailable in 
the United States for those suffering from DFU, and the Biotech 
Institute in Cuba has been, you know, leading in terms of this 
innovative treatment. And we are trying to figure out how we 
can at least go for clinical trials as well as for, if the 
clinical trials work, the opportunity for people with diabetes 
and diabetic foot ulcers to benefit from this treatment 
because, of course, you know, in communities of color, diabetes 
is a very big issue. And we have seen--many of us have seen and 
we know the results of this very effective treatment.
    Secretary Lew. Congresswoman, just to start with what the 
actions taken today are, there is an expansion of banking and 
financial services which permit U-turn transactions so that 
without having direct financing, money can pass through the 
U.S. financial system. There is an expanded authorization for 
educational exchanges that do not involve academic study so 
that individual travelers can engage in people-to-people travel 
so that the travel does not have to be under the auspices of an 
organization.
    There is an expansion of the authorization to pay salaries 
so that the limit on salaries will not stop the employment, and 
certain dealings in Cuban merchandise will be permitted.
    There are a number of other actions in the Commerce 
Department area that I am less familiar with the details of, 
but that get into permitting additional trade and commerce and 
civil aviation. We believe that, again, as I responded earlier, 
that we have acted within the boundaries of the law. If the law 
were different, we would be able to do more than we are doing.
    But we have eliminated restrictions that were the result of 
executive action and we have been respectful of the legal 
boundaries. So while we might prefer to have a more normal 
commercial relationship, until the laws are changed, we cannot 
have a truly normal commercial relationship.
    On the specific question you asked about diabetes, you have 
asked me about this before--I have passed it along to our OFAC 
team. I can't comment on specific OFAC applications, but OFAC 
is reviewing that application.
    Ms. Lee. Okay, thank you very much. Madam Chair, I just 
want to make a note that the U.S. International Trade 
Commission estimated that the opportunity cost to U.S. 
exporters of maintaining the embargo is around 1.2 billion per 
year, so it is really in the United States' economic interest 
to move forward with normalized relations. Thank you again.
    Ms. Granger. Thank you. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chairman. Good morning, 
Mr. Secretary. I stepped out of the room for a moment and I 
walked back with a St. Patrick's Day flower. I was just----
    Secretary Lew. Well adorned.
    Mr. Fortenberry [continuing]. Visiting with my florist from 
back home. Let me make a general comment to you about what I 
perceive and then I would like your perceptions before going 
into policy details.
    The United States after World War II was cast into the role 
really of the world's lone superpower, and we did so--we took 
on that role at great expense to ourselves both in terms of 
lives as well as monetary transfers to other countries. And in 
doing so, we created a certain dynamic, a certain foundation 
for international order and stability.
    In the period in which we are living and in which there has 
been rapid globalization and integration, it seems that this 
post-World War II construct is under great stress, and the 
multilateral institutions that have worked toward those 
original goals. I would like your perspective on that and then 
what you perceive we would need to--how do we evolve a more 
robust 21st century architecture that demands that other 
responsible nations of the world re-commit to more robust types 
of partnerships with us on this fundamental question of 
stability.
    Secretary Lew. Congressman, that is a question I spend an 
enormous amount of time thinking about and working on because I 
think you put your finger on why it was so important that we do 
the IMF quota reforms.
    We were in the penalty box, because we negotiated quota 
reforms that let other countries that had grown substantially, 
have a larger share, and under terms that were very 
advantageous to the United States, but for 5 years we were 
unable to finalize it. That put us in a position where the 
world started to ask is the U.S. committed to the post-World 
War II institutions that it helped build.
    We have removed that question by having an agreement on 
doing IMF global reform, we have kind of lifted ourselves to be 
able to ask exactly the question that you asked and to be part 
of the conversation about taking it to a place that works in 
the 21st century.
    One of the real advantages of other countries coming of 
age, reaching a level of a greater participation is they then 
have greater responsibility, and we have to demand that kind of 
responsibility as part of the institutions that we still have a 
dominant voice in. We have to maintain the dominant voice if we 
want our values and our standards to be the ones that drive the 
debate. Earlier, we were talking about the Asia Infrastructure 
Bank. Even when we are not in an organization, we have a very 
strong voice about what norms should be.
    I believe that the world of the future is going to be a 
world that is very different from the ashes after World War II. 
We had most of the world's wealth, we had most of the world's 
manufacturing capability, the world had no choice, we were 
generous, we stepped forward, we created a period of 
unprecedented economic reconstruction and growth, and we have a 
more peaceful prosperous world because of it.
    Going forward, we are going to need to embrace countries 
that are coming into their own and have them subscribe to the 
standards that we want to live by. I think the worst thing we 
could do would be to step away from that international stage, 
because if we do not play that role, others will.
    Mr. Fortenberry. Well, this is the exact source of the 
tension because I agree with that comment in its substance.
    However, when the United States is not getting the best 
deal or when other countries hide behind our largess or 
continue to push us out in front, which has been the 
traditional role, when they are fully capable of participating 
in a more robust manner, it is simply not fair.
    And the electorate not only perceives this, but feels it, 
and so that is why I think what you are ultimately talking 
about, and what we all ought to be talking about, is a value 
proposition as to what true governance structures mean in terms 
of justice, and how people build out systems economically and 
culturally that protect human dignity and have the enforcement 
mechanisms to do so.
    To Mr. Ruppersberger's point, for instance, in traveling 
through Africa, China is everywhere. I remember being in 
Liberia, and seeing a brand new shiny soccer stadium. Liberia 
of all places, in such proximity to United States.
    I asked one person, ``Why does China trade so much with 
Liberia?'' They said, ``we are waiting for you.'' In other 
words, again, this perception, in certain areas of the world 
anyway, which incline toward who we are, toward our narrative 
and the values we hold--and the institutions that give rise to 
their largess or their potential largess as a country, being 
corrupted by other nations who do not share these values.
    Secretary Lew. We have called on China, in particular, to 
step up and play more of a role in making concessional loans--
contributions to international facilities that make 
concessional lending available. China is no longer the 
developing country, it is one of the two largest economies of 
the world. Responsibility goes with that.
    They are stepping into that space, tentatively, and they 
will not necessarily always want to do it the way we want them 
to do it. The more they are involved in organizations that we 
help shape the standards and the values for, the more likely we 
are for the multi-lateral cooperation to move in the right 
direction.
    When you go to a lot of the countries where China has done 
business bilaterally, it is not a simple, good news story. 
There is a lot of damage left behind, and I do not think that, 
on a multi-lateral basis, that can be tolerated.
    Ms. Granger. Mr. Stewart.
    Secretary Lew. I do not think it should be the work they 
work bilaterally either.
    Ms. Granger. Mr. Stewart.
    Mr. Stewart. Thank you, Madam Chairman, Secretary. It is 
good to be with you as always. We have heard a bit of talk in 
this hearing so far about sanctions.
    I would like to concentrate some about--around North Korea 
now. We haven't discussed them which surprises me a little bit. 
You know, Leader Kim Jong Un is a very interesting person; I 
would sure love to see a psychological profile on him. It would 
be fascinating, I am sure.
    I don't think that we understand him very well. He is very 
unpredictable, he is very aggressive and, you know, it is 
interesting to know with all the talk that we have had about 
sanctions, especially vis a vis Iran and the nuclear agreement 
which we spent a lot of last year talking about, their 
ballistic program which we spent some time recently talking 
about, but North Korea is already there.
    I mean, the thing we are hoping to avoid with Iran, North 
Korea is there; we know that they have had three or four, maybe 
more, successful nuclear tests. And recently they launched a 
missile which, under the guise of a satellite, but it was 
certainly more than that.
    You know, the KN-08, for example, is a frightening new 
technology and one that we can't ignore. And if I could make a 
second point, we can't effectively sanction North Korea without 
Chinese help because they are their largest trading partner by 
far. And recently the Under Secretary for Treasury, Terrorism, 
Financial Intelligence, and I know--this is actually leading to 
my point now. I know that you know this, Beijing--you went to 
Beijing and Hong Kong.
    Secretary Lew. He is in Beijing today.
    Mr. Stewart. Okay, today. My question is this, could you 
give us an update on, forging a stronger cooperative effort 
between us and China regarding these sanctions because, again, 
it doesn't matter what we do. We--it is not going to be 
effective without Chinese cooperation and they haven't been 
very cooperative with us in the past.
    Secretary Lew. Well, I think if you look at the U.N. 
Security Council resolution that passed just about two weeks 
ago, the fact that China supported very tough international 
sanctions is a very significant development.
    Mr. Stewart. I agree. I think it is a meaningful step.
    Secretary Lew. China has a kind of--regardless of country, 
they have a view that international, not unilateral, sanctions 
are the appropriate way to go. So they are always more 
committed to multilateral sanctions than they are to what we do 
on our own.
    I think the fact that they agreed to, frankly, the toughest 
set of sanctions that anyone thought possible to get out of the 
U.N. and it was put into place I think is very meaningful.
    I was in China the week after the U.N. Security Council at 
the G-20 meetings, and I had conversations at the highest 
levels in China, and I can tell you that they do not view this 
as something they are doing for us.
    They look across their border and it makes them very 
nervous that they cannot explain some of the actions that are 
reckless and that are destabilizing.
    So our--acting Under Secretary--we are waiting for Senate 
confirmation, hopefully that will come soon--is in China now. I 
have not had a readout of his meetings but he was meeting with 
people who are in the business of the implementation--and 
sanctions regimes are all about implementation.
    Mr. Stewart. Yes.
    Secretary Lew. They are theory until you implement them, 
and I am looking forward to getting that report.
    Mr. Stewart. Which is actually the core of my question, 
sir, and that is, it is easy to agree to sanctions, many 
nations do that. But have no intention or to comply with those 
sanctions or to help carry them out, well, they either have no 
intention or in some cases they have no ability; it is just so 
against their economic interests that they just can't do it.
    Is your read that China will be more aggressive in 
implementing these sanctions than we have seen in the past?
    Secretary Lew. They have certainly indicated a high level 
of concern and the need to be clear. That is why they supported 
the resolution. They have indicated an intention to implement 
it, and the reason that we have followed up--with Acting Under 
Secretary Szubin's visit is to take it to the next level.
    This is not something that is just a 1-day effort. We know 
from these sanctions programs that it is grueling day-to-day 
work. You have got to identify the entities, act against the 
entities, and then make it clear that they will be the kind of 
international cooperation to actually shut the valves down.
    I think it is a very significant statement to North Korea 
that China is part of this international effort.
    Mr. Stewart. I agree, and I wish that it had happened 
earlier, actually, because we are a long way down that road now 
and Acting Under Secretary Szubin, as you have said, I think 
you and he working together can really make a meaningful 
difference for us with--in an area of the world that I don't 
think we give quite enough attention to as we focus in other 
dangerous places, as well, so--
    Secretary Lew. We give a lot of attention to it but it 
deserves as much attention as we can give it.
    Mr. Stewart. I understand. Thank you.
    Thank you, Mr. Secretary.
    Ms. Granger. Thank you.
    We are going to have another round, or going to try to. The 
President is coming here to the Capitol for a lunch meeting and 
we may have a problem getting out of this room so if you will 
keep in mind the time and if we--if that happens, we will make 
sure that we close it down and get out.
    I think--Secretary Lew, I think you will be able to get 
out. We may be stuck in here so I am just going to turn to Mrs. 
Lowey for her question.
    Mrs. Lowey. Thank you very much, Madam Chair.
    Mr. Secretary, we have sought incentives to bring Russia 
into step with the world community. But Russia's strategic 
foreign policy goals remain elusive. Now, I remember having a 
long talk a couple of times with Secretary Kerry in 2013, and I 
kept saying, what does Russia want? There was already 
tremendous damage in Syria at that point 3 years later. Now it 
has been 5 years.
    And although the Secretary tried to meet with Putin and 
meet with Lavrov, and had a lot of discussions, look how many 
more lives and how much destruction has taken place. So it is 
clear that Putin plays by his own rules, shows no interest, 
except when it is convenient, in international cooperation, and 
appears only interested in aggression.
    Additionally, some countries in Western Europe continue to 
have very significant and economic investments with Russia. So 
I just want your view. Do we have--or is there a coordinated 
international strategy on imposing sanctions against Russia or 
do they just have the upper hand? Is the threat of new 
sanctions having any effect on Putin, particularly with regard 
to the oligarchs, over Syria and Ukraine? How has Putin reacted 
to the sanctions levered on Russia by the United States and 
E.U.? What measures has Russia taken to retaliate against 
sanctions?
    So, basically, we couldn't do anything with Russia in 2013. 
The devastation continues. Is there any way that the 
international community can cooperatively put pressure on 
Russia and work together?
    Secretary Lew. We have obviously had a very complicated 
relationship with Russia over the last few years. We have put 
in place--not just the United States but with the G-7--very 
powerful sanctions against Russia on Ukraine. We have 
maintained unity amongst our European allies in keeping those 
sanctions in place.
    We designed those sanctions to minimize the spillover and 
target them towards the people closest to the decision making. 
I think they have been very effective. It is a little hard to 
attribute the exact amount of impact because with the price of 
oil dropping as fast as it has, there have been multiple things 
hurting Russia's economy. But Russia's economy is in terrible 
shape and the sanctions are a part of that.
    They are now trying very hard to put together a Euro-bond 
financing and they are having trouble getting any financial 
institution to cooperate with them, even though it is not 
technically sanctioned.
    What I can say about the Ukraine experience is we have had 
united action. It has had an impact. I cannot tell you it has 
changed fundamentally their policy. There is a way out for 
them; they could implement the Minsk Accords. If they implement 
the Minsk Accords, the Europeans and we would be very happy to 
lift the sanctions. The purpose the sanctions has changed the 
policy and get Minsk implemented.
    But we have also made clear that those sanctions will 
remain in place and that means that the pressure builds over 
time because sanctions have that effect.
    At the same, we have worked with Russia on a number of 
issues. We talked about the Iran negotiations, just a few years 
ago, working on getting the chemical weapons out of Syria was 
something we worked together on. And now, obviously, Secretary 
Kerry has been involved in negotiations on Syria that are a bit 
out of my immediate realm of responsibility. But they are 
obviously important conversations.
    I think we are going to have to manage this relationship, 
understanding that the things we do have an impact. We can 
maintain unity on things like Ukraine sanctions and that Russia 
will continue to make decisions based on its own national 
decision making and its perception of its national interests.
    But what I could tell you is that the Russian economy is in 
much worse shape today than it would have been if the sanctions 
had not been in effect, and that is causing a lot of wear and 
tear in Russia.
    Mrs. Lowey. Now, I probably have hardly any time, but since 
it is last, why don't I let you conclude by sharing with us the 
monetary benefits there are to the U.S. in participating 
through these institutions, and how are the results measured 
and evaluated? You can say it----
    Secretary Lew. Well, in 15 seconds, I think that if you 
look at our ability to project our policy objectives--just take 
Ukraine. We would not have been able to put a $17 billion 
package together alone for Ukraine. Working with the IMF and 
with our international partners, we could.
    That is replicated on many fronts, whether it is dealing 
with Ebola or dealing with other crises around the world, or 
great needs like food security and climate. I think our ability 
