[Senate Hearing 114-77]
[From the U.S. Government Publishing Office]
S. Hrg. 114-77
U.S. POLICY IN UKRAINE:
COUNTERING RUSSIA
AND DRIVING REFORM
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MARCH 10, 2015
__________
Printed for the use of the Committee on Foreign Relations
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.gpo.gov/fdsys/
U.S. GOVERNMENT PUBLISHING OFFICE
96-831 PDF WASHINGTON : 2015
________________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].
COMMITTEE ON FOREIGN RELATIONS
BOB CORKER, TENNESSEE, Chairman
JAMES E. RISCH, Idaho ROBERT MENENDEZ, New Jersey
MARCO RUBIO, Florida BARBARA BOXER, California
RON JOHNSON, Wisconsin BENJAMIN L. CARDIN, Maryland
JEFF FLAKE, Arizona JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky TIM KAINE, Virginia
JOHN BARRASSO, Wyoming EDWARD J. MARKEY, Massachusetts
Lester E. Munson III, Staff Director
Jodi B. Herman, Democratic Staff Director
(ii)
C O N T E N T S
----------
Page
Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement. 1
Hon. John Herbst, former United States Ambassador to Ukraine;
director, Dinu Patriciu Eurasia Center, the Atlantic Council,
Washington, DC................................................. 51
Prepared statement........................................... 54
Response of John Herbst to question submitted by Senator Bob
Corker..................................................... 67
Hon. John C. Kornblum, former Assistant Secretary of State for
European Affairs, and former United States Ambassador to
Germany, Berlin, Germany....................................... 47
Prepared statement........................................... 50
Responses of John C. Kornblum to questions submitted by
Senator Bob Corker......................................... 67
Mckeon, Hon. Brian P., Principal Deputy Under Secretary of
Defense for Policy, U.S. Department of Defense, Washington, DC. 11
Prepared statement........................................... 13
Responses of Brian P. McKeon to questions submitted by
Senator Bob Corker......................................... 66
Responses of Brian P. McKeon to questions submitted by
Senator James E. Risch..................................... 69
Menendez, Hon. Robert, U.S. Senator from New Jersey.............. 3
Prepared statement........................................... 5
Nuland, Hon. Victoria, Assistant Secretary of State for European
and Eurasian Affairs, U.S. Department of State, Washington, DC. 6
Prepared statement........................................... 9
Responses of Victoria Nuland to questions submitted by
Senator Bob Corker......................................... 65
Response of Victoria Nuland to question submitted by Senator
James E. Risch............................................. 68
Toloui, Hon. Ramin, Assistant Secretary for International
Finance, Department of the Treasury, Washington, DC............ 15
Prepared statement........................................... 17
Additional Material Submitted for the Record
Prepared statement of Olexander Motsyk, Ambassador of Ukraine.... 63
(iii)
U.S. POLICY IN UKRAINE: COUNTERING RUSSIA AND DRIVING REFORM
----------
TUESDAY, MARCH 10, 2015
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:03 a.m., in
room SD-419, Dirksen Senate Office Building, Hon. Bob Corker
(chairman of the committee) presiding.
Present: Senators Corker, Risch, Rubio, Johnson, Flake,
Gardner, Perdue, Isakson, Paul, Barrasso, Menendez, Cardin,
Shaheen, Murphy, and Kaine.
OPENING STATEMENT OF HON. BOB CORKER,
U.S. SENATOR FROM TENNESSEE
The Chairman. This meeting of the Senate Foreign Relations
Committee will come to order.
I want to begin this hearing by expressing my condolences
to the family of Boris Nemtsov and the people of Russia. The
murder of Russian opposition leader, Boris Nemtsov, just
outside the Kremlin appears to be an attempt to silence those
in Russia who want to see their country move away from the
authoritarianism, corruption, and lawlessness of today's
Russia. Boris Nemtsov sought a better future for his people,
and we must remain committed to his vision for a democratic
Russia at peace with itself and its neighbors. He was
especially critical of Putin's aggression in Ukraine where, for
over a year now, Russia has continued its occupation of Crimea
and the destabilization of the country's eastern regions.
Our country made a commitment in 1994 to defend Ukraine's
sovereignty and its territorial integrity, which has been under
a near constant assault by Russia for more than a year. More
recently, we lured Ukraine West by supporting their desire for
closer association with Europe.
Now with Ukraine's future in the balance, the refusal of
the administration to step up with more robust support for
Ukraine and further pressure on Russia is a blight on U.S.
policy and 70 years of defending a Europe that is whole,
democratic, and free.
The conflict in eastern Ukraine, started by Russian-backed
mercenaries, now directly involves thousands of Russian
military personnel and has resulted in over 6,000 deaths and
generated 1.5 million refugees and internally displaced
persons.
For roughly 2 weeks after the second Minsk cease-fire
agreement was signed on February 12, the Russian-backed rebels
continued their offensive activities, ultimately acquiring the
strategic railway hub, Debaltseve. The determination of the
rebels to secure Debaltseve, despite the fact that the Minsk
cease-fire agreement required them to withdraw to a demarcation
line established last September, shows that Putin has no
intention of honoring the cease-fire.
While the violence has subsided since the rebels achieved
their short-term objective and acquired Debaltseve, the Minsk
cease-fire is far from being a success.
In addition to the ambiguous constitutional electoral
conditions required of Ukraine to regain control of its
borders, the second Minsk agreement is burdened by the failure
of the first Minsk agreement as it stands. In fact,
administration officials have repeatedly referred to the recent
Minsk accord as an implementation agreement of the first Minsk
accord.
But jumping from cease-fire to cease-fire in hope of
convincing Russian-backed rebels to fulfill the same
commitments they continually renege on is not a strategy and
certainly not a strategy for success.
In my view, any strategy will not be effective unless the
United States begins to provide Ukraine with the ability to
inflict serious military cost using defensive weapons on the
thousands of Russian troops operating in its eastern regions.
The Ukraine Freedom Support Act, which originated in this
committee, passed unanimously by Congress, and signed into law
by the President, authorizes $350 million in lethal military
assistance to Ukraine. But yesterday we heard Germany's
Ambassador to the United States say that President Obama
privately pledged to Chancellor Merkel in February that the
United States will not deliver lethal military assistance to
Ukraine despite the fact that he and other administration
officials continue to tell the American public that they are
seriously considering this policy.
Deputy Secretary of State Tony Blinken argued last week in
Berlin that no amount of lethal military assistance for Ukraine
will be sufficient to defeat the rebels and their Russian
sponsors.
But our objective is not to provide Ukraine with enough
weapons to overwhelm the Russian military in a direct
confrontation. Rather, the provision of lethal assistance aims
to increase Ukraine's defense capabilities in a way that will
give Kyiv the ability to produce conditions on the ground
favorable to a genuine peace process.
By equipping Ukraine with the means to impose a greater
military cost on Russia, the United States will be contributing
to a quicker, fairer, and more stable settlement of the
conflict.
But our support for Ukraine must go beyond simply imposing
cost on Russia. Ukraine's foreign currency reserves have
diminished to a month's worth of imports. The Ukrainian
currency has lost 80 percent of its value since April 2014, and
its economy continues to teeter on the brink of collapse.
At the same time, while I believe the government in Kyiv is
genuinely committed to reform, more needs to be done by the
Ukrainian authorities to move forward with these reforms,
especially in the energy sector where corruption siphons
billions of dollars away from the budget each year.
Even if the United States does more to help Ukraine and
Kyiv defeats the Russian-backed rebels, but the Ukrainian
economy implodes in the process, we have failed and Putin has
succeeded. As a matter of fact, he has had an even greater
success if that occurs.
This is why the United States must have a comprehensive
strategy that will both counter Russian aggression but also
drive political, economic, and anticorruption reforms in
Ukraine.
During this hearing, I hope to have a detailed discussion
that explores the situation in eastern Ukraine since the Minsk
cease-fire agreement was signed, examines why the United States
has failed to provide Ukraine with lethal military assistance,
and considers additional ways to support Ukraine with its
ongoing economic challenges.
I look forward to your testimony. I thank you for being
here.
And now I will turn it over to our distinguished ranking
member for his opening comments.
STATEMENT OF HON. ROBERT MENENDEZ,
U.S. SENATOR FROM NEW JERSEY
Senator Menendez. Well, thank you, Mr. Chairman, for
holding what is an extraordinarily important and timely hearing
on countering Russia in the Ukraine. And I appreciate our
witnesses being here.
Let me join you in very heartfelt condolences to someone
who was a courageous opposition leader, and sometimes true
patriots pay a price. Boris Nemtsov led efforts in which he
passionately believed in in a different Russia. And I find it
pretty outrageous to see the latest narrative that is being
portrayed that an Islamist plot is the reason why he was
assassinated. But to his family, his friends, and his
followers, we have our heartfelt thoughts and condolences.
Now, as it relates to today's hearing, there are many
experts who would contend that the complexity of the
geopolitics that led to the U.S. retreat from Europe created an
opening for Putin in the Ukraine. Clearly, we must closely
coordinate with our European friends for the sanctions against
Russia to work.
But I think, without any doubt, we can all agree on one
point, and that is that the United States must take the lead. I
believe the administration should fully implement measures in
the Ukraine Freedom Support Act, which the President signed
into law on December 18. The legislation passed with unanimous
consent in both Houses of Congress. It authorizes the President
to provide much-needed military and humanitarian aid to
Ukraine, and it imposes additional sanctions against Russia.
This legislation was necessary in December, and it is certainly
necessary today.
Now, we all want a diplomatic solution, but I believe this
can only come about when Putin believes that the cost of
continuing to ravage Ukraine is simply too high. Providing
nonlethal equipment like night vision goggles is all well and
good, but giving the Ukrainians the ability to see Russians
coming but not the weapons to stop them is not the answer. The
night vision goggles are one thing, but providing antitank and
antiarmor weapons, tactical troop-operated surveillance drones,
secure command and communications equipment would be far
better.
And frankly, I am disappointed that the administration,
required to report to Congress on its plan for increasing
military assistance to Ukraine on February 15, has yet to send
us that report. I was glad to join with Senator Corker in
sending a letter to the President yesterday on the importance
of providing defensive weapons and that we need to see this
overdue report.
In my view, it is time to impose additional targeted
sanctions on the Russian energy sector to add to existing
sanctions that are already costing the Russian economy about
$140 billion per year, or about 7 percent of its economy. The
administration should tighten restrictions on the development
of shale deposits or to drilling and offshore drilling. I think
the last thing we want to do is use American technology to
create a Russian shale revolution that could only extend its
reach into Europe and beyond.
The Ukraine Freedom Support Act called for the
administration to impose sanctions on other defense industry
targets as well as on special Russian crude oil projects by
January 31, and I am still waiting for the administration's
response.
At the end of the day, the most effective sanction is an
economically viable and stable Ukraine. The United States may
provide an additional $1 billion in loan guarantees toward the
end of this year, on top of the $2 billion in guarantees
already provided. In my view, this is a worthy investment, and
it needs to be matched by continued reforms by the Ukrainians.
Finally, I think we need to reinforce the transatlantic
agenda. We must take a more strategic approach in facing this
resurgent Russia. First, we need to reinvigorate the
institutions that have for so long contributed to the
transatlantic relationship and peace and stability. We need to
sharpen our arsenal of response options, and that means NATO
and EU integration and adapting them to today's realities.
In my view, the attention on Europe's east in confronting
the threat from Russia has been necessary, but we also need to
focus on the south, also vulnerable to undue Russian influence.
We need to strengthen secure and economic relationships in the
Balkans, especially in Serbia, Montenegro, Bulgaria, and
Bosnia.
Second, our intelligence community also needs to
reprioritize the Russian threat not only by addressing the
immediate security threat in Ukraine, but across the board in
Europe.
And third is communications. I understand the
administration is working with the Broadcasting Board of
Governors to commit a little over $23 million to Russian
language programming, which is a 49-percent increase over
fiscal year 2014. I think that and other public diplomacy funds
are incredibly important to counter Russian propaganda which,
when I traveled to the region last year and have listened to
those who have visited us from the region, they said they are
overwhelmed by Russian propaganda.
There is one key point, and at the end of the day, that is
that strong American leadership is what will matter.
Mr. Chairman, I would ask that the totality of my statement
be included in the record, and I thank you for the opportunity.
[The prepared statement of Senator Menendez follows:]
Prepared Statement of Senator Robert Menendez
american leadership
There are many experts who would contend that the complexity of the
geopolitics that led to the U.S.'s retreat from Europe created an
opening for Putin in Ukraine . . . Clearly, we must work in close
coordination with our European friends in order for the sanctions
against Russia to work. . . . But, I think--without any doubt--we can
all agree on one key point: The United States must take the lead.
The administration should fully implement measures in the Ukraine
Freedom Support Act, which the President signed into law on December
18. The legislation passed--with unanimous consent--in both Houses of
Congress. It authorizes the President to provide much-needed military
and humanitarian aid to Ukraine. And it imposes additional sanctions
against Russia. This legislation was necessary in December, and is even
more necessary today.
security assistance in ukraine
The simple fact is--we all want a diplomatic solution, but I
believe that this can only come about when Putin believes that the cost
of continuing to ravage Ukraine is simply too high. We have a
responsibility to increase that cost.
Providing nonlethal equipment like night vision goggles is all-
well-and-good, but giving Ukrainians the ability to see the Russians
coming, but not the weapons to respond, is not the answer. Night vision
goggles are one thing, but providing antitank and antiarmor weapons,
tactical troop-operated surveillance drones, and secure command-and-
communications equipment would be better. Frankly, I'm disappointed
that the administration--required to report to Congress on its plan for
increasing military assistance to Ukraine on February 15--has yet to
send us that report.
sanctions
In the meantime, Putin has used his military power to impose his
will in Ukraine, but he is also using every economic tool at his
disposal and we must do the same.
In my view, it's time to impose additional targeted sanctions on
the Russian energy sector to add to existing sanctions that are already
costing the Russian economy about $140 billion per year--or about 7
percent of its economy. The administration should tighten restrictions
on the development of shale deposits, Arctic drilling, and offshore
drilling.
The Ukraine Freedom Support Act called for the administration to
impose sanctions on other defense industry targets as well as on
special Russian crude oil projects by January 31. And I am still
waiting on the administration's response. These sanctions are
necessary, but, at the end of the day, the most effective sanction is
an economically viable and stable Ukraine. The U.S. may provide an
additional $1 billion in loan guarantees toward the end of this year,
on top of the $2 billion in guarantees already provided. In my view,
this is a worthy investment and it needs to be matched by continued
reforms by the Ukrainians.
As I said--all of us can agree on one key point: at the end of the
day, strong American leadership is what will matter most.
With that, I thank the Chairman for calling this hearing, and I
thank our witnesses for taking time to be here.
The Chairman. Without objection, absolutely. We want to
thank you for the comments.
And we will turn to the witnesses. On our first panel, our
first witness is Victoria Nuland, Assistant Secretary of State
for European and Eurasian Affairs. Our second witness today is
Brian McKeon, Principal Deputy Under Secretary of Defense for
Policy. A big title. Thank you. Our third witness is Ramin
Toloui, Assistant Secretary of Treasury for International
Finance. Our fourth and final witness on the first panel is
Vice Adm. Frank Pandolfe, Director for Strategic Plans and
Policy at the Joint Staff. We thank you all for being here,
sharing your thoughts and viewpoints.
I will remind you that your full statement will be entered
into the record, without objection. And so if you would please
summarize your statement, about 5 minutes or so, and we look
forward to our questions. Again, thank you all very much for
being here.
STATEMENT OF HON. VICTORIA NULAND, ASSISTANT SECRETARY OF STATE
FOR EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF STATE,
WASHINGTON, DC
Ms. Nuland. Thank you, Chairman Corker, Ranking Member
Menendez, members of this committee. Thank you for the
opportunity to join you today to talk about the situation in
Ukraine and for the personal investment that so many of you
have made in that country's future.
Today Ukraine is central to our 25-year transatlantic quest
for a Europe whole, free, and at peace. My interagency
colleagues and I are pleased to update you on United States
efforts to support Ukraine as it works to liberate the country
from its corrupt, oligarchic past, and chart a more democratic
European future and to bring an end to the Russian and
separatist aggression.
In my remarks, I will focus on two areas today: first, the
work that Ukraine is doing with U.S. and international support
to reform the country, to tackle corruption, and to strengthen
democratic institutions. Second, I will give an update on our
efforts to support the implementation of the February and
September Minsk agreements, including our readiness to impose
further costs on Russia if the commitments Moscow made are
further violated.
Ukraine's leaders in the executive branch and the
Parliament know that they are in a race against time and
external pressure to clean up the country and enact the
difficult and socially painful reforms required to kick-start
the economy and to meet their commitments to their own people,
to the IMF, and to international community.
The package of reforms already put forward by the
government and enacted by the Rada is impressive in its scope
and in its political courage. Just last week, the Ukrainians
passed budget reform, which is expected to slash the deficit
significantly this year and to give more fiscal control to
local communities and spur economic and political
decentralization.
They have made tough choices in just the last few days to
reduce and cap pension benefits and to phase in a higher
retirement age, as requested by the IMF.
They have created new banking provisions to stiffen
penalties for stripping assets from the banks at the public's
expense, a common practice among oligarchs.
And they have passed laws cutting wasteful gas subsidies
and closing the space for corrupt middlemen who buy low, sell
high, and rip off the Ukrainian people.
Ukraine will use the $400 million in increased revenue from
these measures to care for the 1.7 million people who have been
driven from their homes by the conflict.
With United States support, with your support on this
committee, and in this Congress, including a $1 billion loan
guarantee last year and $355 million in foreign assistance and
technical advisors, the Ukrainian Government is improving
energy efficiency in homes and factories with metering,
consumer incentives, and infrastructure improvements, building
e-governance platforms to make procurement more transparent and
basic government services cleaner and more publicly accessible.
They are putting a newly trained force of beat cops on the
streets in Kyiv who will protect not shake down the citizens, a
prototype of what they hope to do nationwide.
They are reforming the Prosecutor General's Office,
supported by U.S. law enforcement and criminal justice advisors
to help energize law enforcement and increase prosecutions.
With the help of USAID experts, they are deregulating the
agriculture sector and allowing family farmers to sell more of
their produce in local and regional and wholesale markets.
And they are helping those who were forced to flee Donetsk
and Luhansk with new jobs and skills training in places like
Kharkiv.
And there is more support on the way. The President's
fiscal year 2016 budget request includes $513.5 million to
build on these efforts.
And as you said, Mr. Ranking Member and Mr. Chairman,
Ukraine's hard work must continue. Between now and the summer,
we must see continued budget discipline and tax collection
enforced across the country, notably including on some of
Ukraine's richest citizens who have enjoyed tax impunity for
far too long. We need to see continued reforms at Naftogaz and
across the energy sector. We need to see final passage of
agricultural legislation, full and impartial implementation of
anticorruption measures, including a commitment to break the
oligarchic, kleptocratic culture that has ripped off the
country for too long.
As you both said in your opening statements, the best
antidote to Russian aggression and malign influence is for
Ukraine to succeed as a democratic, free market state. For this
to happen, we have to help ensure that the Ukrainian Government
lives up to its promises to its own people and keeps the trust
of the international financial community. But at the same time,
the United States and Europe and the international community
must keep faith with Ukraine and help ensure that Russia's
aggression and meddling cannot crash Ukraine's spirit, its
will, or its economy before reforms take hold.
That brings me to my second point. Even as Ukraine is
building a more peaceful, democratic, independent nation across
93 percent of its territory, Crimea and parts of eastern
Ukraine have suffered a reign of terror. In eastern Ukraine,
Russia and its separatist puppets have unleashed unspeakable
violence and pillage. This is a manufactured conflict,
controlled by the Kremlin, fueled by Russian tanks and heavy
weapons, and financed at Russian taxpayers' expense. It has
cost the lives of more than 6,000 Ukrainians, and hundreds of
young Russians have also lost their lives in eastern Ukraine,
sent there to fight and die by the Kremlin. And when they come
home in zinc coffins, ``Cargo 200'' which is the Russian
euphemism for war dead, their mothers and their wives and their
children are told not to ask too many questions or raise a fuss
if they ever want to see death benefits.
Throughout this conflict, the United States and the EU have
worked in lockstep to impose successive rounds of tough
sanctions, including sectoral sanctions, on Russia and its
separatist cronies as the cost for their actions. Our unity
with Europe remains the cornerstone of our policy toward this
crisis and a fundamental source of our strength.
It is in that spirit that we salute the efforts of German
Chancellor Merkel and French President Hollande in Minsk on
February 12 to try again to end the fighting in eastern
Ukraine. The Minsk package of agreements, the September 5th and
19th agreements and the February 12th implementing agreement,
offer a real opportunity for peace, disarmament, political
normalization and decentralization in Ukraine, and the return
of Ukrainian state sovereignty in the east and border control.
For some eastern Ukrainians, conditions have already begun
to improve. The OSCE reports that the cease-fire is holding on
many parts of the line of contact. There have been significant
withdrawals already of Government of Ukraine heavy weapons, and
some separatist heavy weapons have also been withdrawn,
although that process is incomplete, as is OSCE access. And the
little village in southeast Donetsk of Komintermove demining
has already begun under OSCE auspices.
But the picture is very mixed. Just yesterday, shelling
continued in Shyrokyne, a key village on the way to Mariupol,
and outside Donetsk over the weekend. As I said, access for
OSCE monitors, particularly in separatist-controlled areas,
remains spotty. And just in the last few days, we can confirm
new transfers of Russian tanks, armored vehicles, heavy
artillery, and rocket equipment over the border to the
separatists in eastern Ukraine.
So in the coming days--days, not weeks--here is what we
need to see: a complete cease-fire in all parts of eastern
Ukraine; full, unfettered access to the whole conflict zone; a
pull-back of all heavy weapons; and an end to uninspected
convoys of cargo over the Ukrainian border.
If fully implemented, this will bring greater peace and
security in eastern Ukraine for the first time in almost a
year.
As the President has said, we will judge Russia by its
actions not by its words. And the United States will, with our
international partners, start rolling back sanctions on Russia
but only when the Minsk agreements are fully implemented.
The reverse is also true. If these are not implemented,
there will be more sanctions, and we have already begun
consultations with our European partners on further sanctions
pressure, should Russia continue fueling the fire in the east
or in other parts of Ukraine, fail to implement Minsk, or grab
more land, as we saw in Debaltseve after the agreements were
signed.
Mr. Chairman, Mr. Ranking Member, members of this
committee, America's investment in Ukraine is about far more
than protecting the choice of a single European country. It is
about protecting the rules-based system across Europe and
globally. It is about saying no to borders changed by force, to
big countries intimidating their neighbors or demanding a
sphere of influence.
We thank this committee for its bipartisan support and
commitment to the sovereignty and territorial integrity of
Ukraine and to a Europe whole, free, and at peace. Thank you.
[The prepared statement of Ms. Nuland follows:]
Prepared Statement of Victoria Nuland
Chairman Corker, Ranking Member Menendez and members of this
committee--thank you for the opportunity to speak to you today on the
situation in Ukraine and for your personal investment in that country's
future. As many of you know from your travels, your meetings, and the
establishment of the bipartisan Senate Ukraine Caucus last month,
Ukrainians deeply appreciate this committee's support for their
country's security, democracy, sovereignty, and future prosperity.
Today Ukraine is central to our 25-year Transatlantic quest for a
``Europe whole, free, and at peace.'' My interagency colleagues and I
are pleased to update you today on U.S. efforts to support Ukraine as
it works to liberate the country from its corrupt, oligarchic past,
chart a more democratic, European future, and bring an end to Russian-
fueled violence. In my remarks, I'll focus on two areas: first, the
work Ukraine is doing--with U.S. and international support--to reform
the country, tackle corruption, and strengthen democratic institutions;
second, I will give an update on our efforts to support implementation
of the February and September Minsk Agreements, including our readiness
to impose further costs on Russia if the commitments Moscow made are
further violated. My colleagues from DOD--Principal Deputy Under
Secretary McKeon and Vice Admiral Pandolfe--will address our security
relationship in greater detail. A/S Toloui will speak more to our
macroeconomic assistance in coordination with our international
partners.
First--a quick reminder of why we're here. Sixteen months ago, the
Kyiv Maidan and towns across Ukraine erupted in peaceful protest by
ordinary Ukrainians fed up with a sleazy, corrupt regime bent on
cheating the people of their sovereign choice to associate with Europe.
They braved frigid temperatures, brutal beatings, and sniper bullets.
The leader of that rotten regime fled the country, and he was voted out
by the Parliament--including most members of his own party. Then,
Ukraine began to forge a new nation on its own terms--signing an
Association Agreement with the European Union; holding free and fair
elections--twice--even as fighting raged in the east; and undertaking
deep and comprehensive economic and political reforms.
Against the backdrop of Russia's aggression, the situation in the
country remains precarious. Ukraine's leaders, in the executive branch
and the Parliament, know they are in a race against time to clean up
the country and enact the difficult and socially painful reforms
required to kick start the economy, and meet their commitments to their
people, the IMF and the international community. The package of reforms
already put forward by the government, and enacted by the Rada, is
impressive in its scope and political courage.
