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

                       IRAN'S POWER PROJECTION CAPABILITY

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

                                    HEARING

                                   BEFORE THE

                       SUBCOMMITTEE ON NATIONAL SECURITY

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                NOVEMBER 5, 2015

                                   __________

                               Serial No. 114-83

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
    CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
    THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
    RON DeSANTIS, Florida                TED LIEU, California
    MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
    KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
    MARK WALKER, North Carolina          MARK DeSAULNIER, California
    ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
    JODY B. HICE, Georgia                PETER WELCH, Vermont
    STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                        Sean McLaughlin, Staff Director
                     David Rapallo, Minority Staff Director
        Andrew R. Arthur, National Security Subcommittee Staff Director
                        Sharon Casey, Deputy Chief Clerk
                                     ------

                       Subcommittee on National Security

                        RON DESANTIS, Florida, Chairman
    JOHN L. MICA, Florida                STEPHEN F. LYNCH, Massachusetts,
    JOHN J. DUNCAN, JR., Tennessee           Ranking Member
    JODY B. HICE, Georgia                ROBIN KELLY, Illinois
    STEVE RUSSELL, Oklahoma, Vice Chair  BRENDA L. LAWRENCE, Michigan
    WILL HURD, Texas                     TED LIEU, California

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on November 5, 2015.................................     1

                                   WITNESSES

    Mr. Thomas McInerney, Lieutenant General, USAF, Retired, Member
      of the Iran Policy Committee
        Oral Statement...............................................     5
        Written Statement............................................     8
    Mr. Jonathan Schanzer, Vice President for Research, Foundation
      for Defense of Democracies
        Oral Statement...............................................    11
        Written Statement............................................    13
    Mr. Steven Bucci, Director, Center for Foreign and National
      Security Policy, The Heritage Foundation
        Oral Statement...............................................    22
        Written Statement............................................    24
    Mr. Alireza Nader, Senior International Policy Analyst, Rand
      Corporation
        Oral Statement...............................................    35
        Written Statement............................................    37

                       IRAN'S POWER PROJECTION CAPABILITY

                                  ----------

                           Thursday, November 5, 2015

                       House of Representatives
                      Subcommittee on National Security
                   Committee on Oversight and Government Reform
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 9:04 a.m., in
    Room 2154, Rayburn Office Building, Hon. Ron DeSantis [chairman
    of the subcommittee] presiding.
        Present: Representatives DeSantis, Russell, Hice, Hurd,
    Lynch, Kelly, and Lawrence.
        Also present: Representative Welch.
        Mr. DeSantis. The Subcommittee on National Security will
    come to order.
        Without objection, the chair is authorized to declare a
    recess at any time.
        This hearing will conduct oversight over the enhancement
    due to the Obama administration's nuclear deal of Iran's
    current capabilities to project power by reviewing Iran's own
    military arsenal, as well as its financing, training, and
    arming of proxy groups throughout the Middle East. The hearing
    will also examine how the U.S. should be prepared to defend its
    national security interests in the Middle East and at home
    against Iran's advancement in power projection as a result of
    sanctions relief.
        It has been reported that Iran's defense budget makes up
    one-third of its national $300 billion budget. If these
    estimates are accurate, an influx of $100 billion due to
    sanctions relief would increase Iran's single-year budget by a
    third, providing it with substantially increased financial
    resources to further its foreign policy agenda.
        It is well known that Iran projects power in the Middle
    East through the funding of foreign terrorist organizations,
    hostile governments, and political activist movements, and by
    arming militant groups and offering training facilities. Iran
    has long been a supporter of the Lebanese group Hezbollah, the,
    ``vanguard of resistance to Israel.'' Hezbollah is perhaps
    Iran's most effective terrorist organization within the region
    and of course was responsible for killing more than 240
    Americans at the Marine Corps barracks in Beirut in 1983.
        With Iran's financial and military assistance, Hezbollah
    has become a prominent influence in Lebanese politics. The
    State Department estimates that Iran has given Hezbollah
    hundreds of millions of dollars and trained thousands of
    Hezbollah troops at Iranian training facilities.
        In 2014, the U.S. intelligence community Worldwide Threat
    Assessment argued that Hezbollah has, ``increased its global
    terrorist activity in recent years to a level that we have not
    seen since the 1990's.''
        Further Iranian funding of Hezbollah would be, of course,
    of serious concern to the U.S. and our allies.
        Hamas has also consistently received funds, weapons, and
    training from Iran. People talk about Iran being a Shiite
    power. They are absolutely willing to arm Sunni groups like
    Hamas. And then when you have decent Shiite governments like in
    Azerbaijan, Iran is opposed to that. Iran has frequently
    assisted Shiite militias and terrorists in Iraq, Bahrain, and
    Yemen. For these reasons, Iran has been designated by the State
    Department as a state sponsor of terrorism since 1984.
        Iran is maintaining and expanding an advanced ballistic and
    cruise missile program that poses a threat to U.S. forces,
    interests, and allies in the gulf region and beyond. The
    recently signed nuclear accord does not limit Iran's ability to
    continue to develop its ballistic and cruise missile programs.
    The potential influx of funding as a result of sanction relief
    may facilitate the advancement of Iran's ballistic and cruise
    missile programs which will result in Iran posing an even more
    lethal threat to the United States and our allied assets in the
    region.
        Our military leaders understand the threat posed by Iran.
    During his confirmation hearing in July for JCS Chairman,
    Marine Corps General Joe Dunford said, ``my expectation is that
    regardless of there being an agreement or not, Iran will
    continue to be a malign force and influence across the
    region.''
        Retired Marine Corps General Jim Jones further elaborated
    on this threat during testimony before the Senate Armed
    Services Committee hearing last month. He said, ``it is a
    regime that artfully dodges its commitments, generates
    international friction to exert greater domestic control on its
    citizens, constantly hardens its grip on the country. The
    mullahs' government seriously violates human rights, U.N.
    Security Council resolutions and international law. They reject
    the right of Israel to exist by opposing and actively
    undermining the Middle East peace process. And Tehran remains
    the chief antagonist of democracy and liberalization across the
    Middle East where a better future for millions of people
    struggles to emerge. Its goal is the consolidation of the
    revolution, which is martially enforced at home by the Islamic
    Revolutionary Guard Corps and prosecuted abroad by the Quds
    Force and Iran's many proxy groups.''
        And I think it is worth pointing out that under the
    agreement with the Obama administration, the international
    sanctions on the Quds Force are actually lifted.
        Sanctions relief will exacerbate Iran's ability to pursue a
    nefarious foreign policy agenda. Israeli officials have warned
    that Tehran will direct billions of dollars it will reap from
    the end of economic sanctions toward its anti-Israel proxies in
    the region. Iranian officials often call for Israel's
    destruction. Short of that, proxy forces like Hezbollah, Hamas,
    and Palestinian Islamic Jihad provide Tehran with a shield
    against a possible Israeli military strike on its nuclear
    program.
        And I would note today in the ``Wall Street Journal,'' we
    have on the front page Iranian hacking surges in the U.S. And
    so here you have an agreement. We claim that Iran is going to
    start to change its ways and they are not going to have a
    military use of nuclear energy, but yet how are they responding
    to that? They are hacking inside the United States.
        So Iran's foreign policy will remain at odds with U.S.
    interests. And so with this understanding, we must turn to the
    tasks of protecting U.S. national security issues and the job
    of standing by our closest allies in the region.
        And so we are delighted to have such a great group of
    witnesses here for our hearing, and I will recognize them in a
    minute. But before I do that, I would like to recognize the
    ranking member of the Subcommittee on National Security, Mr.
    Lynch, for his opening statement.
        Mr. Lynch. Thank you, Mr. Chairman. I want to thank you for
    holding this important hearing.
        I also want to thank our witnesses for helping the
    committee out with its work.
        There is no doubt that Iran is a destabilizing force in the
    Middle East, and I agree with the quote by General Dunford that
    they will continue to be so in the future.
        The United States first placed Iran on its terrorist list
    in 1984 due to its support of Lebanese Hezbollah. In its most
    recent country terrorism report, the State Department found
    that throughout 2014 Iran did continue to support terrorist
    groups, including Hezbollah, and providing financing, training,
    and arms to Iraqi Shia militias and even some Afghan fighters
    to bolster Bashar al-Assad in Syria.
        Iran has also detained American hikers and journalists, and
    most recently is reported to have arrested two American
    citizens on unspecified charges.
        It is clear that we cannot trust the Iranian regime, but
    that is precisely why the Obama administration has worked so
    hard to reduce their nuclear weapons capabilities. I believe
    that the Joint Comprehensive Plan of Action, also known as the
    Iran nuclear agreement, offers us the most viable path toward
    limiting Iran's nuclear program and preventing its future
    development of a nuclear weapon.
        In referencing the nuclear arms race between the United
    States and the Soviet Union in his 1960 inaugural address,
    President Kennedy remarked that, ``sincerity is always subject
    to proof'' The Iran nuclear agreement does not require us to
    simply rely on the sincerity of the Iranian leadership. Rather,
    it depends entirely on proof in the form of a robust nuclear
    inspections and verification regime conducted by IAEA, the
    International Atomic Energy Agency. To be clear, the lifting of
    nuclear-related United Nations and European Union sanctions
    will only occur after IAEA verification that Iran has complied
    with its end of the deal.
        Specifically, the IAEA must monitor and verify that Iran
    has met a variety of the stipulations required by the
    agreement. For instance, Iran must reduce its total uranium
    stockpiles by 97 percent, from 10,000 kilos to 300,
    immediately. It must also reduce the number of centrifuges from
    19,000 to about 6,000, which Iran has reportedly already begun
    to do so. The IAEA must also verify that Iran does not produce
    or retain any weapons-grade uranium, and the little low-
    enriched uranium remaining is to be for commercial and
    scientific uses only.
        The IAEA must monitor and verify the dismantling of the
    heavy water reactor at Iran's water plant in Arak so that it
    will not longer be able to produce weapons-grade plutonium.
    These are just a few of the substantial physical and verifiable
    reductions that Iran must undertake.
        The Treasury Department estimates that upon implementation
    of the agreement, Iran will have access to between $100 billion
    and $125 billion in foreign exchange assets held in the U.S.,
    EU, and mostly Asian banks, a lot of which is already
    obligated, including nearly $20 billion owed to China.
        In all, experts anticipate Iran to use the vast majority of
    these funds to pay down current debt obligations and domestic
    needs estimated to be over a half a trillion dollars. These
    needs include as much as $200 billion in necessary oil
    infrastructure investments and the purchase of commercial
    aircraft to replace a deteriorated domestic fleet.
        There is still the danger that Iran may direct a portion of
    repatriated funds to finance terrorist activity or further
    destabilize the Middle East. That is why it is critical that
    the agreement leaves in place our sanctions pertaining to
    terrorist financing, human rights, and weapons of mass
    destruction. As noted by the nonpartisan Congressional Research
    Service, the many U.S. sanctions that will remain include those
    specified by Executive Order 13224 issued by President Bush
    following the 9/11 terrorist attacks and authorizing the U.S.
    Government to block the assets of foreign entities and
    individuals to support terrorist organizations.
        Chief among them is the Islamic Revolutionary Guard Corps,
    which the State Department has deemed the regime's primary
    mechanism for cultivating and supporting terrorists abroad.
    Iran's designation as a state sponsor of terrorism will also
    stay in effect along with the array of sanctions that accompany
    it, from export controls and prohibitions on arms sales to
    withholding economic assistance.
        The nuclear agreement also includes a snapback mechanism to
    reimpose sanctions in the event that Iran cheats.
        Mr. Chairman, I look forward to discussing with today's
    witnesses how we might build upon the Iran nuclear agreement,
    the purpose of which is stated in the preface of the agreement
    that we can all support, and that is, quote--and I am quoting
    from the agreement--that under no circumstances will Iran ever
    seek, develop, or acquire any nuclear weapons.
        Thank you, Mr. Chairman. I yield back the balance of my
    time.
        Mr. DeSantis. The gentleman yields back. Thank you.
        I will hold the record open for 5 legislative days for any
    members who would like to submit a written statement.
        We are going to recognize our panel of witnesses. We look
    like we are going to have votes called in about an hour, so my
    hope is, if you stay to the 5 minutes, we will then do our
    questioning and hopefully we can get everyone or definitely
    most people in because I would hate to have to recess and come
    back. I know you guys have a lot to do.
        So first, I am pleased to welcome Lieutenant General Thomas
    McInerney, United States Air Force, retired, member of the Iran
    Policy Committee; Dr. Jonathan Schanzer, Vice President for
    Research at the Foundation for Defense of Democracies; Dr.
    Steven Bucci, Director of the Center for Foreign and National
    Security Policy at the Heritage Foundation; and Mr. Alireza
    Nader, Senior International Policy Analyst at the RAND
    Corporation. Welcome to you all.
        Pursuant to committee rules, all witnesses will be sworn in
    before they testify. So if you would please stand and raise
    your right hands.
        [Witnesses sworn.]
        Mr. DeSantis. Witnesses, thank you. Please be seated.
        All witnesses answered in the affirmative.
        Your entire written statement will be made part of the
    record, so please limit your testimony to 5 minutes. Lieutenant
    General McInerney, you are now recognized for 5 minutes.

