[Congressional Record Volume 145, Number 141 (Monday, October 18, 1999)]
[House]
[Pages H10162-H10168]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        A NEW VISION FOR RUSSIA

  The SPEAKER pro tempore (Mr. Gutknecht). Under the Speaker's 
announced policy of January 6, 1999, the gentleman from Pennsylvania 
(Mr. Weldon) is recognized for 60 minutes as the designee of the 
majority leader.
  Mr. WELDON of Pennsylvania. Mr. Speaker, I rise this evening to 
discuss Russia, the current problems that we are seeing unfold in 
Russia, discuss consistent with the hearings that are being held in the 
Committee on International Affairs and the Committee on Banking and 
Financial Services and other committees of this Congress, the Committee 
on Government Reform, what impact, if any, the U.S. has had in the 
current economic and political turmoil inside of Russia and the former 
Soviet States.
  Let me say at the outset, Mr. Speaker, this is an issue that I have 
discussed many times on this floor in the past, and I do not just come 
here tonight to criticize this administration, although some of my 
comments will appear to do just that. I come to offer some suggestions 
for perhaps a new way of dealing with Russia. In fact, what I come to 
offer tonight, Mr. Speaker, is a new vision for Russia, a new way that 
this country can relate to the people in Russia who have been dominated 
by a centrally-controlled Communist regime for 70 years and for the 
last 6 years or 7 years actually by a government that was totally 
focused on Boris Yeltsin and the people around him.
  Mr. Speaker, I want the same thing for the Russian people that the 
President wants, and that is a stable, free democracy, a free market 
system allowing the people of Russia to enjoy the benefits that we in 
the West and we in America enjoy. I want them to be trading partners of 
ours; I want them to reap the benefits of free markets; and I want them 
to become a partner with us in helping to ensure world stability. From 
my position as chairman of the National Security Research Committee, my 
job is to oversee $38 billion a year of defense spending for new weapon 
systems and new technologies, and money of those technologies and much 
of that investment is focused on threats, either perceived or real, 
coming from Russia and the former states. So it is my interest, as a 
subcommittee chairman, to try to find ways to work with Russia so that 
perhaps we can create a more stable relationship, not have to spend so 
much of the taxpayers' money on building exotic new weapon systems that 
are designed to kill people.
  Let me say at the outset, Mr. Speaker, I think we made a fundamental 
mistake in 1991. The Russia that people were so excited to throw off 
communism, they were so happy to finally be able to have the 
opportunity to enjoy the kind of democracy and free market capitalism 
that they saw us enjoying in the West. And in those first few months we 
were so excited with the leadership provided by Boris Yeltsin. And all 
of us were solidly behind him at the time, that I think we forgot one 
very important and basic notion, that Russia's success as a democracy 
was not dependent upon one man. It was not going to depend upon Boris 
Yeltsin, but rather we should have focused on upon helping Russia 
establish the institutions of a democracy that would last beyond one 
person.
  If we look at America, we can see that quite evident in our history. 
Yes, we have had great leaders from George Washington, to Abraham 
Lincoln, FDR, Ronald Reagan, all good people. But America's success is 
not based on individual people and the work that they do. It is based 
on the institutions that allow our government to have a system of 
checks and balances. It is based on a Constitution. It is based upon 
the institutions mandated in that Constitution that allow people to 
assume positions, but that the institution can never be circumvented by 
those individual people.
  In our rush to help Boris Yeltsin, Mr. Speaker, I am convinced that 
our focus was wrongheaded. We were so preoccupied with reinforcing 
Boris Yeltsin, the man, that we forgot that Russia could not and would 
not succeed and become more stable unless we focused on institutions 
and strengthening those institutions.
  In fact, Mr. Speaker, it is no surprise to me that for 7 years, as 
Boris Yeltsin called the parliament in Russia, the lower house, the 
State Duma, and the upper house, the Federation Council, repeatedly 
called them a bunch of misfits and rogues and crooks and thugs, and 
while there may be one or two in that Duma or perhaps more that would 
fit those categories, what we did as a country was reinforce Yeltsin's 
notion of what the Russian Parliament was, that it was not an 
institution to be taken seriously. And, therefore, the President, 
largely through his policies of reinforcing Boris Yeltsin, sent a 
message to the Russian people and to the elected leaders of the state 
Duma that America's policy was based on a strong Yeltsin and that we 
were not, in fact, concerned with helping to strengthen the institution 
of the state Duma and the Federation Council and those institutions 
that would allow Russia's Constitution and the Russian government to 
stabilize itself. And now we are paying the price for that, Mr. 
Speaker.
  Yeltsin's popularity in the most recent poll in Russia is 2 percent. 
In fact, one poll had him being disliked by the entire electorate, 
which is something I cannot believe, that everyone in Russia that would 
be polled would say that Yeltsin was not good for Russia as a nation 
and that, in fact, he should be replaced.
  But the most recent poll that I see, provided by one of our think 
tanks here in Washington, showed Yeltsin's acceptance rate in Russia at 
2 percent. Now that leaves us as a country that has been Russia's 
closest partner in this new experiment in democracy as a country that 
has totally reinforced