Just last week:
They passed budget reform expected to slash the deficit this
year, and strengthen decentralization by giving more fiscal
control to local communities;
They made tough choices to reduce and cap pension benefits,
increase work requirements, and phase in a higher retirement
age;
They created a new banking provision to stiffen penalties
for financiers for stripping assets from banks at the public's
expense, a common practice among oligarchs;
And, they passed laws cutting wasteful gas subsidies and
closing the space for corrupt middlemen that buy low, sell
high, and rip off the Ukrainian people. These laws will also
enhance corporate efficiency, incentivize domestic production,
and use $400 million in increased revenue from state-owned gas
companies to help care for the poor including some of the 1.7
million people driven from their homes by the conflict.
With U.S. support--including a $1 billion loan guarantee last year
and $355 million in foreign assistance and technical advisors--the
Ukrainian Government is:
Helping insulate vulnerable Ukrainians from the impact of
necessary economic reforms;
Improving energy efficiency in homes and factories with
metering, consumer incentives, and infrastructure improvement;
Building e-governance platforms to make procurement
transparent and basic government services cleaner and publicly
accessible;
Putting a newly trained force of beat cops on the streets of
Kyiv who will protect, not shake down, the citizens;
Reforming the Prosecutor General's Office (PGO)--supported
by U.S. law enforcement and criminal justice advisors--and
helping energize law enforcement and just prosecutions;
Moving to bring economic activity out of the shadows;
Supporting new agriculture laws--with the help of USAID
experts--to deregulate the sector and allow family farms to
sell their produce in local, regional and wholesale markets,
and;
Helping those forced to flee Donetsk and Luhansk with USAID
jobs and skills training programs in places like Kharkiv.
And there's more support on the way. The President's budget
includes an FY16 request of $513.5 million--almost six times more than
our FY14 request--to build on these efforts.
To turn the page, Ukraine's hard work must continue. Between now
and the summer, we must see budget discipline maintained and tax
collection enforced across the country--notably including on some of
Ukraine's richest citizens who have enjoyed impunity for too long. We
need to see continued reforms at Naftogaz and across the energy sector;
final passage of agriculture legislation; full and impartial
implementation of anticorruption measures, including a commitment to
break the oligarchic, kleptocratic culture have has decimated the
country.
As I said in my last appearance before this committee, the most
lasting antidote to Russian aggression and malign influence in the
medium term is for Ukraine to succeed as a democratic, free market
state and to beat back the corruption, dependence, and external
pressure that have thwarted Ukrainians' aspirations for decades. For
this to happen, we must ensure that the government lives up to its
promises to the Ukrainian people, and keeps the trust of the
international financial community. And, at the same time, the United
States, Europe, and the international community must keep faith with
Ukraine, and help insure that Russia's aggression and meddling can't
crash Ukraine's spirit, its will, or its economy before reforms take
hold.
Which brings me to my second point--even as Ukraine is building a
peaceful, democratic, independent nation across 93 percent of its
territory, Crimea and parts of eastern Ukraine are suffering a reign of
terror. Today Crimea remains under illegal occupation and human rights
abuses are the norm, not the exception, for many at-risk groups there--
Crimean Tatars, Ukrainians who won't surrender their passports,
journalists, LGBT citizens and others.
In eastern Ukraine, Russia and its separatist puppets unleashed
unspeakable violence and pillage. This manufactured conflict--
controlled by the Kremlin; fueled by Russian tanks and heavy weapons;
financed at Russian taxpayers' expense--has cost the lives of more than
6,000 Ukrainians, but also of hundreds of young Russians sent to fight
and die there by the Kremlin, in a war their government denies. When
they come home in zinc coffins--``Cargo 200,'' the Russian euphemism
for war dead--their mothers, wives, and children are told not to ask
too many questions or raise a fuss if they want to see any death
benefits.
Throughout this conflict, the United States and the EU have worked
in lock-step to impose successive rounds of tough sanctions--including
sectoral sanctions--on Russia and its separatist cronies as the costs
for their actions. In Crimea, we have shown through our investment
sanctions that if you bite off a piece of another country, it will dry
up in your mouth. Our unity with Europe remains the cornerstone of our
policy toward this crisis.
And it is in that spirit that we salute the efforts of German
Chancellor Merkel and French President Hollande in Minsk on February 12
to try again to end the fighting in Ukraine's East. The Minsk Package
of Agreements--September 5, September 19, and the February 12
implementing agreement--offer a real opportunity for peace,
disarmament, political normalization and decentralization in eastern
Ukraine, and the return of Ukrainian state sovereignty and control of
its territory and borders. Russia agreed to it; Ukraine agreed to it;
the separatists agreed to it. And the international community stands
behind it.
For some eastern Ukrainians, conditions have begun to improve.
Along long areas of the line of contact, particularly in Luhansk
Oblast, the cease-fire has taken hold; the guns have quieted in some
towns and villages; some weapons have been withdrawn; some hostages
have been released.
But the picture is very mixed. Since the February 15 cease-fire,
the OSCE Special Monitoring Mission has recorded hundreds of
violations. Debaltseve, a key rail hub beyond the cease-fire lines,
fell to the separatists and Russian forces 6 days after Minsk was
signed and 3 days after the cease-fire was to come into effect. In
Shchastya, in villages near the Donetsk Airport, in Shyrokyne and other
towns around Mariupol the shelling continues, as verified by OSCE
Special Monitor Authority.
In the coming days, not weeks or months--here is what we need to
see:
A complete cease-fire in all parts of eastern Ukraine.
Full, unfettered access to the whole conflict zone including
all separatist-held territory, for OSCE monitors, and;
A full pull-back of all heavy weapons--Ukrainian, Russian,
and separatist--as stipulated in the agreements, under OSCE
monitoring and verification.
If fully implemented, this will bring greater peace and security in
eastern Ukraine for the first time in almost a year. And with it,
Ukraine will once again have unfettered access to its own people in the
East, and the opportunity for dialogue and political normalization with
them. That's what Minsk promises. Peace, then political normalization,
then a return of the border. But first, there must be peace.
Russia's commitments under the Minsk agreements are crystal clear
and again the choice is Russia's. As the President has said, we'll
judge Russia by its actions, not its words. The United States will
start rolling back sanctions on Russia only when the Minsk agreements
are fully implemented.
But the reverse is also true. We have already begun consultations
with our European partners on further sanctions pressure should Russia
continue fueling the fire in the east or other parts of Ukraine, fail
to implement Minsk or grab more land as we saw in Debaltseve.
Mr. Chairman, members of this committee, America's investment in
Ukraine is about far more than protecting the choice of a single
European country. It's about protecting the rules-based system across
Europe and globally. It's about saying ``no'' to borders changed by
force, and to big countries intimidating their neighbors or demanding
spheres of influence. It's about protecting our 25 year American
investment in the prospect of a Europe whole, free, and at peace and
the example that sets for nations and people around the world who want
more democratic, prosperous futures.
I thank this committee for its bipartisan support and commitment.
The Chairman. Thank you.
Mr. McKeon.
STATEMENT OF HON. BRIAN P. McKEON, PRINCIPAL DEPUTY UNDER
SECRETARY OF DEFENSE FOR POLICY, U.S. DEPARTMENT OF DEFENSE,
WASHINGTON, DC
Mr. McKeon. Thank you very much, Mr. Chairman and Senator
Menendez. I appreciate the opportunity to appear before you
today.
Having spent nearly half of my professional life on the
staff of this committee under then-Senator Biden, it feels good
to be back in this room, although a little daunting to be on
this side of the witness table.
The statement I have submitted to the committee, which I
will now summarize, is on behalf of myself and Admiral
Pandolfe. So we will save a little time on the back end.
I will not repeat the state of play on the Minsk agreement,
which Assistant Secretary Nuland has just summarized.
Since the beginning of this crisis, the United States has
vigorously pursued a multipronged approach in response to
Russia's aggression in Ukraine. We have raised the cost to
Russia for its actions, reassured allies of our unwavering
support to their security, and provided tangible support to
Ukraine to help it through the crisis.
Working closely with Europe and other partners and allies,
the administration has imposed real costs on Russia for its
aggressive actions. The Department of Defense has halted
defense and military cooperation with Russia. The
administration has also prohibited exports of sensitive
technologies that could be used in Russia's military
modernization, has imposed blocking sanctions on 18 Russian
defense technology firms.
Second, we are taking visible, concrete measures to
reassure our allies and partners in Europe, and to deter
further Russian aggression. Thanks to Congress, the European
Reassurance Initiative, or ERI, is helping the Department to
increase and sustain an enhanced United States air, sea, and
ground presence in Europe and to improve facilities needed to
reinforce allies along the border with Russia. Additionally,
ERI funds will be used to bolster our assistance to Ukraine and
to the Baltic partners.
As part of our reassurance measures, we have maintained a
persistent presence of U.S. military forces in each of the
Baltic States, Poland, and the Black Sea since April of last
year. We have also had a near persistent presence in Romania
and Bulgaria. We have tripled the number of United States
aircraft taking part in our Baltic air policing rotation,
provided refueling aircraft for NATO Airborne Warning and
Control System missions, deployed U.S. Navy ships to the Black
and Baltic Seas 14 times, and increased training flights in
Poland.
In the coming year, using ERI funds, we will increase our
reassurance and deterrence efforts with additional measures,
which are detailed in my prepared statement.
Similarly, NATO has taken concrete steps to reassure the
allies and to deter Russia. These measures are defensive,
proportionate, and fully in line with our obligations under the
North Atlantic Treaty to provide for collective defense of the
alliance.
Allies have also agreed to measures as part of NATO's
readiness action plan that will improve the alliance's long-
term military posture and capabilities and ensure it is ready
to respond swiftly and firmly to new security challenges. Last
month, NATO Defense Ministers decided to enhance the NATO
response force by creating a spearhead force, known as a very
high readiness joint task force, which will be able to deploy
on very short notice. The task force consists of a land
component of around 5,000 troops with an appropriate mix of
air, maritime, and special operations forces units. It aims to
strengthen the alliance's collective defense and ensure that
NATO has the right forces in the right place at the right time.
Third, we are providing substantial support to Ukraine as
it deals with simultaneous economic and military crises.
Ukraine has been a strong partner of the United States and NATO
since independence, and our security cooperation with Ukraine
dates back to 1992. During this period, the United States
provided Ukraine with military training, professional
education, communications equipment, and support for border
control and counter-proliferation efforts. Unfortunately, the
corruption of the Yanukovych regime starved Ukraine's Armed
Forces of resources. The neglect of the armed forces by the
regime did not, however, strip the military of its
professionalism or its determination to fight.
Since the beginning of the crisis, the United States has
increased its security assistance to Ukraine. We have
committed, as you know, $118 million in material and training
assistance to the military, the national guard, and the border
guard service. Under ERI in the coming year, we will dedicate
at least another $120 million, including $45 million for State
Department security assistance programs. Our assistance has
been consistent with identified Ukrainian needs and priorities
and it is vetted by our country team in Kyiv and a flag-level
United States-Ukraine joint commission that continues to assess
how to maximize the effect and impact of our assistance. Key
areas of assistance include sustainment items, medical support,
personal protective gear, secure communications, and perimeter
security. We have also provided countermortar radar
capabilities, which the Ukrainians tell us they have used to
good effect.
Similarly, we are also continuing to conduct longstanding
exercises such as Rapid Trident to increase interoperability
among Ukraine, the United States, NATO, and Partnership for
Peace member nations. The most recent iteration of Rapid
Trident last September included a multinational field training
exercise and saw the participation of 15 countries and
approximately 1,300 personnel.
Other measures remain under active consideration in the
administration, including the provision of additional security
assistance. As the President has said most recently this
weekend, we are looking at all our options, including the
possibility of lethal defensive weapons. At the same time, we
have made clear we do not believe there is a military solution
to the conflict in Ukraine, and we are working actively to
support the diplomatic track, as Assistant Secretary Nuland
outlined.
In conclusion, Russia's aggressive actions in Ukraine are a
threat to the bipartisan objective of American policy since the
end of the cold war of seeking a Europe whole, free, and at
peace. The United States will continue to work closely with our
Ukrainian and European partners to counter these actions and
provide reassurance and support to our partners and NATO
allies.
Thank you for the opportunity to be here.
[The prepared statement of Mr. McKeon follows:]
Prepared Statement of Brian P. McKeon
Chairman Corker, Senator Menendez, members of the committee, I
appreciate the opportunity to appear before you today.
The crisis in Ukraine continues. After more than a year of
aggressive Russian action, the situation in Ukraine remains unstable.
As the committee is aware, last year Russia occupied the Crimean
Peninsula and subsequently has attempted to annex it. Today, Russia
continues its participation and active support to separatists engaged
in violence in eastern Ukraine. As Assistant Secretary Nuland informed
you, the cease-fire under the terms of the Minsk Implementation Plan
may be holding in many areas of eastern Ukraine, and we have seen some
progress on withdrawals of weapons. However, cease-fire violations
continue, almost all of them on the Russian and separatist side; this
is not an ``immediate and comprehensive cease-fire'' as called for by
the plan. We remain concerned that this may be a period of strategic
pause--a stalling tactic as a precursor to more violence as occurred
before the most recent Russian and separatist assault in January. We
call on Russia to stop ``moving the goalposts,'' to uphold the cease-
fire, and to allow Ukraine the freedom to choose its own path.
As you heard from Assistant Secretary Nuland, since the beginning
of the crisis the United States has vigorously pursued a multipronged
approach in response to Russia's aggression in Ukraine. We have raised
the costs to Russia for its actions, reassured allies of our unwavering
support to their security, and provided tangible support to Ukraine to
help it through the crisis. I wish to highlight the measures taken in
each of these three areas, including actions taken by the Department of
Defense.
raising costs to russia
First, working closely with Europe and other partners and allies,
the administration has imposed real costs on Russia for its aggressive
actions. We have worked diligently to isolate Russia at the United
Nations Security Council, we and our partners have suspended Russia's
participation in the G-8. The Department of Defense halted defense and
military cooperation with Russia. The administration has also
prohibited exports of sensitive technologies that could be used in
Russia's military modernization and has imposed blocking sanctions on
18 Russian defense technology firms. Most important, the United States
and its European allies have imposed a series of sanctions to raise the
costs for Russia and Ukrainian separatists for their aggressive
actions, including targeted sectoral sanctions in the Russian finance,
energy, and defense sectors, which have had a substantial impact on
Russia's economy.
reassuring allies
Second, we are taking visible, concrete measures to reassure our
allies and partners in Europe and to deter further Russian aggression.
Thanks to Congress, the European Reassurance Initiative, or ERI, is
helping the Department to increase and sustain an enhanced U.S. air,
sea, and ground presence in Europe and to improve facilities needed to
reinforce allies along the border with Russia. Additionally, ERI funds
will be used to bolster our assistance to Ukraine and to the Baltic
allies.
As part of our reassurance measures, we have maintained a
persistent presence of U.S. military forces in each of the Baltic
States, Poland, and the Black Sea since April 2014. We tripled the
number of U.S. aircraft taking part in our Baltic Air Policing
rotation, provided refueling aircraft for NATO Airborne Warning and
Control System missions, deployed U.S. Navy ships to the Black and
Baltic Seas 14 times, and increased training flights in Poland.
In 2015, using ERI funds, the United States will increase its
reassurance and deterrence efforts with additional measures, including:
Rotating an armored brigade to Europe for several months;
Prepositioning in Europe a second battalion-sized set of
tanks and Bradley fighting vehicles;
Conducting additional bilateral and multilateral exercises
and training with allies and partners;
Deploying a squadron of U.S. Air Force A-10s to Europe for
nearly 6 months;
Making infrastructure improvements to eight airfields;
Prepositioning fuel and ammunition; and,
Building the capacity of close partners such as Georgia,
Moldova, and Ukraine to enhance interoperability to work
alongside U.S. and NATO forces, as well as to provide for their
own defense.
Similarly, NATO has taken concrete steps to reassure allies and
deter Russia. These measures are defensive, proportionate, and fully in
line with the obligations under the North Atlantic Treaty to provide
for allied defense. NATO's deterrence measures have included:
Increasing the number of aircraft on air-policing patrols
over the Baltics and the number of bases used for Baltic Air
Policing;
Deploying aircraft to Bulgaria, Poland, and Romania for
training and exercises;
Commencing AWACS surveillance flights over the territory of
our eastern allies;
Sending more ships to patrol the Baltic Sea, the Black Sea,
and the Mediterranean;
Deploying ground troops to the eastern parts of the alliance
for training and exercises, on a rotational basis; and,
Conducting over 200 NATO and national exercises in Europe in
2014.
Allies have also agreed to measures as part of NATO's Readiness
Action Plan that will improve the alliance's long-term military posture
and capabilities, and ensure it is ready to respond swiftly and firmly
to new security challenges. NATO Defense Ministers in February decided
to enhance the NATO Response Force by creating a ``spearhead force,''
known as a Very High Readiness Joint Task Force (VJTF), that will be
able to deploy at very short notice. The VJTF consists of a land
component of around 5,000 troops with an appropriate mix air, maritime,
and SOF units. It aims to strengthen the alliance's collective defense
and ensure that NATO has the right forces in the right place at the
right time.
efforts to support ukraine
Third, we are providing substantial support to Ukraine as it deals
with simultaneous economic and military crises. Ukraine has been a
strong partner to the United States and NATO since its independence,
and our security cooperation with Ukraine dates back to 1992. Such
cooperation over the past two decades has paid dividends, as Ukraine
has been a steadfast coalition partner in Afghanistan, Iraq, Kosovo,
and Bosnia, as well as in counter-piracy operations off the Horn of
Africa. During this time, the United States provided Ukraine with
military training, professional education, communications equipment,
and support for border control and counterproliferation efforts.
Unfortunately, the corruption of the Yanukovych regime starved
Ukraine's Armed Forces of resources. But the neglect of the Armed
Forces by the regime did not strip the military of its professionalism
or its determination to fight.
Since the start of the crisis the United States has increased its
security-related assistance to Ukraine. We have committed $118 million
in material and training assistance to Ukraine's military, National
Guard, and Border Guard service. Under ERI, in FY 2015 we will dedicate
at least another $120 million including $45 million for State
Department security assistance programs. Our assistance has been
consistent with identified Ukrainian needs and priorities, and it is
vetted by our country team in Ukraine and by a flag-level U.S.-Ukraine
Joint Commission that continuously assesses how to maximize the effect
and impact of our security assistance. Key areas of material assistance
include sustainment items, medical support, personal protective gear,
secure communications, and perimeter security. We have also provided
countermortar radar capabilities, which the Ukrainians tell us they
have used to good effect.
Similarly, we also continue to conduct longstanding exercises such
as Rapid Trident to increase interoperability among Ukraine, U.S.,
NATO, and Partnership for Peace member nations. The most recent Rapid
Trident iteration in September 2014 included a multinational field
training exercise and saw the participation of 15 countries and
approximately 1,300 personnel.
Other measures remain under active consideration in the
administration, including the provision of additional security
assistance. As the President has said, we are looking at all our
options, including the possibility of lethal defensive weapons. At the
same time, we have made clear that we do not believe there is a
military solution to the conflict in Ukraine, and are working actively
to support the diplomatic track.
conclusion
Russia's aggressive actions in Ukraine are a threat to a bipartisan
objective of American policy since the end of the cold war of seeking a
Europe whole, free, and at peace. The United States will continue to
work closely with our Ukrainian and European partners to counter these
actions and to provide reassurance and support to our partners and NATO
allies.
Thank you for the opportunity to be here today, and look forward to
your questions.
The Chairman. Thank you.
Mr. Toloui.
STATEMENT OF HON. RAMIN TOLOUI, ASSISTANT SECRETARY FOR
INTERNATIONAL FINANCE, DEPARTMENT OF THE TREASURY, WASHINGTON,
DC
Mr. Toloui. Chairman Corker, Ranking Member Menendez, and
members of the committee, thank you for the opportunity to
testify today on the U.S. Government's actions to support
Ukraine's economy.
The objective of the United States and international
economic assistance strategy toward Ukraine has been to support
the efforts of President Poroshenko's government to stabilize,
revitalize, and restructure Ukraine's economy. My remarks today
will elaborate upon the strategy and its evolution over the
past year in response to the conflict in eastern Ukraine. I
would note that our efforts to mobilize the international
effort to support Ukraine financially have been complemented by
the work of others at the Treasury Department to impose costs
on Russia for its aggressive actions in Crimea and eastern
Ukraine that have exacerbated the challenges facing Ukraine's
economy.
Last spring, the United States, together with international
partners, supported an international assistance package
totaling $27 billion. This assistance centered on a 2-year $17
billion IMF program and also included a $1 billion U.S. loan
guarantee and $2.2 billion from the European Union.
The IMF and other donors agree that Ukraine has lived up to
its economic reform commitments made in exchange for the
support. Over the last year, the Ukrainian Government has
initiated steps to reduce the deficit and distortionary natural
gas subsidies, improve targeting of social assistance,
strengthen the rule of law and reduced corruption, increase
transparency within the inefficient state-owned energy company,
and initiate financial sector repair. This is very much the
comprehensive approach to reform, Chairman Corker, that you
referred to. In support of these efforts Treasury advisors are
providing the Ukrainian Government with technical assistance.
This was always going to be a challenging program of reform
and adjustment. Unfortunately, the intensification of Russian
aggression has created significant additional pressure on
Ukraine's economy and necessitated further international
support to bolster the government's reform efforts. As such,
during the past few months, we have mobilized the international
community to increase Ukraine's support package by at least $10
billion. Further, the IMF now plans to support Ukraine through
the end of 2018 with a larger gross financing package allowing
more time for the economy to adjust and for economic reforms to
bear fruit.
As part of that international effort, the United States
intends to provide a new $1 billion loan guarantee in the first
half of 2015, provided Ukraine remains on track with the reform
program it has agreed with the IMF. If Ukraine continues making
concrete progress on its economic reform agenda and conditions
warrant, the U.S. administration will also be willing, working
with Congress, to consider providing an additional up to $1
billion loan guarantee in late 2015.
The next step in further driving this augmented
international assistance effort is to secure IMF board approval
on March 11, tomorrow, for the new IMF program. To meet its
reform requirements in advance of the IMF board meeting, the
Ukrainian Government has passed meaningful reform measures to
improve public financing and reduce inefficient energy
subsidies. Provided that the authorities adhere to the reform
program and the security situation does not deteriorate
further, the IMF projects that Ukraine's economy will expand in
2016 and foreign exchange reserves will rise substantially.
In view of the inherent uncertainties in the security
situation, there continue to be risks. This year's
intensification of the conflict has imposed severe damage on an
already fragile economy. Currency depreciation and deposit
flight have put a strain on the banking sector, and significant
structural damage has occurred within Ukraine's economy.
Amid these challenges, Ukraine's ambitious reform agenda
deserves our continued support. Core United States and global
security interests are at stake in Ukraine, and providing
economic support to the Ukrainian Government is an essential
part of our strategy to respond to Russian aggression. As long
as Ukraine's Government continues to undertake difficult
reforms, the international community must do all it can to help
Ukraine succeed and be prepared to adapt its assistance
strategy as required.
At the same time, the international community must continue
to ensure that as long as Russia disregards its commitments and
fuels violence and instability in Ukraine, the costs for Russia
will continue to rise.
Chairman Corker, Ranking Member Menendez, and members of
the committee, as with all emerging market crises, our
assistance strategy is not without risk, and the path to
success is not without obstacles, particularly amid the current
security backdrop. However, critical elements needed for
success, an ambitious reform program, a government and country
committed to change, and a sizable international support
package, are currently in place. To that end, we will continue
to work closely with our international partners to provide
Ukraine the support it needs. The strong backing of Congress
has been a critical foundation to these efforts to support
Ukraine, and we look forward to working closely together in the
months ahead.
And I look forward to answering your questions.
[The prepared statement of Mr. Toloui follows:]
Prepared Statement of Ramin Toloui
Chairman Corker, Ranking Member Menendez, and members of the
committee, thank you for the opportunity to testify today on the U.S.
Government's actions to support Ukraine's economy.
The objective of the United States and international economic
assistance strategy toward Ukraine has been to support the efforts of
President Poroshenko's government to stabilize, revitalize, and
restructure Ukraine's economy. My remarks today will elaborate upon
this economic and financial strategy, and its evolution over the past
year in response to the conflict in eastern Ukraine. I would note at
the outset that our efforts to mobilize the international effort to
support Ukraine financially have been complemented by the work of
others at the Treasury Department to impose costs on Russia for its
aggressive actions in Crimea and eastern Ukraine that have exacerbated
the challenges facing Ukraine's economy.
economic assistance strategy
Last spring, the United States, together with international
partners, supported an international assistance package totaling $27
billion. This assistance centered on a 2-year $17 billion International
Monetary Fund (IMF) program, and also included a $1 billion U.S. loan
guarantee and $2.2 billion from the European Union. In exchange for
this support, the Ukrainian authorities committed to an ambitious
economic reform agenda to reduce vulnerabilities and increase economic
growth potential.