                           WITNESS STATEMENTS

                     STATEMENT OF THOMAS McINERNEY

        Mr. McInerney. Chairman DeSantis, Ranking Member Lynch,
    members of the Subcommittee on National Security, thank you for
    the opportunity to give you my concerns on this important
    subject to our Nation's current and future national security in
    the Middle East.
        The Iran nuclear agreement or, as it is officially titled,
    The Joint Comprehensive Plan of Agreement, is the most
    dangerous nuclear agreement ever signed by an American
    President. Its impact on Iran's ability to dominate the Arabian
    peninsula and force project in the future is profound.
        I harken back to my days on active duty when I commanded a
    U.S. Air Force Europe task force to a CENTO exercise in Iran in
    1977, composed of 12 F-4's and six 111's flying out of Shiraz,
    Iran. The Shah of Iran was highly motivated in expanding
    stability in the region until the Carter administration threw
    him under the bus, as the current administration has done in
    Egypt, Libya, and Syria, as well as enabling the Iranians to
    make Iraq a proxy with our withdrawal in 2011.
        I say this for the following reasons.
        Having read the document in full, one can make a reasonable
    case that it limits Iranian nuclear weapons development over
    the short term with some reasonable oversight procedures.
    However, these are just words similar to what Neville
    Chamberlain produced in September 1938 and yet a year later,
    World War II started and 60 million lives were lost. My point
    is that words might be acceptable if we believe that Iran was a
    trustful partner in this agreement. Yet the mullahs have never
    observed an agreement in the past.
        This agreement should be a formal treaty in accordance with
    our Constitution.
        The Senate has not yet had a vote to approve it.
        There is no coupling with the agreement and Iran's proxy
    force projection of its radical Islamic terror activities
    globally.
        Iran has already made violations of the agreement even
    before it was approved. These violations include the visit of
    General Soleimani to Moscow where he met President Putin and
    leaders in violation of U.N. sanctions to discuss the sale of
    the S-300 SAM. They intentionally violate agreements and
    nothing happens.
        The Iranians launched a nuclear capable IRBM on 10 October
    2015 in violation of U.N. Security Council resolution 1929. No
    action has been taken against them.
        Now, several months after the agreement was reached in
    July, the Russians projected forces into Syria to keep Bashar
    al-Assad in power and attack the Free Syrian Army's forces
    supported by the U.S.-led coalition. The PRC is now supporting
    the Assad government. Is something wrong with this picture of
    Iranian bad behavior being supported by Russia and China after
    the agreement was signed?
        Israel who has the most to lose with this agreement is now
    facing a third intifada instigated by Iran.
        In the meantime, with a growing radical Islamic threat,
    this administration has been unilaterally disarming the U.S.
    military ever since they came into office starting in April
    2009 with the cancellation of the F-22, the next generation
    bomber, the missile defense system in Poland and the Czech
    Republic, and withdrawing prematurely from a stabilized Iraq,
    which has resulted in the creation of ISIS in 2009.
        The administration shifted U.S. policy shortly after the
    President's Cairo speech where he had Muslim Brotherhood
    members in the front row. President Mubarak was not invited,
    which resulted in the Muslim Brotherhood, a radical Islamic
    organization, taking over Egypt until the Egyptian people and
    General el-Sisi threw them out.
        It further created instability in the Middle East by
    attacking Libya to remove Colonel Qaddafi without congressional
    authorization. This resulted in the deaths of four Americans on
    11 September 2012 when the U.S. consulate was attacked. No
    American military response was forthcoming.
        Today a land and air bridge from Iran goes through Iraq
    that the Russians and Iranians are using to reinforce Syria in
    violation of the U.N. Security Council.
        This is the most dangerous situation ever in the Middle
    East. I am skeptical of the Iranians agreeing to follow this
    nuclear agreement. They will continue to force project forces
    throughout the region to spread radical Islam, which the
    administration calls violent extremism. I know not the ideology
    of violent extremism, but I do know the ideology of radical
    Islam, the Koran, Hadith and Sharia Law.
        In summary, I am very concerned we have signed an agreement
    that will rival Neville Chamberlain's failed agreement and
    encourage more Iranian force projection.
        Who could have predicted 7 years ago we would leave a
    vacuum for Russian reemergence into the region and Iran would
    be the de facto hegemon?
        Thank you for your time and God bless you all during these
    very difficult times for America.
        [Prepared statement of Mr. McInerney follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. DeSantis. Thank you, General.
        The chair now recognizes Mr. Schanzer for 5 minutes.