[[Page H10163]]

Yeltsin at the expense of the support for other institutions inside of 
Russia. And therefore, with Yeltsin's popularity plummeting at 2 
percent, it is no surprise that the Russian people, and the Russian 
Duma and the Federation Council see America as an equal partner to the 
problems that Boris Yeltsin has brought to Russia, the problems of the 
threat of billions of dollars of IMF money, the problem of the 
misappropriation of dollars that were supposed to go to help stabilize 
Russia's economy and help create a middle class, the problems of a 
Russia that has not had control of its technology and has allowed 
proliferation to occur on an ongoing basis.
  So now, Mr. Speaker, we find ourselves in a very difficult position, 
that the Russia that is, in fact, no longer supportive of Boris Yeltsin 
in fact no longer has trust for America's interests. We do not have to 
just look at the words that support this, Mr. Speaker. Just a few short 
months ago there were thousands of Russian young people, old people, 
standing outside of our embassy in Moscow, throwing rocks and bricks at 
the American embassy, something we had never seen, even under 
communism. We did not see massive demonstrations against our country; 
but recently, in the last several years, that is exactly what we have 
seen.
  In fact, Mr. Speaker, I think one of the Russian Duma members perhaps 
summed it up best when he was visiting Washington in May of this year. 
I stood next to him at a press conference, and he was talking about the 
Russian perception of our involvement in Kosovo, and this is what he 
said. He said:
  ``You know America, for 70 years the Soviet Communist Party spent 
tens of billions of dollars to convince the Russian people that America 
was an evil Nation and that American people were evil, and they failed. 
But,'' he said, ``You know, in just a few short months and a few short 
years your administration has done what the Soviet Communist Party 
could not do. It has convinced the Russian people that America's 
intentions are not honorable, that in fact you have supported Yeltsin 
every step of the way, even when he's been out of line, even when he 
has overseen the misuse of dollars, even when friends, the oligarchs 
who started and who run many of the Russian banks have, in fact, 
siphoned money away from the Russian people, put it into Swiss bank 
accounts and U.S. real estate investments, leaving the Russian 
government and the Russian people to pay those loans back even though 
that money was misappropriated.''
  Is it any wonder, Mr. Speaker, that our policies in regard to Russia 
have not been successful?
  Now there are committees of this body and the other body holding 
hearings that started in September and will continue through the end of 
October and November about Russia. Some would characterize these 
hearings as: Who Lost Russia? Mr. Speaker, I am one that is convinced 
that Russia is not yet lost, but I do think it is certainly appropriate 
for the American people and its leaders to look at what happened and 
what went wrong. In my humble opinion, Mr. Speaker, there is no doubt 
that this administration has to bear a significant part of the 
responsibility for Russia's economic and political turmoil today.