The IMF and other donors agree that Ukraine has lived up to its
economic reform commitments. Over the last year, the Ukrainian
Government has initiated difficult and urgently needed steps to: reduce
the general government deficit; reduce distortionary natural gas
subsidies; improve targeting of social assistance to protect the most
vulnerable; strengthen the rule of law and reduce corruption; increase
transparency within the inefficient state-owned energy company; and
initiate financial sector repair. In support of these efforts, Treasury
technical advisors are providing the Ukrainian Government with expert
assistance in the areas of bank supervision and bank resolution, and
government debt and liability management.
This was always going to be a challenging program of reform and
adjustment. Unfortunately, the intensification of Russian aggression
has created significant additional pressure on Ukraine's economy and
necessitated further international support to bolster the government's
reform efforts. The fragile security situation has eroded confidence,
increased capital outflows, weakened the currency, and depleted foreign
exchange reserves. The destruction of economic capacity in eastern
Ukraine has driven a deeper and longer economic recession than
previously estimated. As such, during the past few months, we have
mobilized the international community to increase Ukraine's support
package by at least $10 billion. As part of the international effort,
the United States intends to provide a new $1 billion loan guarantee in
the first half of 2015, provided Ukraine remains on-track with the
reform program it has agreed with the IMF. If Ukraine continues making
concrete progress on its economic reform agenda and conditions warrant,
the U.S. administration will also be willing, working with Congress, to
consider providing an additional up to $1 billion loan guarantee in
late 2015. As part of this up-sized economic assistance package, the
IMF now plans to support Ukraine through end-2018 with a larger gross
financing package, allowing more time for the economy to adjust and for
economic reforms to bear fruit. Also as part of this package, Ukraine
has indicated that it will seek to work with creditors to adjust the
profile of its debt to provide additional financial breathing room.
The next step in further driving this augmented international
assistance effort is to secure IMF Board approval on March 11 for the
new IMF program, which will unlock a large disbursement of IMF
financing. Based on international support pledged to date, Ukraine's
foreign exchange reserves are set to increase significantly over the
next few weeks, which will bolster confidence and provide the
authorities with space to further execute their ambitious reform
agenda. To meet its reform requirements in advance of the IMF Board
meeting, the Ukrainian Government passed meaningful and difficult
reform measures to improve public finances and reduce inefficient
energy subsidies. Since these measures were taken, Ukraine's currency
and capital markets have rebounded significantly. Provided that the
authorities adhere to the reform program and the security situation
does not deteriorate further, the IMF projects that Ukraine's economy
will expand next year and foreign exchange reserves will rise
substantially.
In view of the inherent uncertainties in the security situation,
there continue to be risks. This year's intensification of the conflict
has imposed severe damage on an already fragile economy--particularly
the export-oriented regions of eastern Ukraine. Currency depreciation
and deposit flight have put a strain on the banking sector, and
significant structural damage has occurred within the Ukrainian
economy. Overcoming these impacts and restoring market confidence will
be challenging.
Amid these challenges, the Ukrainian Government continues to
demonstrate a strong commitment to an ambitious reform agenda, and
deserves our continued support. Core U.S. and global security interests
are at stake in Ukraine, and providing economic support to the
Ukrainian Government is an essential part of our strategy to respond to
Russian aggression. As long as Ukraine's Government continues to
undertake the difficult reforms required to restore economic and
financial stability, the international community must do all it can to
help Ukraine succeed and be prepared to adapt its assistance strategy
as required. And at the same time, the international community must
continue to ensure that as long as Russia disregards its commitments
and fuels violence and instability in Ukraine, the costs for Russia
will continue to rise.
conclusion
Chairman Corker, Ranking Member Menendez, and members of the
committee, as with all emerging market crises, our assistance strategy
is not without risk and the path to success is not without obstacles,
particularly amid the current security backdrop. However, critical
elements needed for success--an ambitious reform plan, a government and
country committed to change, and a sizable international support
package--are currently in place. To that end, we will continue to work
closely with the international financial institutions and our partners
around the world to provide Ukraine the support it needs and enable
Ukraine's people to achieve their economic aspirations. The strong
backing of Congress has been a critical foundation to these efforts to
support Ukraine, and we look forward to working closely together in the
months ahead. I look forward to answering your questions.
The Chairman. Thank you. We thank each of you for your
testimony and Admiral Pandolfe for being here to answer
questions.
I will begin with you, Secretary Nuland. I know in the past
you have characterized what Russia has done in Ukraine as an
invasion. Does that description still stand with you?
Ms. Nuland. We have used that term in the past.
The Chairman. And are you using that again today?
Ms. Nuland. I am comfortable with that word.
The Chairman. And just for the record, since Russia does
not acknowledge the deaths of their soldiers, if you will,
publicly, how many Russian soldiers do you think have been
killed in Ukraine as part of this conflict?
Ms. Nuland. Well, Mr. Chairman, as you can imagine, it is
pretty difficult to have a completely accurate assessment,
given Russia's efforts to mask its dead, but we estimate it
is----
The Chairman. What does our intelligence tell us?
Ms. Nuland [continuing]. In the hundreds and hundreds.
The Chairman. Hundreds and hundreds? The numbers I thought
were substantially higher than that. So under 1,000?
Ms. Nuland. Chairman, I cannot speak to more than 400 or
500 at the moment, but if we have a better number for you in
the future, we will come back to you.
The Chairman. Okay, good.
I know that you have been a strong advocate publicly for
support in Ukraine and have been a good person for us to talk
to both by phone and here as a witness.
What is the administration's position right now on the
Debaltseve as far as what are our demands regarding Russia's,
the rebels' withdrawal--from that area and by what timeline?
Ms. Nuland. Well, Mr. Chairman, as you know--and I think it
is in my longer statement--we were extremely concerned to see
the flattening of Debaltseve after the signing of the Minsk
agreement. Debaltseve is outside of the special status
territory. So it is territory that the Government of Ukraine
did have control of. Under the Minsk agreements, there is
supposed to be a complete withdrawal to the lines agreed on
September 19. So that would include the vacating of Debaltseve
by the separatists.
The Chairman. So we are demanding that they leave. Is that
the U.S. position and by what date?
Ms. Nuland. That is the position that Minsk calls for and
we support Minsk, yes.
The Chairman. And what is that date? What is the timeline
by which they have to step back away from Debaltseve?
Ms. Nuland. Well, the implementation agreement of February
12 calls for the full pullback of heavy weapons and military
equipment within some 16 days. We are already beyond that, but
they are working on it.
With regard to when the----
The Chairman. They actually are working on it. Russia is
working on that?
Ms. Nuland. As I said in my testimony, we have seen
incomplete compliance in terms of OSCE access, including in
Debaltseve, incomplete compliance in terms of OSCE being able
to verify the pullback of separatist heavy weapons. But when
you get to the political phase of Minsk, which is to follow
this, the political jurisdiction of the special status zone
does not include the town of Debaltseve. If the separatists
comply, they should be not insisting on having political
control of that area by spring.
The Chairman. Secretary McKeon, we appreciate you coming
here today and sitting on that side.
Secretary Carter and Joint Chief Dempsey have both talked
about the fact that they would like to see defensive weaponry
supported. Secretary Nuland, I know, has advocated for that. We
have passed that unanimously out of both Houses, at least
passed it unanimously out of the Senate. It came out of the
House. There seems to be some debate within the administration,
and obviously, the German Ambassador thinks the President has
made quiet commitments that we are not going to do that.
What is the status of this debate within the administration
where we are all getting mixed signals and very confused by the
stance the administration is taking?
Mr. McKeon. Senator Corker, I cannot speak to what happened
in the bilateral meeting between the President and Chancellor
Merkel.
The Chairman. Well, can you speak to where we are in this
debate?
Mr. McKeon. I can. It probably will not be a very
satisfying answer, sir. We are still working in the interagency
on reviewing a number of options, including lethal defensive
weapons, but I cannot give you a timetable on when we might
have a decision on additional assistance.
The Chairman. You said $118 million and other kinds of
assistance. But it is my understanding we have committed $118
million or $120 million. We have only delivered half of that.
Is that correct?
Mr. McKeon. About half. That is correct.
The Chairman. So just for what it is worth, this feels just
like 3 years ago the Syrian opposition where basically we were
going to help. There were all these things we were going to do.
We were going to deliver trucks. They got there way beyond
their usefulness.
What is happening? I mean, we have Secretary Nuland come
in. She speaks strongly. We see her in Munich. She speaks
strongly. We thank her for that. And yet, the administration
does not do even what it said it would do. I mean, what is
going on with the administration? It is incredibly frustrating
for all of us to think the administration truly supports
Ukraine; and yet, it feels like they are playing footsy with
Russia. There is something else that is happening. They are not
really committed to this. And I am wondering if you could speak
clearly to what is happening.
Mr. McKeon. Senator Corker, what I could say is we share
your frustration about the speed of delivery of our
commitments, and the new Secretary has pressed us on this. In
fact, in one of my first meetings with him, he said to us let
us start a new policy. Let us not promise assistance unless we
can deliver it quickly.
The Chairman. And what would keep us from being able to
deliver $118 million worth of nonlethal assistance?
Mr. McKeon. It is a range of things, sir. Some, it is a
case of finding it in the stocks of the United States military.
In the case of some equipment, we are purchasing it off the
production line. I can tell you that the head of our Defense
Security Cooperation Agency has made this a high priority, and
we are pushing him all the time. And the case of the
countermortar radars is a good example. We got approval for
those in late October, and we got them delivered, trained, and
fielded within 2 months. So we are able to move quickly in some
instances. In other instances, it is unacceptably slow. But I
can assure you we are making it a top priority. I just cannot
explain why in some circumstances it goes slower than we would
like.
The Chairman. And we know this is not your decision. We
appreciate you being the messenger. But as Secretary Nuland has
said, Russia has invaded Ukraine. We agreed to protect their
territorial sovereignty in 1994. They gave up 1,240 nuclear
weapons, and we agreed to protect them. And now, as Russia has
invaded, we are still not willing to give defensive weapons.
I would just go to Secretary Nuland. Why do you think that
is the case? I mean, why would we be so feckless--feckless--in
agreeing to something back in 1994 and yet be unwilling to give
them the kind of defensive weaponry that they can utilize, not
more than they can utilize? Why would we not be doing that?
What would be your impression of our inability to make that
happen?
Ms. Nuland. Well, Chairman, as Under Secretary McKeon has
said, we have provided some significant defensive systems,
including the counterfire-mortar radars which have saved lives
in Ukraine. We have not answered the entire shopping list from
the Ukrainians. There are a lot of factors that go into that.
And we are continuing to look at the situation on the ground
and the needs and the implementation of Minsk as we evaluate
this going forward.
The Chairman. It is my understanding that we have also
dropped back from training the Ukrainian National Guard and put
that on hold. Can you just briefly tell me why that is the
case, Secretary McKeon?
Mr. McKeon. Senator Corker, as you know, we had notified
your committee I believe several months ago about a program of
training for the National Guard. We have not had a decision--
never had a decision on the final timing and scope of it. We
had talked about doing it this month, but it is still under
consideration as to when we would do that training.
The Chairman. It is pretty evident that we are really not
going to do much. It is pretty evident that the strong
statements that we have made are statements.
And I will close. I know my time is up.
But I will just say to Mr. Toloui thank you for your
presentation. I do hope that we--and our partners--are
committed to providing the financial assistance that is going
to be necessary to keep Ukraine afloat. I think the greatest
victory for Putin--other than certainly making us look really
weak to the world right now and certainly not following through
on our commitments--I think his greatest victory would be for
Ukraine to fall and him not to have to break it--but for it to
break by economic conditions there on the ground. And I hope
that we are committed. I know others may ask you questions
about how much we are committed to provide them.
But thank you all for your testimony. I realize each of you
are messengers and not making these decisions.
Secretary Menendez.
Senator Menendez. Well, thanks for the promotion, Mr.
Chairman. [Laughter.]
Let me say I am not quite sure why we cannot move ahead.
Former National Security Advisor, Dr. Brzezinski, former
Secretary of State, Madeleine Albright, both testified before
the Senate Armed Services Committee that the United States
should provide defensive weapons to Ukraine. When asked about
providing such weapons to Ukraine, Ash Carter said during his
confirmation hearing, I very much am inclined in that direction
because I think we need to support the Ukrainians in defending
themselves. U.S. Army Europe Commander LTG Ben Hodges recently
stated his support for providing weapons to Ukraine in order to
provide the necessary muscle for a diplomatic solution. The
Chairman of the Joint Chiefs of Staff has suggested the same.
So I have a question. Are Dr. Brzezinski, Secretary
Albright, Secretary Carter, General Hodges, General Dempsey,
and a unanimous Congress all wrong?
Ms. Nuland. I take it that is a question to me, Ranking
Member Menendez?
Senator Menendez. Well, either you, Madam Secretary, or the
Secretary of the Defense Department, whoever wants to take it.
But I mean, you have an overwhelming view from a wide spectrum,
and I do not get it. So maybe you can elucidate. Are they all
wrong? And if so, why are they wrong?
Ms. Nuland. I think as the interagency discussion on this
subject has taught us, there are factors on both sides, and we
are continuing to evaluate. I think from where we sit at the
State Department, if we can see these Minsk agreements
implemented, if we can see peace in eastern Ukraine, that
offers the best hope for the Ukrainian people. But we will
continue to evaluate the situation as we go forward.
Senator Menendez. Let us stop there. Minsk I, nothing, a
disaster. Minsk II only went ahead and largely incorporated
more territory that the rebels had taken since Minsk I and made
the boundary lines to assure between Ukraine and Russia less
capable of actually being pursued because it was all dependent
upon some votes on decentralization of the government. There
have been, Admiral Pandolfe, about 1,000 violations of the
cease-fire. Is that a fair estimate?
Admiral Pandolfe. I cannot give you a precise figure, but
there have been a number.
Senator Menendez. Okay. That is a commonly referred to
number, 1,000 violations of the cease-fire.
And so we keep working on this aspirational basis while
Russia works effectively to take more and more Ukrainian land.
And there is not enough money in the world to be able to help
the Ukrainians sustain themselves if they continue to bleed
because of the conflict that Russia has created and still
stokes in eastern Ukraine.
So I do not get it. Unless you change the calculus for
Putin, this is going to continue. He will get his land bridge
to Crimea, and so much for our statements about we are not
willing to forgive the fact that Crimea is gone. I do not get
it.
So I do not know how much the interagency process is going
to continue to wait. I guess when all of this is solidified,
then it will be too late.
Let me ask you. According to the law, the administration is
supposed to report on its plan for increasing military
assistance to the Government of Ukraine. It was supposed to
have done that by February the 15th. It has not. What day can
we expect this report to be submitted?
Ms. Nuland. Senator Menendez, we very much regret that
these reports are not yet ready. We are continuing to work on
some of the programmatic issues that we want to reflect in
these reports, including those that flow from our 2015 budget,
and speaking for us, we have only just had our pass-back. So we
are hoping to have them up to you in coming weeks if not in
coming days.
Senator Menendez. Secretary McKeon, welcome back to the
committee. You did a lot of distinguished work here while you
were here.
On December 10, you testified before the Armed Services
Subcommittee that the United States was considering a variety
of military responses to Russia's violation of the INF Treaty.
Among the responses you outlined was the placement of U.S.
ground-launched cruise missiles in Europe, which I assume would
have nuclear capability. Can you further elaborate on the
military responses the administration is considering to
Russia's INF violation and how NATO allies have reacted to the
suggestion of the introduction of U.S. GLCM's?
Mr. McKeon. Senator Menendez, on the last issue, when I
talked about that in the hearing, it was in the hypothetical
sense. Introducing a GLCM into Europe would not be in
compliance with the treaty. So we would have, in the first
instance, to withdraw from the treaty or declare it null and
void based on Russia's actions. I had put that out there as
just something we obviously could do if we chose to come out of
the treaty.
What we are looking at in terms of options,
countermeasures, some of which are compliant with the treaty,
some of which would not be--I can describe a range of things in
different buckets. One would be defenses of NATO sites or U.S.
sites in Europe. Second would be counterforce capabilities to
prevent attacks, and third would be countervailing strike
capabilities to go after other Russian targets. So we are
looking at a range of things.
We are still, in the first instance, trying to persuade
Russia to come back into compliance with the treaty and
remember why they signed it in the first instance. But if that
does not succeed, our objective is to ensure they have no
significant military advantage from their violation of the
treaty.
Senator Menendez. And so far, we have not succeeded at
getting them back into compliance.
Mr. McKeon. That is correct.
Senator Menendez. Now let me ask you Secretary Toloui. At
the height of the Maidan protests in December 2013, Russia
extended a $3 billion bond in an attempt to keep President
Yanukovych in power. He fled the country with unknown millions,
but Ukraine and its citizens retained the debt. Given the
exorbitant terms of the bond, Russia can demand immediate
repayment in full, and if Ukraine refuses to pay, it would
trigger default on all Ukrainian debt. In my estimation, that
is clearly an economic weapon.
Now there is precedent for shielding countries from this
type of coercion. In 2003, the United States and the EU, among
others, adopted in their legal systems U.N. Security Council
Resolution 1483, which made Iraqi oil and gas assets immune to
seizure by private creditors. The U.K. Parliament could
similarly enact legislation to deny enforcement of the bond
since it is governed under English law.
If Russia refuses to reschedule payments on the bond or
reclassify it as a government-to-government debt under the
auspices of the Paris Club, has the administration engaged with
the British Government on the possibility of denying
enforcement of the bond under British law?
Mr. Toloui. Ranking Member Menendez, thank you for that
question. I think you touched on a few points, so let me touch
on a few aspects that are relevant.
First of all, Russia has not asked for, has not demanded,
so-called acceleration of this payment.
In addition, the Ukrainian Government, in the context of
its IMF program, has indicated that it intends to discuss with
creditors, which would include Russia, the rescheduling of
obligations falling due, primarily within the scope of the IMF
program. That would include this Russian $3 billion. And those
discussions are only beginning with what we anticipate will be
the approval of the IMF program tomorrow.
Second, let me also mention that Treasury, specifically our
FinCEN, is cooperating with the Ukrainian authorities on the
other issue that you mentioned which is the recovery of assets
that went missing with the departure of the previous regime.
So we are certainly willing to look at the issue that you
mentioned, should that eventuality arise, but right now, as I
said, Russia has not accelerated this claim, and also this
claim is going to be subject to the discussions between the
Ukrainian Government and its creditors.
Senator Menendez. Well, one final point. I hope we do not
wait until Russia pulls such a trigger. I hope they do not. But
then if it is all too late and the process of doing what is
necessary to create the appropriate protection under
international law, as it relates to the U.N. Security Council
resolutions, may be too late. So it seems to me there is no
harm in having a discussion to be poised for that possibility
so that we are not on the back end of trying to play catchup
ball.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Gardner.
Senator Gardner. Thank you, Mr. Chairman, for this hearing
today, and thank you to the witnesses for testifying today.
I am going to start with Secretary Nuland and just talk
briefly about some of the comments that were made last week at
a hearing the committee held, including witnesses, Gary
Kasparov, as well as President Saakashvili. When I asked the
President about his role with Ukraine and to talk about the
promises that he believes have been made by the United States
to Ukraine and whether or not we had met those promises, I
think the answer was clearly he did not feel that we had lived
up to all that we had promised. And the bargain that the United
States had entered into--excuse me--the agreement--the benefits
of the bargain they had not yet received in terms of promises
of our commitment to them.
In your testimony, you stated that the United States must
keep faith with Ukraine. How do you mesh his belief through his
representation of Ukraine and your statement that we have kept
faith with the people of Ukraine?
Ms. Nuland. Well, I cannot speak to how former Georgian
President Saakashvili comes to his conclusion, but I would
simply say that I think this Congress has been enormously
generous and responsive to the administration's request,
including going above and beyond in some cases the requests
that we have made, including in the category of the European
Reassurance Initiative where we have more money for Ukraine
than we asked for.
What we have been trying to do, both through the loan
guarantee program and through the bilateral assistance that I
outlined in some detail, is to try to support the
implementation of these very, very tough reforms that the
Ukrainians are making, and we will continue to do that.
We have also fielded a huge number of technical advisors
into the ministries to help them both with the drafting of
legislation and with the implementation.
And on the security assistance side, the numbers are
significant as compared to previous support for Ukraine, but as
Under Secretary McKeon said, we want to see it move faster.
Senator Gardner. And thank you.
And I believe this question is probably more appropriate to
Mr. McKeon, as you discussed in your comments to the chairman,
according to an Associated Press article, the German Ambassador
claimed that President Obama agreed not to send arms to
Ukraine. What is the administration's current posture on lethal
assistance to Ukraine?
Mr. McKeon. Senator, we are still reviewing it. It is still
an option.
Senator Gardner. And when do you believe this review will
be completed?
Mr. McKeon. I hope soon but I cannot put a timetable on it.
Senator Gardner. Soon. Is that days, weeks, months?
Mr. McKeon. I hesitate to predict, sir.
Senator Gardner. What has your conversation been with the
Ukraine leadership regarding this assistance?
Mr. McKeon. There are conversations going all the time in
the field with Ambassador Pyatt but also my former boss, the
Vice President, has put President Poroshenko and the Prime
Minister on speed dial. He talks to them at least once a week
it seems. I do not know the latest of what he has said to them
on this issue. I think in general they are getting the same
information that I am giving you, that it is under
consideration.
Senator Gardner. So they would say the same thing to you as
well, that they have not heard. They do not know when this
assistance----
Mr. McKeon. That is correct. And they have made their
requests and interests known. There is no doubt about that.
Senator Gardner. When we are talking about the cease-fire
and the Russia-backed offensive, do you think--in your
intelligence, your reports that you have seen, how much time do
we have before Putin renews his push into Ukraine? Mr. McKeon?
Mr. McKeon. Sir, getting inside President Putin's head and
predicting his next move is an ongoing challenge for the
intelligence community, as well as the policy community. I can
tell you some reporting today that I can give you on an
unclassified basis, some of which Assistant Secretary Nuland
gave briefly in her testimony. The Russians continue to operate
in eastern Ukraine where they are providing command and control
support, operating air defense systems, and fighting alongside
the separatists. As she said, they are moving military
equipment, and there are still battalion tactical groups across
the border of some significant number. But when they may make
another move I do not think anybody can say.
Senator Gardner. In terms of sanctions, you mentioned
sanctions, Secretary Nuland. What are we doing right now in
terms of the European Union governments such as Hungary,
Greece, Cyprus, those nations who have been opposed to
traditional sanctions on Russia--what have we been doing to
talk to them about the steps needed and necessary for
additional sanctions?
Ms. Nuland. Well, despite some publicly stated concerns,
those countries that you mentioned have supported sanctions in
the council when the leaders come together. We continue to talk
to them bilaterally about these issues. I will make another
trip out to some of those countries in the coming days and
weeks.
But we are also working with the commission itself to
continue to design sanctions that if we need to use them, if
they need to be applied either in deterrent or actual, have
more of an effect on Russia than they do on the European
economy or our own economy. So that is part of the conversation
that we have.
Senator Gardner. In that consideration of design of
sanctions, does the administration support and what have the
conversations been expelling Russia from the SWIFT financial
system?
Mr. Toloui. I think it would be better not to get into the
details of potential actions that we could take. The framework
that we evaluate all potential actions is basically the impact
that they would have on Russia and the Russian economy against
the spillover or blowback that would occur both to the United
States and our partners in Europe. So without commenting on
specific actions, that would be the prism through which we
would be evaluating something like that.
Senator Gardner. But you have discussed the SWIFT financial
system option with European counterparts?
Mr. Toloui. We have discussed a whole range of options for
further sanctions.
Senator Gardner. Mr. McKeon, last week we also talked about
the length of time it would take for NATO to train a capable
Ukrainian military that can successfully defend its territory.
What time length do you think it would take? How much time do
you think it would take to train Ukrainian military forces?
Mr. McKeon. Well, Senator, it depends on the type of
training and the scope of training, how many units we were
talking about. The training that the chairman asked me about
that was on the books is being looked at for the National Guard
Forces was going to be over the course of 6 months, and I think
it was five or six companies or battalions. But, Frank, do you
know the details on that?
Admiral Pandolfe. Four.
Mr. McKeon. So if we were to train all of their military--
you are talking over 100,000 people--that would take a much
longer period of time, sir.
Senator Gardner. Thank you, Mr. Chairman.
The Chairman. Secretary Shaheen? I am having trouble with
all these Secretaries, and you all could serve extremely well
in those positions. I apologize for the demotion. [Laughter.]
Senator Shaheen. Well, thank you, Senator Corker. I
appreciate that.
And thank you to all of our witnesses for being here today.
I want to begin by just sharing the frustration that we
have heard from other members of this committee about the
slowness with which we are providing assistance to Ukraine on
the weapons side, not just about the decision, which seems to
be taking a very long time on providing assistance, but the
other forms of assistance that would be helpful to the
Ukrainian military that is in the field.
I had an opportunity to meet last week with some
representatives from Ukraine, a member of Parliament and some
others. And one of the things they talked about was--and I got
into a back and forth with them about the reservations that
have been expressed by this administration and by Chancellor
Merkel and other Europeans about providing weapons and the
extent to which that might escalate the conflict. And they said
a couple of things that really resonated with me.