to leverage our values, our objectives, our policies through 
these multilateral institutions is just an enormous asset to 
our national security and our economic security.
    Ms. Granger. Thank you. Mr. Diaz-Balart.
    Mrs. Lowey. Thank you for your leadership.
    Thank you, Madam Chair.
    Mr. Diaz-Balart. Mr. Secretary, sticking with the theme of 
sanctions, on February, OFAC licensed a U.S. company to build a 
factory at the port of Mariel, which by the way, happened to be 
the port from which the Castro regime smuggled the weapons to 
North Korea from. The venture at the Mariel port is run by 
Almacenes, SA [Spanish spoken] a company of the Cuban military. 
Cuba's ministry of interior, an arm of the Cuban military is 
the most responsible for the brutality against the Cuban 
people.
    So, how does permitting companies to partner directly with 
the Cuban military promote the Cuban people's independence from 
Cuban authorities, which is the stated policy goal of the 
President and that you have talked about as well?
    Secretary Lew. So, Congressman, I would have to go back and 
look into a specific license. I think that the general 
objective of opening ports, opening shipping, having air 
traffic and commerce within the confines of our law is about 
building more economic----
    Mr. Diaz-Balart. Mr. Secretary--and again, I apologize for 
interrupting, but I get that. It sounds nice. But you are 
dealing directly with the Cuban military.
    How does doing business with the Cuban military--let's not 
talk about theories. It is not--what you talk about, what you 
say, what the President says. What you are doing is authorizing 
business directly with the Cuban military.
    Here is my question: how does doing business with the Cuban 
military help the Cuban people be independent of the Cuban 
military and its authorities?
    Secretary Lew. Well, I am not going to address the specific 
license----
    Mr. Diaz-Balart. In general. How does doing business with 
the military help the Cuban people?
    Secretary Lew. If the transaction you are talking about is 
facilitating shipping in and out of Cuba, and one of the things 
we do is we ship agricultural products to Cuba, and hopefully 
we will be shipping things like communications equipment to 
Cuba. That helps the Cuban people, that is the kind of support 
for the Cuban people----
    Mr. Diaz-Balart. Mr. Secretary, this is not the instance 
where you have permitted doing business directly with the Cuban 
military. And again, that goes against what the President has 
said, and it is just--it is again, how can you justify doing 
business with the Cuban military as a way to help the Cuban 
people?
    Secretary Lew. We have never said that Cuba's system is 
where it should be.
    The question is, how do you cause Cuba's system to change? 
We believe that by building more ties between the American 
people the Cuban people, between the U.S. economy and the Cuban 
economy we are more likely to change Cuba's system than a 
policy that has failed for 50 years----
    Mr. Diaz-Balart. Oh, on that point, on that point. What 
Congress has codified into law in a very strong bipartisan way 
was basically asking for a number of things in return for a 
sanction relief, and you know what those are. Free all the 
political prisoners, some basic freedoms, freedom of press, 
independent labor unions, political parties, and then start the 
process towards elections.
    I am assuming that you support those concepts.
    Now, here is a question. That is what Congress insisted on, 
before sanctions were--there was sanctions relief.
    What has the administration gotten, because the 
administration didn't insist on any of those things as a 
condition. So, what, specifically, has the administration 
gotten for the sanctions relief that it has given to the Castro 
regime.
    Secretary Lew. I think--you know, we can go back and 
forth----
    Mr. Diaz-Balart. No, I am just asking--I am actually asking 
for specifics. What have we gotten back?
    Secretary Lew. We are trying to change the relationship 
between the Cuban people and the American people. We are trying 
to set a foundation to be able to have change in Cuba----
    Mr. Diaz-Balart. So, what are you asking back? What are you 
asking for?
    Secretary Lew. We are increasing the contact between the 
U.S.--the American people----
    Mr. Diaz-Balart. What are you asking for, though? Are you 
asking for anything?
    Secretary Lew. There have been a number of reforms that the 
State Department has worked with Cuba on----
    Mr. Diaz-Balart. Can you tell me what--just want are you 
asking for, Mr. Secretary? What are you asking for?
    Secretary Lew. So, the----
    Mr. Diaz-Balart. Not on that theory, what are you asking 
for? Specifically, what are you insisting on as to--you know, 
we talked about, you just spent a lot of time talking about 
demanding things in return for sanctions relief of Iran. And we 
can argue whether it is enough.
    What are you asking for in return?
    Secretary Lew. I think--if you look at the Cuba policy, it 
is the exact opposite of Iran.
    We did not have the world with us, putting pressure on 
Cuba. We were the outliers, even in the Western hemisphere. 
There is not a country that I have talked to in the Western 
hemisphere----
    Mr. Diaz-Balart. Mr. Secretary, for a long time, everybody 
did business with South Africa, and I think you would disagree 
that doing business with it was a good thing, whether you were 
an outlier or not.
    Secretary Lew. No, I am not--I am not going to defend 
policies in Cuba that need to change. The question is, how are 
we the most likely to----
    Mr. Diaz-Balart. And what are you asking for?
    Okay, what are you asking for?
    Secretary Lew. Okay, so we believe that the process of 
increasing people-to-people contact----
    Mr. Diaz-Balart. But Mr. Secretary, when you are dealing 
with the military, that is not people-to-people.
    Secretary Lew. But if we--if there is more information, 
more communication available, if there is more contact----
    Mr. Diaz-Balart. With the military, with the military.
    Secretary Lew. But when we----
    Mr. Diaz-Balart. With the oppression system.
    Secretary Lew. It is not----
    Mr. Diaz-Balart. Mr. Secretary, I have just 90 seconds 
left. Mr. Secretary, just very quick----
    Secretary Lew. It is not the military----
    Mr. Diaz-Balart. You were appointed to the OMB--you were 
appointed to the OMB and also National Security Council during 
the Clinton administration. Were you involved in the 
negotiations with the North Korea deal--nuclear deal?
    Secretary Lew. Not directly.
    Mr. Diaz-Balart. Well, I just hope that you do a better job 
and this administration does a better job of that when you are 
dealing with North Korea. You have all of those promises that 
they were not going to have nuclear weapons.
    Ms. Granger. Your time is up, Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you.
    Ms. Granger. Ms. Wasserman Schultz, please.
    Ms. Wasserman Schultz. Thank you, Madam Chair.
    I just want to return to the subject of multilateral 
development banks and other international financial 
institutions, and our private sector engagement and how we can 
best leverage it.
    We are going to be meeting soon, the subcommittee with Bill 
Gates, and you know, I know companies like Cargill and Coca-
Cola are interested in increasing their engagement and getting 
involved in sustainable development. So, you can--can you talk 
about that a little--expand on that a little bit?
    Secretary Lew. Yes. I think that the future for successful 
international development is going to have to get well beyond 
the official development assistance pattern in order to have 
the kind of impact that we need.
    When we met in Addis Ababa at the Funding for Development 
Conference, it was very important that there were three prongs 
of the international commitment. It was to continue the Office 
of Technical Assistance (OTA), but it was to be supplemented 
with private economic activity and local government 
contribution. There need to be three legs on the stool to 
really build the kind of future that we need.
    I do not think we can remove the bilateral and multilateral 
development assistance, but it is not going to get all the way 
to where we need to go if you do not have an environment for 
private investment. So let me go back to why we pledge to 
double the Office of Technical Assistance.
    One of the things that we can do that has got the biggest 
bang for the buck is to help a lot of these countries put in 
place the kind of tax system they need, and business approval 
system they need to have transparent, honest systems which will 
attract the kinds of international investment that can really 
leverage the development process.
    When we made that pledge, it was the--the reaction was the 
most reaction I have ever gotten for that small of a commitment 
of dollars, because it is just considered to be many, many 
times more important than just direct dollar assistance.
    The Gates Foundation is a very large player, obviously. 
They have the ability, just as an individual party, to make 
commitments that equal major government contributions. We work 
closely with them on a number of initiatives and we reach out 
to the private sector, the not-for-profit sector as well as our 
multilateral and bilateral partners.
    I think the future is going to look very different than the 
past in terms of how all of those elements fit together.
    Ms. Wasserman Schultz. How would you assess the United 
States being in arrears on what we owe to this fund affecting 
our influence?
    Secretary Lew. I have had the misfortune and fortune of 
inheriting arrears on multiple occasions. I think it is a 
terrible thing. We have got to pay our bills. When you do not 
pay your bills, you do not have the same amount of influence as 
when you do pay your bills.
    So now we are okay at the IMF, we have got a whole bunch of 
others where we are behind. They are much smaller numbers, they 
are things we should be able to address, but, it was not good 
when we were in arrears at the U.N. in the 1990s, we cleared it 
out, we are back in arrears.
    We need to stay current with the commitments that we make. 
You know, getting back to the idea of what is the pathway to 
the future for the United States to sustain the kind of 
influence we developed in the post-World War II environment, 
part of it is keeping our commitments.
    Ms. Wasserman Schultz. So you are saying playing whack-a-
mole when it comes to maintaining our pledges and keeping our 
commitments isn't really the best policy to expand our 
influence?
    Secretary Lew. No. I mean, there is a certain confidence 
that in the end will pay our bills, but I think we would gain 
stature if we did it in a more orderly way where it was not 
with the anxiety that we might not.
    Ms. Wasserman Schultz. Thank you.
    Ms. Granger. Mr. Fortenberry.
    Mr. Fortenberry. Mr. Secretary, I want to return to our 
earlier conversation about this idea of a values proposition 
and then making it real for the benefit of other peoples, 
creating an environment of stability, which is intimately tied 
to our national security as well as our humanitarian interest 
and economic well-being.
    Agriculture. I come from Nebraska. I am so excited, 
thrilled that agriculture has become cool.
    The whole idea of creating initiatives for sustainable 
agricultural development and properly ordered and inclusive 
market systems, I think, meets multiple goals of empowering--
taking on the structures of poverty, empowering those to 
provide for themselves, integrating again our own values and 
technical assistance with others in need, thereby strengthening 
underlying market-based systems which are consistent with human 
dignity, and then basically taking away the option for twisted 
forms of nationalism and ideology to take people in directions 
that are just harmful and destructive.
    So I present that to you because I think, again, looking at 
the 21st century architecture of how we evolve, properly 
evolve, development assistance and international frameworks for 
those three outcomes of security, economics, humanitarian 
values, that has to be core.
    Secretary Lew. I agree with that entirely. I mean, if you 
look at what a difference it makes in a remote area of Africa 
when a cell phone came in to the town and you could all of a 
sudden know what the price of a commodity was and you were not 
a victim of whoever was there offering you whatever they wanted 
to pay. That was a market; information created a market.
    You now have exchanges developing in countries where there 
is a formal market that empowers local producers, it also 
provides a level playing field for imports and local products 
to compete with each other on a fair basis. There is a long way 
to go, but technology both in terms of the marketplace and in 
terms of the food chain itself offer enormous potential.
    You know, one thing that I know is that it will not be a 
more secure world if we have, you know, more millions of 
starving people. Starving people tend to be, looking for relief 
wherever it can come from, and it is a source of instability 
for there to be a lack of adequate nutrition.
    Economically, you know, you look at where the growth of the 
future is, the growth in demand is in countries where the 
population is growing, and that is good for the United States 
because we are going to sell things to those countries as they 
break out of the subsistence levels into the middle class.
    As far as values go, it is not just rhetoric when we talk 
about a level playing field and transparency, it actually is a 
different way to lead your own life and the life of your 
country and the life of the world, and getting out of the 
shadows of corrupted systems makes the world a better place. I 
think we can promote that through these efforts.
    Mr. Fortenberry. Well, farm products and agricultural 
products is one of the things that we make on a very large 
scale, and continuing the export and the use of those products 
for our own diplomatic goal is very important. It can be 
augmented by these new development initiatives that point to 
sustainability and in what I call inclusive capitalism that, 
again, leads to these values outcomes. So that was a bit more 
of an editorial than----
    Secretary Lew. In a lot these countries, if women could 
just get loans it would make a huge difference.
    Mr. Fortenberry. Mrs. Lowey has heard me tell the story 
before of how I was--had the privilege of going to Honduras, 
and a programs that related to Feed the Future and some of 
USAID's efforts, but nonetheless, it was targeted to the most 
violent area of Honduras, highest murder rate in the world, 
people living in what I call a kind of a benign poverty. There 
is not starvation or anything, but really no hope for anything 
more.
    Through the infusion of capital from a multinational 
corporation with the development assistance from an NGO 
shepherded by the United States government, you had women--that 
is women-owned bakery--empowerment, vision, hope, an idea of 
how to expand regionally all happening in the midst of this 
chaos and disorderly world where one woman had lost her husband 
3 weeks earlier to the violence. So----
    Ms. Granger. Your time has expired.
    Ms. Lee.
    Ms. Lee. Sure. First, I just have a comment of--and again, 
the disagreement is very clear on Cuba. But one thing I want to 
mention is that no country is perfect. Vietnam, China, the 
United States, we have many countries that have not 
accomplished what we think are universal standards of human 
rights. Our country, even in terms of mass incarceration of 
African-American men and political prisoners. And so I think 
what is important as it relates to Cuba is that we work towards 
a more perfect union here in our country, Cuba, wherever else.
    And people-to-people exchanges, lifting the embargo, 
lifting the travel ban moves us closer, moves the Cuban people 
closer to realizing a democratic society without the types of 
barriers that my colleagues have raised. But also we have to 
keep in mind we are still seeking liberty and justice for all 
in our own country.
    It is only through discussion, dialogue and diplomatic 
relations will that ever occur.
    I want to ask you with regard to the Office of Technical 
Assistance within your department. There have been prior 
efforts, including by the United Nations, to encourage donor 
nations to improve the coordination of their development 
assistance program. One of these include I think it is the 2014 
Addis Ababa action agenda. One of the goals, of course, is 
capacity building for developing countries.
    And so I wanted to ask you what are some of the major 
constraints to improving the coordination of technical 
assistance programs in developing countries.
    Secretary Lew. I think that the provision of technical 
assistance is critical. One of the commitments that I made when 
I was at the conference in Addis Ababa was to double our OTA 
over a period of years. And the United Kingdom made a similar 
pledge.
    I think that there are multilateral institutions like the 
IMF, there are countries like the United States and the U.K., 
that have specific skills and ability to go into these 
countries and do this work.
    There is room for all of us, but there are a lot of 
countries where none of us are doing what we need to do. That 
is why we need--we need more resources.
    When I go around the world and I meet with the OTA folks 
that we have, it really is very impressive what a few people 
are doing in really hard places to build systems that will last 
forever after they leave if the people that they are training 
continue the work. That has to do with central bank policies. 
It has to do with tax systems. It has to do with land 
registration. It has to do with all kinds of things that are 
just part of being able to conduct business in a transparent 
way.
    I have seen more appreciation for the OTA advisers than I 
have in many cases for enormously larger sums of direct aid. It 
has been striking to me that countries we have given billions 
of dollars to have told me the most important thing you did was 
provide these three technical advisers.
    It just shows how--we--I do not think it is either-or. We 
need to do both. They were not saying they did not need the 
money. But the thing that they were just like over and over 
pointing to was the value added with the OTA. So that is 
something I think that we hopefully can work together to do 
more of.
    Ms. Granger. Thank you.
    Secretary Lew, thank you again for your time today. Members 
may submit any additional questions for the record.
    This Subcommittee on State, Foreign Operations and Related 
Programs stands adjourned.
    Secretary Lew. Thank you.
    