  But we cannot just stop by pointing fingers at this administration 
because the logical response is: Well, what would you have done 
differently? It is easy to criticize, but what different approach would 
you take? And also the criticism would be such that the administration 
would say, well, hindsight is always 20-20. It is easy to say what we 
could have done, but where were you while these last 7 years unfolded?
  Well, Mr. Speaker, that is why I rise tonight, because over the past 
7 years I have not been silent. In fact, Mr. Speaker, 6 years ago, 
working with the Russian members in the state Duma, I started a caucus 
to deal with Russians on energy because I knew that helping them 
develop their energy resources was the quickest way to bring in hard 
currency to help stabilize Russia's economy, and so working with those 
Duma deputies from energy-rich regions, we got our energy companies 
together: Occidental, Mobil, Marathon, the key companies that wanted to 
do business in Russia to see if we could not encourage joint ventures 
and, in the process, encourage the Duma to pass production sharing 
laws, which they did twice, to allow American companies to invest in 
Russian energy.
  And it was 5 years ago that we began a process of engaging the Duma 
on Russia's environmental problems to make sure that we were helping 
Russia deal with its nuclear waste issues and the problems of clean air 
and clean water and maintaining an environment for the Russian people 
to live and to work in, and it was the day that the current speaker of 
the Russian Duma was elected to that post that I was in Moscow almost 6 
years ago with a letter from then Speaker Gingrich inviting the Speaker 
of the Russian Duma to engage the Congress in a formal way, an 
institutional relationship with the Congress so that we could begin the 
process of helping strengthen and helping to empower the parliament in 
Russia so that it could play its rightful role in making sure that 
Russia's democracy succeeded.
  For the past 6 years, Mr. Speaker, working with my colleague on the 
other side, the gentleman from Maryland (Mr. Hoyer) we have led 
delegation after delegation to Moscow and St. Petersburg, and we have 
hosted delegation after delegation to Washington.

                              {time}  2100

  We have discussed issues that confront us, and we have discussed 
opportunities to join together. But we have worked together in an 
effort to strengthen the Duma to make it a more powerful force in the 
governing of Russia.
  Mr. Speaker, it was 5 years ago that I brought over then General 
Alexander Lebed, who is today the governor of Krasnoyarsk. I brought 
him over to testify 5 years ago of what he thought was happening in the 
Yeltsin government 5 years ago, and he said before this Congress and my 
committee that the current administration was corrupt. And following 
General Lebed's testimony, I brought over the leading Russian 
environmental activist Alexei Yablakov, Dr. Yablakov himself a member 
of the Academy of Sciences, and at two hearings on the public record he 
said that the leadership in Russia was corrupt, that it was siphoning 
off money that should have been going to the Russian people, and he 
begged America to come in and help establish proper oversight.
  Mr. Speaker, that was not last year, it was not last month. Those 
hearings were 3, 4, 5, and 6 years ago. Mr. Speaker, we in the Congress 
have been telling this administration repeatedly that its policies were 
going in the wrong direction, that reinforcing Boris Yeltsin as a 
person as opposed to reinforcing institutions of the presidency, of the 
parliament and of the Constitution in Russia would eventually cause us 
major problems.
  Mr. Speaker, it was 3 years ago that I brought in Stanislav Lunev, 
the highest ranking defector from the Soviet Russian Intelligence 
Service, to talk about some of the continuing problems that Russia was 
going through and how we needed to be aggressive in dealing with 
Russia, to ask candid questions.
  So over the past 5, 6, 7 years, Mr. Speaker, this Congress has 
repeatedly questioned the policies of this administration relative to 
our embracing Boris Yeltsin, embracing him under any circumstance, 
fearful of embarrassing him. And that has been our policy for the last 
7 or 8 years, Mr. Speaker. Actually starting with the last year of 
President Bush and then beginning with the leadership of President 
Clinton, we have seen a consistent policy of reinforcing one man 
instead of the institutions that Russia needs to strengthen itself so 
that it may survive for a long period of time much like America has 
survived.
  So with those thoughts in mind, Mr. Speaker, a year ago I traveled to 
Moscow because I knew at that time that the Russian Duma was opposed to 
any more IMF funding going into their country. Now, imagine that, Mr. 
Speaker. Here, the elected Russian leaders equivalent to our Congress 
who were about to receive another $4 billion in outside aid from the 
International Monetary Fund, and here they were standing up, all seven 
major factions saying to the world, we do not want anymore IMF funding. 
We do not want any more dollars coming into our country.