                     STATEMENT OF JONATHAN SCHANZER

        Mr. Schanzer. Chairman DeSantis, Ranking Member Lynch,
    members of the subcommittee, on behalf of FDD and its Center on
    Sanctions and Illicit Finance, thank you for the opportunity to
    testify.
        Iran has long projected power through the financing of its
    proxies around the Middle East. This strategy figures
    prominently in Iran's plans for regional hegemony.
        The nuclear deal signed this summer will now provide Iran
    with an estimated $120 billion in sanctions relief and another
    $18 billion in annual oil sales. The White House insists Iran
    will invest this windfall in roads, schools, hospitals, and
    other neglected infrastructure, but this is wishful thinking
    given Iran's track record. Even if Iran earmarks only 10
    percent for its proxies, we are looking at more than $10
    billion in illicit finance.
        The beneficiaries of Iran's largesse will include terrorist
    groups, Hamas, Hezbollah, Palestinian Islamic Jihad, Kata'ib
    Hezbollah, and other violent factions in Iraq and al-Sabireen,
    a new Shiite group in Gaza.
        On top of that, we can expect continued assistance to the
    Assad regime in Syria which continues to drop barrel bombs on
    its own population. And let us not forget the Houthis who
    continue to play a destabilizing role in Yemen.
        Iran's sanctions relief will further benefit Iran's
    hardliners who bankroll those terror groups and rogue regimes.
    This includes the Islamic Revolutionary Guard Corps, IRGC,
    which will see many of its sanctioned entities de-listed in
    Europe. Sanctions relief will further benefit companies
    belonging to the Supreme Leader himself. I am referring here to
    Ali Khamenei's economic empire known as EIKO.
        Mr. Chairman, all this raises troubling questions about the
    U.S. Treasury's mission. It was a little more than a year ago
    when the New York Times' David Sanger wrote about the Treasury
    sanctions team is President Obama's favorite noncombatant
    command. The moniker was well deserved. The Office of Terrorism
    and Financial Intelligence played a crucial role, along with
    Congress in building the sanctions architecture that punished
    Iran for its nuclear mendacity, ballistic missile development,
    the funding of terror groups, human rights abuses, and the
    backing of rogue states.
        Above all else, Treasury's mandate was to protect the
    integrity of the U.S.-led financial sector, but that mandate is
    now in jeopardy. The banks, businesses, and persons said to be
    de-listed have not earned it. Iran has provided no evidence
    that they have ceased their illicit activities, and once they
    are de-listed, the terms of the Iran deal forbid them from
    being re-listed, even if they commit new financial crimes. And
    the $120 billion in sanctions relief will flow regardless of
    Iran's regional activity. In the end, Treasury's principles
    were compromised to secure President Obama a diplomatic
    victory, and it is doubtful that this will be a lasting one.
        For Treasury's mission to be taken seriously, it must now
    be able to resume its campaign against Iranian financial crimes
    and to punish Iran for violations of the nuclear deal. How it
    will do this, given the constraints of the Iran deal, is
    unclear.
        Mr. Chairman, the road ahead will be challenging, but I
    offer several recommendations here for the committee's
    consideration.
        Number one, Treasury needs to reaffirm its mission.
    Congress should request a road map from the Office of Terrorism
    and Financial Intelligence. Treasury must now articulate how it
    plans to continue to be an effective noncombatant command under
    these new challenging circumstances.
        Number two, change the way Treasury designates. Treasury
    usually targets illicit financial actors by designating them
    pursuant to one executive order, such as terrorism or human
    rights or proliferation. But in the case of Iran, illicit
    actors are often guilty of many financial crimes. Congress
    should demand that Treasury designate more entities under
    multiple executive orders simultaneously, making it harder for
    them to de-list.
        Number three, enforce what we have left. Congressional
    oversight over what relevant sanctions architecture remains is
    crucial to stemming the flow of Iranian illicit finance. The
    rigorous enforcement of existing executive orders and the
    creation of new ones, when appropriate, will be vital to
    curbing Iranian support for terrorism.
        Number four, enforce and expand designations of IRGC-
    affiliated entities. Congress should direct Treasury to
    designate the IRGC in its entirety under Executive Order 13224
    for its role in financing, directing, and supporting
    international terrorism. It is currently designated for
    proliferation and human rights purposes, while only the Quds
    Force, an IRGC subsidiary, is designated for terrorism.
        And number five, lower the threshold for IRGC designations.
    Congress should consider making it easier to designate IRGC
    companies. The Financial Action Task Force suggests that the
    threshold could be 25 percent controlled and that could include
    both members of the board and stakeholders.
        Mr. Chairman, on behalf of FDD and its Center on Sanctions
    and Illicit Finance, thank you again for inviting me to
    testify. If I have missed anything that you wish to discuss, I
    am happy to answer your questions.
        [Prepared statement of Mr. Schanzer follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. DeSantis. Thank you.
        Dr. Bucci, you are now recognized for 5 minutes.