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                                         Wednesday, March 16, 2016.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

                                WITNESS

GAYLE SMITH, ADMINISTRATOR, UNITED STATES AGENCY FOR INTERNATIONAL 
    DEVELOPMENT

                Opening Statement of Chairwoman Granger

    Ms. Granger [presiding]. The Subcommittee on State Foreign 
Operations, and Related Programs will come to order.
    I want to welcome the Administrator of the U.S. Agency for 
International Development. Administrator Smith, thank you for 
being here today for your first hearing before the 
subcommittee. We look forward to your testimony on the fiscal 
year 2017 budget request.
    USAID plays a key role in our nation's foreign policy, and 
the members of this subcommittee understand and support the 
good work of your agency from life-saving disaster assistance 
to global health and other development programs that provide 
clean water, agricultural assistance and education.
    The men and women of the USAID are the face of the 
generosity of the American people.
    I would like to take a moment to highlight the impressive 
work of USAID and other agencies in response to the Ebola 
epidemic.
    This time last year, we were fearing the worst, but the 
response was an unprecedented example of American leadership 
overseas. Now we see another public health threat on the 
horizon, the Zika virus, and we expect collaboration across the 
U.S. Government.
    We want to hear your thoughts today about what can be done 
to immediately address the Zika outbreak with the resources and 
authorities available.
    During the time I have chaired this subcommittee, I have 
been surprised by the length of time it takes for funds to be 
directed towards urgent needs. I also remain concerned about 
the size of USAID and how difficult it can be to partner with 
the agency.
    Administrator Smith, I appreciate the discussions we have 
had in your first few months on the job. I hope we can continue 
to work together and to find real solutions to some of these 
long-standing problems.
    The budget request includes approximately $11 billion that 
USAID manages directly. Additional funds are partially 
administered by the agency. Unfortunately, once again, the 
budget proposes to sacrifice congressional priorities for 
administration initiatives.
    For example, the request for climate change programs, 
including the Green Climate Fund, is proposed to be increased. 
Yet basic education programs and humanitarian assistance are 
proposed to be reduced.
    The request prioritizes malaria, but suggests that 
tuberculosis and nutrition programs can be cut. In addition, 
the administration has once again proposed to reduce two of 
this subcommittee's top priorities: biodiversity activities and 
programs to combat wildlife poaching and trafficking.
    The subcommittee will carefully consider how to allocate 
resources to address the greatest needs and meet our shared 
priorities.
    I want to close by thanking you, the men and women of USAID 
and your partners for the most important work you do every day 
to improve the lives of others and promote American interests.
    I will now turn to my Ranking Member, Mrs. Lowey, for her 
opening remarks.
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 Opening Statement of Mrs. Lowey

    Mrs. Lowey. And I thank you, Madam Chair.
    Administrator Smith, I welcome you again to the helm of 
USAID. I am pleased to have you here today.
    USAID continues to play an indispensable role in spear-
heading global development efforts. I am sure we will see even 
greater achievements under your leadership. Given unprecedented 
levels of humanitarian needs around the world today, you face 
the unenviable task of guiding U.S. response efforts on nearly 
every continent.
    With this in mind, I have concerns regarding whether the 
Fiscal Year 2017 Budget Request will provide USAID the 
necessary resources to implement current programs and prepare 
for new or unanticipated challenges.
    First, I am pleased with the proposed increases for malaria 
and GAVI. However, I do not understand the cuts to nutrition 
and tuberculosis programs, when nearly 800 million people 
worldwide suffer from malnutrition, and T.B. claims more than 
1.5 million lives per year.
    Second, with regard to Central America in last year's 
omnibus, this committee provided $750 million to address the 
root causes driving thousands of minors to flee.
    I look forward to hearing from you what progress the 
Northern Triangle countries have made on good governance, the 
rule of law, education, job creation, citizen security that 
would provide the basis for further federal investment.
    Third, the Zika virus has spread to more than 20 countries, 
yet many governments have responded to their citizens with 
antiquated messages to simply avoid pregnancy.
    This is absurd; ignoring the potential effects of Zika by 
putting our collective heads in the sand will only make the 
problem worse. Restricting access to family planning and 
reproductive health services would be a failure to support 
women abroad during a public health emergency.
    I hope we can work together without the partisan fights and 
divisive riders on this issue. Unlike the emergency funds to 
combat Ebola, which I recall only narrowly authorized the 
specific use in West Africa, funding for Zika must also come 
with as much flexibility as possible.
    Finally, Administrator Smith, I still do not understand the 
administration's continued refusal to prioritize education. In 
2013, your predecessor said, in testimony to this committee, 
that education was a core development objective.
    Yet, given this year's low funding request, it appears to 
me that it is only a core development objective to Congress, 
not to the President or OMB.
    There are currently over 120 million children and 
adolescents out of school, and some 250 million primary school 
age children in school but not learning the basic skills they 
will need to participate in their communities and economies.
    According to USAID's own reporting, the world is in the 
midst of a global learning crisis. The United States has 
prioritized many admirable programs, from food security to 
electricity, health to economic empowerments. Yet, without 
universal literacy, these programs are out of reach for 
significant portions of poor communities.
    We simply will not achieve real, long-term success without 
education at the center of our efforts.
    In closing, I want to recognize the remarkable public 
servants throughout USAID who work night and day to better the 
lives of millions of people around the world.
    I thank them and you for your tireless efforts. I look 
forward to advancing our shared development goals.
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    Ms. Granger. Thank you very much. Administrator Smith, you 
can see there are few members here. It is because they have 
already called votes, and they are waiting to vote.
    I ask that you proceed with your opening remarks. Members 
will be here today, so I would encourage you to summarize your 
remarks, so we have time for you to address questions. The 
yellow light on your timer will appear when you have 2 minutes 
left, and I will stay for your testimony, and then hope the 
rest will come.
    Thank you.
    Ms. Smith. I was complimenting you, and I didn't even have 
the mic on. [Laughter.]
    Ms. Granger. Oh, we listened to that part, anyway.