[[Page H10164]]

  Now, at the same time, the U.S. Congress has been saying the same 
thing. In fact, for 8 months President Clinton could not get the 
support in the Congress to support additional IMF funds to replenish 
the ones that had been committed. Why would the Russian Duma members 
oppose more IMF funding for their own homeland? The reason is very 
simple, Mr. Speaker.
  Because for the previous 5 and 6 years, Duma Members had seen 
billions and billions of dollars go into Russia that were designed and 
supposedly earmarked to help Russian people, and time and time again, 
they saw those dollars simply flow through the system, through the 
oligarchs running the banking system in Moscow, many of whom were 
Yeltsin's friends and back out the other side.
  Where were the dollars going? To U.S. bank accounts, to U.S. real 
estate investments, to Swiss bank accounts, to the Russian people in 
some cases who were former leaders of the Communist party and the KGB 
who had offshore accounts. In fact, there are reports being 
investigated today that Boris Yeltsin himself and his family had secret 
bank accounts where they have stashed significant amounts of money for 
his retirement days.
  So it was no surprise, Mr. Speaker, that the Russian leaders said, we 
do not want any more, we do not want any more of your money. With those 
thoughts in mind, and realizing that if we did not get additional IMF 
dollars into Russia, their economy would collapse, I traveled to Moscow 
and I took with me eight points. Because I was convinced that if I 
could convince the Duma to accept a new direction in dealing with 
Russia, that perhaps we could bring some discipline and some new 
direction for the way that Russia was moving.
  To my surprise, the Duma deputies that I met with and worked with 
representing various factions agreed to all eight points. Mr. Speaker, 
last week I submitted those eight points in the form of legislation. I 
want to review those eight points tonight because I think they 
represent a new direction for the U.S. in terms of dealing with Russia.
  The Joint Statement of Principles Governing Western and Foreign 
Assistance to Russia is simple, but I think it is profound. In fact, I 
have introduced it and it is out now, H.R. 3027, for those Members who 
would like to become cosponsors. The eight principles lay out a new 
direction in terms of our relationship with Russia, both monetarily and 
in terms of dealing with them on issues of transparency.
  The first is a simple one, Mr. Speaker, and that is to establish a 
joint Russian-U.S. legislative oversight commission to monitor all 
Western resources going into Russia. Today, there is no such effort. 
Today, we have no capability to monitor inside of Russia where the 
dollars are going, the dollars from the International Monetary Fund, 
the dollars from the World Bank, and the dollars from the U.S. 
taxpayer.
  I might add, Mr. Speaker, we put approximately $1 billion a year of 
U.S. taxpayer money into Russia, much of it through the Cooperative 
Debt Reduction Program, other money through our military-to-military 
efforts, environmental cooperation, and cooperation with Russia in 
helping them stabilize their economy. So we, in fact, directly and 
indirectly put billions of dollars into Russia every year. There is 
today no ability for the U.S. Congress and the Russian Duma to monitor 
where those dollars end up.
  Now, the administration would have us believe that they can watch 
over where the money is going, but I would say this, Mr. Speaker. Not 
being able to trust the Russian regime of Boris Yeltsin, which I think 
is a uniform given right now, I think everyone understands and it has 
certainly been pronounced in the press, as just several weeks ago we 
saw the first indictments handed down in the New York Bank case where 
there is expected defrauding of up to $4 billion to $5 billion of IMF 
money for the Bank of New York that was assisting some of Yeltsin's 
friends in Moscow.
  We need to have the capability inside of Russia, one that understands 
the Russian process, but is backed up by the integrity of the U.S. The 
only way to accomplish that is to get the Russian Parliament, the Duma, 
and the Federation Council to join with the Congress in establishing a 
bilateral commission, separate from our two governments, separate from 
Bill Clinton and separate from Boris Yeltsin, whose only purpose would 
be to monitor where the monies are going; not to determine where they 
go, because we do not want congressional interference in saying that 
money should go to this agency versus that. That is up to the two 
administrations, whether it would be Clinton or Yeltsin or their 
successors.
  Mr. Speaker, there needs to be a process where our two elected 
parliaments, representing both political parties in America and 
representing all of the political factions in Russia, can monitor where 
the dollars are ending up in Russia. The Russians love that 
recommendation, because the Duma today has no input in terms of 
monitoring where the money has gone and where it is going today and 
where it will go in the future.
  The second principle was to focus Western resources on programs like 
housing that will help to develop a Russian middle class. Now, Mr. 
Speaker, over the past 7 or 8 years, we have pumped billions of dollars 
into Russia. Do we see a housing industry developing? Absolutely not. 
To date, Russia does not even have an established mortgage program. 
Three years ago, the gentleman from North Carolina (Mr. Taylor) and I 
traveled to Moscow. The gentleman from North Carolina (Mr. Taylor), as 
we know, is a very successful banker from North Carolina, and he 
envisioned a plan where, initially controlled by a U.S. commission, we 
would help Russia establish a Western-style mortgage program, with 
tight discipline, a program that would bypass Russian banks because of 
their corruptness, that would establish standards based on the U.S. 
mortgage system with tight controls to which Russian entities could 
apply. We outlined this in a piece of legislation.
  The Russian Duma was so excited, they produced this document, Mr. 
Speaker. It says, Housing for Our People. That was over 3 years ago, 
Mr. Speaker. We came back and we told the administration, the Duma, 
including the Communists in the Duma, we are ready to embrace a 
Western-style mortgage program initially controlled by the U.S., so 
that we can maintain the integrity of it when it is first started, and 
once it becomes successfully operational, then after a period of years, 
turn it over to the Russians to operate like our Freddie Mac and Fannie 
Mae. Mr. Speaker, the Russians even gave it a name. They called it 
Natasha Mae like our Fannie Mae.
  They were excited about this idea, because for the first time, it 
would create a mortgage program at low interest rates and we envisioned 
below 10 percent interest rates for terms of 30 years to help develop a 
housing market to create jobs and housing for Russia's people.
  In fact, Mr. Speaker, it was over 2 years ago that I came back from 
Moscow on one of our trips, after having negotiated the first phase of 
this, and I went to the administration very quietly. I went to 
Ambassador Morningstar with the gentleman from North Carolina (Mr. 
Taylor), who at that time was in charge of the Russia desk at the State 
Department. And I went to him because Russia was very paranoid at that 
time about our expanding NATO.
  Russians were being told by the ultranationalists in Russia that this 
was America's way of threatening Russia and using NATO to take over 
Russia. They were scaring the Russian people. And if my colleagues 
understand the history of Russia as I do, where Russia has been invaded 
from the west and the north and the south repeatedly in its history, my 
colleagues will understand why Russians might be paranoid and might 
believe the outlandish rhetoric from some of the ultranationalists in 
Russia trying to benefit politically from scaring the Russian people, 
basically putting in false ideas about America's real intentions.
  But the gentleman from North Carolina and I went to Ambassador 
Morningstar; and we said, Ambassador, you have a chance here, and we 
want to give you a chance to have President Clinton do something 
extremely positive to show the Russian people that NATO's expansion is 
not about backing Russia into a corner. Take this housing mortgage 
initiative. We as Republicans