                       STATEMENT OF STEVEN BUCCI

        Mr. Bucci. Thank you, Mr. Chairman, Ranking Member, members
    of the subcommittee. I am Director of the Allison Center for
    Foreign and National Security Policy at The Heritage
    Foundation. The views I express in this testimony are my own
    and should not be construed as representing any official
    position of The Foundation.
        I retired from the Army as a special forces colonel, having
    served as a human intelligence collector for DIA and as the
    Commander of 3rd Battalion, 5th Special Forces Group in the
    CENTCOM AOR. I later served as the Deputy Assistant Secretary
    of Defense for Homeland Defense.
        My focus here will be the threat that we face from Iran in
    their efforts to project power and impose its extreme and
    abhorrent will on the world.
        The majority of my written testimony is taken from The
    Heritage Foundation's recently released 2016 Index of U.S.
    Military Strength.
        The immediate threat is the IRGC Quds Force terrorism. The
    IRGC is a very capable organization that matches its
    operational expertise in guerilla warfare, terror, and murder
    with an ideological purity that makes their only comparable
    analog the old Soviet Spetznaz. They have done operations
    around the Middle East and the world, including the attempted
    murder of the Saudi Ambassador here in Washington, D.C.
        Down the road, Iran will gain considerable capability in
    ballistic missiles. They will undoubtedly gain nuclear weapons
    eventually. They will definitely re-equip their conventional
    forces with the help of the Russians. The real key here,
    though, is the orders of magnitude greater and more dangerous
    terror events that the Quds Force can fund and execute given
    their share of the soon to be released $100 billion in new
    money. There is no sequestration pending for the IRGC. The
    windows of heaven or hell are about to open for them.
        Iran is an anti-Western revolutionary state that seeks to
    tilt the regional balance of power in its favor by driving out
    the Western presence, particularly the United States,
    undermining and overthrowing opposing governments, and
    establishing its hegemony over the region. It also seeks to
    radicalize Shia communities and advance their interests against
    Sunni rivals. Iran has a long record of sponsoring terrorist
    attacks against American allies and other interests. With
    regard to conventional capabilities, Iran's ground forces dwarf
    the relatively small armies of the other Gulf states.
        Importantly, Iran has adopted a strategy that emphasizes
    irregular warfare, asymmetric tactics, and the extensive use of
    proxy forces. The IRGC has supported and collaborated with a
    wide variety of radical Shia and Sunni militant groups, as well
    as Arab, Palestinian, Kurdish, and Afghan groups that do not
    even share its radical Islamist ideology. The Quds Force has
    trained and armed numerous proxies, particularly Lebanese
    Hezbollah, the Iraqi Shia militias, Palestinian groups such as
    Hamas and Islamic Jihad, and groups that have fought against
    the governments of Afghanistan, Bahrain, Egypt, Israel, Iraq,
    Jordan, Kuwait, Saudi Arabia, Turkey, and Yemen.
        Iran is the world's foremost sponsor of terrorism and has
    made extensive efforts to export its brand of radical Shia
    Islamist revolution.
        One cannot discuss Iran's abilities to project power
    without looking more closely at its main proxy. Hezbollah is a
    close ally of, frequent surrogate for, and terrorist
    subcontractor for Iran's revolutionary Islamist regime. Tehran
    provides the bulk of Hezbollah's foreign support, arms,
    training, logistical support, and money. Iran provides at least
    $100 million to possibly $200 million annually in financial
    support to Hezbollah. I expect this to grow substantially.
        Iran presents a significant threat to U.S. national
    security interests in the Middle East, to our key allies, and
    to our position as the balancer and influencer there. It has
    the ability to project power around the world and around the
    region, particularly in asymmetric forms. The recent collusion
    of Iran with Russia gives Iran additional abilities to move
    around the world and do significant mischief. As mentioned,
    there is no sequestration for the biggest purveyors of state-
    sponsored terrorism in the world.
        With respect to the Secretary of State and his comments,
    you cannot logically separate Iran's terrorism from the JCPOA.
    It is a mistake to underestimate either the intentions or
    capabilities of Iran to do harm. Iran is not our partner, but
    they are a clear adversary.
        Thank you.
        [Prepared statement of Mr. Bucci follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. DeSantis. Thank you.
        The chair now recognizes Mr. Nader for 5 minutes.