One was that they were not sure that the conflict could be
escalated to much worse than they expect it to be, in fact,
under the current circumstances, and that there was a real
symbolic impact should we provide defensive weapons that would
have a real morale boost on both the military and on the people
of Ukraine.
So in our analysis of the pros and cons of providing
defensive assistance, do we disagree with that assessment, that
there would be a real symbolic impact to providing that help? I
guess this is directed at either you, Secretary Nuland, or
Brian McKeon.
Mr. McKeon. Senator, all of our assistance to the
Ukrainians is providing not just symbolic but real assistance
to support their government across the board, both economic and
the security assistance. So I am not going to deny that any
assistance we provide would be of importance to the Ukrainians.
What I would say, though, about what we have already
provided and what we have committed is it is meeting real
Ukrainian military needs. The armed forces were somewhat
stripped bare by the corruption of the last regime, and so
while I realize a lot of it seems rather basic in terms of----
Senator Shaheen. No, I appreciate that, and I am not
disagreeing with that at all. I am expressing my frustration,
as others have, with the timeliness of providing that
assistance, as well as a decision about whether we are going
to, in fact, provide defensive weapons.
And I guess I would ask this of you, Secretary Nuland. Do
we think there is a point at which Chancellor Merkel would feel
like the second Minsk agreement has failed and that an effort
to find a peaceful resolution to the conflict has failed and
therefore we may need to think about other steps?
Ms. Nuland. Senator, we are in an intense conversation with
our allies about a common standard for measuring implementation
with Minsk and ensuring that the OSCE gives us all, whether it
is Chancellor Merkel, President Obama, or anybody else, a clear
picture of where the cease-fire is holding, where it is not,
where OSCE has access, where it does not, where weapons are
being pulled back so that we can measure.
We have talked with our European allies, including Germany,
about two things, not only seeing those things implemented but
also about the danger of any future land grab, which is why I
shouted out this village of Shyrokyne which is on the road to
Mariupol.
But there is now this third concern that I also mentioned
in my opening, which is the continued resupply over the border
which is not compatible with either the spirit or the letter of
Minsk. So we need to watch all of those things together. As I
said, sanctions are going to have to increase. Pressure is
going to have to increase if Minsk is not implemented.
Senator Shaheen. Well, as I know you all know, there was a
European Subcommittee hearing last week on Ukraine, and one of
the concerns that was expressed was about the economic
assistance because if the economy of Ukraine fails, then a
resolution to the conflict probably is moot.
But one concern that we discussed was the ability of the
Ukrainian people to continue to support the reforms that are
being enacted. And I wonder if you could speak to that,
Secretary Nuland.
Ms. Nuland. Well, thank you, Senator. This is a real
concern for Ukraine's leaders, whether they are in the
executive or they are in the Rada. As I outlined in my opening,
the kinds of intensive changes to the structure of the economy
are going to have impacts in people's pocketbooks and in
people's lives, including the raising of the pension age,
increased energy prices. So this is why we are working so hard
with the IMF and our international partners that as Ukraine
takes these tough measures, that the support comes in quickly
so that the economy can stabilize, so investment can come back,
so that the people can see a light at the end of the tunnel. We
have to get Ukraine growing again.
Senator Shaheen. Thank you.
One of the other things that was mentioned at last week's
hearing--and I guess this question is probably for you, Admiral
Pandolfe--and that is the concern that Putin might try to test
the Article 5 commitment of NATO countries. And can you talk
about what steps we are taking to try and deter Putin from
thinking that he should test that?
Admiral Pandolfe. Well, yes, ma'am.
First of all, our commitment to Article 5 is ironclad, as
is all the allies, and that needs to be understood--and we
believe that is understood--to emphasize that NATO has enacted
some reassurance measures, which include increasing air,
ground, and sea forces in the eastern parts of Europe. They are
also adapting their force structure with a very high readiness
joint task force and standing up what is called NATO force
integration units to facilitate the flow of reinforcements,
should that be needed, into eastern Europe. These all come out
of the Wales Conference. So it is a head of state-level
commitment, and NATO is moving forward with that.
And on the United States side, the ERI monies that were
authorized by the Congress are most appreciated and are very
much helping in that as well.
Senator Shaheen. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator Perdue, please.
Senator Perdue. Thank you, Mr. Chairman.
I just want to echo the frustration that you are hearing
this morning. Because of the intransigence of this
administration, it seems to me that all of a sudden we are in
an era where our allies do not trust us and our enemies do not
fear us. You know, as it was mentioned earlier, Ukraine
unilaterally gave up over 1,000 nuclear weapons on the
assurance that their national security would be protected. NATO
and the United States was behind that.
Last September, with President Poroshenko by his side,
President Obama promised to help Ukraine build up an effective
security force to defend themselves from aggression. And yet,
here we are today talking about more delays in terms of getting
that support.
Kurt Volcker, a former U.S. Ambassador to NATO, has written
that this new cease-fire amounts to, ``an institutionalization
of a frozen conflict inside Ukraine along the lines of Abkhazia
and South Ossetia in Georgia and Transnistria and Moldova. This
is exactly what the Kremlin wants.''
Admiral, I have just got a couple questions. Do you think
that Putin's objective is to create a frozen conflict like the
ones in Georgia and Moldova? And if so, what would be our
response to that?
Admiral Pandolfe. Senator, I think his objective is to keep
Ukraine destabilized so it does not effectively join the West.
He is threatened by progressive democracies on his borders in
my opinion, and he is trying everything he can to prevent that
from happening.
In their previous responses, Secretary Nuland and Secretary
McKeon have pointed out that we have implemented a wide array
of initiatives focused on generating pressure, economic,
diplomatic, and military, to try to force the Russians to stop
this behavior and respect the territorial integrity of Ukraine.
Senator Perdue. Thank you.
And from a strategic perspective, in recent months Russia
has kidnapped an Estonian intelligence officer on Estonian
soil, warned Latvia of unfortunate consequences for its alleged
mistreatment of ethnic Russians, forced Sweden to reroute a
civilian airliner recently to prevent a collision with a
Russian military jet, and flown strategic bombers over the
English Channel actually, and sent unannounced formations of
military aircraft into European airspace.
I would like to follow up on Senator Shaheen's question
about Article 5. But do you believe Putin's strategic objective
is to undermine the credibility of NATO's guarantee to secure
all its member states?
Admiral Pandolfe. I do. I think President Putin would like
very much to undermine the NATO alliance, and we are working
very hard to communicate to him the solidarity of that alliance
and taking steps to emphasize and illustrate that solidarity.
Senator Perdue. Can you talk specifically about what is
being done by NATO in Estonia, Latvia, and Lithuania in regard
to that?
Admiral Pandolfe. Well, as mentioned a moment ago, the
reassurance measures being taken by NATO do include--and the
United States is part of this obviously--rotating forces
through the Baltic States, engaging those states in terms of
exercises and training and assistance, as well as facilitating
additional aircraft being stationed into those countries. NATO
AWACS are flying over eastern Europe to a greater extent. Ships
are in the Baltic and the Black Seas to a greater extent. All
of this holistically is designed to bolster and underline the
Article 5 commitments.
Senator Perdue. Thank you.
And one last question, Secretary Toloui. All four of you
have said in different ways that the solution here is
diplomatic, economic, and military. My question is on the
sanctions. You know, Russia does not have a consumer economy.
They have got an energy economy. Their banking sector can be
hit and also their military arms manufacturing sector.
Can you speak in a nonclassified way about what needs to be
done from the sanctions perspective that can actually get his
attention at this point?
Mr. Toloui. Senator Perdue, thank you for that question.
The sectors that you mentioned actually have been targeted
through the sanctions. Both the defense sector and the
financial sector have been subject not only to what we call
sectoral sanctions, which restricts the ability of companies in
that sector to borrow money, to tap the capital markets, which
are needed for them to develop their businesses, but also in
particular in the defense sector, there have been individual
companies listed and subject to asset freezes.
So those sectors are very important. They are part of the
reason why the sanctions have had the effect that they have had
on the Russian economy with the currency depreciating by more
than 40 percent, the economy expected to contract this year,
inflation rising to over 17 percent. So those sectors are very
important. They have been part of our tailored sanctions
program, and these are the effects that we have seen.
Senator Perdue. Thank you, Mr. Chairman.
The Chairman. Senator Murphy.
Senator Murphy. Thank you very much, Mr. Chairman.
Thank you to the panel for being here today. I would just
note to the chairman and ranking member, Senator McCain was in
Connecticut yesterday, and we held a townhall meeting with
Connecticut's Ukrainian American population. We had an overflow
crowd at the Ukrainian National Home in Hartford, probably
around 300-400 people. And they raised some of the similar
concerns that were raised here today, but they also expressed
real and heartfelt appreciation for the fact that if it were
not for the leadership of the United States rallying the
international community to the economic assistance that is
allowed for the Ukrainian Government to still stand, if it was
not for our leadership on rallying the international community
towards a policy of sanctions, this story would have played out
in a very different way. This is a dire situation in eastern
Ukraine today, but I think many of the people that I represent,
though they want us to go further, understand what we have done
thus far and its importance to the ability of Ukraine to
continue to defend itself to the degree that it can.
I have one specific question, and then I wanted to talk a
little bit about some of the concerns that many of us have
about a policy of providing defensive arms, though I support
it.
First is the question of what the Budapest Memorandum
obligates the United States to do. Already today I have heard
some of my colleagues talk about the Budapest Memorandum as
obligating the United States to defend or obligating NATO to
defend Ukraine from a territorial attack. I think it is
important for us to know exactly what we are obligated to do
when we sign these international agreements, notwithstanding
our unanimity in our belief that we think we should provide
defensive weapons to the Ukrainians.
So maybe I will pose this question to you, Secretary
Nuland. It is my understanding the Budapest Memorandum
obligates each country individually to respect the territorial
integrity of Ukraine but, significantly, is not a mutual
defense treaty, does not obligate any of those countries to
then defend Ukraine. It is not comparable to Article 5. I just
think it is important for us to understand if that is actually
the case.
Ms. Nuland. First of all, Senator, as a native Connecticut
girl, I am glad to see that Connecticut Ukrainian Americans are
active and supportive of Ukraine.
I was part of the negotiating team that worked on the
Budapest Memorandum, so I know it well. You are accurate. It
was a political agreement among the four signatories, notably
the United States, the United Kingdom, the Russian Federation,
and Ukraine, to respect the sovereignty and territorial
integrity of Ukraine, not to attack her. But it was a political
agreement. It did not have legally binding treaty force or
legally binding national defense obligations.
That said, it is Russia that has violated the spirit and
the letter of that agreement.
Senator Murphy. Agreed.
Mr. McKeon, I want to just talk a little bit about how
circumstances on the ground would play out in the event that we
decided to give substantial defensive weapons to the
Ukrainians. The supposition is that Putin is not paying a big
enough price simply with economic sanctions, and that the price
that he would pay perhaps in greater numbers of lives lost that
he would not be able to cloak in secrecy due to increased U.S.
assistance would change his calculus. I think that is a chance
worth taking. That is why I have joined with my colleagues in
supporting providing defensive weapons. But I understand that
it is a chance and that there is also a significant chance that
that is not how things will go, that he will just continue his
march straight through the lines that we have fortified.
I do not know if you are to this point in terms of your
thinking or the proposals that you have been making to the
President, to the Secretary, but what would we do in the event
that we provided a certain level of defensive weaponry, Putin
amassed additional forces, moved straight through the lines
that we have then supplied? Would we be in the position of then
having to send additional supplies, additional weapons? How
does this play out in the case that it does not go the way that
we hope it goes whereby Putin pays a bigger price than he is
paying today, stops his aggression, or comes to the table? What
happens if that does not work?
Mr. McKeon. Senator Murphy, without getting into all the
specifics of the internal debate in the administration, in some
respects you have put your finger on the conundrum. From the
beginning of this crisis, we have looked at ways to increase
the costs on President Putin, to deter further aggression, and
to change his calculus. And so that is certainly part of the
thinking that goes into weighing whether additional weapons,
including lethal defensive weapons, would achieve that and then
on the opposite side what you said about does this raise the
ante. I do not want to say does this provoke him because he
does not need any provoking. Then what would Ukraine feel that
the United States owes them in terms of additional assistance?
So it is trying to see to the second, third, and fourth move on
this chessboard that is part of the conversation.
Senator Murphy. Yes, I agree with you. I do not buy this
argument that us supplying the Ukrainians with defensive
weapons is going to provoke Putin. He has got a plan here that
he is going to carry out regardless. We are already in for a
pretty significant commitment as it is. I just want to make
sure--and I think you are suggesting that you are having these
conversations--that we are playing this out not just to step
one, but to step two and three and four. I think very often we
supply you with advice that does not necessarily contemplate
the follow-on actions of our initial commitment.
A very final question. I will try to make it quick. Back to
you, Secretary Nuland. Just speak to us about the greater
challenge here. We are seeing the tip of the iceberg when it
comes to the tools that Russia is using, and frankly you and
our Government, writ large, is vastly underresourced to try to
prevent the next Ukraine from occurring. And as I have been
saying a number of times in a number of different forums, at
the same time that we are debating the assistance that we
should be giving to Ukraine, we really need to be having a
discussion about how we resource State and Defense to help all
these other countries that we are talking about, whether it be
the Baltics, the Balkans, Moldova, Georgia, to try to make sure
that this is the last crisis of this proportion that we face in
the region.
Ms. Nuland. Thank you, Senator, and thank you for your
attention to some of the underresourced parts of Europe, in
particular the Balkans and Central Europe.
Well, as you said, in addition to the security challenges
and not only the security challenges in Ukraine and the other
key periphery states like Moldova and Georgia, but also to the
alliance itself as Under Secretary McKeon and Admiral Pandolfe
have spoken to, there are all kinds of asymmetric challenges
posed by this conflict, whether you are talking about the use
of energy as a weapon, which requires us to work much more
intensively with the EU and with our European allies and
partners on energy diversification, the work that we have been
doing on reverse flow gas to Ukraine, more LNG terminals in the
Baltics, now looking at the energy dependence of some of our
allies in southern Europe. We would like to be able to do more
to help Bulgaria, Hungary, Croatia, and other countries like
that, although we are doing a lot together with the EU.
Things like use of corruption as a tool of malign influence
to undermine sovereignty, whether you are talking about
directly paying political candidates or whether you are talking
about just ensuring that there is enough dirty money in the
system to undercut democratic institutions or to make
individual political actors vulnerable to outside pressure. So
we are working with countries to expose that and also to close
the space for corruption in their system particularly focused
on central Europe and the Balkans.
The propaganda, which is not simply what you see in terms
of news, but it is also under-the-table efforts to support what
looked like legitimate NGOs but are actually agents of
influence in countries that change the debate on things that we
are working on, whether it is about TTIP or whether it is about
Ukraine or other things. So there is a lot to focus on,
particularly in the Balkans, where they are not, most of them,
cemented into the alliance, and many of them not cemented into
the EU, so they are more at risk, but also in allied territory.
Senator Murphy. Thank you, Mr. Chairman.
The Chairman. Before turning to Senator Johnson, I do want
to say that countries watching the last exchange--Madam
Secretary, from a person who helped write the Budapest
agreement, apparently it was a superficial agreement, only a
political agreement. I would say that countries watching that
last exchange would be pretty reticent to come to any agreement
with the United States for sure, the U.K., and Russia regarding
nuclear arms. My guess is that last exchange would be a pretty
major setback to anyone who thought we were ever serious about
an agreement relative to nuclear proliferation.
But with that, I will turn it over to Senator Johnson.
Senator Johnson. Thank you, Mr. Chairman. Yes, that answer
to that question certainly does not reassure the allies, which
I think was one of the phrases I heard in the testimony.
Senator Gardner and Senator Shaheen mentioned the hearing
we had last week in our European subcommittee. I called that
hearing to try to lay out and describe reality, to really tell
the story of what Russia has become under Vladimir Putin. I
would refer people to my written opening remarks where we laid
out a pretty revealing timeline that included 29 political
assassinations. And of course, the day after we called the
hearing, we saw the assassination of Boris Nemtsov. Pretty
stark.
I want to talk about the strategy here. We have talked
about the objectives of Vladimir Putin. I want to talk about
the strategy. During that hearing, Gary Kasparov, who has been
a leading voice of the opposition, said that Putin rebuilt a
police state in Russia in full view of the outside world, and
now he is confident enough in his power to attempt to export
that police state abroad to Georgia, to Ukraine, to Moldova.
Where next?
Former Georgia President Saakashvili told our subcommittee
that only the swift and immediate action of the U.S. Government
to train and equip the Ukrainians can stop Putin's strategy to
deconstruct the transatlantic architecture, to deconstruct the
post-cold-war order.
Secretary Nuland, do you agree that that is by and large
what Vladimir Putin is trying to do? And if you do not agree,
what is his strategy? What is his overall motivation? What is
his overall goal?
Ms. Nuland. Well, I certainly agree with the way Admiral
Pandolfe characterized his motives earlier in this hearing. He
is looking to keep countries in the former Soviet space under
his political and economic control. He is looking to roll back
the gains of a Europe whole, free, and at peace, which is why
all of the things that we are talking about here, whether it is
allied reassurance and making sure that where we do have treaty
commitments, which is to our NATO allies, that every millimeter
of space is defended, but also to help strengthen and provide
more resilience, political security and economic to all the
countries in the periphery.
Senator Johnson. Earlier in Vladimir Putin's aggression
against Ukraine, I heard a number of administration officials
saying that we were trying to offer an off-ramp to Vladimir
Putin. Does anybody on the panel here believe that Vladimir
Putin is looking for an off-ramp? By my evaluation, he is just
simply looking for on-ramps, strategically pausing, and looking
for that next on-ramp. Anybody want to dispute that?
Mr. McKeon. I do not know that I would call it an off-ramp,
Senator. I think there was a point earlier in the crisis where
he arguably was. I think, as Admiral Pandolfe said, he is
trying to keep Ukraine out of the West and keep it in a
destabilized situation. Whether he seeks to go further in
Ukraine, I cannot say.
Senator Johnson. Certainly from my standpoint, he is really
not looking for off-ramps. He is looking for opportunities.
Dr. Stephen Blank testified. I want to see if this is
pretty much the administration's evaluation of really what
Russia is doing. According to the IHS consultancy firm,
Ukrainian authorities, and the Potomac Institute, there are
currently 14,400 Russian troops on Ukrainian territory backing
up the 29,300 illegally armed formations of separatists in
eastern Ukraine. These units are well equipped with the latest
main battle tanks, armored personnel carriers, and infantry
fighting vehicles plus hundreds of pieces of tube and rocket
artillery. There are also 29,400 Russian troops in Crimea and
55,800 amassed along the border with eastern Ukraine.
Is that pretty much this administration's assessment of
really what the Russian troop strength is in Crimea and in
Ukraine? Whoever is the most qualified.
Mr. McKeon. Senator Johnson, without going into the
specifics of the intelligence on the number of Russians in
eastern Ukraine, I cannot comment on--it changes from week to
week. It is somewhat fluid. Suffice it to say there are many
Russian soldiers in eastern Ukraine, and there is no doubt they
have transferred hundreds of pieces of equipment.
Senator Johnson. You are certainly not saying this
assessment is inaccurate. There is a real possibility this is
accurate.
Mr. McKeon. I cannot say that the number is exactly right
in terms of 14,000. In terms of the numbers on the border, as I
mentioned earlier, the latest information we have on the
border, there are 11 Russian battalion tactical groups on the
Rostov area off of eastern Ukraine.
Senator Johnson. Senator Shaheen was talking about meeting
with some of the Ukrainian parliamentarians, and I did the same
thing. They were certainly concerned about a potential spring
offensive by Russia. And, Secretary Nuland, you talked about
they are amassing, moving additional heavy equipment into
Ukraine. Is that not a big concern?
Ms. Nuland. Senator, that is exactly why we are seeking the
greatest degree of fidelity on whether this Minsk agreement is
being implemented and strengthening the OSCE so it can give us
an accurate picture. But it is also why we are publicly here
calling out some of the specific concerns we have, whether it
is about the rearming that we have seen in the last couple of
days, whether it is about the continued firing in the
strategically important villages of Shyrokyne, et cetera. So,
again, if Minsk is implemented before spring and things pull
back, then that will allow space for politics to begin in
eastern Ukraine, but if not, we have to be prepared to have
more sanctions pressure on Russia, and that is what we are
preparing.
Senator Johnson. That is a big ``if.'' I would argue
sanctions have not worked particularly well. In one of my
meetings with some of our European allies, the comment was made
that as Russia becomes weaker economically, they become more
dangerous. I kind of agree with that assessment which is again
why I believe we have to provide a military response, lethal
defensive weaponry.
Let me just close with a quote by Georgian President
Saakashvili or certainly his assessment--there are a couple
quotes in here--about changing Putin's calculus. As Senator
Menendez mentioned, he was there on the front lines when Russia
invaded Georgia. In a resolute action on the part of the Bush
administration, sending in supplies without Russia really
knowing what was on those cargo airplanes, that was certainly
one of the factors causing Russia to stop further expansion,
aggression into Georgia.
Saakashvili basically said that deployments from Russia's
far east are proof that the Kremlin is sensitive to the rising
``costs for Putin's invasion of eastern Ukraine'' because
Russians have ``a very thin layer of tolerance for human
casualties.'' So again, that was Saakashvili's assessment, that
if we would show some strength, some resolve, in other words,
respond to President Poroshenko's plea that, yes, they will
provide the courage, they will provide the boots on the ground
to fight Vladimir Putin's aggression, but they cannot do it
with blankets.
Thank you, Mr. Chairman.
The Chairman. Senator Cardin.
Senator Cardin. Thank you very much, Mr. Chairman, and
thank you for holding this very important hearing, and I thank
all of our witnesses.
There is no question there is strong consensus on this
committee, I think in the United States Senate, that the United
States needs to do more to help the Ukrainians defend
themselves. So I just want to make that clear from the
beginning. The Ukrainians need defensive support so they can
defend themselves as far as weapons are concerned. And this
committee has spoken and many of us have voiced this, and the
hearing, I think, has been pretty clear about our position in
that regard.
It is also clear that we need to take stronger action
against Russia. The tragic assassination of Boris Nemtsov
really points out just how extreme the Putin regime has gotten.
I think what we could do, Madam Secretary--and I would just
urge you to look at--the individuals Mr. Nemtsov exposed who
were committing gross violations of Russian rights. It would be
appropriate for us to review whether we should be imposing the
Magnitsky type sanctions against those individuals that he
worked on within Russia.
And let us not forget Nadiya Savchenko who is unlawfully
imprisoned in Russia today, who was taken from Ukraine by
Russia. This Senate has spoken on Ms. Savchenko through passage
of a resolution.
So there is just continued effort, and Russia's violations
of its agreements, including the Minsk II cease-fire. I am
pleased to see you are looking at additional sanctions.
Understand that it is going to take U.S. leadership. If we
wait for Europe to act, it is not going to be effective. We
have to be out there with our European partners, but it is
going to require U.S. leadership.
I want to change gears for one moment, if I might. I think
we have had a lot of questioning on the defensive issues. I
want to get to the economic front for one moment because my
assessment from visiting Kyiv was that what happened in the
protests there were as much about basic rights and economic
rights as it was about political issues. So as we look to
Ukraine being able to defend its borders and being able to
control its territory, we also, at the same time, have to make
sure that they have an effective government with the
institutions that protect the rights of all of its citizens to
express their views and to be treated fairly, free from
corruption, as well as economic opportunities that that country
should be able to provide for its citizens.
So I know the IMF originally made a commitment in 2014. I
think it was $17 billion, $4.5 billion was released. They now
have a new commitment that they entered into in February this
year that looks like it takes this up to maybe $22 billion. I
know the United States has provided some direct assistance.
But can you tell us how confident you are that the
Ukrainian Government is moving toward the development of the
institutions critical for democracy to flourish and how
successful we are on their path for economic reform?
Mr. Toloui. Senator Cardin, thank you very much for that
question.
I could not agree more that what we saw in the Maidan and
what we have seen since reflects the desire of the Ukrainian
people for a better life, including a better economic life. And
I think that one reason that we have been successful in
mobilizing such large international financial assistance for
Ukraine is because the actions that the Ukrainian Government
has taken reflect a decisive break from the past. Their
willingness to address subsidies and inefficiencies and
corruption in their government spending and their state-owned
enterprises, establishing an anticorruption bureau, and
addressing issues related to insider influence within financial
institutions, all of these are actions that the Ukrainian
Government has put forward, not that the international
financial institutions have imposed on Ukraine. And when
Secretary Lew or Under Secretary Nathan Sheets or myself have
visited Ukraine in the last couple of months, the departure
from the past practices of Ukrainian governments could not be
more evident.
So our responsibility is to ensure that the international
community, and the United States as part of the international
community, is doing everything it can to support this reform
agenda that the Ukrainian Government has embraced and has been
embraced by huge legislative majorities in the recently elected
Ukrainian parliament.
Senator Cardin. Is there more that the United States should
be doing? Are we satisfied with the IMF package? Are other
countries coming forward with appropriate aid also?