[[Page H10165]]

will help you get some small seed funding from the Congress. Take that 
seed money as we have done with Israeli housing and go to our NATO 
allies, all of them, and ask them to put a per capita amount equal to 
what we put up and create a NATO housing mortgage fund.
  Imagine, Mr. Speaker, if we had taken the initiative 2 years ago, 
over 2 years ago with a very small amount of money going to our NATO 
allies and said put up a per capita amount and we will create a NATO 
housing mortgage fund to show the Russian people that we want them to 
enjoy the benefits of democracy, we want them to enjoy the benefits of 
free markets, and a benefit from the kinds of systems we have in the 
West because as we all know, when housing starts up in America, our 
economy is strong, because housing starts create jobs.
  The administration had no interest in our idea. In fact, Mr. Speaker, 
for the past several years, the administration's only support for 
mortgages in Moscow has been to the established banks that we all know 
in many cases are corrupt, where they are charging interest rates of 15 
to 30 percent for terms of 5 to 10 years, which we all know no Russian 
family could afford to be able to purchase a home. A missed 
opportunity.
  So our second initiative says to those lending institutions putting 
money into Russia that you must focus the resources on programs like 
housing that will help to develop a Russian middle class, because the 
long-term success of Russia is going to require a strong middle class, 
much like America and much like Europe and much like Japan have. Today, 
Russia has no middle class.
  Mr. Speaker, this is an area where all of us should come together. 
Imagine, Mr. Speaker, if we would have taken the $20 billion of IMF 
money that has been dumped into Russia, which who knows what it has 
been used for. I cannot point to one thing in Russia today that has 
been built with the $20 billion of IMF money we put in. But imagine, 
Mr. Speaker, if we had built $20 billion of homes for Russia's 
citizens. Even if they went bankrupt or belly up, would they be any 
worse off than they are today?