                       STATEMENT OF ALIREZA NADER

        Mr. Nader. Chairman DeSantis, Ranking Member Lynch, and
    members of the subcommittee, thank you for inviting me to
    appear before you today to speak about the impact of sanctions
    relief on the Iranian regime's policies at home and in the
    Middle East.
        The Joint Comprehensive Plan of Action between Iran and the
    P5 Plus 1 will no doubt provide Iran with significant sanctions
    relief and alleviate some of the stresses faced by the Iranian
    economy. But several factors will constrain the Iranian
    regime's ability to substantially grow the economy and use
    newly found resources to achieve its foreign policy objectives.
        First, sanctions relief will not be granted unless Iran
    sharply reduces its nuclear capabilities. This means that Iran
    will be unable to use its nuclear program to expand its
    regional influence. Iran will only be rewarded economically
    once it has met its obligations under the nuclear agreement.
        Second, while the United States will lift secondary
    sanctions against Iran, primary American sanctions targeting
    the Iranian regime's support for terrorism and its human rights
    abuses will remain, preventing Iran from gaining access to
    American capital, and most importantly, American technology and
    know-how.
        Although the nuclear agreement is expected to provide Iran
    with significant economic relief, the amounts involved are
    unlikely to greatly empower the Iranian regime at home or
    abroad. The regime is massively indebted due to its costly
    nuclear policies. It owes as much as $100 billion to Iranian
    banks and private firms. The Rouhani government was elected on
    a campaign to improve the economy, which will require Iran to
    spend at least $200 billion on its decrepit energy sector, in
    addition to tens of billions of dollars on domestic
    infrastructure, health care, and educational system. So while
    the lifting of U.S. secondary and European nuclear sanctions
    may enable Iran to increase its oil exports and give it access
    to $50 billion to $100 billion held in escrow accounts, much of
    this money will be used to pay debts and invest in the
    country's infrastructure and social services.
        In addition, because global oil prices are likely to remain
    low for the foreseeable future, oil exports will not enable
    Iran to get rich quickly. Iran faces stiff global competition,
    and its reentry into the global market is unlikely to pose
    serious competition to major oil producers such as Saudi
    Arabia.
        Even after the nuclear agreement, many foreign companies
    will be hesitant to trade with Iran due to remaining U.S.
    sanctions and, perhaps more importantly, due to the overall
    reputation of the Iranian regime. Iran is one of the most
    corrupt and least business-friendly countries in the world.
        The Iranian regime's asymmetric capabilities will remain
    the key challenge for U.S. interests, but increasing U.S.
    military leverage in Syria and Iraq and a political solution to
    the Syrian conflict decrease the regional instability, which
    the Iranian regime exploits. The United States should be
    willing to engage Iran diplomatically when it suits its own
    interests.
        Iran appears ascendant in Syria today, but it is more eager
    to end its involvement in the conflict than it may appear.
        I have four recommendations for the United States,
    especially Congress.
        Congress has a vital role to play in ensuring Iran's
    adherence to the nuclear agreement by engaging in vigorous
    oversight of the agreement's implementation. Congress should be
    ready to impose new sanctions against Iran if it is found to be
    violating the agreement. Moreover, Congress should remain fully
    informed of the status of the nuclear agreement by holding
    frequent hearings regarding its implementation.
        However, Congress should not pass new legislation on
    terrorism and human rights abuses, especially as the nuclear
    agreement is implemented. Such steps could be viewed by U.S.
    partners and the international community as an attempt to
    undermine the nuclear agreement, endangering international
    enforcement of sanctions against Iran.
        The nuclear agreement will not end the rivalry between the
    United States and the Islamic Republic. The Rouhani government
    is very limited in its ability or willingness to reform Iran. A
    U.S. focus on democracy promotion would, therefore, be
    beneficial.
        The United States should make it easier for Iranian
    students to study at American universities, allowing them to
    gain an even more positive view of the United States and its
    values. U.S. programs that aim to increase cultural and sports
    exchanges between Iran and the United States should be
    expanded.
        Finally, U.S. diplomacy with Iran can help resolve regional
    crises while strengthening positive views of America within
    Iran. Therefore, the United States should lift restrictions
    against diplomatic engagement with Iranian diplomats. U.S.
    diplomacy with Iran does not confer legitimacy on the Iranian
    regime. Such legitimacy can only be conferred by the Iranian
    people.
        Thank you for the opportunity to share my views with the
    subcommittee. I look forward to your questions.
        [Prepared statement of Mr. Nader follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. DeSantis. Thank you.
        The chair now recognizes himself for 5 minutes.
        Dr. Bucci, Mr. Nader stated in his written testimony that
    the amount of sanctions relief is, ``unlikely to greatly
    empower the Iranian regime at home or abroad.'' And he said
    that they will likely use it to pay down debts and follow
    through with President Rouhani's promises to invest in the
    country. Do you agree that that is how Iran is likely to spend
    the money it receives from sanctions relief?
        Mr. Bucci. With due respect to my colleague, Mr. Chairman,
    I think that is wildly optimistic. Clearly they will apply some
    of the money. That is a ton of money they are going to get
    suddenly injected into their economy. Some of it will go to pay
    some debts. Some of it will go to some infrastructure things.
    They have got a considerable domestic ferment there that they
    need to address. A regime that under the sanctions was spending
    as much money as they were spending on support of terrorism, to
    think they are not going to siphon off at least some of that
    money, maybe a big chunk of it, to upgrade that support of
    terrorism once they get this new money is delusional.
        Mr. DeSantis. And their proxies like Hezbollah have cheered
    the agreement. I do not think they would do that unless they
    saw benefits for them as a result of it.
        Dr. Schanzer, Mr. Nader agrees with--this is with respect
    to the increase in oil exports of $1 million per year. He
    agrees with that, but he argues that Iran will use this
    additional income to pay debts and invest in the country's
    infrastructure and social services.
        So what do you believe just based on the history of human
    rights abuses that we have seen under the Supreme Leader? We
    have seen the regime's conduct. That oil money--what is your
    best guess as to what is going to happen with that?
        Mr. Schanzer. Mr. Chairman, look, I would just say this as
    an overall observation that those who are proponents of the
    regime all of a sudden are also accountants and purport to know
    how Iran is going to spend its money. We have seen, during the
    time when Iran was building its nuclear weapons capability,
    that it was spending money, not paying down its debts,
    obviously. It was pursuing a reckless policy then. I do not
    expect it to change a policy of recklessness even though they
    have at least for now decided to curb their nuclear objective.
    So I would certainly expect to see oil funds, as well as the
    sanctions relief, flowing to groups like Hezbollah, Kata'ib
    Hezbollah in Iraq, a lot of the other groups there that are
    fighting on behalf of the Iranians. I would expect to see the
    IRGC getting huge amounts of this.
        But one other thing that is incredibly important to note is
    that the IRGC controls roughly a third of the Iranian economy.
    And so when you talk about money that is going to flow to
    hospitals and schools and roads, what you are doing is you are
    sinking money into companies controlled by the IRGC. So it is
    simply a pass-through to this radical organization which will
    then go and finance all these radical groups around the region.
        Mr. DeSantis. Thank you.
        Lieutenant General McInerney, as a result of this deal, you
    sketched out kind of Iran's malign influence. Does this deal
    make their project in, say, Yemen easier for them or more
    difficult for them?
        Mr. McInerney. It makes it much easier, Mr. Chairman.
        Mr. DeSantis. How about their project--I know that they
    have designs on Bahrain. Is this better for Iran and their
    designs on Bahrain, or does it make their life more difficult
    with respect to those ambitions?
        Mr. McInerney. Again, better for their designs on Bahrain.
        Mr. DeSantis. And we have talked about--and I think you
    have pointed this out in your testimony very well. You know, we
    talk about, hey, Iran--yes, they get this entire nuclear
    infrastructure. It is basically being kept in place. They got
    the heavy water reactor. But they have promised that there is
    not going to be any plutonium production. Yes, they have an
    underground facility at Arak, but they are going to--or in
    Fordow--excuse me. But they promise they are just going to do
    research there. So you have words on the paper. True. In your
    judgment, do you think it is likely that you will see the type
    of unfettered inspections that you need? I know in some of the
    military sites, they are essentially going to self-inspect. So
    are the words on the paper something that we would want to hang
    our hats on?
        Mr. McInerney. Mr. Chairman, they celebrated their 36th
    anniversary of seizing our embassy yesterday. I expect no
    changes in their conduct.
        Mr. DeSantis. Let me ask you this. I think Dr. Schanzer
    made some good recommendations about what Congress can do in
    terms of the financing. What would you say--two-thirds of the
    American people I have seen do not think this is a good idea.
    What should Congress do? This was never passed by Congress. It
    is essentially an executive-to-executive agreement that will
    expire with the new administration. But in the meantime, what
    would you recommend that Congress do to combat the threat?
        Mr. McInerney. I would increase the sanctions, as Dr.
    Schanzer mentioned. We have got to put bounds on that nation,
    and we are not. We are encouraging bad behavior.
        Mr. DeSantis. Dr. Bucci, what should we do? If we agree
    with your testimony, we think this is a problem, we think
    Iran--the net effect of this, Iran is stronger, more and more
    of a malign force than they have already been. It hurts our
    national security interest. But yet, we cannot really--I mean,
    we voted the agreement down, but it did not matter. It is going
    forward as an executive agreement.
        Mr. Bucci. Mr. Chairman, I think you ought to take whatever
    steps you think you can get away with to put the clamps back
    on, particularly the Quds Force people, General Soleimani. He
    is catting around the world going into Moscow to chat with