                     Opening Statement of Ms. Smith

    Ms. Smith. No, I wanted to sincerely thank both of you. 
This is a great job; there is a lot of work we can do together, 
and there are some things about the Agency I think we all want 
to improve. It has been a pleasure working with both of you. 
The ability to come up and seek your guidance, and work through 
how we would make some of these improvements is a real pleasure 
to me.
    Let me quickly go through my remarks. As you know, and have 
asserted yourselves, for more than 50 years, USAID has led our 
nation's efforts to advance dignity and prosperity around the 
world, both as an expression of our values and to help build 
peaceful, open and flourishing partners.
    This request will help advance that important legacy, but 
our budget line items tell only part of the story. In recent 
years, with vital support from Congress, we acted to make our 
work more efficient, effective and impactful.
    First, recognizing that foreign assistance is just one 
valuable tool of many, we are making smarter investments with 
our assistance; leveraging private capital and funding from 
other donors to scale our impact; and supporting governments, 
small businesses and entrepreneurs to mobilize domestic 
resources for development.
    Second, recognizing that development is indeed a 
discipline, we are improving the way we do and measure our 
work. Since adopting a new evaluation policy in 2011, the 
Agency has averaged 200 external evaluations a year and our 
data show that more than 90 percent of these evaluations are 
being used to shape our policies, modify existing projects and 
inform future project design.
    Third, recognizing that we can achieve more when we join 
forces with others, we have partnered with other U.S. 
government agencies, American institutions of higher learning, 
NGOs and communities of faith. When we can achieve greater 
efficiency or impact, we align goals and strategies with 
governments and organizations all over the world. Engagement 
with the private sector is now fully embedded into the way we 
do business.
    Finally, recognizing that development solutions are 
manifold, we are pursuing integrated country strategies, 
helping to build local research capacity and harnessing 
science, technology and innovation to accelerate impact faster, 
cheaper and more sustainably. These and other steps are making 
us more accountable, stretching our dollars further and helping 
USAID live up to its important role as the U.S. lead 
development agency.
    For less than 1 percent of the federal budget, the 
President's request will keep us on this path, enabling us to 
meet new challenges, seize emerging opportunities, improve the 
way we do business and deliver transformational results on 
behalf of the American people.
    Specifically, the request of $22.7 billion will help 
advance progress in the four core pillars of our work. First, 
fostering and sustaining development progress. Second, 
preventing, mitigating and responding to global crises. Third, 
mitigating threats to national security and global stability. 
And fourth, leading in global development, accountability and 
transparency.
    In countries around the world, we work to foster and 
sustain development progress in a range of sectors. In global 
health, we will continue to save lives and build sustainable 
health systems. We will also continue to achieve 
transformational progress through the U.S. government's major 
development initiatives, including Feed the Future and Power 
Africa.
    And we will continue to promote quality education and 
increase access to safe water and sanitation. Finally, as we 
know progress is not sustainable without open and effective 
governance and a vibrant civil society, the request will enable 
us to expand our work in democracy, rights and governance.
    As a global leader in humanitarian response, the U.S. is 
there whenever a disaster hits. Our assistance saves lives and 
protects precious development gains, whether in Syria and South 
Sudan, or on any of the four continents affected by El Nino 
this year.
    The President's request provides the agility and 
flexibility that is so desperately needed to prevent, mitigate 
and respond to these global crises. We also work in places of 
strategic importance to U.S. foreign policy, to mitigate 
emerging threats and other global security challenges.
    This request supports these critical efforts from planting 
the seeds of dignity and opportunity that offer a counter-
narrative to violent extremism to fostering goodwill towards 
the United States. We are addressing the root causes of 
insecurity and migration from Central America, strengthening 
our partners in Eastern Europe and Central Asia and investing 
in long-term progress in Afghanistan.
    Finally, this request will enable USAID to continue to 
lead. It includes support for the Global Development Lab to 
help us spur and integrate innovation across and beyond the 
Agency and for our Bureau of Policy Planning and Learning to 
help us continue to drive with evidence.
    It also supports our work to strengthen USAID as an 
institution and support the men and women of this Agency who 
serve their country bravely, and in some of the world's most 
challenging environments.
    It is my honor to serve the American people alongside the 
men and women of USAID, and I look forward to working closely 
with Congress to make USAID more agile, accountable, and 
impactful. Together we are building the Agency we need and the 
world deserves, and making investments in a better future that 
will pay dividends for years to come.
    Thank you for this opportunity and your support, and I 
welcome your questions.
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    Ms. Granger. The subcommittee stands in recess.
    [Recess.]
    Ms. Granger. The committee will come to order. We will have 
some members that are coming in. Unfortunately, because of our 
timeframe, we are all overlapping with each other's hearings.
    I am going to start with a question that I think is a very 
important budget issue. The Development Assistance account is 
USAID's main source of funds outside of global health, and it 
is also the account that has the slowest rate of spending in 
our entire bill. We recognize that long-term development takes 
time, but the data is troubling.
    The latest information shows more than $4 billion in 
unexpended balances and an additional $4 billion that has not 
been obligated. This is difficult to explain in a time of tight 
budgets. Administrator Smith, I know you want to work on this 
problem during your time at USAID. Can you tell the 
subcommittee how you plan to address this issue?
    Why is the USAID standard of an 18-month pipeline 
considered an acceptable amount of time to spend funding?
    Ms. Smith. Thank you for that. As we have discussed before, 
this is a priority for me. On the pipeline side, there has been 
a reduction from 18 to 16 months, which is progress. This is 
also something that has been bumped up to what is called the 
Administrator's Leadership Council, so that there is a tracking 
on a regular basis of where we are on the pipeline.
    Some of the reasons that we carry a pipeline are things 
beyond our control. There are some environments where it is 
harder and slower to obligate money than others, but there are 
some things we can fix on our side. There has been a lot of 
great work done on looking at our systems and our processes for 
how we can spend down more quickly.
    I think with the combination of tracking it--in what are 
quarterly meetings now at the leadership level of the Agency--
to see exactly where we are and what additional we need to do, 
I am confident we can make additional progress on this.
    The notion of a pipeline in health is one particular thing. 
You need to carry a pipeline for some specific reasons so that 
you don't get to the point that you have any risk that people 
will not receive the assistance or the medicines that they 
need.
    But in other cases, it is to have the assistance to plan 
and obligate even as we are learning what the impact is and 
seeing how we spend down the money in the field. So it is not 
unusual to carry a pipeline of some volume.
    I think what we want to do is two things--reduce the number 
of months of pipeline we carry and then, second, look at our 
systems and our processes, see what we can--and I have raised 
this with you before--systemically fix, even as we look at 
particular accounts to spend down.
    What do we need to do across the Agency to speed up the 
time?
    Ms. Granger. All right, thank you. The other question I 
have is the issue of staffing. You inherited an agency with 
more than 20 different hiring authorities. Included in the 
fiscal year 2017 budget request is a proposal to add one more 
for the global development lab, and included in the emergency 
supplemental request to combat Zika is another proposal for two 
additional hiring authorities. Why does USAID need these new 
hiring authorities?
    Ms. Smith. Madam Chair, you are absolutely right. We have a 
lot of authorities. I have learned about many of them in the 
last 3 months. A couple things on that: We need specific 
authorities because at certain times we need specific kinds of 
people for a time limited period to undertake a specific task. 
And that is something the Agency will always need. In the case 
of the Lab, this is a new entity, and we need to be able to 
bring on specific people. With Zika, as with Ebola, there is a 
temporary need.
    If I may, let me offer a reflection based on having worked 
at USAID before, served on a Congressional Commission to look 
at these kinds of things, and led the President's transition 
team in 2008 that looked across all of our agencies. I think 
one of the things that has happened, frankly, over 20 years, 
rather than us from administration to administration looking at 
what our development agency needs foundationally, in terms of 
staffing to support its work, and then what are the 
capabilities it needs to surge if there is an emergency or a 
special requirement, what has tended to happen is that as a 
need arises, there is a new authority, a new way to hire, so on 
and so forth. As you can imagine, it is not the most efficient 
thing internally, and I am sure it is of--well, I know from 
what you have said to me in the past it causes you to scratch 
your head oftentimes.
    We would like to propose two things. One, these authorities 
would help us a great deal, but at the same time--and, again, 
can we look at, over time, what kind of hiring authorities this 
Agency needs to have a strong foundation, so that we have got 
the institutional knowledge and memory that we can carry 
forward, and the ability to flex when we need to flex?
    We are also looking at this internally in terms of how this 
affects our personnel system. And we have done an assessment 
and put together a strategy to start fixing it internally to 
make us more nimble.
    Ms. Granger. Good. Mrs. Lowey.
    Mrs. Lowey. I mentioned in my opening statement my 
disappointment that the administration continues to undercut 
basic education programs. USAID has made progress toward 
reducing the pipeline that accrued after reorienting to the new 
education strategy in 2011, and I am encouraged by the 
successful reading pilot programs that are going to scale in 
many countries and the heroic efforts to reach children in 
conflict zones.
    But this year's low funding request would undermine these 
efforts. I know we agree on how important basic education is to 
our success in every development goal and that we know how to 
get results. So I have to ask, number one, why does the 
administration continue to underinvest in this sector? Two, 
last year, First Lady Michelle Obama announced a new 
initiative, Let Girls Learn, to tackle adolescent girls' access 
to education.
    How were these efforts building on, but not diminishing, 
our work in basic education? And how does the administration 
plan to tackle such an important initiative with such an 
insufficient budget request? And lastly, can you share concrete 
results and progress with respect to USAID's bilateral 
education program?
    Ms. Smith. Thank you, Mrs. Lowey, for your championship not 
only of the work that we do, but for education. Our challenge 
on education is that we face multiple demands. Basic education; 
workforce education, given what we are seeing with jobs and the 
inability of people to find or create jobs; higher education, 
where there are places where we feel that our investments have 
enabled them to provide better training for citizens so that 
they are creating an able workforce; and the emergency 
education to which you refer, which unfortunately has proven 
increasingly necessary in places like South Sudan and Nigeria.
    We have also been able in education to do a couple of 
things that I think stretch our dollars further. One is public-
private partnerships, which we do across the Agency now. The 
value of those in education--and all of these are basic 
education, so it is education across the board--from 2000 to 
2014 is $957 million.
    The other thing--this is a place where I think the Agency 
with what we have learned with the shift to really focusing on 
the ability of kids to actually read after they go through 
basic education--is working with governments to affect their 
education policies and what they do across the board. So in 
some cases, we are affecting policy and national strategies 
even if we are only financing a piece.
    As I think you may know, so far in the 5-year strategy, we 
have reached 30 million children. And let me just give you a 
couple examples of places where I think in addition to the 
dollars that we invest kind of in a straight-line fashion we 
have been able to have impact beyond that. In Malawi, we have 
been able to support the national scale-up of a local language 
reading program that was proven to significantly increase 
student learning outcomes in the pilot phase.
    Now, by supporting the national scale-up, we are not 
financing the entire national scale-up. Other donors are doing 
some of that. The government is doing some of that. But we have 
been able to play a role in the pilot and translating the 
findings of that into government policy.
    In Jordan, the Ministry of Education, with our support, is 
now supporting nationwide adoption of these early grade reading 
and math policy standards curricula and assessment. So again, 
where we are able to provide kind of proof-of-concept of what 
works, we are finding that we are able to influence and work 
with governments to expand those efforts. May I----
    Mrs. Lowey. Pardon me?
    Ms. Smith. I am sorry. I just wanted to answer on Let Girls 
Learn. On Let Girls Learn, there are a number of ways that I 
think the First Lady has envisioned, and we have seen success 
of getting support for that initiative. Already, there are 
partnerships with the government of the U.K. and their 
assistance agency, DFID, with Japan; and now with Canada. So 
part of what we are able to do is go to them, and encourage 
them to do more; and quite frankly, they are spending a lot of 
their resources.
    We have also been able to attract a great deal of interest 
on the public-private partnership front. We have found that 
there are a number of foundations and companies, propelled I 
think by their own interest, but also now by the Sustainable 
Development Goals, that really want to get behind this notion 
of supporting adolescent girls.
    Last, through the Challenge Fund, which is included in the 
budget, what that is set up to do is develop new ideas and ways 
of ensuring that girls stay in school, because as you know very 
well, one of the problems we have is retention. It is $35 
million, but I think we will get ideas, recommendations and 
proposals on that that, again, the teams will be able to force 
multiply.
    Mrs. Lowey. Well, let me just say--because I think my time 
is up--we will be coming back--I am always delighted to hear 
about successes, but you know and I know that there are 
millions of girls who are not getting an education.
    Ms. Smith. Absolutely.
    Mrs. Lowey. In fact, I think we heard recently, as we 
follow, both the Chair and I, Jordan very carefully and the 
King comes and his deputies come on a regular basis. At one 
point, we were hearing they are building schools, which is all 
fine, but you can have girls learning in tents.
    So I am glad to hear about your successes. Please keep them 
coming. But I really don't think the explanation for decreasing 
money for girls' education, when there are so many millions of 
girls, as you know, who need an education, so let's continue to 
work together on that.
    Ms. Smith. Let's please do that. Thank you.
    Mrs. Lowey. Thank you.
    Ms. Granger. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Madam Chair. Good afternoon. 
Good to see you. Thank you for joining us.
    Ms. Smith. Good to see you.
    Mr. Fortenberry. Sorry I missed your earlier statement. I 
don't have the benefit of your testimony in that regard, though 
I would like to follow up on some of the earlier conversations 
that we have had regarding organizational structure of USAID.
    It is difficult to get the arms and mind around the 
multiple tasks that you are engaged in and whether or not this 
is the most effective model to meet these four principles that 
you have well laid out in your opening statement that--I agree 
with this--foreign assistance is a valuable tool, it has to be 
explained to the American people as to why it is valuable.
    It is intimately tied to our own national security, as well 
as our own humanitarian and values interest, and creating the 
conditions for international stability is beneficial not only 
to other peoples, but to us, as well.