Mr. Toloui. We think that we have the right package right
now. We are satisfied with the IMF package. As you know, the
United States had provided a $1 billion loan guarantee for
Ukraine last year. We intend to provide another one in the
first half of this year and are working with Congress to
consider another $1 billion loan guarantee at the end of this
year. So we appreciate congressional support for that.
In terms of other countries, we have had Europe and other
bilateral donors increase their assistance to Ukraine in recent
months. That is something that the senior officials within the
Treasury, as well as the State Department, have worked on and
we are going to continue to work on. We think that this
government merits continued support not only from the United
States but from other countries and international financial
institutions.
Senator Cardin. And I support the packages. I think we are
doing the right thing.
But I just urge us--our support for Ukraine must include
accountability and progress being made in regards to governance
issues and human rights issues, and we have to make that very
clear. We will be patient, but we will not have indefinite
patience. They must demonstrate their ability to carry out
their verbal commitments to their people, and we have to be
tough about that.
I would ask one last question, if I might, and that is an
assessment of the OSCE mission. As you know, one of the hats I
wear is the ranking Democrat on the Helsinki Commission. Can
someone give me an assessment as to how effective the OSCE has
been in Ukraine?
Ms. Nuland. Senator, well, first, thank you for the work
that you do with the OSCE. I think this is a tool of foreign
policy and of European policy that was underutilized until the
Ukraine crisis. Without the eyes and ears of the OSCE, I would
not have been able to give the rundown that I gave of where
things are going well and where things are going poorly in
Ukraine at the beginning of this hearing.
That said, as you know, they are an unarmed force. They can
only operate in a permissive environment. So that has been one
of the challenges that they have had, whether it was getting
into secure the crash site after Malaysian Air Line 17 or
whether it has been now working, particularly in separatist-
held areas, to get the kind of access that they need. So that
is what we have to continue to work on.
We are trying to work now with European partners to make
sure that every OSCE nation carries its weight in terms of
fielding monitors, in terms of paying the budget increases that
this requires, but also in terms of the specialized skills. We
now need OSCE monitors who know the difference between an X
kind of artillery piece and a Smerch rocket and that kind of
thing. So we are working on all that.
Senator Cardin. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator Isakson.
Senator Isakson. Thank you, Chairman Corker.
The chairman and I were in a private meeting this morning.
So I cannot quote by name the individual but it is a very well
respected journalist and commentator in America who was asked
the question about what is the greatest threat to the United
States security. Ironically, although acknowledging ISIL and
obviously what we all know is going on in the Middle East, he
directly cited the threat of Putin to disrupt NATO and destroy
NATO as the biggest threat to the United States and the world,
as he saw it, in the outlying years.
So, Secretary McKeon and Admiral Pandolfe, I would like
your opinion on that statement.
Mr. McKeon. Senator Isakson, I would, in some respects,
defer to the IC and its judgment of current threats to United
States security. In terms of the terrorist threat, ISIL is
certainly a threat. AQAP and core al-Qaeda is still a threat to
the United States, as are other branches of al-Qaeda and ISIL.
We are certainly worried about the negative trend of Russia
and what it is doing not just in Ukraine but along Europe's
borders, and it is the core of the reason we have taken a lot
of reassurance measures that we have and thinking hard about
making sure that the alliance commitment can be met not just
through the United States but through all of our NATO partners.
Senator Isakson. Admiral.
Admiral Pandolfe. Senator, traditionally degree of threat
is defined as capability and intent. In terms of capability,
you know, the Russians are a world-class state with a world-
class military. In terms of intent, that makes it even more
important that we do the kinds of initiatives we have talked
about this morning to try to shape the intent to minimize the
risk.
Senator Isakson. Well, thank you for those answers.
You know, one good benefit of older age, which I am
enjoying, is you have a long memory of experiences you went
through in your life. One of the ones I went through is the
Cuban missile crisis in the 1960s, and there are some--I am not
drawing a total comparison, but some comparison to what
Khrushchev did in trying to put missiles in Cuba and what
Kennedy did in response and the potential of what is going on
in the Ukraine because finally President Kennedy put a blockade
around Cuba and called Khrushchev's bluff. And when he did,
Khrushchev pulled his missiles out and went home.
I do not think we are at that place yet by any stretch of
the imagination, but you all spend a lot of your careers
looking into the future and saying ``what if.'' And so I think
it is a lot of what Senator Johnson was saying. What if things
get worse? We need to be prepared to be able to have the same
type of response to match the threat with the force necessary
to thwart that threat.
Am I right or wrong on that?
Mr. McKeon. Senator, in the Department of Defense, we are
always worrying about the threats right in front of us but also
the threats in the future, and we do a lot of planning to look
out ahead. And the military modernization of Russia and its
activities in central Europe have, no doubt, got the mind focus
on looking ahead at various permutations of what Russia might
do. So it is definitely an area of concern that we are giving a
lot of thought and attention to in the Department.
Senator Isakson. Well, I know you have to be careful in
your answer. And I will get to you, Admiral. And I respect that
an understand that. But I think it is a fair enough comparison
to underscore the needs. I think this committee feels in its
entirety for us to look down at possible calculations down the
line and be prepared to confront power with power and threat
with threat.
Admiral.
Admiral Pandolfe. I would just like to underline what Mr.
McKeon said and to your point, Senator. I mean, readiness is
absolutely key to deterrence. It is fundamental to what we do,
and it is coupled to, as Assistant Secretary Nuland has said,
Alliance solidarity. Those elements together are the best way
to buy down risk and ensure stability and security.
Senator Isakson. Secretary Nuland, I want to ask you a
question for my own edification. Would you consider Russia's
use of its infinite supply of natural gas and oil soft power?
Ms. Nuland. Certainly its use of energy as a weapon. I do
not know if I would call it soft, but it is certainly a tool of
its influence.
Senator Isakson. My question--I do not know the answer to
this. This is not a loaded question. It is one that is going to
show my ignorance probably. But had their been a counterbalance
to the supply of petroleum and gas that Russia could supply in
that part of the world, could that have thwarted what Russia
has done in the Ukraine and Crimea?
Ms. Nuland. Well, I think their interest in controlling
supplies of energy to Europe is a factor. There were many other
factors at play in Russia's decisions that it made in Ukraine.
Senator Isakson. But an alternative supply available to the
Ukraine would have made possibly a difference in how far Russia
went early on? And I am not trying to bait you. I am just
trying to understand your----
Ms. Nuland. Yes. I mean, I think if Ukraine had been able
to be more energy independent earlier in its period since
independence from the Soviet Union, it would have had more
resilience, and it would have had more ability to resist. And
that is one of the reasons why we are putting so much effort
now in the bilateral program into energy diversification,
energy security for Ukraine, as well as for the rest of Europe.
Senator Isakson. And the reason I asked the question is it
is important for us to understand the national defense interest
of developing all the petroleum resources we can in the United
States so we have control to kind of balance what the Russians
are able to do in Russia.
Thank you all for your time and your interest.
The Chairman. Thank you.
Senator Kaine.
Senator Kaine. Thank you, Mr. Chairman, and thanks to the
witnesses.
I want to pick up on where Senator Isakson left off, and
then I have some questions about the economy and energy issues.
I have been a strong supporter of the economic sanctions
against Russia, and I understand there have been earlier
questions about the possibility of more sanctions in the energy
sector. It does seem this is the economic tool that Russia uses
most. So whether it is sanctions in the energy sector or
helping nations that over-rely on Russia to have alternate
sources of energy or to develop their own sources of energy,
these are all strategies that I strongly support.
But Senator Johnson made a comment repeating some comments
from a hearing last week, and I am just interested in your
theories about it. To the extent that we are more successful in
economic sanctions, to the extent that an extended period of
low oil prices, for example, puts economic pressure on Russia,
there was some testimony in the hearing last week that that
makes Russia more dangerous militarily. And I would be curious
as to your thoughts on that. I am a supporter of sanctions and
energy pressure, but does that raise the risk of unpredictable
military behavior?
Mr. McKeon. Senator Kaine, I do not know that it raises the
risks or makes Russia more dangerous. It is hard to understate
the provocations and dangers of the actions President Putin has
already taken. He is going to face some hard economic choices
if oil prices stay down and capital flight continues and the
ruble continues in the direction it is going. He has got a big
investment in his military modernization. It is a big part of
his budget. And as I say, if the oil prices stay down, he is
going to have to make some hard choices. If he continues to
sustain those investments, there are going to be some other
costs I suspect in the social safety net in Russia. So he is
going to have to weigh that in terms of his internal politics.
I know it is not exactly a democracy, but he does have to pay
attention to what is going on in the country and public
attitudes.
Senator Kaine. Any different positions?
[No response.]
Senator Kaine. So this is not something we should be overly
concerned about if we decide to do more sanctions in the energy
sector or take steps to help Ukraine and other nations
diversify their energy portfolio?
Then let me follow up and ask about this issue of the
internal Russian dynamic. There has been a lot of question of
how much are the sanctions having an effect, how much are low
oil prices having an effect. Clearly we have seen statistics
about capital outflow, reduction in foreign direct investment,
devaluation of the ruble, other economic effects. What is the
best that you can tell me now in an unclassified setting about
the combined effects of either sanctions or oil prices on the
internal political dynamic in Russia today?
Ms. Nuland. Well, I think Assistant Secretary Toloui has
given you some of the facts and figures that this policy has
wrought, not only Russia's vulnerability to low oil prices
because of their lack of economic diversification over the last
15 years, but also as a result of sanctions. I think we have
yet to see what the political impacts will be, but we clearly
can see from some of the statistics that Russian kitchen tables
are being hit now by these policy choices that the Kremlin are
making. When you hear Assistant Secretary Toloui talk about
inflation at 15 to 17 percent, when we have statistics of
skyrocketing food prices across the Russian space, 20 to 40
percent in some places, when we know that average Russians are
having difficulty paying for loans for apartments, for cars,
when we see imports way down, it is affecting lifestyles. Now,
that simply goes to the point that the Kremlin has prioritized
their international adventure over the quality of life for
their own people, and at what point that has a political
effect, I think we have yet to see.
Senator Kaine. The question about where will oil prices be
in a year is something of which we should be wary with respect
to speculating, but there are people who have to make that
speculation. Folks who buy fuel for major airlines, et cetera
have to do projections all the time, and some of their
projections are that oil prices would stay in this low range
for some extended period of time.
If we are a year from now and oil prices have stayed in
basically this historically low level, talk a little bit about
what you would predict that you would see in terms of the
internal Russian economic dynamic, and then we can draw the
line between that and likely political feelings.
Mr. Toloui. Senator Kaine, thank you for that.
I think it is important to recognize that the economic
outcomes that we have seen in Russia have really been an
interaction between what we have seen in oil and the impact of
economic sanctions. Higher oil prices would definitely be a
positive for the Russian economy.
But I think it is relevant to look at what both Moody's and
S&P have done to Russia's credit rating. Russia has been
downgraded to junk for the first time since 2003-2004. Now, the
responsibility of agencies like Moody's and S&P is not to react
to what the oil price is today but to think about how Russia's
economy is being managed, what the impact of sanctions is, and
how that affects the Russian Government's ability to meet its
obligations not only to foreign creditors but to its people.
And so I think that if we saw higher oil prices--and I am
not going to speculate on oil prices like you mentioned. But I
think that even if we see oil prices rise, the combination of
economic mismanagement and the impact of sanctions has cast the
shadow on Russian economic prospects that is expected to
persist. And one manifestation of that is the decision of the
rating agencies to designate Russian debt as junk.
Senator Kaine. Thank you, Mr. Chair. I do not have other
questions.
The Chairman. Senator Rubio.
Senator Rubio. Thank you. Thank you all for being here.
Secretary Nuland, in your statement, you outline our goal
as threefold. First, we want peace, then political
normalization, and then ultimately the return to borders, which
I imagine includes Crimea as well. The question that I have is
how realistic--and the hope is that Minsk would offer that
promise with peace coming first as the precondition for all
these things to be possible.
The question that I have is how realistic is that goal,
given the goals that Putin has himself. I think the goal,
unless any of you dispute this--I think the goal Putin has here
is to basically--it is not just about Ukraine. It is about
completely reorganizing the post-cold-war, post-Soviet-era
order in Europe. And it is not just about Ukraine.
And in that context, that is why he wants to weaken and
divide and perhaps even force NATO to fall apart. In fact, he
has questioned why we even need a NATO anymore since there is
no more Soviet Union. As part of furthering that goal, he has
openly said that they believe they need to establish a sphere
of influence and not just throughout the former Soviet space
but also in former Warsaw Pact type countries.
This whole talk about protecting Russian speakers--this is
just an excuse that he puts out there as a justification before
the international community for moving forward. But ultimately
their goal, their ultimate goal, here is to carve out, to
reorder the post-Soviet order in the region and to carve out
for Russia a strategic space, for themselves, of influence.
And so in light of that, why should we have any hope that
these cease-fires are actually going to hold, given we know
what his ultimate goal is? Now, he may agree to a temporary
cease-fire as a tactical move maybe hopefully to split us off
from the Europeans, in essence hoping for us to act. And maybe
that is why there have been arguments that we should not go on
sanctions alone because it could cause friction with the
European Union and split us from them in that regard. But at
the end of the day, he may agree to a cease-fire temporarily
either to consolidate gains they have already made or to
perhaps try to create a point of friction between--hoping that
we will jump out ahead of the Europeans and create that as a
division. But ultimately his goal unquestionably is to
completely rearrange the order in this area and carve out for
Russia a sphere of influence.
So how is it even realistic, knowing that about him, to
think that he is ever going to allow stabilization to return to
Ukraine and that he is ever going to return back to their
borders, given we know what their goal is. I mean, he is a
criminal and a thug, but he is also a very determined one who
has shown the willingness to act out in furtherance of a
strategic goal. So why should I feel optimistic that there is
any chance of that happening, given the goal he has now, unless
the cost/benefit analysis changes for him?
Ms. Nuland. Senator, I am not going to dispute any of your
analysis. I am simply going to say that Minsk is a test for
Russia. Russia signed it. The separatists signed it. It is also
a choice for Russia. If fully implemented, it would bring back
sovereignty and territorial integrity in the east. It does not,
obviously, address Crimea.
So now we have to test. And as I said at the beginning, the
record is already mixed today, and we have to be ready both for
the opportunity for success but also to impose more costs,
significant costs, on Russia, with our European partners, if
Minsk is violated either because the agreement is not
implemented or because there is a further land grab or because
the separatists are further armed. And that is what we are
watching.
Senator Rubio. So in furtherance of that question, if in
fact this is a test, what is wrong with now laying out clearly
exactly what we are going to do if that test has failed. In
essence, if this test fails, we are going to arm the Ukrainians
with--by the way, as a sovereign country, Ukraine has a right
to defend itself not just against Russian aggression or
separatist aggression but any aggression. If in fact we are
trying to strengthen the writ of that government, part of that
is allowing them to provide for their own defense. So we should
be doing that anyway.
But is it the position of the administration that we are
going to lay out a clear picture, hopefully with your European
partners, of what the specific sanctions will be and what
specific military aid we will provide if Russia fails the Minsk
test?
Ms. Nuland. Senator, I think in my opening I made clear
that we are working now with the Europeans to lay out concrete
sanctions costs if Minsk is not implemented or further
violated. We generally do not signal those in advance, but we
make it clear that we are prepared, and that is what we are
working on. With regard to security assistance, we are
continuing to evaluate that based on the situation on the
ground, and implementation of Minsk will very much be part of
that.
Senator Rubio. Can you comment on whether denying Russia
access to the SWIFT system is something that has been
discussed?
Mr. Toloui. We actually generally do not discuss in a
public forum any specific measures, but we discuss a whole
range of things. As we are evaluating it, we look at both the
impact that it would have on Russia, as well as the spillovers
that it would have on the global economy, the United States,
and our European partners. But I do not want to comment on any
specific action.
Senator Rubio. My last question, I guess, is just more of
a--maybe I do not expect you to comment on this. But
irrespective of whether Russia adheres to Minsk or not, if in
fact we want to stabilize Ukraine, is not part of that
stabilization to give them the ability to defend themselves in
the future from any other aggression that may exist? In
essence, there are other countries that have not been invaded
who we provide military assistance to and defensive systems to
because we understand that the absence of it invites aggression
in the future. I just want to know why is it a bad idea to
provide them defensive systems irrespective--and I know that is
being reviewed. But is there an argument to be made against
providing defensive weapons to a country irrespective of how
the cease-fire turns out since we are trying to help them
stabilize their government and as part of that, it has to be
the ability to provide for their national defense?
Mr. McKeon. Senator Rubio, as you know, we have provided a
range of security assistance in the nonlethal categories which
have met real Ukrainian security requirements because the armed
forces were not fully stripped bare, but they were left rather
lacking by the corruption of the last regime. And I expect long
past this crisis, we will have a defense partnership with the
Government of Ukraine, but at the present time, as Assistant
Secretary Nuland said, defensive lethal weapons are being
reviewed but it is not something on offer at the present time.
Senator Rubio. And my last question is--I have heard some
commentary that even among Putin's critics within Russia there
are those who do not support giving defensive weapons to
Ukraine because ultimately that would lead to the death of
Russians, and they cannot support that. I read that yesterday.
I think The Washington Post reported or had some commentary
from some of Putin's opponents.
So here is my question. If Putin says there are no Russian
troops in Ukraine, therefore, if we provided--if that is true,
he has nothing to worry about. Right?
Ms. Nuland. As I made clear in my opening, not only do we
believe that there are Russian forces in Ukraine, we believe
that they are responsible for command and control, arming,
financing, directing of this conflict. We also believe that
there are many hundreds of Russians dead in Ukraine and that it
does pose a vulnerability for the Kremlin politically at home
because they are denying they are even active there.
Senator Rubio. Sorry. Just one quick point. I read in your
statement--maybe you did not say this publicly because you had
to shorten your statement. Is it not accurate that as these
coffins are returning and these bodies are returning to Russia,
Russian families of the dead soldiers are being told not to
comment on it or they will be denied death benefits?
Ms. Nuland. Yes, and I did say that publicly here.
Senator Rubio. Thank you.
The Chairman. Thank you.
I know Senator Menendez had a closing question for this
panel.
Senator Menendez. Well, thank you, Mr. Chairman, and thank
you all for your testimony.
Madam Secretary, the Budapest Memorandum was basically a
way to entice the Ukrainians to give up their nuclear weapons.
Is that a fair statement?
Ms. Nuland. Ranking Member Menendez, at the time the
primary intent was to get Russia to assure Ukraine that it
would not seek to take advantage of Ukraine's sovereignty and
territorial integrity if it gave up its weapons. So Ukraine
sought that political guarantee primarily from Russia, and it
is that guarantee that Russia has violated. There was never an
intent to have treaty obligations----
Senator Menendez. No. I gather that from your answer to
Senator Murphy. You said it was a political agreement. Right?
Yes?
Ms. Nuland. Yes.
Senator Menendez. All right. So we also, however, signed
that political agreement, and so while you say the concern for
Ukraine was Russia not seeking to attack it or to interfere
with its territorial integrity if it did what? If it gave up
its nuclear weapons. Right? That is the essence of what was
induced from the Ukrainians. Is that not fair to say? Whether
it was that they wanted a guarantee from Russia and we just
joined with Great Britain and others to sort of like give them
further comfort in this political agreement, it was to give up
their nuclear arms because otherwise there is no reason for
such an agreement.
Ms. Nuland. Senator, they also sought assurance from the
other two nuclear powers, the United States and Great Britain,
that we would not seek to exploit Ukrainian sovereignty and
territorial integrity. And we obviously have not done that. So
that was the structure of the agreement.
Senator Menendez. But the whole purpose of it was to
guarantee territorial integrity and not to face the threat from
any of these powers if it did what? Give up its nuclear
weapons. Is that correct?
Ms. Nuland. Of course.
Senator Menendez. I do not know why we are dancing around.
Ms. Nuland. No. Of course.
Senator Menendez. It is about giving up their nuclear
weapons.
Ms. Nuland. Of course, and they did that.
Senator Menendez. So how is this political agreement
different than the one we are trying to strike with Iran? Is
basically the agreement we are trying to strike with Iran not a
political agreement because it is not a treaty obligation the
administration has said?
Ms. Nuland. I am not, as you know, qualified to get into
the intricacies of the deal that we are trying to strike with
Iran. I think I will leave that to the folks in the
administration who work on Iran.
Senator Menendez. I am not asking you about the intricacies
of the agreement. That is for another time with another panel.
The question is it seems to me that what we have heard from
the administration, as it relates to Iran, is to say that it is
not going to be a treaty, therefore the Congress has no need to
have a say. It is going to be basically a political agreement.
And if that is the case, then we need to know the nature of
what that means. As I see it unfolding here in the Budapest
Memorandum, which was a political agreement ultimately to
entice the Ukrainians to give up their nuclear weapons, which
they did with an understanding that all of these powers were
not going to affect its territorial integrity, which in the
case of Russia has been violated. So I do not see the
difference, and I do think it is very much on point.
So it raises concerns for me as to where we are going in
that regard. But you tell me you are not capable of answering
that question.
Ms. Nuland. Well, let me just say that with regard to the
Budapest political commitment, the United States of America
lived up to its commitments under Budapest. So if the concern
is whether the United States honors political commitments as it
honors treaties, I think one can be reassured by our behavior
vis-a-vis Budapest. I cannot speak to other nations.
Senator Menendez. We have certainly, nor did we ever have
any intention of interfering with Ukraine's territorial
integrity. The reason that we joined is to give comfort,
support, and I think the Ukrainians would think that in fact
that political agreement with these three powers--because I
doubt that the Ukrainians ever thought that we were going to
somehow invade their territory--was in fact that we would be
supportive of their security and their territorial integrity.
But at this point, while we certainly have not done anything to
interfere with its integrity, I think the Ukrainians would feel
far short of what that agreement meant in terms of its actual
implementation. And so at the end of the day, it is a political
agreement that can be interpreted as those who signed it wish
to interpret it. And that is, I think, a challenging
proposition.
The Chairman. I very much appreciate the line of
questioning the ranking member just put forth.
I have to say this has been a very good hearing. We thank
all of you for your testimony.
It has been very unsatisfying to me. I would ask the
Secretary who does meet with people constantly around the
world. Surely on the heels of us never doing the things we said
we would do with the Free Syrian Army rebels and now the world
being very aware of this Budapest Memorandum and knowing that
this is another decision memo that sits on the President's desk
undecided.
This has to have affected our credibility with others
around the world. I would love to have your sense of that and
how damaging our lack of ability make simple decisions--they
certainly have complex outcomes, but the decisions themselves
are relatively simple, certainly highly supported by Congress.
So we are all in this together should a decision be made.
But I would just like to get your sense of how badly, on
the heels again of what we never did in Syria, on the heels of
a redline that was never adhered to, and this particular issue
which is so important to world stability--I would love to get
your sense of how this is affecting us with others.
Ms. Nuland. Well, Chairman, I would say with regard to my
patch, Europeans do see these strong bipartisan, bicameral
support for Ukraine, whether it is on the economic side or on
the security side--and frankly per capita, we have done--well,
I do not want to say ``per capita,'' but we have done far more
than most nations in the transatlantic space to support
Ukraine. And I do think that our leadership in this is
recognized. As spirited a debate as is ongoing inside the
administration on some of these security support questions,
there is also a transatlantic debate. So that question gets
asked also in our diplomacy. But the Europeans come at it from
both sides depending upon where they sit.
The Chairman. Well, we are going to have the record open
for questions and move into a second panel.
I would just say that I have very much enjoyed our
conversations. You have been very forward with your statements
regarding Ukraine and the things that need to be done, and that
has been appreciated very much by most of us.
I would have, at this point, significant difficulty coming
to work each day with these decisions lingering in the way that
they have and us, again, not taking the steps that many people
within the administration, as I understand it, feel need to be
taken. And yet, we continue for some reason not to do those
things that we have acted as if we might do.
So I have a number of other questions that I will send in
writing, and I thank each of you for being here. I realize that
in all cases you all are messengers and not the ones that have
these decision memos sitting on your desk unheralded. But we
thank you for your service to our country and appreciate your
candid testimony.
With that, we will move to the second panel.
Our first witness is former Assistant Secretary of State
for European Affairs and former U.S. Ambassador to Germany,
John Kornblum. Our second and final witness on this panel is
former U.S. Ambassador to Ukraine and Director of the Eurasia
Center at The Atlantic Council, John Herbst.
And as you all are getting seated and comfortable, we will
begin with Ambassador Kornblum.
Ambassador Kornblum, I do want to thank you for being here
in particular. I know you are a resident of Nashville, TN, and
we are always glad to have really bright people from Nashville,
TN, here testifying. With that, if you would begin, we would
appreciate it.
STATEMENT OF HON. JOHN C. KORNBLUM, FORMER ASSISTANT SECRETARY
OF STATE FOR EUROPEAN AFFAIRS, AND FORMER UNITED STATES
AMBASSADOR TO GERMANY, BERLIN, GERMANY
Ambassador Kornblum. Thank you very much. You might even be
more pleased to learn I have very direct contact with another
city you know, Chattanooga, TN. And Mr. Mayor Berke is going to
be at a meeting that I am organizing in Berlin in 3 weeks to
talk about the tremendous success that Chattanooga has had in
revitalizing the city and supporting entrepreneurship there.