    Vladimir Putin, those kind of things that are now legitimate
    under this agreement. That is such a slap in the face of the
    people that have been killed by this man's troops and his
    plots. Those kind of sanctions, very specific, very directive,
    at least ought to be put back in place.
        Mr. DeSantis. And I would venture to guess that Soleimani,
    of any living person, probably has more American blood on his
    hands than anyone. I mean, Osama bin Laden has been killed. He
    killed at least hundreds of our troops in Iraq. I have heard as
    many as 1,500. General, do you think that sounds reasonable, a
    reasonable estimate?
        Mr. McInerney. Well, I have heard a number between 500 and
    1,500.
        Mr. DeSantis. You know, relieving international sanctions
    of somebody that is not just a malign influence but has
    actually killed a lot of Americans--and we have had people come
    to Congress who were wounded by these EFP's that Iran was
    providing these Shiite militias. And it is not a story I think
    that is as well known as the Sunni insurgency during that time
    period.
        The one thing I would also mention--and we are working on
    some legislation, but because this was not ratified as a treaty
    or even passed this Congress as statutory law, what the
    President has agreed to cannot supersede State sanctions. It is
    not the supreme law of the land. And so we have States--I am
    from Florida that has pretty tough sanctions in terms of the
    investments in Iran and what can be done with the pension
    funds. And we are going to be introducing some legislation
    hopefully soon that will allow really saving the State
    sanctions, making it clear and really encouraging States that
    they should do what is right for their folks. And so those
    States and those States that have acted are really an important
    part of this right now, more important than we probably
    thought.
        With that, I am out of time, and I will recognize the
    ranking member, Mr. Lynch, for 5 minutes.
        Mr. Lynch. Thank you, Mr. Chairman.
        America has always been somewhat forward-looking, and I
    think the examples in our history where we have had tremendous
    loss of life within our Nation--you know, wars against Germany,
    against Japan, against Vietnam. And now we have got trade
    agreements, and we are trying to move forward with those
    relationships.
        And I think that while there is need for great caution
    here, no question about it--I do not trust the Iranian regime--
    I think there is an opportunity here that has been created not
    by just the United States but by P5 Plus 1. So we have got to
    consider the implications here. I think that the verification
    protocols have to be in place. They have to be robust.
        Mr. Nader, I want to ask you about the state of the Iranian
    economy and the impact of whatever money pours over--some say
    $100 billion. Some say $200 billion--into the Iranian economy.
        We have had a chance to talk to the IAEA inspectors who
    have been in Tehran and around the country. They tell me that
    they are afraid to fly commercially within Iran because our
    sanctions, together with the Europeans and others--we have
    blocked basic commercial airline parts as part of our sanctions
    so that the IAEA inspectors--the way they operate is they fly
    directly on Lufthansa mostly from Germany into Tehran. They
    will not fly around the country because they are deathly afraid
    of the safety conditions of the Iranian commercial airlines.
        They have also indicated that this petrol economy--and Iran
    is basically gas and oil. That is a huge part of their economy.
    That has been devastated by the sanctions, which was the whole
    idea to get them to the table.
        What do you think the impact of this money--have any of the
    financial sanctions been lifted so far? Has any of the money
    gone to it? So nothing yet. So we have got a parade of
    horribles that might happen, but nothing has gone.
        And why is that? Why has no money gone to Iran yet?
        Mr. Nader. Well, first of all, Iran has not implemented the
    nuclear agreement. Once it implements the nuclear agreement and
    the IAEA verifies that Iran has taken these steps and they are
    verifiable, then Iran will meet with some sanctions relief.
        But I think it is important to recognize that a lot of U.S.
    sanctions are going to remain against Iran. You mentioned
    Iran's civilian airlines. They have been without modern
    technology and parts for decades. Iran's natural gas industry,
    which Iran has one of the biggest gas reserves in the world,
    cannot take advantage of the resources because of U.S.
    sanctions preceding the nuclear sanctions. So if you look at
    the long list of U.S. sanctions, a lot of sanctions, the
    primary sanctions will remain against Iran. A lot of companies
    will be hesitant to trade with Iran and deal with Iran.
        And when we look at Iran's conventional military
    capabilities, under the JCPOA Iran will face a 5-year embargo
    on its conventional arms imports. It will face an 8-year
    embargo on its missiles. Even after that, the U.S. primary
    sanctions are going to deter a lot of foreign countries from
    selling equipment to Iran. Even before the nuclear issue became
    such a problem, Iran was having a difficult time importing
    sophisticated weapons because the Europeans and even the
    Russians and Chinese were hesitant to deal with Iran. So I
    think there are going to be a lot of restraints on Iran, on its
    economy moving forward.
        And finally, I want to say that, yes, this regime will
    support terrorism. It will deny human rights to its people. But
    it is important that we have a nuclear agreement which takes
    the nuclear capability away from the Iranian regime. And I
    think this is why this agreement is important. It is a strong
    nonproliferation agreement that will ensure Iran does not have
    a nuclear weapons capability.
        Mr. Lynch. The latent capability of the Iranian regime
    really lies in oil and gas. There are some who say there is an
    oil glut now. That is why prices are down. But the natural gas
    piece there is a concern because there is a greater use around
    the world. You know, people are getting away from coal and oil
    to some respect, but natural gas--that could be a bonanza for
    Iran.
        How far behind are they? How long would it take--I know we
    have a lot of--there are already contracts in place with a lot
    of the European countries and the United States with Qatar, for
    example. They have already rebuilt their whole natural gas
    infrastructure, and they have not cornered the market, but they
    have got a huge advantage there. What would it require for Iran
    to sort of catch up? Because they are actually pre-LNG still
    back in Iran. They have not even come forward with that
    technology. So could you talk about how much time it might take
    them to catch up?
        Mr. Nader. Well, if you compare Iran to Qatar, it is years
    if not decades behind. And Iran and Qatar share a very large
    gas field, the South Pars gas field. And Qatar has really taken
    advantage of it because it is a close U.S. ally. It has access
    to liquefied natural gas technology through the United States,
    and Iran lacks that technology. And I doubt that it will be
    able to catch up anytime soon because of U.S. primary sanctions
    against Iran.
        And I think a lot of European companies and even Asian
    companies will be reluctant to help Iran develop its natural
    gas resources. So Iran is years if not decades behind in its
    natural gas. And in terms of its energy sector, when you
    compare it to Saudi Arabia, for example, or Russia, it is also
    years and decades behind.
        I talked to an economist who had worked on Iran's petroleum
    industry during the shah's reign. At that time it was
    relatively modern, and when he saw Iran's current status, he
    said it brought tears to his eyes as an engineer and scientist
    because how behind Iran had fallen because of the regime's
    policies, because of its nuclear policies, and its reputation
    overall.
        Mr. Lynch. Thank you.
        I thank the chairman for the indulgence. I appreciate that.
        Mr. DeSantis. No problem.
        The chair now recognizes the gentleman from Georgia, Mr.
    Hice, for 5 minutes.
        Mr. Hice. Thank you, Mr. Chairman.
        And thank you, each of our witnesses, for being here.
        It is my understanding from your testimony, what you have
    shared to this point--yes or no--would you agree that if the
    sanctions are lifted, that Iran will most likely, probably use
    a significant portion of that revenue to advance their military
    strategy?
        Mr. McInerney. I concur with that, sir.
        Mr. Schanzer. I do as well.
        Mr. Bucci. Absolutely, yes.
        Mr. Nader. Yes. I think it will use some of it.
        Mr. Hice. Okay. All right.
        Dr. Bucci, let me go with you. Any idea how many American
    lives have been lost since 2001 in Iraq and Afghanistan?
        Mr. Bucci. Total is up about 8,000 I think.
        Mr. Hice. Any idea of how many have been killed by
    specifically Iranian activity?
        Mr. Bucci. The number that gets batted around that the
    General mentioned, up around 1,500, is generally associated
    with the use of the Iranian-provided shaped penetrators, the
    sort of enhanced IED's that were provided to specifically the
    Shia militias. I think you need to go a little beyond that
    because it is not just the IED's that kill people. There were
    bullets that killed people. There were advanced sniper rifles
    that were given to those same Shia militias by Iran that also
    killed American service members. So I would guess it is more
    than the 1,500 that people generally quote.
        Mr. Hice. All right, sir. If you had to give one weapon,
    what is the key weapon that has been used against Americans?
        Mr. Bucci. The enhanced penetrator.
        Mr. Hice. Is that produced in Iran?
        Mr. Bucci. Absolutely.
        Mr. Hice. In an interview with a British paper, ``The
    Telegraph,'' there were a couple of British military officers
    who allegedly said that Iran had paid Taliban fighters $1,000
    each for each American soldier that they killed in Afghanistan.
    Is this accurate?
        Mr. Bucci. I have not seen proof of that, Congressman, but
    I have seen pretty good proof that the Iranians were paying the
    Taliban's salaries, in some cases over $500 a month, which is a
    pretty hefty salary in Afghanistan. So whether they were doing
    it as a direct bounty or just the general funding of their
    operations, it is still pretty significant.
        Mr. Hice. So they are funding the Taliban soldiers against
    us.
        In your experience, what is the greatest threat Iran poses
    to American ground forces?
        Mr. Bucci. The exportation of terrorism around the Middle
    East. None of our people are essentially safe anywhere in the
    Middle East that the Quds Force can reach them, and that is
    pretty much the entire region.
        Mr. Hice. Would you agree that regardless of an agreement
    being reached, that Iran is still going to be a significant
    threat to both American interests and our allies?
        Mr. Bucci. Not only is it my opinion that they will be so,
    Congressman, the Iranians have said they will be. They have
    said they will not back off on any of those type of operations
    or policies regardless of this agreement.
        Mr. Hice. Specifically, what kind of threat does Hezbollah