    So there are intended multiple good outcomes here, but 
there also has to be a discipline. And joining forces with 
others leverages scarce dollars. In that regard, why don't you 
just walk through the basic--I think earlier you talked about 
four columns and what those represent, their missions, as well 
as the expenditures that go toward each column of activity so 
that we can refresh ourselves?
    Ms. Smith. Yes, and I will----
    Mr. Fortenberry. I am going off memory from the earlier 
conversation. So you might not have had four columns. It might 
have been three----
    Ms. Smith. No, I called them buckets.
    Mr. Fortenberry. Buckets, thank you.
    Ms. Smith. But I do have these--and I will confess that I 
pulled these buckets together as a way to, as you rightly say, 
get your arms around things and also some conversations with 
Ms. Granger about how this Agency carries out a huge number of 
tasks in the interest of our national security, as an 
expression of our values, and in response to emergencies.
    And so the first one where we are talking about fostering 
development progress, that is the one where I would define our 
primary purpose there is development where we have the 
conditions to get meaningful long-term gains. It is the steady 
hard work of putting investments in the bank that are going to 
yield returns over time.
    So in that category, I would put Feed the Future, for 
example. I would put our global health budget--those are, I 
think, $978 million and $2.9 billion, respectively. I would put 
the work we are doing on Power Africa, and some of our country 
programs. Now, it gets a little tricky whether you put 
democracy and governance there. I would argue that we should. 
It is a long-term investment over time.
    Then we get to preventing, mitigating, and responding to 
crises. That would carry our emergency assistance budgets, but 
also I think some very important work that we do on resilience, 
which is more of what the Agency is doing. It is very effective 
work at reducing the vulnerability of communities and countries 
to external shocks, which we know we are going to see more of 
over time, and a lot of the analytical work that we do and so 
on, on Ebola, all of those things fall in that category.
    The third are the times where as a matter of national 
security or foreign policy, USAID is called upon to bring the 
third ``D'' of defense, diplomacy and development to the table 
in the interests of policy and to pursue an important national 
security priority.
    Now, those are regions where it is difficult, Afghanistan, 
for example. Our people work extremely hard under really 
difficult circumstances, are given a challenging task in an 
environment where it is not near as easy as doing Feed the 
Future, quite frankly, where you have got better conditions.
    Mr. Fortenberry. Let me--because the time is short, and I 
am going to get cut off--let me--and maybe we will have a 
chance to come back to it--but let me introduce my perspective 
on one of your intense areas.
    Ms. Smith. Yes, please.
    Mr. Fortenberry. I am afraid our Chair is going to get 
tired of me saying this, but agriculture has become cool. And I 
am very happy about that, being from Nebraska. The whole idea 
of sustainable agricultural development as an augmenting of our 
traditional ag disposition or our traditional agriculture 
exports and programmatic systems is a key component of 
sustainable development.
    Ms. Smith. Absolutely.
    Mr. Fortenberry. It meets people where they are in the most 
nurturing of circumstances. If we are looking for the ability 
to meet national security goals in terms of giving people some 
opportunity to have continuity with their own subsistence and 
build out true market systems that are beneficial to persons 
not controlled by others, you take away the options for twisted 
ideology and wrongly directed nationalism to coopt 
perspectives.
    This is the right thing to do. We have got the technology. 
The populations are growing. It is consistent with, again, 
working toward the right market principles, and this helps 
create the conditions for international stability.
    You listed it first--and I don't know if you did that 
intentionally as it is in the top of your mind as the main 
development assistance priority, or it is certainly ranking, 
but I noted you said Feed the Future first.
    Ms. Smith. I have been involved with Feed the Future since 
its inception for all the reasons that you point to. To your 
earlier comment about the need to make the case to the American 
people that assistance works and development is a worthy 
enterprise, this is also an area where we have the evidence and 
facts to show that we are having real impact, so I think it is 
helpful in that regard, also. But I welcome your support for it 
and agree with you.
    Mr. Fortenberry. Thank you. Thank you, Madam Chair.
    Ms. Granger. Ms. Wasserman Schultz.
    Ms. Wasserman Schultz. Thank you, Madam Chair. Welcome. It 
is good to see you again.
    Ms. Smith. Thank you.
    Ms. Wasserman Schultz. I wanted to touch on nutrition and 
the Rio summit, as well as Zika and family planning. As far as 
the Rio summit, I would really like to know--because nutrition 
has become one of the really kind of wonderful bipartisan 
efforts that we have made here. Congressman Diaz-Balart and I 
have led a resolution pushing the U.S. to follow through with 
our commitments at the last nutrition for growth effort. We 
want to make sure that we are stepping up to the plate and 
maximizing our reach.
    So can you talk about our commitment and how we are going 
to make sure that we meet the kinds of commitments that we need 
to be able to make at the conference or at the summit, rather, 
and how we are planning to leverage the upcoming Nutrition for 
Growth to really be able to ensure that the global community 
strengthens its commitments for the lives of people, of 
children who are struggling from malnutrition and from 
stunting?
    Ms. Smith. Yes, and thanks for your interest in this. And I 
want to point out one thing on nutrition, which Mrs. Granger 
and Mrs. Lowey both raised in their opening comments, and 
concerns about the budget level.
    One of the challenges we have on nutrition--including going 
into things like the Rio summit--where what people look at as 
the measure of our commitment is a line item in a budget, is 
that what is carried in global health, which is where nutrition 
is counted, does not include the work we do on nutrition 
through Feed the Future, where we have seen reductions in 
stunting from between 9 percent to 33 percent in the areas 
where we work, or the work that Food for Peace does on 
resilience--where nutrition is one of the core activities that 
they undertake to, again, reduce the vulnerability of 
particularly the extremely poor.
    We have a great story to tell on nutrition and a lot of 
evidence to show that it works. Our thoughts in terms of going 
into Rio are that we need to do two things to leverage and 
mobilize the international community. One is lift up those 
partners who are doing more. There are a lot of developing 
countries that are putting their own resources into this and 
getting real results. We think that tells us a story and, quite 
frankly, compels some other donors that aren't stepping up.
    The second: this is an area where we have had huge interest 
from the private sector. Now, I have been enormously impressed 
by the degree to which every part of the Agency has factored 
public-private partnerships into the work that they do. I think 
we are at the stage now--and we are only in the preliminary 
discussion phase--with some of our partners with whom we may 
have seven or eight partnerships in different parts of the 
world--to talk about what we have called ``systemic 
partnerships'' where we look all across the value chain, even 
at a global level, to see what impact we have.
    I hope we can make progress on those soon, because I think 
those could point to much greater gains in nutrition. So I 
share that as a priority with you, and I think we will be able 
to both deliver in terms of our commitment, but also show 
enough results that we can persuade others to join us.
    Ms. Wasserman Schultz. Good. And on Zika, how is USAID 
working to improve access to family planning with UNFPA and 
other international partners in the Western Hemisphere? We 
talked about this yesterday with Secretary Lew--there are 
countries that severely limit access to family planning, deem 
women as falling pregnant, somehow, as if it happens by 
accident. Clearly, we have all seen the heartbreaking pictures 
of babies with microcephaly and we have really got to make sure 
that we not only provide assistance for those who are afflicted 
with Zika, but to make sure that women--in light of those 
nations' recommendations to their own people--that they avoid 
falling pregnant for 2 years, at the same time they are 
blocking access to family planning to be able to make sure that 
doesn't happen.
    Ms. Smith. Thank you for that. Our proposed approach on 
Zika--and we have moved out on some of it, but not as broadly 
as we hoped to--we are in dialogue with both the House and the 
Senate on our emergency request--I think we need to address 
that in three ways. One is through information, because I think 
when women have the information they need, the scientific 
information that they need, they can learn how to protect 
themselves.
    One of the things we are already moving out on is, how do 
we provide that public information? Again, we all know how 
powerful that is when women need to act.
    The second is on care and a focus specifically on women of 
child-bearing age. With respect to family planning, our 
approach in policy has been that it is voluntary. We provide 
the information and we hope to be able to do that again in this 
instance, should it be needed by women who are affected.
    Ms. Granger. Mr. Ruppersberger.
    Mr. Ruppersberger. Thank you, Madam Chair.
    The key is to have a good team, and I am sure you have that 
team with you. I want to talk about TB, tuberculosis. And just 
before I get into the questioning, it seems to me that there 
are three different types of strains, and the first is just 
regular TB. The second is drug-resistant, which they call 
multi-drug resistant TB. And the third which is extremely 
dangerous, and that is extensively drug-resistant TB.
    Now, according the World Health Organization, TB is now the 
leading global infection disease killer ahead of HIV-AIDS. The 
continued spread of drug-resistant TB is a threat to global 
health security, with 480,000 cases of multi-drug--that is the 
second--multi-drug-resistant TB reported in 2014 globally.
    Yet the World Health Organization estimated that less than 
25 percent of people with a multi-drug-resistant globally are 
getting treated appropriately. Now, it is an increasing problem 
also for the U.S.
    In 2015, the U.S. had three cases of the extensively drug-
resistant TB, which is the most dangerous. The most difficult 
and expensive strain to treat, and including--I am from 
Baltimore, Maryland--and including one case in a young child in 
my state who is being treated at Johns Hopkins right now and is 
very sick right now.
    Now, in December 2015, the President released the national 
action plan for combatting the drug-resistant TB. When it says 
national, that is really international and national, it is both 
here also. It is also a comprehensive plan for combatting this 
MDR TB in the U.S. and abroad and accelerating research and 
development. But the President's budget proposes to cut funding 
for the USAID TB program from $236 million in fiscal year 2016 
to $191 million, a cut of 19 percent.
    Can you update the subcommittee on USAID's efforts to 
implement a national action plan and address what ramifications 
that this President's cut, if it is sustained, will have not 
only in the United States, but internationally? Did you get all 
that?
    Ms. Smith. I got all that.
    Mr. Ruppersberger. OK, good.
    Ms. Smith. Thank you for that. I was thinking to myself as 
you were speaking, we have done Ebola and Zika and now we have 
got extensively drug-resistant TB. The story just continues to 
get worse.
    A couple things on this. Our request on TB does not reflect 
what we do through PEPFAR, the President's Emergency Plan for 
AIDS Relief, and through the Global Fund for AIDS, TB and 
Malaria, to which we are the largest donor. So we have 
additional resources that go to TB, again, than are represented 
in the line item.
    The other thing--and particularly on the President's plan--
part of the reason that plan was put out there was a call to 
action, both domestically as you rightly point out, but also 
globally. This is an issue that has been raised in the G7, in 
the G20: that we are seeing the acceleration of this and the 
world is not responding. And just as the President led on the 
Global Health Security Agenda, he has been out there pressing 
on the rest of the world to do more.
    Now, in the case of TB, one of the issues we also face is a 
very high incidence in middle-income countries, so one of the 
things we are pressing for through the action plan and our own 
work is that those countries step up and put more----
    Mr. Ruppersberger. What are some of those countries?
    Ms. Smith. South Africa, which has just in its own domestic 
budget rolled out increased funding for diagnostics and 
treatment; and Brazil, which has recently--and I would like to 
think this call to action had something to do with it--in 
addition to their own recognition of the problem--expanded its 
national TB control program. Russia is a country with a fairly 
high incidence.
    Mr. Ruppersberger. Even with all that vodka?
    Ms. Smith. It turns out vodka and TB just doesn't do it.
    Mr. Ruppersberger. It doesn't kill it? OK.
    Ms. Smith. We are unfortunately in a moment where we have 
to make some choices. This is one that we think if we marry it 
to, again, what we are doing through the Global Fund and PEPFAR 
and pressing on and working with middle-income countries to 
raise their contributions, we can still move the ball forward.
    Mr. Ruppersberger. It is important, I know, that we do our 
research, and I know there are funds that you have. But we deal 
a lot with medicine. I would think some of the research that 
you are doing to try to deal with some of these things, it 
should be akin to like a DARPA situation, almost out of the box 
research that might be needed to address some of these issues 
that are getting worse and worse.
    Ms. Smith. I think there is a lot more of that going on 
across the government as we see new diseases and higher 
prevalence, absolutely.
    Mr. Ruppersberger. Thank you.
    Ms. Smith. Thank you.
    Ms. Granger. We are going to have a second round. I would 
like to address the growth in funding by USAID and the 
Department of State to trust funds at the World Bank and other 
banks, and I am concerned about the lack of oversight of the 
taxpayer's dollars. We received a report from the Department of 
the Treasury that we requested on these trust funds, but it 
raised additional questions to me.
    First, how does USAID oversee this funding once it has been 
transferred to the World Bank or other banks? Second, are 
restrictions on U.S. foreign assistance adhered to if funds are 
provided to trust funds? And finally, there are examples of the 
trust funds languishing for years. Is there any mechanism for 
the United States to retrieve funds once they are provided?
    Ms. Smith. That is a really good question. And let me say a 
couple things. Trust funds are often very valuable in 
situations of post-conflict, for example, where you may have a 
weak government that, quite frankly, doesn't have the capacity 
to manage multiple donors. It often makes a great deal of sense 
to put our resources into a trust fund, and reduce the 
management burden that we impose.
    I have worked with and through a lot of trust funds over 
many years. And trust funds are as good as they are built and 
as good as the oversight is. There are some very good ones, but 
there have been some that have been terribly ineffective.
    What we generally do with trust funds is have a role in 
their creation, both through our role in the World Bank, where 
Treasury plays a key role. With the global food security fund 
at the World Bank, for example, we played a huge role in 
actually designing that from the get-go, including the 
governance structure.
    In other cases, our oversight is through Treasury and our 
role on the executive board, and on the ground. In countries 
where we use trust funds, our USAID missions and other donors 
regularly meet with and require evaluations from trust funds of 
resources.
    And, third, to your point about whether U.S. law applies, a 
couple of things. For example, on terrorist financing, World 
Bank Trust Funds are required through their connections to the 
United Nations to screen for terrorist financing, Specifically 
on health, when we provide contributions to a fund, our 
agreement letter includes provisions that they must honor that 
are in U.S. law.
    So I think we have a role often on the ground floor through 
the Bank, through regular monitoring in the field, and through 
stipulations we may put in our agreements, I think it is always 
important to take a look at how well a trust fund is working, 
and that is one of the things our teams do. We are looking now 
at how well things are going in Afghanistan, for example, 
because it can never hurt to kick the tires and make sure 
things are working really well.
    As to the matter of trust funds that may be dormant and 
still have resources available, I don't have a specific answer 
for you, but I would be happy to look into that and get you 
one.