And I think you had a little bit to do with that. I have heard
that anyway from history.
And so I am very pleased to be here both because of my ties
to Tennessee and also because these are issues that I worked
upon a lot in the 1990s. I was the Assistant Secretary during
this whole period involved in all these memorandum and these
agreements and participated in the negotiation of most of them,
not the Budapest paper but most of the others. And so to you
and also to Ranking Member Menendez, I am very pleased to be
here.
I have a very special point to make. You have heard in
extremely good detail if not always satisfying detail about how
our Government sees things. But I think there is one thing that
we need to think about which Senator Rubio in particular talked
about, and that is the direction of this conflict and the
definition of this conflict.
My own view is--and I have been living in Germany for a
long time now after I stopped being Ambassador. And I think
that I can say with a certain amount of accuracy that whatever
we are doing in Ukraine and with Russia, we are losing the
public affairs battle on this crisis, the narrative as we say
in the journalistic world.
The narrative that is most prevalent, in the United States
to a considerable extent but more so even in Europe, is that
this is a Russia which is reacting angrily because it was
cheated, ill-used, misused by the West after 1990. And I think
it is important that we focus on this fact because many of the
decisions--and let me say a couple points about that--which are
going to be taken in the future will depend considerably on
whether the Russians believe that they have the upper hand on
this aspect of the crisis and whether we, in fact, can maintain
a strong situation and a strong direction.
The fact is that after 1990, we dealt with the Russian
leadership which saw the collapse of the Soviet Union as a
liberation and not as a Western attack on Russia. And they knew
exactly what our plans were. We talked to them in great detail
about it. We did not talk to them about the details of NATO
enlargement or EU enlargement, but we certainly told them that
our goal for them and for Europe was to establish democracy,
establish free market systems, and to allow Russia to join the
Western world. And on many of the discussions I had, Ambassador
Herbst was along, and I think he can attest to this. We worked
very hard to make this point not only clear but to establish
things to make it real.
And now, 20-25 years later, for me the narrative of this
crisis is not whether Russia somehow is now a wounded power,
but the fact that the United States, three administrations in
connection also working with the Congress, have established
between the Baltic States and now, hopefully, Ukraine also, and
the south, a community of nearly a billion persons, which is
democratic, which is secure, which is oriented toward free
markets, and which wants to be part of the Western and the
Atlantic world.
Now, I say this so precisely because we have to remember
what the situation was 25 years ago. Twenty-five years ago, we
had the western part of the continent democratized. The eastern
part was, to put it mildly, a mess. When we first came in to
establish relations with the new governments in Poland and
Czechoslovakia, Hungary, we found that they had hardly any of
the basic conditions for modern industrial Western society. And
so the cooperation within NATO, with the strong leadership of
these countries, has in fact succeeded.
And many of the reasons that we have this conflict with
Russia right now is not because Ukraine violated orders or not
because Russia has somehow felt threatened by the West. It is
because the leadership in Russia, after the beginning of this
century, has covered its own misdeeds, its own poor performance
with an increase in the authoritarian system, and they are
finding that the countries on their periphery, but also until
recently, much of their population wanted to join the West and
not to maintain an eastern orientation.
This is the basic point, and it leads to strategy, however.
It suggests, for example, that entering into negotiations with
the Russians over how to conclude this crisis are not very
relevant at the moment. There is not any new security system
which we can offer the Russians which would not include giving
them a sphere of influence in these very countries we are
trying to protect. There is not any military arrangement which
we can enter with the Russians which would not somehow limit
our ability to defend these countries to the east who we have
helped become democratic. There is not any new political forum
which we can think up which would change the fact that the real
reason that Putin and his cohorts in Russia in general feel
threatened at the moment. It is not because of anything we have
done and not because of NATO sanctions even, although I favor
them, but because of things such as--it has all been discussed
here today--the oil price, Russia's lack of investment in the
high-tech sector, Russia's inability to build the
infrastructure necessary for a modern industrial economy, et
cetera, et cetera.
It also, I think, has to do with the fact that Russia--Mr.
Herbst is more of an expert on this than I am--has, in fact,
also failed to have the political leadership since 2000 which
helped its population come out of the shock of the end of the
cold war and to understand how closely its interests are
involved with being part of the West.
So we have a situation now which is important for all the
reasons that our Government officials mentioned to you today.
They gave, I thought, a very comprehensive view of what is
going on. But we are, in effect, facing an even larger
challenge, a challenge which is not only a challenge to Europe
but a challenge actually across the entire world, and that is
that Russia, whether consciously or by accident, is taking
account of a growing unease around the world at the
dislocations caused by what is called ``globalization,'' what
is the modern information technology world, what is happening
with the dislocation of industries, et cetera, et cetera, and
that the Russians have been able to harness this
dissatisfaction in their own country.
But I can tell you with, shall I say, a lot of experience--
I have been living in Berlin now for 17 years and I am still
very politically active there--that these arguments are also
having an effect in Western Europe, and they are also having an
effect, as you know, in other parts of the world.
Add to that--one of the Senators mentioned it--Russia is
financing, with very large efforts, movements in Western Europe
who are antidemocratic, who are trying to undermine the Western
system. And Russia is also continuing to threaten in one way or
the other the weakest points of our system such as the Baltic
States, such as the Republic of Georgia, where I worked quite
diligently in recent years. And so we are facing not just the
question--and it is a very important question.
I might add that I will mention to Senator Murphy that my
wife grew up in the Ukrainian community in Hartford, CT. And so
she is very oriented toward Ukraine, has been an election
observer there twice already. So we are very committed to
Ukraine.
But the real challenge of this crisis is that Russia, after
immense efforts on the part of the West--and I must say really
immense efforts--has broken out of the channel of unity and
cooperation among the countries of Europe and is now adapting
an anti-Western--but ultimately that means anti-globalization
and anti-American approach.
And to understand the importance of this, there was an
extremely good article in The Washington Post this week talking
about the rhetoric that is being used inside China about the
West. And it turns out to be almost word for word the same
rhetoric that Russia is using. The same rhetoric is heard in
the Middle East. And even in India, which we consider to be a
very important partner, Putin has been visiting, and the Indian
leadership more or less agreed with many of the things he was
saying.
So we are talking here not just about a problem with
Russia, which is an important one. We are talking, in fact--and
that is why I mentioned Senator Rubio--about a wearing away at
the foundations of the Western community in Europe but, even
more so, a wearing away of the ability that the West is going
to have to influence, control if you will, the content of the
new globalized world which is coming up. And so that is the
main consequence that I see in this conflict.
And my final point would be I am very appreciative of your
personal efforts to increase our information budgets, to have
Radio Liberty and Radio Free Europe be more active. And I think
that winning back the narrative and using tools such as the
ones that you are financing is almost as important as
considering military support for Ukraine, which I support very
strongly.
Thank you.
[The prepared statement of Ambassador Kornblum follows:]
Prepared Statement of John C. Kornblum
Senator Corker, members of the committee, I am honored to have been
invited to join your hearing on the crisis in Ukraine. I was a frequent
guest of this committee and its members during the 1990s in my role as
Assistant Secretary of State and Special Envoy to the Balkans. I look
forward to our discussion of ways in which Russian strategy can be
countered.
In those years, we cooperated to establish conditions for a
peaceful, democratic transition for nations of the former Warsaw Pact.
Congressional support for economic and humanitarian aid to Russia, the
economic support funds extended to Eastern Europe and the tireless
efforts of Senators Nunn, Lugar, and many others to reduce the threat
of nuclear weapons in the former Soviet Union, including in Ukraine,
were essential to our success.
In the London Summit Declaration of July 6, 1990, NATO promised to
``reach out to the countries of the East which were our adversaries in
the cold war and extend to them the hand of friendship.'' The London
document also presented ideas for an important strengthening of the
OSCE, which were agreed at the Helsinki summit 2 years later.
First assessments of conditions in the former Warsaw Pact in 1990
were pessimistic to say the least. These countries had been stripped of
their talent and identity and left with few of the structures of modern
political or economic life.
But Western assistance and the dedication of their own peoples
worked a near miracle. One by one the nations of Central Europe
departed intensive care. Today, we can be proud of the secure and
prosperous democratic community of nearly 1 billion inhabitants which
stretches from the east of Europe to the tip of Alaska.
Membership of both NATO and the European Union gave these countries
the stability and the technical assistance necessary to succeed. It was
in no way aimed at isolating Russia.
Many of the Russian leaders with whom we dealt in those years
welcomed these efforts. They viewed the collapse of the Soviet Union as
liberation rather than defeat. They embraced hopes for Western
democracy as the best path to both security and freedom for their
country.
I repeat this history, because it so contradicts the version of
post-cold-war events we now often hear. Today it is our economic and
political success which threatens Russia's authoritarians rulers, not
our soldiers. Those who find logic in Russian criticism of Western
behavior 20 years ago have perhaps not asked residents of Estonia or
Slovakia how they feel about NATO expansion.
This is why the Russian counterattack, military and digital, has
been so vicious. Current Russia leaders appear to view the growing
encroachment of the Western way of life as an existential challenge.
I am one who favors military assistance to help Ukraine regain its
footing. But I believe that a substantially expanded public
presentation of the facts could be equally as important.
Why? Because at the moment, Putin's ability to control public
perceptions is severely hindering efforts to stop the fighting and
restore order in Ukraine. And, for the moment at least, the West is
losing the rhetorical battle.
Russia has invested immense resources into applying the tools of
globalization to a massive program of disinformation. It has combined
nationalism within Russia, with the legend of a proud nation humbled by
the evil West and added an extra dose of old fashioned anti-Americanism
to shoot an unbroken stream of invective around the world.
Putin is also using the same methods to influence the self-styled
Western ``realists'' who seem not to understand that Russia's anger has
little to do with NATO or European security structures. Bowing to
Putin's imperial pretensions will do nothing to redress the falling oil
price, Russia's failure to invest in new technology or the flow of
talented scientists and technicians to the West.
In other words, the Russian attack on Ukraine has already expanded
into what is probably the world's first digitally managed diplomatic
confrontation. Normal people, rich and poor are increasingly worried
that they are losing control of their destinies to something called
globalization. Putin has been able to harness these fears in a
desperate effort to return the narrative to issues of the past.
He wants us to believe that the crisis is really about the way in
which the West suppresses countries like Russia which don't follow the
American lead. However far-fetched it may seem, this image of Western
betrayal is attractive to many non-European and even some European
countries who also feel put upon by the West. The echo has helped Putin
justify his unbroken flow of troops and materiel into Ukraine. At the
same time, Russian aggression has provided Ukraine one thing which was
so far lacking--national purpose.
Unless the United States and its allies wrest the rhetorical high
ground from Russia, Mr. Putin is likely to become more arrogant and
thus more dangerous. His sense of media control could ultimately make
him overconfident and prone to disastrous mistakes. Senator Corker I
congratulate you for your efforts to strengthen our information
activities in the region.
Championing the need to ensure a democratic operating system for
digital society is today the equivalent of our support for political
democracy during the cold war. The radical integration of the world
through high speed information networks and modern logistics is
redrawing the global geostrategic map before our very eyes.
Everyone, including Russia, will profit if we ensure that the
principles of Western democracy are firmly established as the basis for
global integration. If, however, we allow the debate to lend credence
to those who reject the openness of Western values, it won't stop at
Russia or Ukraine, or even in Europe. China is already mounting a
counterattack. We could see the digital world rapidly deconstructing
into competing cultural fiefdoms.
Above all this crisis demonstrates that in a networked world, there
are no longer any unimportant far away countries. Every place on earth
can become central to our concerns if the factors line up correctly.
One of the main jobs of a new generation of digital diplomats will be
to learn how to judge the factors which influence such network behavior
better than we have done so far.
The Chairman. Thank you.
Ambassador.
STATEMENT OF HON. JOHN HERBST, FORMER UNITED STATES AMBASSADOR
TO UKRAINE; DIRECTOR, DINU PATRICIU EURASIA CENTER, THE
ATLANTIC COUNCIL, WASHINGTON, DC
Ambassador Herbst. Chairman Corker, Ranking Member
Menendez, thank you very much for this chance to testify. It is
an honor to be here.
I have been asked to talk about Kremlin aggression in
Ukraine and how to counter it. But in order to take this
subject on properly, we need a wider lens. The reason for this
is simple. There are influential people in the United States
and especially in Europe who do not understand the gravity of
this crisis. They do not understand it because they think the
crisis is simply about Ukraine and Moscow's aggression there.
With that narrow understanding, they oppose the strong measures
necessary to counter Kremlin aggression and to secure vital--
and I mean vital--American interests, not simply important
interests.
The crisis that we face is, as I think almost every Senator
today said, a crisis of Kremlin revisionism. Mr. Putin does
want to overturn the post-cold-war order established in Europe
and Eurasia. This order has been the foundation of the
unprecedented peace and prosperity that not just Europe but the
entire world has enjoyed over the past 25 years. Mr. Putin has
stated that he must have a sphere of influence in the post-
Soviet space, not just the post-Russian world; his concerns
extend into the Warsaw Pact countries and he has the right to
protect ethnic Russians and Russian speakers wherever they
reside.
Mr. Putin has major resources to pursue aggression. He
possesses the world's sixth-largest economy, one of the world's
two largest nuclear arsenals, and far and away the strongest
military in Europe.
And we all know Mr. Putin has committed multiple acts of
aggression in Georgia in 2008, in Crimea early last year, and
since April of last year, he has been conducting an
increasingly overt, covert war in Ukraine's east.
In this covert war in Ukraine's east, he has escalated his
intervention multiple times. He has agreed to two cease-fires,
Minsk I and Minsk II, and violated each one of them. His goal
in Ukraine is what the Admiral said earlier today, to
destabilize the country. But to achieve that--and this is not
clearly understood--he cannot settle for a frozen conflict. He
needs to be regularly on the offensive, albeit with tactical
pauses.
He has made clear by his statements and his actions that if
he succeeds in Ukraine, there will be future targets. The
targets may include NATO allies, specifically Estonia and
Latvia, where ethnic Russians and Russia speakers comprise 25
percent of the population.
Recent Kremlin provocations include the kidnapping of an
Estonia intelligence official from Estonia. And that happened
on the day that the NATO summit ended last September. They have
also included the seizure of a Lithuanian ship from
international waters of the Baltic Sea. He is telling the
Baltic States and all the states in his neighborhood that they
are not secure even as members of NATO.
We have a vital interest--again I use that word ``vital''--
in stopping Moscow's revanchist policies before they move to
other countries, especially to the Baltic States.
I think it was Senator Isakson who said that the Kremlin
menace is the most important national security danger we face
today. I endorse that wholeheartedly. ISIL is a ragtag bunch of
terrorists, a serious danger to individual Americans, not an
existential threat to the United States. A revanchist Moscow is
an existential threat to the United States. Even Iran with its
nuclear program is not the same order of threat as Mr. Putin's
Russia, one of the world's two largest nuclear powers and on
the prowl. If Western leaders clearly understood this danger,
they would devote substantially more resources to deal with it
and they would draw a bright redline in Ukraine, stop Putin in
Ukraine before he moves elsewhere.
To date, Western policy has been slow, reactive, and all
too concerned about giving Mr. Putin a graceful way out of the
crisis--and not sufficiently focused on imposing costs that
would make it too expensive for him to continue his aggression.
We had a very distinguished panel in the first 2 hours of this
session, but they were all too reflective of a slow, reactive
approach.
To persuade Mr. Putin to put aside his revisionist dreams,
we need to do things that play on his weaknesses. Strong
sanctions are part of this. We have to deal with Mr. Putin's
economy. We must persuade Mr. Putin by announcing the strong
additional sanctions for aggression to come. I think it was
Senator Rubio who asked why we cannot tell Mr. Putin now what
sanctions we will impose if he moves beyond the current cease-
fire line. He asked a very good question. We need to have
sanctions in place now if he moves again. Such proactive
measures may deter aggression; but if he moves, they will
impose costs for the aggression by weakening his economy,
weakening his political support at home, and depriving him of
resources for his next aggression. I give the Obama
administration pretty good marks for dealing with sanctions
because they are trying to pull along a somewhat reluctant
Europe.
The other area we need to work on is on the security side.
Mr. Putin has a serious vulnerability. The Russian people do
not want Russian troops fighting in Ukraine. That is why he is
lying to them. That is why the Russian dead that come back are
buried in secret. That is why the families of the Russian dead
are told that if they tell the neighbors that their sons fought
and died in Ukraine, they will not get death benefits from the
government.
If we provide defensive lethal equipment to Ukraine, that
means that either Mr. Putin will be deterred from going further
into Ukraine because he does not want to risk the casualties,
and the political fallout of the casualties; or if he goes
further into Ukraine, he suffers those casualties, and his
support at home will weaken. This is a compelling reason to
give weapons to Ukraine.
Some people who argue against supplying weapons say that if
we do that, Mr. Putin will simply escalate. Perhaps. But if he
escalates, again he suffers more casualties, he weakens his
support, and he has fewer resources with which to pursue
aggression beyond Ukraine.
I was one of a group of eight former officials who produced
a report on this. We suggest giving Ukraine $1 billion a year
for each of the next 3 years, $3 billion of weapons total. The
report provides the details. I want to mention to this
committee just two elements of that.
One, we should be providing antiarmor equipment because the
Russians have used mass tanks in order to commit their
aggression in Ukraine. We should also be providing
counterbattery radar for missiles because Ukrainians have
suffered 70 percent of their casualties from Russian missiles.
We are giving them counterbattery radar for mortars. They need
it for missiles.
We also need to keep in place the sanctions for the seizure
of Crimea. And I should add the Atlantic Council just released
a report on substantial systematic Russian human rights
violations in Crimea.
I would like to briefly mention two other essential
elements of our policy. We need to do more in NATO to bolster
the deterrence to Russian aggression against the Baltic States.
The administration and NATO have taken some good steps forward.
The Wales summit talked about creating this rapid reaction
force and deploying a company of soldiers to the Baltic States.
That is a nice first step but it is very small. We should put a
battalion into Estonia and the other Baltic States, properly
armed as a serious trip wire against further Russian
aggression. We need to make sure that NATO has a contingency
plan dealing for a possible Russia hybrid war in the Baltic
States. Especially vulnerable is Narva in Estonia, which is a
Russian-speaking enclave.
Finally, we need to do the right thing in the information
war against Russia. John already mentioned that. I know that
this committee supports additional funding for Radio Free
Europe and Radio Liberty. This is important to offsetting the
massive Russian propaganda campaign.
These four steps, enhanced sanctions, military supplies to
Ukraine, a much stronger military posture in NATO's east, and a
ramped-up information effort, will give us a good, good start
in stopping Mr. Putin in Ukraine, making sure he does not go
beyond Ukraine. Again, this is a vital American interest.
[The prepared statement of Ambassador Herbst follows:]
Prepared Statement of John E. Herbst
Chairman Corker, Ranking Member Menendez, members of the committee,
thank you for the invitation to speak this morning. It is an honor.
I have been asked to speak about the Kremlin's aggression in
Ukraine and how the United States should counter this. In order to take
on this subject properly, we need a wider focus. I will try to provide
that wider focus here.
Over 1 year has passed since Moscow began its invasion of Ukraine,
introducing to the world a new term: ``little green men.'' Using these
troops over 11 months ago, the Kremlin began its hybrid war in
Ukraine's east. The political class in Washington, policymakers, and
influence wielders are slowly coming to understand what is going on. In
the most powerful capitals in Europe, the process is even slower. Only
in the eastern reaches of Europe--Poland, the Baltic States, Romania,
Moldova, Georgia--is the crisis in Ukraine properly understood. That is
no surprise. Proper understanding of the crisis and an adequate
response is essential for the very survival of these states.
Ukraine, the states of the former Soviet Union, NATO, and the EU
face the problem of Kremlin revisionism. President Putin has stated on
numerous occasions his dissatisfaction with the peace in Europe and
Eurasia established at the end of the cold war. He has at his disposal
substantial means for acting on his dissatisfaction and most important
of all, he has used those means. It is time policymakers in major
capitals understood this.
the post-cold-war order
What is the post-cold-war order that Mr. Putin finds so
objectionable? It is the peace that emerged just before and after the
dissolution of the Soviet Union with the following traits:
The countries that were subservient to Moscow in the Warsaw
Pact pursued independent internal and foreign policies;
Due to an agreement accepted by the leaders of Russia,
Ukraine, Belarus, and Kazakhstan, the Soviet Union dissolved
and its constituent republics became independent states. (It is
important to note that this decision was taken exclusively by
Russian and other leaders in the Soviet Union. The West played
no part in this and then President George H.W. Bush even
advised against it.);
It was understood that disputes in Europe would be resolved
only by negotiations and other peaceful means;
The tensions and geopolitical competition that characterized
20th century Europe and made it history's bloodiest were a
thing of the past;
To reduce political tensions and to promote prosperity,
European integration would continue, including the countries of
the former Soviet bloc; and
Russia and the West were now partners, and ever closer
relations were in prospect.
the putin doctrine
Mr. Putin, senior Russian officials, and commentators have made
their views of the post-cold-war order clear. In numerous statements
Mr. Putin and other senior Russia officials have:
Called for a Russian sphere of influence in the former
Soviet space;
Described Georgia, Ukraine, and now Kazakhstan as failed or
artificial states;
Asserted Moscow's right and even duty to protect not just
ethnic Russians, but Russian speakers wherever they happen to
reside. (Russian speakers make up 25 percent of the population
of Kazakhstan; as well as our NATO allies Estonia and Latvia.
There are also significant Russian populations in countries
that used to be part of the Soviet Union.); and
Called for new rules for the post-cold-war order, or ``there
will be no rules.''
the kremlin tool box for undermining the peace of europe and eurasia
To understand the challenges posed by a country, it is necessary to
understand not only its intention, but also its potential. To his
credit, Mr. Putin has overseen the rebirth of a strong Russia. He has
accomplished this by establishing some stability in the political
system; instituting sound fiscal policies; permitting, within certain
limits, entrepreneurs to make business decisions; and inviting Western
investors. He was also a major beneficiary of the rise of gas and oil
prices.
Mr. Putin presides over the world's sixth-largest economy. He
controls one of the world's two-largest nuclear arsenals, the strongest
conventional military in Europe, and the worlds' second-largest arms
industry. In short, Mr. Putin's revisionist intentions are supported by
a substantial economy--albeit one under pressure due to falling
hydrocarbon prices--and one of the world's three most powerful
militaries.
Were Moscow's attack on the post-cold-war order purely rhetorical,
it would be problematic, but manageable. Unfortunately, this assault
has been comprehensive. It involves Russia's information apparatus,
intelligence services, criminal networks, business community, and
military.
The heavily subsidized Russian media has been conducting a virulent
anti-Western and particularly anti-American campaign for years. Mr.
Putin's media have fanned xenophobia and intolerance throughout Russia.
This campaign has been part of Mr. Putin's effort to (1) reduce the
chance that the Russian people are attracted to democratic ideas, and
(2) mobilize the Russian people to support his aggression in
neighboring countries.
Russian intelligence services and connected criminal networks play
an important part in Mr. Putin's efforts to undermine the post-cold-war
order. First, we should note that the very organization of Moscow's
intelligence agencies provides a clue to its intentions. The Soviet
Union's intelligence service (the KGB) was split in half. The FSB was
given responsibility for domestic security. The SVR was given
responsibility for foreign intelligence. The fact that the independent
states of the former Soviet Union were the responsibility of the FSB
tells us what Moscow thinks of their independence.
A main purpose of the FSB--and the GRU, Russian military
intelligence--is to penetrate the security organs of the neighboring
states to ensure that they will promote Russian interests as defined by
the Kremlin. That includes, as we have seen in Ukraine, making sure
that the military, police, and intelligence will not mobilize against
Russian-led insurrection or invasion.
Corruption, a major feature of Mr. Putin's Russia, is an important
tool for the Kremlin in promoting its influence in the Near Abroad. The
Kremlin understands that corrupt foreign officials are more pliant.
Cooperation between Russian intelligence services and criminal
organizations figures here. For instance, the siphoning off of vast
resources from the gas sector into private hands has created a huge
scandal in Russia and Ukraine. Shadowy companies--Eural Trans Gas,
RosUkrEnergo--were set up as operators in a scheme put together by
Semion Mogilevich, a major Russian crime boss.
As he consolidated power in Moscow, Mr. Putin established that
Russian companies were subject to Kremlin control to promote objectives
abroad. Gas and oil production is the heart of Russia's economy. Mr.
Putin has used these assets to promote his foreign policy in a number
of ways. He has built gas pipelines to Western Europe around Ukraine
and even ally Belarus so that he can use gas as a weapon against these
countries, while maintaining access to his wealthy customers in the
West. He has hired shameless senior European officials to work as front
men in his companies.
Gazprom has established business practices regarding the carrying
of Central Asian gas in its pipelines and the delivery of gas to
European customers that violate EU energy policy and maximizes Russian
leverage in dealing with individual countries. For instance, Gazprom
practices have made it harder for European countries to supply gas to
Ukraine. This is done so that the Kremlin can punish Kyiv by cutting
off the supply of gas. Lucrative arrangements with specific companies
in select EU countries also build constituencies that will support
Kremlin foreign policies.