    pose to Israel?
        Mr. Bucci. They are the best supplied, the best equipped,
    the best organized. While they are tied up in Syria right now,
    that is frankly gaining them additional equipment and
    experience that they could then turn around and apply against
    Israel. So they are, by far, the biggest threat.
        Mr. Hice. And I would assume that same threat would carry
    over to America as well.
        Mr. Bucci. Oh, definitely.
        Mr. Hice. So what level of support has Iran contributed to
    the funding, training, support, so forth of Hezbollah?
        Mr. Bucci. Pretty much 100 percent of Hezbollah's support
    comes directly from Iran.
        Mr. Hice. So is it fair to say that at least in your
    opinion if the sanctions are lifted, Hezbollah is going to see
    a significant boost in its financial backing?
        Mr. Bucci. They will benefit. Hezbollah, Hamas, and other
    terrorist groups around the Middle East--they will all gain
    from this largesse of the Quds Force.
        Mr. Hice. Dr. Schanzer, you had mentioned a while ago--and
    I would like to get a little more information about EIKO. Can
    you give a little bit more information as to what that is?
        Mr. Schanzer. Absolutely. That is a $95 billion fund owned
    by the Supreme Leader, Ali Khamenei. It includes a big chunk of
    the Iranian stock market, I think 5 or 10 percent, on top of
    that, significant real estate holdings, international holdings
    as well. We had sanctions on it. It is set to be de-listed now
    as a result of this deal.
        Mr. Hice. Again, I want to thank you for being here, each
    of you.
        My time has expired. I appreciate it very much. Thank you,
    Mr. Chairman.
        Mr. DeSantis. I thank the gentleman.
        The chair now recognizes the gentlewoman from Michigan for
    5 minutes.
        Mrs. Lawrence. Thank you, Mr. Chair.
        Mr. Nader, is it true that while this agreement was
    announced in July, it was technically adopted on October 18th,
    2015?
        [Nonverbal response.]
        Mrs. Lawrence. So a couple questions.
        Iran is now expected to begin nuclear disarmament. Is that
    right?
        [Nonverbal response.]
        Mrs. Lawrence. So technically adopted October 18, 2015. So
    now the disarmament is expected to begin.
        And as I understand it, the next milestone would be
    implementation day. Is that correct?
        [Nonverbal response.]
        Mrs. Lawrence. Can you explain what implementation day is?
        Mr. Nader. Sure. Once the nuclear agreement was adopted,
    which you mentioned, Iran is expected to implement the
    agreement over the next few months. That entails Iran
    undertaking actions that block all the paths toward nuclear
    weaponization. That means severely restricting its uranium
    enrichment program, reducing its centrifuges that spin uranium
    by two-thirds, by reducing its stockpile of enriched uranium by
    97 percent, by reconfiguring the Arak facility that could
    produce plutonium for nuclear weapons. So that would block
    Iran's plutonium weapons production. And also Iran would accept
    very intrusive inspections into its nuclear facilities.
        From the bottom up, the IAEA and the United States will
    have a very good idea of what Iran is up to. So when Iran is
    building these centrifuges in its factories, we will know where
    it is building them and what they are doing with the
    centrifuges. So if they want to pursue a covert program and
    take these centrifuges, we will know what is going on. And
    these actions are expected to give us about a year warning if
    Iran decides to produce breakout, meaning that if Iran races
    toward a nuclear weapon, if it decides to violate the
    agreement, then we will know and we will have the ability to
    respond whether economically, diplomatically, and militarily.
        So in terms of implementation, once Iran implements the
    agreement, the nuclear program is going to be under very close
    monitoring and inspection. And that is what really the
    international community has asked Iran to do for the past 10
    years.
        Mrs. Lawrence. Thank you.
        I have heard estimates for the implementation day could be
    as soon as the end of the year or as far off as next spring. Is
    that correct?
        Mr. Nader. Yes. It could take a few months.
        Mrs. Lawrence. Now, the sanctions are not to be lifted
    until everything Iran has done has been physically verified as
    complete by the IAEA. Correct?
        Mr. Nader. Yes.
        Mrs. Lawrence. Now, I understand that the implementation
    day--only nuclear-related sanctions will be removed. You
    mentioned it, but could you just restate what are some of the
    other--because I understand the remaining conventional arms and
    ballistics sanctions are to be removed in phases. So could you
    please give us some information on that?
        Mr. Nader. Yes. According to JCPOA, Iran will still face a
    5-year embargo on the import of conventional weapons. So no
    country can sell conventional weapons to Iran for 5 years. If
    they do, they will be punished and sanctioned.
        For 8 years, no other country can help Iran develop its
    missile program. If any countries or companies help Iran with
    its missile program, they will be punished and sanctioned.
        And once the nuclear sanctions against Iran are eased, you
    still have a number of U.S. sanctions that date from 1979 to
    the Iran revolution. Whether you are looking at the freezing of
    Iranian assets, Iran Sanctions Act that dates from the 1990's,
    sanctions against the Revolutionary Guard and the Quds Force,
    those will remain. The American sanctions will remain against
    terrorism and human rights abuses.
        Although the European Union is expected to lift its nuclear
    sanctions against Iran, its human rights abuses sanctions will
    also still remain. And a lot of the European countries do care
    about human rights and look at human rights in terms of
    investing in Iran.
        Mrs. Lawrence. So in the last few minutes I have, I agree
    with the statements that have been provided by our
    distinguished panel. There are some bad guys in Iran. They are
    not a friend of the United States.
        This nuclear agreement is directed toward a verified system
    of stopping Iran from getting the nuclear weapons. And we have
    just begun this process so that we can examine and verify
    before any sanctions will be lifted. Is that correct?
        Mr. Nader. Yes, exactly.
        Mrs. Lawrence. Thank you. I yield my time.
        Mr. DeSantis. The gentlelady's time has expired.
        The chair now recognizes the vice chair of the committee,
    Mr. Russell from Oklahoma, for 5 minutes.
        Mr. Russell. Thank you, Mr. Chairman.
        And thank you, panel, for being here.
        Mr. Nader, you said both in your testimony and in answers
    to questions that no one that is on the terror and human rights
    lists will have sanctions lifted. Yet, I like General McInerney
    have read the entire agreement, have researched every single
    name on the sanctions list. I have personally discovered over
    50 individuals and entities that have violated terror and human
    rights. Yet, they are listed for sanctions relief. For example,
    General Soleimani, General Salami, General Hajizadeh, the Quds
    Force, the Islamic Revolutionary Guard Corps, the Islamic
    Republic of Iran's shipping lines, a known shipper of weapons
    all over the region for terror.
        So my question is, since the agreement clearly says that
    these sanctions will be lifted, how can you state that?
        Mr. Nader. Those are the nuclear secondary sanctions. So
    the secondary sanctions under the nuclear sanctions that the
    United States has passed compel other countries and companies
    to stop trading with Iran. And in order to achieve the nuclear
    agreement, those secondary sanctions will be eased.
        But when you look at U.S. primary sanctions--for example,
    Iran is designated as a supporter of terrorism by the United
    States. It was designated in 1984. That puts a lot of sanctions
    against Iran and deters foreign companies and countries from
    trading with Iran. And there are a number of other sanctions
    that precede the nuclear sanctions going back to 1979. There
    are many overlapping U.S. and international sanctions against
    Iran.
        Mr. Russell. Well, and that is the concern. And I would
    invite all of the panel and even, Mr. Chairman, our committee
    to look at paragraph 37 of annex 2 in the agreement because
    Iran has a much different view about these sanctions liftings,
    and they believe that these individuals will be wide open for
    business.
        And in that regard, Dr. Schanzer, the Islamic Republic and
    Guard Corps, the Quds Force, and others--it has a vast array of
    business that it conducts. Can you very succinctly describe
    what it is, that its legitimate business reach is? We think it
    is nefarious, but yet, on the other hand, we see that it is
    conducting itself normal and it will be able to conduct
    enterprise in your hometown.
        Mr. Schanzer. That is right. This was the point that I was
    trying to make earlier that the IRGC has deep penetration
    across just about every sector within Iran. This is
    construction. It is petrochemical. It is gas. Basically every
    major sector within Iran has IRGC companies that are set to
    benefit from this. This is one of the reasons why we have
    placed such a huge focus on targeting the IRGC itself, lowering
    the threshold for designating the IRGC businesses to make it
    harder for our money to flow there.
        But there is one other thing that I think is worth noting.
    We keep hearing that we have not lifted any sanctions yet. That
    is untrue.
        Mr. Russell. I agree.
        Mr. Schanzer. After the signing of the JPOA, the interim
    agreement, back in November of 2013, we began to provide Iran
    with $700 million per month. We lifted sanctions on gold,
    petrochemicals, auto, a range of other sectors, and that has
    allowed Iran to benefit from this deal even before we signed
    it. And so it is just simply not true to say that we have not
    provided them with sanctions relief to this point.
        Mr. Russell. I appreciate that.
        And, General McInerney, you will not remember me, but we
    served together when you were the Joint Task Force Alaska
    Commander and I was the aide to General Sam Ebbessen when
    General Tom Fields was there. And it is good to see you again
    after all these years.
        Mr. McInerney. You were dressed differently, sir.
        Mr. Russell. I was indeed, sir. Thank you for being here.
        Sir, can you speak to Iran's missile and cruise missile
    threats and the development of the underground silos and what
    the implication of that is?
        Mr. McInerney. Briefly, sir. They are missiles. The primary
    value is in the nuclear realm. So they are leading the problem
    in developing conventional. And we just noticed on the 10th of
    October, less than a month ago, that they launched an IRBM. And
    they are going to continue to progress. They are getting help
    from China, North Korea, and Russia.
        Now, their eventual goal is to put nuclear weapons on
    these. And we have seen the ability, when you then have that
    capability and then when you go to underground silos, as well
    as the Chinese have where they have roads underneath--you then
    have the ability for a nation like Iran to hold hostage Europe,
    the United States, other parts of the world. And that comes