    The World Bank maintains a donor balance account for trust 
fund contributors to allow for the return of unexpended trust 
fund principal and accrued interest. USAID is examining this 
donor balance account to determine which amounts will be 
returned to Treasury as miscellaneous receipts versus funds 
that may be eligible for reprogramming for other foreign 
assistance activities. Once we make this final determination, 
we will provide the World Bank with specific instructions on 
how to direct these funds to the appropriate account.

    Ms. Granger. Great, thank you. Mrs. Lowey.
    Mrs. Lowey. Thank you. You just touched on Afghanistan, so 
I would like to follow up, because so much of our efforts a few 
years ago was focused there, and many of us worry about what is 
happening now. And, in fact, at a hearing like this a few years 
ago, it would have been primarily about Afghanistan.
    But the world has shifted its attention. Unfortunately, 
there are so many trouble spots, and your important work is 
evident in every one of them. But I have been--and I continue 
to be--concerned about the women of Afghanistan following the 
U.S. military drawdown.
    I think we need to be more mindful of how fragile the gains 
of Afghan women are. In 2014, USAID launched PROMOTE, an 
initiative focused on the empowerment of Afghan women in 
several ways. If you could share with us the progress this 
program has seen so far, what benchmarks do you use to assess 
whether we are having an impact, what is the current status and 
near-term outlook for USAID's program in Afghanistan, and what 
are we retaining, what are we turning over to the Afghan 
government?
    And if we do turn it over, how successful have we been? And 
how does USAID combat fraud and abuse of U.S. taxpayers' 
dollars? You can take a deep breath.
    Ms. Smith. First, thank you for your attention to 
Afghanistan. I think you are right that there is a lot of 
competition in the world now. I think this may be the most 
difficult transition our teams have been asked to handle. The 
circumstances are really difficult. The security environment is 
tough. I think we have some good fortune in that we have a 
president in Ashraf Ghani who knows development well. I have 
known him for a long time and worked with him.
    But there is also some progress I think we don't want to 
lose sight of. School enrollment has gone from 1 million to 8 
million. Sixty percent of the population now lives within 2 
hours of a health facility. It doesn't sound like something 
that would perhaps satisfy you or me, but it is a very big 
change.
    When we started, 6 percent of Afghans had access to 
electricity. It is up to 28 percent. On the sustainability 
side--and that is what we are really focused on now--there is 
some progress. Domestic revenues are increasing about 25 
percent a year. That is slow. It is not enough to get over the 
mountain, but we are certainly climbing up it.
    On the issue of women and girls--and you know that is a 
priority of the President himself--he has spoken as 
articulately about girls' education as almost anyone--we are 
seeing an uptick in enrollment in schools, and also in 
universities, where university enrollment is up to I think 
175,000 or so, and I think some 35,000 of those are women. 
Again, it is not 50/50 yet, but that is tremendous progress for 
Afghanistan.
    On the program you mentioned, which is designed to 
ultimately reach 75,000 women, it is the largest gender program 
that we have in any country. Just a few results so far: We have 
provided 3,500 women with vocational training; trained over 
2,000 midwives; facilitated almost $2 million in small private-
sector loans, so that women can start and sustain their own 
businesses; and trained 25,000 female teachers to support basic 
education.
    So that is starting. We are working with the Ministry of 
Education to do that, because when you ask what are we handing 
over, what we are trying to do with our partners is exercise 
the muscles of governance to the point that they work well and 
the government is putting resources on the table.
    So we have seen some successes. If you look at the power 
utility, which at one point we were financing, the government 
has now taken that over. We are not financing it anymore. So 
there are things that we are handing over, and our hope is that 
we can sustain the gains, for example, in the social sectors, 
including for girls and women, and work with the Ministry of 
Education, and gradually more and more of that will be handed 
over to them. But I don't think the task is completed yet.
    We do a lot of evaluations in Afghanistan. We invite other 
evaluations--GAO, the inspector general, and others--we get a 
lot of recommendations which we are constantly working into the 
system. And part of that is in terms of waste, fraud and abuse 
from misuse of funds. I don't want to suggest that that is 
easy.
    And in an environment where our people can't move around 
freely, and often have to rely on third parties to monitor, it 
is a constant effort to reinvent how we track funds, what we 
learn, and what new systems we need to put in place.
    I can tell you, I have talked to the teams about this a 
lot. They spend a huge portion of their time constantly 
figuring out--again, in one of the hardest environments I think 
we face--how they can both get the results we need for 
sustainability in Afghanistan and take the recommendations that 
they themselves often solicit to make sure that we are 
protecting the resources we are given.
    Mrs. Lowey. Thank you. But I know how difficult it is.
    Ms. Smith. It is really hard. And I will tell you honestly, 
I think the men and--the biggest change I have seen in USAID--I 
was there during the Clinton administration--is the----
    Mrs. Lowey. In Afghanistan, you mean?
    Ms. Smith. No, in USAID.
    Mrs. Lowey. Oh, USAID.
    Ms. Smith. Is the impact on the agency of the men and women 
who for 15 years have worked in environments like Afghanistan 
where it is uphill and slow, two steps forward, one step back, 
on and on. It is hard to spend money, hard to track money. It 
is really difficult. And the reason I mention the gains is, I 
think there are enough gains there that we need to keep going, 
and I think we can get to where we need to go.
    But you are right to point out that this can't fall off the 
radar and not get the attention it deserves.
    Mrs. Lowey. Well, let me thank you, because I know you have 
been involved here so very long. And when I meet these 
dedicated men and women, I really have just such enormous 
respect and working together with other groups like Mercy Corps 
that just get in there and putting their lives on the line in 
many respects----
    Ms. Smith. Absolutely.
    Mrs. Lowey. It is extraordinary. But I just feel so 
passionately about the girls' education, and I know our chair 
does, in Afghanistan. And I do hope not only can we maintain 
what we have achieved----
    Ms. Smith. Can we expand?
    Mrs. Lowey. But we can expand. So I look forward to 
continuing to hear about the progress.
    Ms. Smith. Absolutely. Thank you.
    Mrs. Lowey. Thank you.
    Ms. Granger. Mr. Fortenberry, do you have another question?
    Mr. Fortenberry. Thank you, Madam Chair. I only want to 
spend a minute on each one of these things. The first question 
is--and it is unfair to you--and then I will give you my 
answer--but if you were re-designing this agency, what would 
you do? Starting from scratch. Okay, I will propose my solution 
or my perspective.
    If you think about America and how America's economic 
progress really was launched, it is through the land grant 
university system and extension, whereby technical expertise 
was then spread out across the land, mainly during agrarian 
times. But that is really the source of it, a foundational 
source of America's sustainable economic well-being.
    Now, you don't have a corner on the market on development. 
Universities are in this business. Other areas of the Federal 
Government are. Charities. And all of that, that is good, that 
is fine. But it just seems to me that replicating the land 
grant system and then the cooperative extension service is a 
means to get to all of the various components of what we are 
trying to do here in a way that we already have knowledge 
about.
    Ms. Smith. You are speaking to an Ohioan, so I am for this. 
And I have spent a long time in this field, and the land grant 
universities are also something where I have seen a return 
everywhere I have traveled, because you meet people who have 
either been taught by, attended, met with, or benefited from 
the research from some of the land grant universities.
    One of the things that we have done over the last few years 
which is important in building on that same kind of approach 
of, how do you take the knowledge and expertise that we have 
and share it systematically through our institutions, whether 
land grant or others? Part of Feed the Future----
    Mr. Fortenberry. Which provide a permanency of continuity.
    Ms. Smith. Yes.
    Mr. Fortenberry. And this is one of the difficulties of 
fragmentation of air-dropped aid, semi-permanent contracts that 
shift and change and--
    Ms. Smith. Well, and also changes from administration to 
administration. One of the things that has been a pleasure to 
me is watching health from administration to administration on 
health. We have continued. It is my hope that from 
administration to administration we will continue on food 
security and agriculture.
    Early in the design of Feed the Future, one of the things 
we saw as critical was to establish relationships with U.S. 
academic institutions and other research facilities so we could 
build that kind of institutional partnership that would 
translate over time.
    That has been done. My predecessor put a great deal of time 
and energy into that. Those are relationships that in some 
cases had faltered and I think have been rebuilt. Those same 
kind of relationships are being built through the Lab. So this 
notion that we need to have long-term institutional 
relationships with institutes of higher learning is something I 
think that has been brought back through Feed the Future and 
through the Lab, and something, I agree with you, we should 
absolutely continue.
    Mr. Fortenberry. What is the best example--again, another 
hard question--where the agency has picked up the pieces from 
war, from external shock factors as you have said, has moved 
people with respect to local values and local norms into a more 
sustained position both in terms of eradicating poverty, 
structural poverty, putting in place governance structures that 
are consistent with human dignity, and then, again, provide 
continuity for real hope and human flourishing in the future. 
Where is the best example?
    Ms. Smith. Colombia. Now, here is the challenge, though, 
with that being the best example. That has taken a long time, 
and we are about to embark on the next phase of the transition. 
And I think there have been a lot of places where we have seen 
significant gains over a year, 2 years, 4 years.
    You can look at a country, any number of them, including in 
sub-Saharan Africa, Central America, Latin America, where we 
say there is great progress. There has been a huge reduction in 
poverty, but do we have all the ingredients we need for that to 
be sustained?
    Oftentimes, the answer is no, because it takes a very long 
time. One of the things I would put on a white sheet of paper--
we can talk about that plain white sheet of paper sometime--is 
the ability to sustain the very long-term work it takes for 
these transitions. It is not a 2-year proposition.
    Mr. Fortenberry. It is a good answer. Let me add one more 
thing before my time is up. There is a very small program which 
you administer that goes through USDA called Farmer to Farmer. 
It was the brainchild of my predecessor. And what this does is 
it links farmers who are retired or who are in a phase of life 
where they have a little extra time with partner countries, 
communities in other areas where they can move their technical 
expertise, develop person-to-person contact. What a beautiful 
concept. And it has been very successful. However, I don't 
think it is branded very well.
    I mean, think of the impact that if this was more well-
known and then became a model for Doctor to Doctor, Nurse to 
Nurse, Engineer to Engineer, Lawyer to Lawyer. It fits 
seamlessly into what we already do, but it humanizes and 
personalizes it for the American people. Most people can't join 