As a last resort, of course, Mr. Putin has modernized and rebuilt
the Russian military; and he has not hesitated to use it in pursuit of
his revisionist objectives in Georgia and Ukraine.
the kremlin record before the ukraine crisis
The crisis in Ukraine originated not in Ukraine, but in the minds
of Mr. Putin and the Russian security elite that find the post-cold-war
order unacceptable. While the broad extent of today's crisis is Mr.
Putin's responsibility, its roots go back to imperialist thinking in
Russian security circles since the dissolution of the Soviet Union.
In this respect, I commend to the committee Serhii Plokhy's
excellent work, ``The Last Empire: The Final Days of the Soviet
Union.'' Dr. Plokhy describes how even Mikhail Gorbachev and Boris
Yeltsin objected to Ukraine's 1991 referendum, in which 91 percent of
the Ukrainians , including 54 percent in Crimea, voted for independence
from the Soviet Union (and Russia). It is worth noting, too, that when
the results of the Ukrainian referendum became clear, these two
relatively liberal Russian politicians began to assert Moscow's right
to protect Russians in Ukraine--the same ``principle'' that Mr. Putin
has been using to justify his aggression.
From the very first days of the post-Soviet world, Moscow's
security services developed the ``frozen conflict'' tactic to limit the
sovereignty of its neighbors. It supported Armenian separatists in the
Azerbaijan region of Nagorno-Karabakh in order to exert pressure on
Azeris, South Ossetians, Ajarians, and the Abkhaz in Georgia to
pressure Tbilisi, and the Slavs in Transnistria to keep Chisinau in
check. For those who mistakenly blame current tensions with Moscow on
the West, it is worth noting that Moscow had its frozen conflicts
policy in place before discussions of NATO enlargement.
Russian activity in the Near Abroad in the 1990s was just a prelude
to Mr. Putin's policies. He unleashed a massive cyber attack on Estonia
in 2007 to express his unhappiness with a decision to take down a
memorial to the Red Army in Tallinn. This attack took full advantage of
the security service-criminal nexus in Russia described above. (Due to
corruption, Russia, a nation rich in mathematicians, has not produced a
world-class cyber company, but it does have the world's best hackers.).
While it was clear that the attack in Estonia originated in Moscow, the
West chose not to state this clearly or to make it an issue in its
relationship with Mr. Putin.
In 2008, Moscow provoked a conflict with Georgian President Mikheil
Saakashvili and used its army to defeat the Georgian military. In that
same year, Moscow recognized Georgia's breakaway regions as
independent. Moscow's aggression was condemned in the West, albeit to
varying degrees. It is both amusing and sad to note in retrospect that
then-French President Nicolas Sarkozy agreed to sell Moscow
the Mistral aircraft carrier as a reward for observing the cease-fire
that he had negotiated.
This episode revealed a weakness of Western diplomacy toward Russia
that Mr. Putin has been exploiting regularly in the current Ukrainian
crisis. Mr. Putin commits an act of aggression, threatens further
aggression, and then graciously accepts Western gifts in exchange for
not escalating the violence. While the American response to Mr. Putin's
aggression was not craven, President Obama launched his naive reset
with Mr. Putin only a year after the Georgian war.
mr. putin's ukraine adventure and the west's reaction
Mr. Putin's adventure in Ukraine began when he decided at some
point in 2013 that it would be unacceptable for Ukraine to sign a trade
agreement with the EU. This prospect had not disturbed him in the past.
When I served as Ambassador in Ukraine, it was clear that Moscow
strongly opposed NATO membership for Ukraine, but it had not taken a
position against EU membership for the country. And of course, the
prospective trade agreement was a good deal short of membership. It is
important to remember this when reading the arguments of those who
claim that this crisis is actually due to NATO enlargement.
Most Ukrainians, including then President Yanukovych, who was often
described as pro-Kremlin (a simplification), wanted the EU deal. Partly
due to Kremlin pressure--Moscow had been banning Ukrainian exports--Mr.
Yanukovych backed away from the trade deal in late November 2013. The
next day, there were tens of thousands of demonstrators on the streets
of Kyiv protesting this decision. When Mr. Yanukovych tried to clear
the streets with strong-arm policing, he roused hundreds of thousands
of demonstrators, tired of his corrupt and increasingly authoritarian
rule. Mr. Putin's offers of lower gas prices and a loan of $15 billion
did not satisfy the demonstrators. For 2 months Mr. Yanukovych
alternated between police methods and inadequate concessions to
persuade the protestors to go home. He failed. Sergei Glaziyev, Mr.
Putin's principal adviser on Ukraine, was publicly urging Mr.
Yanukovych to use force to deal with the protesters.
Finally in late February 2014, Mr. Yanukovych either permitted or
ordered the use of sniper fire to terrorize the protesters into leaving
the streets. A hundred people died as a result. But the demonstrators
did not leave the streets; they were enraged and Mr. Yanukovych's
political support collapsed. He fled the country a few days later for
Russia.
In response, the Kremlin launched its invasion of Crimea with
``little green men,'' who looked like and were equipped like Russian
soldiers, but without the insignias and flags of the Russian military.
The United States and Europe placed some mild economic sanctions on
Russia in response. They were also making every effort in private
diplomacy and public statements to offer Mr. Putin an ``off ramp'' for
the crisis. That the West had such a tender regard for Mr. Putin's
dignity was not unnoticed in the Kremlin and certainly made Mr. Putin's
decision to launch his hybrid war in the Donbass easier. The Sarkozy
model was holding and has yet to be broken.
Since Mr. Putin launched his decreasingly covert war in Ukraine's
East, he has escalated his intervention several times. It began last
April with Russian leadership, arms, and money. When Ukraine launched
its counteroffensive under newly elected President Poroshenko last
June, the Kremlin sent in increasingly sophisticated weapons (including
the missile system that shot down the Malaysian airliner in July), more
mercenaries (including the Vostok Battalion of Chechens), and finally
the Russian Army itself in August. Only the use of regular Russian
forces stopped the Ukrainian counteroffensive. Throughout this period,
the West was slow and weak in confronting the Kremlin. For instance,
the G-7 leaders had warned Mr. Putin in early June that if he did not
cease his intervention in Ukraine by the end of the month, Russia would
face sectoral sanctions. Yet by the end of June, despite the
introduction of major Russian weapons systems into Ukraine, there was
no more talk of sectoral sanctions. Only the downing of the Malaysian
passenger jet in July and the invasion by Russian troops persuaded the
Europeans to put those sanctions in place.
After the regular Russian forces defeated the Ukrainian Army in
early September, Germany and France helped negotiate the Minsk I cease-
fire. However, Russia repeatedly violated its agreement by introducing
more military equipment and supplies into Ukraine and taking an
additional 500 square kilometers of Ukrainian territory. This escalated
aggression did not lead to any additional sanctions last year.
Despite the Russian offensive that greeted the New Year, EU foreign
policy chief Mogherini was floating the idea of easing sanctions. As
the violence increased, Ms. Mogherini dropped the subject. But in
February, Germany and France helped negotiate a new cease-fire, Minsk
II, with terms far worse for Ukraine. Mr. Putin certainly enjoyed this
process. The Sarkozy pattern was unbroken. For violating Minsk I, Mr.
Putin received a much more favorable cease-fire, which he promptly
violated by seizing the strategic town of Debaltseve. And why not?
While Western leaders huff and puff at each new Kremlin aggression,
they hope out loud that this is the last one. And then, occasionally
they levy additional sanctions on Russia.
what the west should expect next from the kremlin
Nowhere has Mr. Putin stated clearly what he needs to stop his war
against Ukraine. Western leaders have fallen all over themselves
offering solutions publicly and privately to assuage the Russian
strongman, but to no avail. There is a simple reason for this. Mr.
Putin's objective in Ukraine is, at a maximum, to establish a compliant
regime in Kyiv. This is something that he cannot achieve, because a
large majority of Ukrainian citizens despise him for the bloody war
that he unleashed. His minimum objective is to destabilize the country,
so that it cannot effectively reform itself and orient its policy
toward Europe.
Mr. Putin has not stated these objectives formally, because they
are things he cannot admit in polite society. But destabilizing Ukraine
means that he cannot sit still in the territories that have already
been conquered by his proxies. He has to continually stir the pot by
military action and/or terrorism/subversion. A good example of terror
was the bombs set off in Kharkiv that killed demonstrators at last
month's rally honoring those killed by snipers on Kyiv's Maidan Square.
Leaders in Washington, London, Berlin, and Paris need to understand
what their counterparts in Warsaw, Riga, Tallinn, and Vilnius
understand: that Kremlin ambitions go beyond Ukraine. If the West does
not stop Mr. Putin now, they will find him revising the post-cold-war
order elsewhere. It is time to break the Sarkozy pattern.
Mr. Putin is not hiding his ambitions. While we do not know
precisely where he may move next, we know the candidates. The Kremlin
has proclaimed its right to a sphere of influence throughout the post-
Soviet space, as well as its right to protect ethnic Russians and
Russian-speakers wherever they reside. This just happens to include the
entire post-Soviet space, including some countries that were never part
of the Soviet Union, but were members of the Warsaw Pact. Kazakhstan's
Russian-speaking Slavic community is 25 percent of its population. The
same is true in Estonia and Latvia.
Last August, Mr. Putin called Kazakhstan an artificial country
created by the genius of President Nazarbayev. Mr. Putin noted that
Russians in Kazakhstan faced no ill treatment under President
Nazarbayev, but speculated that problems could arise once he passes the
scene. Kazakhstan's Slavs are located along the border with Russia, in
areas that contain a good percentage of the country's oil resources.
Just as the West's weak reaction to Moscow's Georgian invasion
emboldened Mr. Putin to strike in Ukraine, so too will a Western-
tolerated Kremlin victory in Ukraine endanger the former states of the
Soviet Union. Is that an acceptable outcome for Western statesmen?
The danger goes beyond the grey zone, to states that enjoy
membership in the EU and NATO. While never recognized by the United
States, Estonia, Latvia, and Lithuania were incorporated into the
Soviet Union; and two of those states have large Slavic communities. A
good number of serious thinkers and statesmen say that Mr. Putin's
reach will not extend to the Baltic States, because they are members of
NATO and have Article 5 protection under the NATO Charter. That is, of
course, a critical deterrent, but does Mr. Putin understand this?
Mr. Putin has wondered publicly, as have other senior Russian
officials, why NATO is still in existence. After all, they opine, it
was created to stop the Soviet Union, which dissolved 25 years ago. It
is no secret that the Kremlin would like to weaken the alliance. Mr.
Putin has been playing games in the Baltics to probe for weaknesses and
to challenge the applicability of Article 5. The list is not small. In
2007, he unleashed the devastating cyber attack on Estonia. Last
September, on the day that the NATO summit ended (2 days after the
visit of President Obama to Tallinn), the Kremlin seized an Estonian
counterintelligence officer from Estonia. A few weeks later, Russia
seized a Lithuanian ship from international waters in the Baltic Sea.
what the united states and the west must do
First, Western leaders need to understand the nature of Mr. Putin's
threat. In charge of one of the world's most formidable militaries and
a large economy, he is intent on upsetting the post-cold-war order. He
represents a threat to global order far larger than ISIL, and notably
larger than a radical-Mullah-run Iran seeking nuclear weapons. NATO
statesmen who labeled ISIL and not Russia an existential threat to the
alliance will be figures of fun for future historians.
Recognizing this means that we will cease to take seriously the
argument that we must let Mr. Putin violate the sovereignty of multiple
neighbors in order to get his help with Iran and ISIL. It would also
mean that we would spend more resources dealing with the Kremlin menace
than we devote to ISIL.
This last point is especially important in the intelligence area.
The intelligence resources that we devote to an aggressive nuclear
superpower is significantly less than what we use to monitor a rag tag
bunch of terrorists numbering no more than 20,000. It also matters when
looking at financial and military support for Ukraine, as we will
discuss below.
If we understand that Mr. Putin's ambitions extend to the entire
post-Soviet space, including perhaps our Baltic NATO allies, we
recognize that we have significant interest in stopping Mr. Putin's
aggression in Ukraine. We do not want Mr. Putin's grasping hand
extending to additional countries, and we have a vital interest in
stopping him if he moves against Estonia, Latvia, or Lithuania. It is
very much in our interest to make his life so uncomfortable in Ukraine
that the Kremlin thinks twice about additional aggression.
First, on Ukraine.
sanctions
In Ukraine, our short- and middle-term objectives should be to
prevent further Russian aggression, which will allow President
Poroshenko to reform and develop Ukraine in peace. That is not easy to
do, since Mr. Putin's plan is precisely the opposite, to keep the pot
boiling. Our policy should not be to refrain from taking any
``provocative'' action, in the hopes that this time the Kremlin will
actually observe the Minsk II cease-fire. This approach has failed
multiple times for over a year. It guarantees that the crisis will
escalate, because the only world leader who believes that there is a
military solution to the Ukraine crisis has an office in Red Square.
To increase the odds that Mr. Putin does not move beyond the
current cease-fire line, we must address his vulnerabilities. He has at
least two. First of all, his implicit deal with the Russian people is
that he delivers prosperity and they let him rule the country. The
Russian economy is under serious pressure today because of the sectoral
sanctions levied last summer by the United States and EU, in addition
to the sharp fall of hydrocarbon prices. The sanctions will bite harder
with time, especially if oil prices remain low.
The last serious sanctions were put in place lasts September. Since
then, Moscow has taken over 500 square kilometers of additional
Ukrainian territory and violated both the Minsk I and II cease-fires.
For that, both the United States and the EU should either level
additional sectoral sanctions or extend last year's sectoral sanctions.
In response to the latest Kremlin aggression, the EU renewed some
sanctions imposed last spring early. That was not enough. Besides
additional major sanctions for the substantial aggression over the past
6 months, it is time for the United States and Europe to take the
initiative. Specifically, they should reach agreement on new sanctions
that will be imposed if the Kremlin's proxies seize Mariupol or any
additional territory in Ukraine. This might serve as a deterrent for
the Kremlin.
Part of this deterrent could include a public discussion of
removing Russia from the SWIFT system of financial payments. Actually
barring Russia from SWIFT would have a devastating impact on Moscow's
economy; it would also be controversial globally. But an effort by the
United States to put it on the agenda would create substantial pressure
on Moscow and encourage the Europeans to be less cautious in applying
additional sectoral sanctions.
It is important to note here that the Obama administration has done
a good job in regards to sanctions. It understands that the key to
success is to make sure that both the United States and the EU sanction
Russia. I fully understand that there is reluctance in corners of the
EU to do so. The administration has worked hard, and largely with
success, to impose sanctions in tandem with Europe. But as described
above, the process has been too slow.
military assistance
Mr. Putin's second vulnerability concerns the use of his army in
Ukraine. While his media have spread a sea of vitriol among the people
of Russia, it has not been able to persuade them that Russian troops
should be used in Ukraine. Since last summer, numerous polls by
Moscow's Levada Center have shown that a large majority of the Russian
people oppose using troops in Ukraine. Since his people do not want
Russian troops in Ukraine, he is telling them that no troops are there.
He is lying to his people. Thousands of regular Russian troops were
used in August and September to stop Ukraine's counteroffensive. Our
intelligence now estimates that there are anywhere from 250 to 1,000
Russian officers in Ukraine. Ukrainian intelligence claims that there
are as many as 9,000 or 10,000 Russian troops in Ukraine. I am not
endorsing the higher figures. I do believe, however, that since we are
not devoting enough intelligence assets to the Russia menace, our
numbers are far from certain; and if they err, it is likely on the low
side.
In any case, Russian casualties are a vulnerability for Mr. Putin.
He is burying his dead in secret. More casualties make this harder to
do. What this amounts to, is that we should give Ukraine defensive,
lethal aid, so that is may defend itself.
I was one of a group of eight former U.S. officials who issued a
report urging the Obama administration to provide $1 billion in
defensive arms, including lethal equipment, to Ukraine for the next 3
years. For a major national security priority, $1 billion a year is not
a great deal of money. In the first 6 months of Operation Inherent
Resolve against ISIL, the United States spent $1.5 billion.
The purpose is to deter further aggression--and to stabilize the
situation in the rest of Ukraine. Opponents of this idea argue that
this would not deter the Mr. Putin, because the Kremlin has escalation
advantage, and Ukraine is more important to Russia than the United
States. It may be true that Ukraine is more important to Moscow than
Washington, but it is not more important to Moscow than to Kyiv. Kyiv
and the Ukrainian people will continue to fight the aggressors. Why do
we want to disadvantage the victim of aggression by denying them arms?
Some opponents of providing weapons argue that Kremlin military
strength means that it can defeat any weapons system we provide. And if
that happens, it would be geopolitical defeat for the United States.
This is simply false. We can pursue a policy of weapons supply without
taking responsibility for securing Moscow's defeat. We can provide
weapons while making clear that we have no intention of using American
troops. This was the successful rationale behind the Reagan Doctrine,
which challenged Soviet overreach in Third World conflicts around the
globe by providing weapons.
The last point is this. If we understand that Mr. Putin's aim of
revising the post-cold-war order may mean aggression in countries
beyond Ukraine, it is very much in our interest to make his experience
in Ukraine as painful as possible. That will make him more vulnerable
at home and will leave him with fewer resources for mischief elsewhere.
The Obama administration is reviewing its position on weapons for
Ukraine. Many senior figures in the administration support this. It is
time for the White House to make the decision to send weapons to
Ukraine. Chancellor Merkel made clear during her visit to Washington
last month, that while she opposes the supply of weapons to Ukraine,
she would work to ensure that such a decision by the United States did
not undermine transatlantic unity.
Such military equipment must include light antiarmor weapons--the
massing of Russian tanks was critical as Moscow's proxies seized
Debaltseve in violation of Minsk II--and counterbattery radar for long
range missiles. Seventy percent of Ukrainian casualties come from
missile and artillery fire. The report also recommends sending armored
Humvees, secure communications equipment, equipment to jam Russian
unmanned aerial vehicles, and medical supplies.
Within the U.S. Government, Congress has taken the lead on the
supply of weapons for Ukraine, when it passed the Ukraine Freedom
Support Act. That bill authorized the expenditure of USD 340M for
weapons. Congress may need to act once again. But this time it is
essential to pass legislation that both authorizes and appropriates USD
3B over 3 years. This is the most pressing national security danger at
the moment. Congress needs to appropriate resources.
There is also a critical economic element in the Ukraine crisis.
This involves both comprehensive reform in Ukraine and Western
assistance to help Ukraine pay its short-term international debt. I
have not dwelt on this here because this testimony focusses on the
broader Kremlin danger. But it is important to note that the West needs
strongly encourage the Poroshenko/Yatsenyuk team to implement reform
and provide the necessary financing on the debt problem.
In addition, while focusing on stabilizing the security situation
in Ukraine's East, the West must not recognize in any way Moscow's
annexation of Crimea. The United States and Europe can support the
people of Crimea by:
Maintaining the sanctions already passed in response to the
Kremlin's taking of Crimea;
Refusing to confer legitimacy on Moscow's control of Crimea,
just as the United States refused accept the to recognize the
Soviet Union's ``incorporation'' of the Baltic States after the
signing of the Molotov-Ribbentrop Pact;
Passing legislation forbidding its citizens and companies
from conducting business with Russian authorities and companies
in Crimea, except when the Government of Ukraine agrees;
Making sure that their courts are open to suits by the
government, companies, and citizens of Ukraine for the use of
Crimean assets and resources by the Russian Government and
others not authorized by the government of Ukraine.
countering revisionism beyond ukraine
The United States must act in two different geopolitical areas
beyond Ukraine to deal with Moscow's revanchist tendencies. Most
importantly, we must act decisively to strengthen NATO and deterrence
in the new members of the alliance, especially the Baltic States. Since
the Kremlin offensive in Ukraine's East began last spring, NATO has
taken a number of positive steps in this direction. Last April, the
Pentagon deployed infantry units of 150 troops to Poland, Estonia,
Latvia, and Lithuania. This is a ``persistent,'' but rotating
deployment. Washington is also planning on deploying 150 Abrams tanks
and Bradley fighting vehicles to Poland. Air patrols in the Baltic
States have tripled in the past year. And more NATO ships are entering
the Black Sea than in the past.
These are all good measures. So too was the decision at the Wales
summit to create a rapid response force that could deploy 5,000
soldiers within 48 hours; and the decision by NATO Defense Ministers
last month to place some headquarters' functions in Bulgaria, Romania,
Poland, and the Baltic States.
Still, two more steps are needed in the short term. First the
deployment thus far is too small. During the cold war, our ``trip
wire'' force in Germany was 200,000 troops. We should put forward in
the Baltics at least a fully equipped battalion. Of even more
importance, we need a quickly but carefully worked contingency plan for
the appearance of Kremlin provocateurs among the Slavic population of
Estonia or Latvia. This plan should include elements for small
provocations, such as the kidnapping of the Estonian intelligence
official. We should also work within the alliance to achieve agreement
to formally review the NATO-Russia Founding Act if Moscow's proxies
seize significant territory in Ukraine.
The second area that requires a new policy is that grey zone in
Eastern Europe, the Caucasus, and Central Asia where Moscow claims a
sphere of influence. Do Western policymakers believe that Moscow has a
right to order things in this area as it chooses--never mind the
preferences of the other states? If not, the United States, NATO, and
the EU need to consider measures that will strengthen these countries.
Some are relatively simple. Countries interested in a stronger United
States and/or NATO security connection would certainly welcome more
American or NATO military visits. For Georgia that might mean more port
visits by a more proactive NATO presence in the Black Sea. In Central
Asia, that might mean more CENTCOM visits for Uzbekistan. We might
enhance cooperation with all interested Central Asian states in
offsetting the potential destabilizing impact of our withdrawal from
Afghanistan. While this may seem counterintuitive, this last initiative
need not exclude the Kremlin. Indeed we can also help strengthen some
nations on Russia's periphery by projects that include the Kremlin.
This would also demonstrate that our policies are designed not just to
discourage Kremlin aggression, but also to seek cooperation on matters
of mutual interest.
Policy in the grey zone should also focus on state weaknesses that
Moscow exploits in order to exert its control. As discussed above, the
Kremlin uses its intelligence services to recruit agents in the power
ministries of the post-Soviet states; and its uses its firms to acquire
key sectors' of these countries' economies and to buy political
influence. With interested countries, the United States and NATO should
offer programs to help vet the security services and military in order
to establish that they are under the full control of the political
leaders in these states. At the same time, the United States and the EU
offer programs to uncover corruption in the financial and other
sectors' of these countries' economies.
a final policy recommendation
There is one more element of Mr. Putin's aggressive policy that
needs to be addressed: the weaponization of information. An admitted
admirer of Nazi propagandist Joseph Goebbels, Mr. Putin has gained
nearly complete control over the Russian media and turned it into an
instrument promoting extreme nationalism. Its disinformation has been
successful especially at home, but also in neighboring countries. The
budget for broadcasts by Radio Free Europe and Radio Liberty in Russian
and other languages of the former Soviet Empire was sharply curtailed
after the dissolution of the Soviet Union. At the time, that made
sense. It no longer does.
In response to the crisis in Ukraine, the Broadcasting Board of
Governors (BBG) in FY15 increased its budget for Russian-language
programming by 49 percent to USD 23.2M. It will be asking for an
additional USD 15.4M for FY 2016. I would certainly endorse this
request for additional funds, but would also suggest that Congress
reach out to the BBG to see if, in fact, more resources are not
required.
a kremlin problem, not a russia problem
The challenge that we face is rooted in Mr. Putin's style of
leadership, a style which privileges the security services, with their
neoimperial policy preferences, criminal connections, and disdain for
civil society and democracy. None of the policies recommended in this
paper are directed against the people of Russia. The assassination of
Boris Nemtsov last month is a reminder of a truth uttered by the great
Russian historian, Vasiliy Klyuchevskiy, in his lectures on Russian
history. He observed that the expansion of the Russian state abroad is
inversely proportional to the development of freedom for the Russian
people. In other words, expansion abroad means repression at home. That
is certainly the pattern that Mr. Putin has established. Opposing Mr.
Putin's aggressive policies is not only vital to our national security,
but a service for the Russian people as well.
The Chairman. Thank you both for outstanding testimony.
And I am going to defer questions at this moment to Senator
Menendez.
Senator Menendez. Well, thank you, Mr. Chairman. And thank
you both for your service to our country at different times.
It is always a pleasure to welcome another Tennessean here
to the hearing room. You have a great Tennessean here as the
chairman, and you should all be very proud of him.
Ambassador Herbst, let me just ask you. I think you laid
out a pretty compelling case and probably did it better than I
have been successful in trying to do in terms of the importance
of it. You spent time in Kyiv as our Ambassador. You had a lot
of opportunities to observe President Putin's behavior toward
its neighbors. If I were to ask you to--and you have largely, I
think, already referred to his intentions, but would you
expect, for example, if unchecked, Russian forces to move into
Mariupol?