    back to then when them are negotiating. When you are
    negotiating and you are looking at a person you are negotiating
    with and he does not have to say it, but you know he has
    nuclear weapons that he can put on your cities, that changes
    the tone of the negotiations. And that is the direction that
    they are going to. Will it happen next week? No, but that is
    their long-term objective. And if they are still in power in 36
    years from now, we are in trouble.
        Mr. Russell. I thank you for that, General.
        And, Mr. Chairman, my time has expired, but if we have a
    chance for a second round at the end, I would have some more
    questions. Thank you.
        Mr. DeSantis. We have still got over 10 minutes on the
    vote, 410 not voting. So I think we will be able to get through
    a couple more.
        So the chair now recognizes Ms. Kelly for 5 minutes.
        Ms. Kelly. I will keep it short. Thank you, Mr. Chair.
        Iran's neighbors such as Israel and Saudi Arabia are
    concerned that the deal is not sufficiently strong and does not
    prevent Iran from obtaining a nuclear weapon. This was a
    serious concern that warranted consideration prior to
    enactment. However, now with the deal in place, it is
    imperative that we move forward and work to ensure that
    compliance is strictly enforced and any and all sanctions be
    implemented following noncompliance to ensure those fears
    remain unwarranted.
        Mr. Nader, what provisions of the deal hold Iran's feet to
    the fire to ensure its compliance?
        Mr. Nader. There are many provisions, from Iran having to
    verify--or the IAEA having to verify that Iran has complied
    with their program to the future restrictions in place against
    Iran for the next 15 years, which is the duration of the
    program. And then even after 15 years, there are components of
    the program that last for 20 to 25 years giving the United
    States insight into Iran's program and enable to reassure our
    allies the United States has provided them with the technology
    and weaponry to deter Iran's military capabilities. For
    example, the United States has helped Israel develop a very
    sophisticated antiballistic missile defense system. The same
    goes for Saudi Arabia and the GCC states. And while those
    allies have been concerned about Iran's nuclear activities and
    have been concerned about the negotiations, as they should be
    because Iran poses a threat to them, they have come to see that
    the nuclear agreement can be beneficial to their interests.
    Saudi Arabia and the GCC have approved of the program and are
    working very closely with the United States to strengthen their
    conventional military capabilities against Iran.
        Ms. Kelly. A shortcoming of the deal many point to is that
    provisions expire at all. However, to my knowledge, no arms
    treaty or agreement has ever been without expiration. But in
    fact, even the much hailed Nuclear Nonproliferation Treaty had
    an expiration date until it was renewed. Is that not correct?
        Mr. Nader. Yes. All nonproliferation treaties do have an
    expiration date.
        I think what is unique about JCPOA is it does last 15
    years, but even after 15 years, the IAEA has a very close
    inspections regime against Iran's nuclear program. Some of the
    measures last 20 and 25 years. From the time Iran mines uranium
    from the ground to the time it builds its centrifuges and takes
    them for enrichment, we will know what it is doing even after
    the agreement has expired.
        Ms. Kelly. Because these provisions do not extend into
    perpetuity, compliance with the agreement is even more
    dependent on Iran's domestic politics and leadership. Moving
    forward, what must Congress do to ensure future Iranian regimes
    continue to abide by the agreement and we do not have to keep
    going back to the negotiating table and face a threat of a
    nuclear Iran?
        Mr. Nader. I do not think the Iranian political system is
    going to change any time soon. Ayatollah Khamenei still rules
    Iran as long as he lives. The Revolutionary Guards are a
    powerful force.
        But there are millions of Iranians who want change in their
    country. We saw in 2009 millions of Iranians come into the
    street in support of democracy. And moving forward, I think
    there is a lot the United States can do to foster democracy in
    Iran whether it is increasing exchanges between Iranians and
    Americans. And I think that is very important actually because
    the Iranians get to come here, see what the United States is
    like, and not be subject to their government's propaganda. So
    strengthening civil society, public diplomacy, U.S. broadcasts
    to Iran can all be very helpful.
        Ms. Kelly. Thank you.
        I yield back the balance of my time.
        Mr. DeSantis. The gentlelady yields back.
        The chair asks unanimous consent to welcome Mr. Welch of
    Vermont, who is not on the subcommittee, but to allow him to
    participate in today's hearing. Without objection, so ordered.
        Mr. Welch, you are now recognized for 5 minutes.
        Mr. Welch. Thank you very much.
        I really appreciated the testimony and the points that you
    made.
        We had this fierce debate, obviously, about the nuclear
    deal. The majority of Congress was against it. The minority was
    for it. It has been implemented. I did support it but share a
    lot of the concerns that have been expressed.
        And in listening to the testimony and reading beforehand,
    there is an aspect of what you have said--and I will start with
    you, General McInerney--that, on the one hand, cautions us
    about the future, and we have got to take that seriously. But
    on the other hand, there is an aspect of it that I hear as a
    continuation of the fierce debate that we had about the deal
    itself. The deal is done. So that is not going to be undone
    realistically.
        So when you are talking about the sanctions relief, how is
    it that we would not comply on our part with the sanctions
    provisions that were part of the nuclear deal even as we are
    extremely wary and watchful about what Iran is doing to cause
    difficulties in an already difficult Middle East situation? In
    other words, what is the tool that we have? We have to comply
    with the agreement. Right?
        Mr. McInerney. This administration does, yes, sir.
        Mr. Welch. Would you just elaborate on that?
        Mr. McInerney. Well, this administration that signed it as
    an executive agreement is going to comply with relieving those
    sanctions when they meet their appropriate endpoints.
        We think that we should put as a Congress additional
    sanctions on certain elements like the Quds Force, IRGC, et
    cetera.
        Mr. Welch. Let me just understand this because I think it
    is important. A lot of people I think probably agree with you.
    But if the administration signed this agreement, what I am
    hearing you say is that the next administration is going to
    have its own option to review it and perhaps change it. Is that
    your suggestion?
        Mr. McInerney. Yes. As a matter of fact, some of the
    candidates have already announced that they will cancel it. And
    that is a clear option.
        My personal course of action on this altogether would have
    been never to have the JCPOA but we should have continued the
    sanctions, which were very effective, and we have to, in the
    long run, look for regime change. Remember the difference that
    this government is. It is a radical Islamic government. If you
    look at Saddam Hussein, he was a Baathist. If you look at
    Bashar al-Assad, he is a Baathist.
        Mr. Welch. Yes. I do not have that much time. So your view
    is that the stability that we need will come only through
    ultimately a regime change in Iran.
        Mr. McInerney. Correct.
        Mr. Welch. And, Dr. Schanzer, do you agree with that?
        Mr. Schanzer. I am not going to speculate as to whether the
    next President would cancel the deal, but what I can tell you
    is that there are measures that can be taken in the interim --
    --
        Mr. Welch. I am wondering whether you agree with General
    McInerney that regime change is ultimately the option that is
    the only option that will really assure us that there will be
    stability with respect to Iran.
        Mr. Schanzer. Look, as long as this regime is in place, you
    will continue to see the sponsorship of terrorism in other
    proxies around the region. There is no question about it. We
    should be working toward regime change. 2009 was a huge missed
    opportunity.
        Mr. Welch. Dr. Bucci?
        Mr. Bucci. I would agree with that also, Congressman. This
    regime has stated publicly--they are actually quite honest
    about it--that they are not going to give up any of those
    things. They do not see that they have to with this deal, so
    they will not. And in fact, the deal will enable those efforts
    to be stronger and more widespread than they were before. So I
    think regime change is the only way it achieves stability in
    that country and in the region.
        Mr. Welch. There were a number of people who agreed with
    you on that. A number of people disagreed, myself among them,
    partly on practical grounds. Regime change did not work out so
    great in Iraq.
        But the original sanctions that we had did not stop the
    nuclear program. They froze the Iranian assets overseas, but
    the Iranians proceeded even further along the nuclear program,
    which means that there is a judgment all of us have to make as
    to the effect of our actions. And what we hope it will
    accomplish will not necessarily be the case.
        General McInerney?
        Mr. McInerney. We with those sanctions, sir, needed to
    continue our covert operations, which I will just say that if
    we were in a closed session, we could talk about it.
        Mr. Welch. My time is up. Mr. DeSantis, thank you very much
    for letting me participate.
        Mr. DeSantis. Absolutely.
        I am going to recognize the vice chair. He has got one more
    question. We are all pretty much out of time on the votes, and
    so we will do this question and then I think we will wrap up
    the hearing.
        Mr. Russell. Thank you for your indulgence, Mr. Chairman.
        Dr. Bucci, my last remaining question was for you. Could
    you speak to the recent activity of the Quds Force and its
    terrorist activity? And by recent, I mean within the last 2 to
    5 years.
        Mr. Bucci. Yes. They tried to kill the Saudi Ambassador
    here in Washington. I think that is within that time period.
    They hired one of the Shia militia groups in Iraq to rocket the
    *MEK camp that is there, people that were under our protection
    and the protection of the Iraqi Government. They are behind the
    cyber attacks that the chairman mentioned at the beginning of
    the hearing and the ones who did the attack on Saudi Aramco
    where they destroyed 30,000 computers in one day using a very
    heavy-handed piece of malware. They have done operations in
    Latin America, Africa, and they are behind the Houthis in
    Yemen. So they are pretty busy fellows and very, very
    effective.
        Mr. Russell. Thank you.
        And thank you, Mr. Chairman.
        Mr. DeSantis. Well, I would like to thank all of our
    witnesses for taking the time to appear before us today.
        If there is no further business, without objection, this
    subcommittee stands adjourned.
        [Whereupon, at 10:18 a.m., the subcommittee was adjourned.]

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