the Peace Corps. Most people are beyond military volunteer age. 
Most people are not going to join the foreign service or the 
foreign ag service or USAID and an NGO, but they want to do 
something that has meaning.
    And that is a little small program that is not branded very 
well that I think if further--I have talked to the secretary of 
ag about this--further integrated into the ag department in 
partnership with you, and then administered more closely by the 
government itself, it becomes a template for leveraging the 
vast expertise and goodwill of many Americans in achieving the 
goals of leveraging additional assistance in continuity over 
time that are available to us, if we just tap into the 
expertise.
    Ms. Smith. I like it.
    Mr. Fortenberry. I will include you. I am getting ready to 
write a letter to the secretary of ag on this, which he asked 
me to do. Maybe I can copy you.
    Ms. Smith. Please do, because I will meet with our Feed the 
Future team and also talk to the Secretary about it.
    Mr. Fortenberry. Okay, thank you.
    Ms. Smith. I appreciate that. Thank you.
    Ms. Granger. Mr. Serrano.
    Mr. Serrano. Thank you, Madam Chair. And thank you to you, 
Administrator, for being here with us today. I am going to ask 
a question that I have been asking for years. I have never 
gotten an answer. I am going to try it again.
    How do we get into a country that doesn't want us to be 
there? For example, Cuba. Did the Cuban government say it is 
okay for USAID to be here, involved in activities? Did Mr. 
Gross know what he was getting into, where at that time and for 
many years an unfriendly government, unfriendly--and I am a 
believer that we caused a lot of that unfriendliness--but 
nevertheless unfriendly.
    I mean, I sometimes can't tell the difference--and I will 
be as blunt as I can--between your agency and the CIA on that 
issue.
    Ms. Smith. Sir, I think the policy of the Agency--and I 
think it has been very much the policy of our government for 
decades--is that we strongly support civil society and the 
rights of people to organize and speak their views. 
Unfortunately, some governments don't support that. And we 
abide by U.S. law in our democracy and governance programs. We 
support civil society all over the world.
    We also abide by the Brownback amendment, for example, 
which is included in annual appropriations bills, which reads 
specifically that ``with respect to the provision of assistance 
for democracy programs in this Act, the organizations 
implementing such assistance, the specific nature of that 
assistance, and the participants in such programs shall not be 
subject to the prior approval of the government of any foreign 
country.'' We abide by that law, sir, and it is in annual 
appropriations.
    Mr. Serrano. Okay, so you do get into countries in a covert 
way?
    Ms. Smith. No, it is not covert. We support partners on the 
ground. There are civil society organizations all over the 
world, including in Cuba and individuals, and in the case of 
Cuba, we also have followed the law, as passed by this 
Congress, but there are civil society organizations all over 
the world that operate in their countries and oftentimes with 
U.S. support. It is not us going in and sneaking in.
    Mr. Serrano. But, I mean----
    Ms. Smith. And I think if you look----
    Mr. Serrano. I understand that. And I am not necessarily 
against that. But I have always been amazed, especially in 
Cuba, on how we pull that off. To be writing to a group and 
saying, ``You should be doing this,'' that is one thing. To be 
sending them text messages, if that is available, that is okay. 
Sending them videos, that is okay. But going in physically and 
establishing yourself there against the wishes of that 
government, how do we do that? The Cuban Government knew you 
were there all the time, right, USAID was there?
    Ms. Smith. Sir, respectfully--and we have discussed this 
before--past programming in Cuba, much of that was undertaken 
before I joined the Agency. I am more than happy to have teams 
come up and brief you on the very specifics of everything that 
has happened up to now.
    I can tell you that where we are now is that our programs 
have hit their expiration date. I have asked our teams to do a 
forward-looking portfolio review to see how we proceed, and we 
will continue to support, as the President has said, democracy, 
human rights, and governance in Cuba, despite the change in 
policy. It is still a priority for the United States.
    Mr. Serrano. And I think that is fine. You didn't answer my 
question, but I don't think you did it because you didn't want 
to. I don't think you know the answer to the question, and I 
don't think anybody really knows the answer to the question.
    The thing is that a lot of members of Congress--and this is 
not a knock on any of my colleagues--accept things as they are. 
``Well, that is the way it is.'' I tend to at times ask, why is 
it that way? You know, how did we get into that country? I 
mean, I know invasions. I know how we got into Iraq. I know how 
the CIA gets into places. We all know that.
    But I can't for the life of me figure out how USAID gets 
into a place, works on the ground, and then is surprised when 
one of the members is arrested or something for being in a 
place they are not supposed to be in.
    Ms. Smith. Right, let me share with you--I can assure you, 
we do not invade anyone. New guidance was put in place at the 
Agency almost a year ago for how the Agency operates in 
environments where the space for civil society is closed 
because governments do not support the right of their citizens 
to engage in the way they feel they should be able to do so. 
And we work through partners in those cases. This is not USAID 
personnel on the ground.
    And I am speaking from my experience. I joined the Agency 
in December. And if you would like to go back into the past, I 
am more than happy. Again, I would like to bring a team of 
people to discuss it in detail. I was not present for all that.
    But I can tell you that we work with partners. They are 
aware of the laws. They are supposed to have--we require them 
to have risk analysis plans, risk mitigation plans, shutdown 
plans, should it become difficult for them to operate. We 
regularly review all of these programs.
    I have been able to attend one such review since I started, 
and all these things have been put in place to get to some of 
the concerns you point to, which is the well-being of partners.
    Ms. Granger. Thank you. Mr. Ruppersberger.
    Mr. Ruppersberger. Thank you. I am still fairly new on this 
committee, but one item that has intrigued me is the Global 
Development Lab. I think it is supposed to be--and I referred 
to it in my last questioning--kind of the DARPA of the 
development world.
    And I have worked with DARPA in my former committees and I 
find them to be probably one of the most outstanding 
organizations, because they think out of the box, they are 
willing to take risk, but the whole purpose is to have the 
ingenuity and the development to keep America ahead of our 
enemies or adversaries or whatever.
    DARPA has a 50-year track record of true innovation. The 
Internet, GPS, stealth tech, drones, their involvement has 
dramatically altered our military to an extent.
    Now, it is my understanding that the Global Development Lab 
is supposed to do the same. The lab is designed to be an 
outside-the-box innovative group dedicated to disruptive ideas 
and technologies to solve development challenges.
    Their mission, the key to this lab is disruption. It has to 
break down traditional ways of getting at problems, as to end 
up notions of protocol and how we deliver services, and it has 
to be allowed to think differently, act differently, in the end 
game to find breakthrough solutions.
    Now, I can say this. It is kind of tough to have an 
organization like that with a manager. A manager has to have 
accountability. But this is something that has worked in our 
military, and I would really like you to address what your 
opinion is, as the administrator for USAID, how you would 
manage that.
    I know that USAID has requested $170 million, which is a 
lot of money, for this line item. And I am asking, as the 
manager, how can you guarantee that this group will not just 
unconditionally take the traditional ways down the road and 
that you have the right people who are smart, that--you know, 
they are given the right and the ability to be a special group?
    It is kind of like the transition, when our younger 
generation would go to work with no coats and ties and had pool 
tables, but this is addressing those brilliant people that need 
to try to take this group to another level. Could you tell me 
what your opinion is and how you are going to manage it?
    Ms. Smith. Thank you for that. And I think the Lab is a 
really valuable addition to the Agency. And it has a lot of 
smart people in it, so I am very confident that we have 
intelligent, smart people running it.
    One of the other benefits, in terms of when you ask how do 
you manage it, is one of the things these people tend to do, 
and they do it of themselves, but they also help the rest of 
the Agency figure out how to do this, is that they measure 
things all the time. They pay attention to data. They pay 
attention to evidence. That is part of what drives their work.
    So in my work with them since I--actually since I have been 
nominated--and when I look at their plans for the coming year, 
they have set targets for themselves. And, again, they measure 
across the board to see if they are delivering. And I think 
there is a high probability that they will.
    I think the challenge in managing the Lab is twofold. On 
the one hand, I think it needs to have the space to innovate 
and be disruptive, as you rightly point out. But I think at the 
same time it needs to be sufficiently integrated that we are 
taking advantage of the innovations it brings to the table and 
figuring out how to both integrate them into our programs and 
get them to scale, because the other advantage we have--we are 
the United States.
    So if the Lab comes up with a development solution--as they 
have in many cases--that if scaled could change the world, we 
have also got to do the work of figuring out how we use our 
convening power to force multiply in that way.
    So my view is, as a manager, I am going to judge them 
against the measurements they have put forward of their goals 
and objectives for the next year. They have done a fine job, I 
think, of striking the balance between space for innovation in 
a kind of unfettered way, as well as innovations that are 
directed towards our priorities.
    And then my goal--and, again, I am a short timer--is to see 
whether we can put in place some sort of process and if we can 
pull one or two of these innovations forward, and really look 
at how we use our role as the U.S. government to convene others 
and take some of these things to scale. Because I think that is 
the other piece of this.
    Mr. Ruppersberger. And everyone has to be held accountable, 
especially for the money that we are putting in.
    Ms. Smith. Absolutely. We do a great deal more evaluation 
than was done in the past across the Agency, so I think that 
helps us do that. I am a strong believer in accountability, but 
also transparently measuring our results, because that will 
tell us whether we are succeeding or not.
    Mr. Ruppersberger. Okay, great, thank you.
    Ms. Granger. Ms. Wasserman Schultz will have the last 
question.
    Ms. Wasserman Schultz. Thank you very much. Just briefly, I 
continue to be concerned, as many other members do, about Haiti 
and its continued struggle with being able to utilize, plan and 
execute projects that are funded by USAID's assistance. There 
was a GAO report on the $1.7 billion in USAID assistance that 
Haiti has received, and they clearly found a lack of planning 
for the sustainability of non-infrastructure projects.
    So can you talk about what USAID has done to address GAO's 
recommendations in its report and to try to focus on projects 
with long-term sustainability and what your view is on how 
Haiti is doing and how we can get them to do better?
    Ms. Smith. Sure. And with GAO and other reports, what the 
Agency does is track what the recommendations are and where we 
are with respect to implementing them. I don't have the 
specifics on exactly where we are against the number of 
recommendations they provided, but I can get that information 
to you.