Ambassador Herbst. Mr. Putin cannot accept a frozen
conflict. A frozen conflict is a bad outcome. But with a frozen
conflict, Ukraine could develop as a democratic, prosperous
state, and that is what Mr. Putin is against. So he has to move
beyond the area he currently controls.
Mariupol is the most likely target but not the only one. He
could move further into the northern parts of the Donbass. The
Russians have been conducting a terror campaign in Kharkiv.
Kharkiv is arguably the second largest city in the whole
country, but the Russians have been unable to establish a clear
presence there. But they will continue to probe there. They
will move wherever they can with the least casualties to
themselves and the least uproar in Europe. We need to provide
Ukraine the means to stop that from happening. Otherwise, Mr.
Putin will continue to go forward.
Senator Menendez. Let me ask you to answer two questions
that are also often poised in a contrary view to mine, that
providing defensive lethal weapons to Ukraine would create
serious problems with Europe or that providing such weapons
would just lead Russia to further escalate. What would you say
in response to those questions?
Ambassador Herbst. I will start with the second because the
answer is quicker. Mr. Putin has escalated half a dozen times
precisely because he has not had any pushback. If we push back,
I am not going to say Mr. Putin will not escalate. We do not
know what he will do. But the chances of him escalating go
down. That is the second question.
As for the first question, I watched very carefully
Chancellor Merkel's visit to Washington in February. She said
``that she opposes sending weapons to Ukraine.'' She also said
that if the United States were to do that, she would work hard
to make sure that there is no transatlantic disharmony. That is
an amber light, a light which we can go through because she
understands the United States may ultimately make the
intelligent decision to provide Ukraine the weapons needed to
defend itself. I do not have any doubt that we can manage the
alliance on this issue. What you need is strong leadership,
which unfortunately we have not seen, strong leadership from
Washington in Europe, in NATO. With that, this is manageable.
Senator Menendez. Thank you, Mr. Chairman.
The Chairman. Well, gentlemen, I apologize for not having
questions at this moment. I have got to get to a meeting at
12:45. This has been a very long, but a very informative
meeting. I want to thank you both for your testimony, and if
you would, we will have some written questions we would like
for you to respond to.
I do think the strategy that you have laid out, Ambassador,
is very clear, very helpful. I think, Ambassador Kornblum, the
insights into what is driving Russia were also very helpful. We
appreciate both of you for your service to our country, for
being here as an asset to us as we try to serve our country.
And with that, the record for this hearing will be open
until March the 12th. So if people have questions, they can
send those in and hopefully you will respond promptly to those.
We thank you again for being here.
The meeting is adjourned.
[Whereupon, at 12:38 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Prepared Statement of Olexander Motsyk, Ambassador of Ukraine
Distinguished Senators, ladies and gentlemen, let me start with
expression of gratitude for your continued support of Ukraine in this
difficult time of its young history. Last year was a period of
unprecedented challenges to global order and international law, which
Russian aggression against my country brought about. But it was also a
time of strong unity of the civilized world in the face of fundamental
threat to democracy and peace.
This threat has emerged as a response to aspirations of the
Ukrainian nation to return to its European roots. The Revolution of
Dignity on Kyiv's Maidan has evoked admiration around the globe as an
unbreakable ambition to break with the past and strive for prosperous
future. At the same time, it was perceived as an existential threat by
the Russian leadership which deems liberty and democracy as obstacles
on a path to realization of its goals.
A year of Russian aggression has undeniably revealed the true
intentions of Moscow's actions. Its persistence in spite of Western
sanctions and international isolation shows that Russia will use any
means necessary to forestall democratic development of Ukraine. The
primary goal is to prevent Ukraine's European integration, keep it in
Russia's orbit, or dismember it altogether.
The Kremlin uses any means to fulfill this task, including the
attempted illegal annexation of our sovereign territory of Crimea,
manufacturing conflict, based on false pretext, in eastern Ukraine and
directly participating in it by flooding the region with weapons,
military equipment, mercenaries, Russian armed forces and resorting to
vicious propaganda campaign.
The character of Russia's geopolitical calculation show that
despite the central role of Ukraine, it is only one of the key elements
in the implementation of its strategic objective--restoration of new
form of the Soviet Union by creating a circle of instability in the
region. In the 21st century, when progress is achieved through
cooperation and measured by well-being, Russia resorts to force,
coercion, intimidation, and violation of international law as the means
of imposing its will on the global arena. Chances are high that this
line of action will not be limited to Ukraine and will reach other
countries such as Moldova, Georgia, and Kazakhstan, and even NATO
allies, primarily the Baltic States.
In defense of their land, Ukrainians demonstrated an unswerving
will to protect their country. This fight, however, is not only about
us. By countering the forces of oppression and authoritarianism,
Ukraine serves as a powerful line of defense of freedom and democracy.
Our success in this struggle today is the guarantee that the full-scale
war will not come knocking on the doors of the West tomorrow.
We highly appreciate great support of the United States, both the
administration and U.S. Congress, provided so far. Without it, the
situation for our independence would be much more difficult. A number
of declarative and legislative actions by Congress have created a
formidable framework of cooperation between our countries in general,
and in countering the Russian aggression in particular. Combined with
strong stand and decisive action by the administration, they
established the leading role of the United States in this process and
reinforced the unity with Europe as a major factor in its success.
Despite the strong counteraction, Russia's calculus remains
unchanged and the efforts to restore the vision of Europe whole, free,
and at peace must be enhanced. In this context, we want to hope for
full implementation of Freedom Support Act, passed by the U.S. Congress
last year, which envisages a number of provisions, fulfillment of which
would significantly impact the situation.
Ukraine shares the view of its Western partners that the diplomatic
settlement is the only way forward in terms of resolving the conflict.
But we also believe that a decision in favor of providing Ukraine with
means to defend itself would considerably contribute to this process.
The concerns associated with such a step are legitimate, but there can
be no doubt that defensive weapons in possession of Ukraine would
substantially raise the cost of Russian aggression. They would incline
Moscow to negotiate or at least waive any remaining doubts about its
strategic intentions.
Ukraine will not use arms to escalate the conflict. Our goal is to
bring peace to our people. That is why last month at the Minsk summit,
Ukraine negotiated an agreement with Russia, with the participation of
Germany and France. Although extremely fragile, the deal can lay a
reliable foundation for a peaceful settlement of the conflict. Our
major concern in this regard is the inclination of the Russian side and
the separatists it supports to comply with their obligations.
The seizure of Debaltsevo, the increasing threat of attack on
Mariupol and the continued flooding of Ukraine's territory with Russian
weapons and military personnel raise doubts about Moscow's inclination
to implement the Minsk Agreement. If these activities continue, the
response of the West has to be robust with all options on the table.
These can include traditional means of raising the cost for aggression,
such as new round of economic sanction, but also new measures--
exclusion of Russia from international organizations and SWIFT banking
system, and deprivation of the right to host the 2018 FIFA World Cup.
Moscow has to be put before a simple choice: either it will comply
with international law or suffer difficult consequences. In order for
good relations to be restored, Russian forces, mercenraries, and arms
must leave Ukraine's territory and the Kremlin must stop its
interference in our internal affairs. Restoration of territorial
integrity of Ukraine must be seen as a logical step in the context of
Budapest Memorandum, of which Russia is the side.
This also concerns the Ukrainian region of Crimea, which has become
the victim of the initial stage of Russian aggression. Since the
unlawful annexation of peninsula it has turned into a territory of
brutal violations of human rights and abuses of individual freedoms.
The indegeneous population of Crimean Tatars is constantly harassed by
the puppet authorities, while the mere of expression of support for
Ukraine is treated as a crime. We believe that this situation can be
resolved only through return of Crimea to Ukraine and we will not rest
until this goal is achieved.
Although preservation of territorial integrity dominates on
Ukraine's agenda, other challenges are of critical implication as well.
We are determined to use the chance of truce presented by the Minsk
Agreement to make progress with much-needed reforms in our country. As
of today, Ukrainian Government and Verkhovna Rada took significant
steps directed at comprehensive overhaul of the state budget, judicial
system, prosecutor's office, pension system, anticorruption
legislation, energy-efficiency, governmental transparency. This
incomplete list will be expanded as the Ukrainians are committed to
transforming their country into a modern European state.
Progress in this area would not have been possible without strong
financial support of our Western partners led by the United States. We
hope that this support will be expanded into a comprehensive program
similar to the Marshall Plan, which once helped Europe to recover from
the consequences of a devastating war.
For all the tragedy of recent developments in Ukraine, they have
demonstrated that in face of enormous challenges, the Ukrainians have
chosen not to give in but to stand up for their rights and freedoms,
and to unite to preserve their country's sovereignty. What can be
observed today is the reemergence of a new civilized European nation,
determined to build its future on the everlasting principles of
accountable government, respect for human rights, dynamic civil
society, free media and protected national security. It is my strong
conviction that sooner rather than later this development will lead us
to become an equal and effective member of the European family of
nations.
Such an outcome would be in the interests of not only the Ukrainian
people, but also of Europe as a whole, including Russia. This task can
be fulfilled through strong and decisive actions of the democratic
world aimed at assisting Ukraine, restoring the stability of
international system and negating the prospects of another global
conflict. We are looking forward to the continued U.S. leadership in
this process.
______
Responses of Victoria Nuland to Questions
Submitted by Senator Bob Corker
Question. Although the terms of Minsk II cease-fire agreement
indicate that Debaltseve should remain part of Ukrainian-held
territory, the Russian-backed rebels launched an offensive to acquire
the town after they signed the cease-fire agreement and now control
Debaltseve.
What does this indicate about the commitment of the rebels
to the Minsk agreement and its implementation? Is it the
position of the administration that the rebels will have to
withdraw from Debaltseve? What is the deadline for this
withdrawal?
Answer. Combined Russian-separatist forces launched the offensive
on Debaltseve before the negotiations in Minsk on the February 12,
2015, Minsk implementation plan--also called ``Minsk II'' by some--and
extended the offensive through the negotiations, leading to the
Ukrainians' withdrawal of their forces from Debaltseve on February 18.
The September 2014 Minsk agreements have the line of contact running
clearly east of Debaltseve, leaving that city firmly in the Ukrainian
Government's hands. The February 12 Minsk implementation plan links
back to those agreements. We support Ukraine's claim that Debaltseve
lies outside the Special Status Area, and that the separatists must
vacate it as part of the fulfillment of the Minsk agreements.
The commitments contained within the Minsk agreements are supposed
to be fulfilled by the end of 2015, but this will require political
will on the part of Ukraine, Russia, and the Russia-backed separatists,
all of whom signed the agreements. We stand ready to assist in their
fulfillment, as we believe the Minsk agreements are the best chance for
a durable, diplomatic resolution of the crisis. We will judge the
separatists and their Russian backers by their actions.
Question. What distinguishes the second Minsk cease-fire agreement
from the first? Why would this cease-fire agreement hold when the first
cease-fire agreement collapsed?
Answer. The main distinguishing feature to date has been the
overall reduction of violence along the cease-fire line since the
February 15 cease-fire went into effect.
That said, attacks across the cease-fire line persist, and their
numbers have recently increased. The OSCE's Special Monitoring Mission
(SMM) has been inhibited by access restrictions placed on it mainly by
the Russia-backed separatists, making it difficult for the SMM to
report on cease-fire violations and the status of heavy weapons
withdrawal. We have seen frequent attacks usually initiated by the
separatists against Ukrainian positions to the west and north of the
cease-fire line.
A true cease-fire would require full and unfettered access by the
OSCE SMM to the entire length of the cease-fire line and separatist-
held territory, and constant vigilance by the U.S., our European allies
and partners, and like-minded countries.
We must be prepared to increase the costs on Russia and the
separatists if we see continued stalling on fulfillment of the Minsk
commitments, or renewed land grabs by combined Russian-separatist
forces.
Question. The Minsk II agreement states that Ukraine will not be
able to assume control of its internationally recognized border with
Russia until Kyiv changes its constitution to include decentralization.
Is decentralization clearly defined in the agreement?
Answer. Decentralization is defined sufficiently in the Minsk
agreements--including the February 12 Minsk implementation plan, or
``Minsk II''--that it should be achievable to a standard that is
agreeable to all concerned. It will be complicated, however, as the
process of decentralization applies to the entire country of Ukraine,
and therefore will require the agreement of the Ukrainian Parliament
(Rada) on its features, not only for the area currently held by the
separatists, but for all of Ukraine. We are confident the Ukrainian
Government and Rada can find a solution that will work and have the
desired effect.
______
Responses of Brian P. McKeon to Questions
Submitted by Senator Bob Corker
training the ukrainian national guard
Question. Why have plans to train Ukrainian National Guard troops
not been implemented?
Answer. DOD and the Department of State notified Congress last
summer of the administration's intent to transfer a total of $19
million of available fiscal year (FY) 2014 funds to the Global Security
Contingency Fund for the purpose of providing training and additional
nonlethal equipment to units of the Ukrainian National Guard as early
as the second quarter of FY 2015. The equipment will begin arriving in
early April and the training is scheduled to begin the week of 20
April.
delays in nonlethal military assistance
Question. Approximately $120 million in nonlethal military
assistance has been committed to Ukraine by the United States but
equipment worth only half of this amount has been delivered to Ukraine.
What explain this delay?
Answer. Ukraine is a top priority and we are working to further
expedite the provision of assistance. When implementing government-to-
government security assistance programs, however, we must operate
through technology, security, and foreign disclosure reviews;
contracting processes; and then arrange for transportation and
delivery. We are constantly working to speed up these timelines and
have been successful in some instances, such as countermortar radars,
which we were able to deliver these in less than 2 months after the
decision was made to provide them. We will continue to expedite the
provision of assistance whenever possible. Once the GSCF training
program starts in late April for the Ukrainian National Guard, we will
have delivered well over half of the $120 million in assistance.
assessment of ukrainian capacity, capabilities and gaps
Question. Has the U.S. military conducted an assessment of the
Ukrainian Armed Forces to gain an understanding of their current
capacity, capabilities, and gaps? What were the findings and how is the
United States prepared to assist in filling the training and arming
gaps?
Answer. Yes, through the U.S.-Ukraine Joint Commission, led by the
U.S. European Command and senior Ukrainian Ministry of Defense
officials, the United States engages in regular, senior-level
discussions with Ukraine to identify gaps in Ukraine's military
capacity and capability. Over the past year, the Joint Commission
conducted comprehensive assessments of Ukrainian military functional
areas. These assessments resulted in prioritized lists of requirements
that have informed current security assistance, mid- and long-term
cooperative and institutional reform efforts, and training and
professionalization of the Ukrainian Armed Forces. The assessment teams
have made recommendations for improvements and growth in the following
areas: medical, logistics, institution building, special operations,
communications, information, and border security. The assessment and
review process, through the commission, is an ongoing process
necessary equipment for the ukrainian military
Question. Does the Ukrainian military possess the necessary
equipment, including lethal weapons systems, to effectively respond to
attacks from the Russian-backed rebels and Russian forces operating in
eastern Ukraine or neighboring Russian regions? What U.S. weapons
systems and equipment, if provided, would pay the biggest return on
investment--lethal and nonlethal? What is the status of providing such
equipment?
Answer. We do not believe a military resolution of this conflict is
possible. The President is regularly reviewing options to support
Ukraine, including whether the United States should provide defensive
lethal assistance. We have thus far provided assistance that helps to
address key Ukrainian capability gaps, such as in communications,
mobility, and countermortar radars. We continue to provide assistance
to Ukraine and expect deliveries to continue for at least the next 18
months as funds are allocated, contracts signed, and equipment
delivered. We are also processing $75 million in additional assistance
authorized as part of the European Reassurance Initiative (ERI).
______
Responses of John C. Kornblum to Questions
Submitted by Senator Bob Corker
Question. What exactly is at stake for the United States in
Ukraine? What are the consequences of our failure and Putin's success?
Answer. Russian action against Ukraine came almost exactly 20 years
after Russia, together with the U.S., U.K. and France had guaranteed
the sovereignty and territorial integrity of Ukraine as part of
Ukraine's relinquishment of nuclear weapons it had inherited from the
Soviet Union. Ukraine's independence and security were thus tied to the
overall ``settlement'' of issues resulting from the collapse of the
USSR. For the United States to acquiesce in Russia's unilateral moves
against Ukraine, would mean that we had accepted the end of rule of law
in relations with Russia. The complex European project, which the
United States led for nearly 50 years would be put in question. We
would be faced with a rogue power (Russia) playing as desired among
several weak and insecure countries such as the Baltics, Georgia, or
Moldova. America's own security would be threatened. The freedom of
movement of our diplomacy would be severely limited by the instability
throughout the region.
This freedom of movement will be especially important to protect in
the new international conditions which are emerging in the 21st
century. Coming years will be characterized by the emergence of new
powers, by new and untested crisis situations and by the rapid spread
of high-speed information technology. Maintaining a coherent foreign
policy will become many times more difficult. The United States will
succeed only if it is able to build a sense of cohesion among new
powers and old. To do this, we must maintain the leading role of
Western values and methods in the new information networks. Losing the
advantage to Russia would undercut this interest severely. We would
find ourselves on the defensive. We would be unable to take initiatives
to maintain our technological advantage. This is one reason why Russia
is spending so much on propaganda and information technology. It wants
to steal the narrative and has succeeded already to a considerable
extent.
Question. Is Germany a mediator in the Ukraine conflict or a
genuine supporter of Ukraine's desire to join Europe?
Answer. Germany rejects the idea that it is mediating in this
crisis. Chancellor Merkel has taken the lead, because she has the best
contacts with Putin and because Germany has serious interests in
Russia. But as her quick trip to Washington in February demonstrated,
Chancellor Merkel conducts her diplomacy with the closest consultation
with the United States and the European allies. From the first days of
post-Soviet Ukrainian independence, Germany has been among the
strongest supporters of Ukraine's sovereignty and economic stability.
It supported Ukraine's desire to move closer to Europe, because it
believed this was the best way to ensure both the security and economic
independence of Ukraine.
Question. Can U.S. leadership in Ukraine be supplanted by German
leadership? If so, is this desirable or conducive to the advancement of
American national interests?
Answer. No, Germany cannot take over leadership from the United
States in Ukraine or elsewhere in Europe. The Germans are the first to
state that without American support, there could be no European defense
or diplomacy with Russia. As I mentioned during my testimony, I believe
that the United States has put too much burden on Germany during this
crisis. Chancellor Merkel is a brilliant, dedicated leader, but neither
she nor her country have the background or the resources to be the
major Russian interlocutor with the West. Germany would be in a better
position if there were a more active American role. Not taking over the
negotiations, but participating in both words and deeds. It is at this
moment not clear whether Putin believes he can push through his goals
with the Europeans, while the United States stands by. Testing his
intentions is too big a risk to take. it is important that he be clear
that the United States will react if he pushes further forward than he
already has.
______
Response of John Herbst to Question
Submitted by Senator Bob Corker
Question. Given the magnitude of the threat and challenges posed by
Russian aggression in Ukraine, has the United States devoted sufficient
attention and resources to this issue? What more can and should be
done?
Answer. A revisionist Kremlin bent on overturning the post-cold-war
settlement in Eurasia is the greatest threat to global stability and
American interests at this moment. The American response to this
suggests that the White House does not understand this danger. That
response has been reactive, piecemeal and, overall, ineffective.
This danger is currently manifest in Ukraine. What we face today is
not a Ukraine crisis, but a crisis of Kremlin aggression which appeared
earlier in Georgia and today in Ukraine. To address this challenge, we
need a comprehensive policy with at least six elements.
First we need to accurately and publicly define the challenge.
Nowhere has the White House laid out the challenge to Eurasian and
global stability posed by Mr. Putin's revanchist policies.
If the administration correctly defines the problem, it will be
clear that the United States must take the lead in resolving it--the
second element of a sound policy. We cannot subcontract leadership on
this issue to Berlin or any other capital because our vital interests
are involved. So, for instance we would insist that the United States
must be part of the negotiating process that produced the cease-fires.
We would also develop strong and proactive policies imposing major
costs on the Kremlin for its aggression. This leads us to the third and
fourth elements of our policy.
The third is to impose economic costs on Moscow for its aggression
by economic sanctions. Washington has done a pretty good job on this
front in pulling an, at times, reluctant Europe to levy sanctions.
But the fourth element relates to the military. Ukrainian forces
have done a commendable job fighting the strongest military in Europe.
We should openly and unapologetically be providing Ukraine substantial
military equipment, including defensive lethal weapons, to deter
further Russian aggression in Ukraine or, if deterrence fails, to
impose a higher cost on Russian forces. This cost might help ultimately
stop Kremlin aggression in Ukraine; but even if it does not achieve
that, it will leave Moscow with fewer military resources to carry out
aggression elsewhere. At a minimum, our policy should be designed to
make the war in Ukraine so unpleasant for Moscow that it decides it is
too expensive to unleash war beyond that country.
Fifth, we need to exert our leadership in NATO and push for the
deployment of far more substantial forces and equipment to the Baltic
countries and perhaps other eastern members of the alliance. The
purpose is to deter possible Kremlin provocations there.
Finally, we need to provide even more additional resources to Radio
Free Europe and Radio Libert to increase its Russian language
programming to help offset the massive Kremlin propaganda program.
These six elements will secure our vital interests against the
rogue policies of Mr. Putin.
One last point. The administration is not devoting sufficient
intelligence resources to the Russian war in Ukraine and the broader
Kremlin danger. This flows naturally, but unfortunately, from the
failure to understand the gravity of the danger. This needs to change.
______
Response of Victoria Nuland to Question
Submitted by Senator James E. Risch
Question. A few months after the Russian invasion of Georgia,
President Obama was unwilling to provide defensive military equipment
to the Georgian Government; this opposition also led to European allies
refusing to provide any level of military equipment to Georgia. While
President Obama has refused to provide defensive lethal arms to
Ukraine, does the U.S. position support other nations offering military
assistance to Ukraine, or will the administration seek to block those
provisions as well?
Answer. The administration has not taken a position on other
nations providing security assistance to Ukraine. In fact, we have
worked closely with a number of allies and partners to encourage them
to contribute greater security assistance to Ukraine. Solidarity among
allies is essential to our response to Russian aggression. Russia's
aggression in Ukraine makes clear that European security and the
international rules and norms against territorial aggression cannot be
taken for granted. Together with Europe, we are supporting the
Ukrainian people as they choose their own future and develop their
democracy and economy.
While we continue to believe that there is no military resolution
to this crisis, Ukraine has the right to defend itself. We have
committed significant nonlethal security assistance to help Ukraine
sustain its defense and internal security operations.
The interagency is conducting an ongoing review of our elements of
security assistance to Ukraine to ensure they are responsive,
appropriate, and calibrated to achieve our objectives. We continue to
monitor the situation closely and remain in constant contact with our
Ukrainian counterparts, as well as our NATO allies and partners, to
explore opportunities for defense cooperation.
______
Responses of Brian P. McKeon to Questions
Submitted by Senator James E. Risch
european reassurance initiative
Question. In your testimony you mentioned the European Reassurance
Initiative and the success of the ERI among our eastern European
allies. Unfortunately, ERI was not placed in the Defense Department's
base budget; and as a result has created some concern among European
allies about an enduring U.S. commitment to the initiative.
Will you ensure the ERI is included in the base FY17
budget?
Answer. The European Reassurance Initiative (ERI) is an important
tool for U.S. efforts to reassure our allies and partners, and it is
critical that these efforts continue for as long as necessary. The
Department's FY 2016 Overseas Contingency Operations (OCO) request
includes $789.3 million in ERI funding to sustain the efforts started
in FY 2015 and reflects our continued commitment to the initiative. The
source of the funds will be considered against competing global
priorities, legal requirements, and the constraints imposed by the
Budget Control Act before a final decision is made for the FY 2017
budget.
Question. In your testimony you mentioned the European Reassurance
Initiative and the success of the ERI among our eastern European
allies. Unfortunately, ERI was not placed in the Defense Department's
base budget; and as a result has created some concern among European
allies about an enduring U.S. commitment to the initiative.
What additional steps can the United States take to
increase the level reassurance?
Answer. The United States is committed to the security of our
Central and Eastern European allies in promoting regional security. We
will continue our reassurance measures through a persistent presence of
air, land, and sea forces in the region. The Department's request of
$789.3 million for the European Reassurance Initiative (ERI) fiscal
year 2016 reflects this commitment. Additionally, we plan to increase
the capability, readiness, and responsiveness of allies and partners by
continuing to increase the number of exercises and training events,
improve infrastructure, build partner capacity, and enhance
prepositioned U.S. equipment in the region. In support of NATO's
Readiness Action Plan (RAP), the United States will also participate in
NATO's new Very High Readiness Joint Task Force (VJTF); increase the
number of servicemembers we have assigned to Multinational Corps
Northeast in Poland; and assign staff officers to the six new NATO
Force Integration Units that NATO Defense Ministers agreed to establish
at their February 2015 meeting.
Through both a fully funded FY 2016 ERI appropriation and the U.S.
commitment to NATO's RAP/VJTF, our Eastern European allies will see
results regardless of whether funding is appropriated in the base
budget or the Overseas Contingency Operations (OCO) budget.
[all]