    USAID closely tracks the status of the Agency's responses 
to GAO recommendations. We are addressing the three 
recommendations from the June 2015 GAO report on Haiti 
reconstruction.
    With regard to the first recommendation, in December 2014, 
USAID's Mission in Haiti began to incorporate sustainability 
analysis into the design phase of non-infrastructure 
activities, including for education and health (nutrition) 
sector activities and for a project to combat gender-based 
violence. The Mission has also made specific tools available on 
its internal website to assist with sustainability analysis. 
These tools include a checklist of sustainability 
considerations and a menu of illustrative questions, issues and 
examples to help design teams work through the sustainability 
objectives of projects.
    USAID expects to implement the second recommendation, 
providing guidance on the types of information that missions 
should include in Section 611(e) certifications, in the current 
fiscal year. The Agency is already taking actions to address 
Section 611(e) compliance, including having select operating 
units develop guidance for construction activity management, 
holding training on compliance with Section 611(e), and 
incorporating construction activity tracking in the Agency's 
Acquisition and Assistance Planning system.
    USAID is also taking action to address GAO's third 
recommendation. The Agency expects to complete guidance on 
construction activities and link the guidance to our Automated 
Directives System within the next six to 12 months.

    I would say a couple of things. I think the challenge of 
sustainability in Haiti is that Haiti still doesn't have some 
of the core capabilities that are needed to sustain the gains. 
And a lot of that rests with governance. And I don't mean a 
government that we may like or dislike; I mean a government 
that actually has the skills, inclination and steadfast 
commitment to governing and managing resources.
    That is, I think, one of the biggest challenges in Haiti, 
which was not aided by its history, and certainly was not aided 
by an earthquake that literally destroyed any physical 
semblance of government that existed. It is still an uphill 
battle to get the kind of sustained gains we need in Haiti, 
given the weakness in capacity across the entire government.
    So I think that has been a constraint. I have worked Haiti 
for a long time, and actively once the earthquake struck. I 
think that is still our long-term challenge.
    In sustainability, I will just mention two examples to you. 
We have done a lot of tree planting across Haiti and found very 
high returns so far in terms of the sustainability there, that 
those--I forget the--I can get you the exact percentage, but it 
is well over 75 percent, 80 percent of the 5 million some trees 
that we have planted with partners in Haiti are still growing; 
they are still being taken care of, and so they are still 
there.

    As part of a larger effort to stabilize watersheds, 
increase tree cover, and promote sustainable agricultural 
practices in disaster prone regions of the country, USAID has 
supported the planting of over 5 million seedlings (through the 
Feed the Future WINNER project) with a survival rate of about 
70 percent throughout the country.

    But I was recently involved in a review of another project 
that we did with partners--the Inter-American Development Bank 
and Coca-Cola--on mangoes. Haiti produces, it turns out, very 
good mangoes. We found that through the course of that project 
we were able to increase incomes, and train producers in skills 
that enabled them to care for and produce better quality 
mangoes for export.
    What we agreed, though, in terms of sustainability, is we 
can't judge yet whether that is going to be sustainable. We are 
going to come back and look in a year and see whether it is 
sustainable, because, again, what is necessary to really 
sustain it, it has to be either communities and/or governments 
that will sustain it.
    So I think Haiti is still a challenge. I think it is one we 
need to have a commitment to working on. But I would have to 
say, in all honesty, this is still going to be very slow going.
    Ms. Granger. Thank you. Mrs. Lowey.
    Mrs. Lowey. As we close, I can't resist, and I want to 
thank my colleague, Ms. Wasserman Schultz, for bringing up this 
issue. We have had probably two of the best professionals--and 
there are many extraordinary professionals at AID--Beth Hogan 
and then Tom Adams, retired. And we have had in-depth briefings 
on Haiti.
    We don't have Boko Haram, thank goodness. We don't have 
other terrorist groups there. We have really good people who 
have endured a great deal. And it really is, for me, one of the 
most--I don't want to quite say depressing--but unhappy 
situation, because it seems to me we could do so much more.
    I will give you one suggestion. I tried to put in place 
what I have called the community of learning, getting people 
outside of Port-au-Prince, establishing a school. We have Paul 
Farmer, who is doing very good work on health care, putting in 
place some kinds of source of ways for them to learn a living. 
We just can't seem to do it. And we are upwards of $3 billion--
we have other private-sector money.
    So I just want to say, as someone who has worked on AID 
programs a long time, that many outstanding professionals, I 
would like to work with you in the short period of time--and I 
know when you say governance, we have governance problems 
everywhere. And I wonder what are the lessons learned? How do 
we improve the governance problem?
    I think, frankly, of course, you will always have people 
come and say, oh, we did this, we did that, but basically it 
has been a failure. We don't have governance, we don't have 
jobs, and the people keep smiling and singing. I really feel we 
have let them down, so I would like to work with you to see 
what we can do to really improve the situation. I know you 
don't have that much time. But I just have always felt that 
this was doable and somehow we just haven't done it.
    Ms. Smith. I would love to work with you on that. And thank 
you for your kind words about Tom and Beth. I have benefited 
enormously from Beth's knowledge and experience, including on 
this issue.
    I think in an interesting way--and you may be able to tell, 
I am the eternal optimist, glass-half-full kind of person.
    Mrs. Lowey. As are we.
    Ms. Smith. We may have a bit of an opportunity, quite 
frankly, in Haiti right now, by which I mean if you look at the 
sheer force of that earthquake, it literally broke Haiti in 
two. I still can't wrap my arms around, my head around what 
actually happened.
    Then there was a very big surge of activity around 
reconstruction. And this often happens. And during the big 
surge, things often get quite confusing. Everybody is there. 
Lots of donors. Peacekeeping force, lots of attention. It is 
now a slightly quieter period. I think we have some evidence 
and knowledge in the bank, both from Haiti, but also from other 
cases about what has worked and what hasn't. We have a lot of 
evidence of what didn't work, but I think we have some 
important evidence of things that have worked.
    So I think it may be possible in a slightly quieter way, if 
you will, to take some things that have worked, and figure out 
where we can build on them--your notion of communities of 
learning is quite interesting. So I would be delighted to work 
with you on this.
    Mrs. Lowey. Well, I thank you very much. I thank my 
colleague for bringing the issue up. I know you have in your 
district, as I have, many Haitians who would like to be 
helpful. I look forward to talking about successes a few months 
from now.
    Ms. Smith. I am game.
    Mrs. Lowey. Thank you, Madam Chair.
    Ms. Granger. Now, as we close, just a couple of things. 
One, Mrs. Wasserman Schultz raised Zika during the questions. 
You mentioned a few things USAID had been doing, but not how 
much funding that has actually been obligated. So can you 
follow up after this and just let us know that for this fiscal 
year?
    Ms. Smith. Yes.
    Ms. Granger. The second thing as we close, one issue I 
mentioned in my opening statement, we continue to hear from 
organizations with little experience competing with USAID about 
how difficult it can be to partner. There are many groups that 
are doing good work, have ideas they bring to the table. I know 
that we could all give you an example of someone we had heard 
from.
    So we need you to come up with ways to address this issue 
and report back to the subcommittee, if you will do that.
    Ms. Smith. I would be happy to.
    Ms. Granger. Good, thank you. Administrator Smith, thank 
you again for your time. Members may submit any additional 
questions for the record. The Subcommittee on State, Foreign 
Operations, and Related Programs stands adjourned.


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Brownfield, Hon. William R. 

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Hogan, Elizabeth.................................................    79

Kerry, Hon. John F...............................................    24

Lew, Hon. Jack...................................................   344

Palmieri, Francisco..............................................    74

Postel, Hon. Eric G..............................................    14

Smith, Gayle.....................................................   421

                                  [all]