                              {time}  2115

  They have nothing to show for the billions of dollars of U.S. and 
World Bank and IMF money that has gone into their country. If we had 
put the money into mortgages, we would have $20 billion worth of new 
housing, and all the jobs that would have gone along with that to show 
for our investment.
  The third priority, Mr. Speaker, in our joint statement is to make 
western resources available to reform-minded regional governments. Our 
policy for the past 7 and 8 years has been to reinforce Yeltsin in 
Moscow. Think of our policy: Clinton/Yeltsin, Major/ Chernomyrdin. 
Everything has gone through those figures. In many cases, Mr. Speaker, 
anyone who travels to Russia knows that Moscow is Moscow and the rest 
of the Russian people consider the rest of Russia to be almost a second 
nation.
  What has been our policy? It has been to reinforce Yeltsin and his 
cronies in Moscow, and not reinforce those reform-minded regions that 
are making outstanding progress in privatizing their land; in 
collecting more taxes; in making responsible actions to control 
corruption; in putting into place a legal system with a fair court 
system. We have done nothing of substance over the past 7 years to help 
direct our assets and our resources toward those regions to allow them 
to continue their reforms. If anything, they have looked at America and 
said, well, you in the West and you in America only want to reinforce 
Yeltsin, and he is corrupt. You are ignoring us out here in the regions 
where we are doing good things, where the governors in fact are making 
the reforms that we wanted to have happen in Moscow.
  Mr. Speaker, the fourth principle was to deny any corrupt 
institutions, especially those in Moscow, any future resources. If a 
bank, if a lending institution or a business, is found to be corrupt, 
then what we say is we go after those companies, those individuals, try 
to bring them to justice, try to recapture any money that is left, sell 
off any assets we can seize, and never give them any more money again. 
Again, the Russians were ecstatic. The first four principles, all of 
them they loved.
  Number five, and this one came from George Soros, who has probably 
been the single biggest private entrepreneurial in Moscow for the past 
20, 25 years, I traveled up to New York to meet with him before I went 
to Moscow a year ago and I said, ``Mr. Soros, what would you do after 
this economic collapse of August a year ago, what would you do to help 
the Russian economic situation?''
  He said, ``Congressman, there is only one thing that I could think of 
that needs to be done.'' He said, ``The International Monetary Fund is 
out of sync. It does not understand emerging economies like Russia's. 
What I think you need to do in the Congress is to call for the IMF to 
empanel an international blue ribbon commission to make recommendations 
back to the IMF, to reform itself, to make it more responsive to 
emerging economies like the Russian economy.''
  So the fifth recommendation is just that, to have the International 
Monetary Fund establish a blue ribbon task force to make 
recommendations as to how it can reform itself.
  Mr. Speaker, the sixth is probably the most substantive point of all 
the principles that we laid out, and this is absolutely amazing because 
this principle was a principle that the IMF has been demanding of 
Russia for the past 4 years and could not get. This principle is the 
principle Bill Clinton has been calling for for the past 4 years and 
could not get, and that was to put the horse in front of the cart, make 
the reforms precede and not follow the resources; to have the Russian 
Government understand reforms must come first and then the dollars will 
flow.
  Now, the IMF said that was necessary, and the Duma said no way are we 
passing your tough reforms.
  Mr. Speaker, if I was in the Duma I would say the same thing. Why 
should I pass tough reforms simply because the IMF board and Bill 
Clinton want us to pass them, or Boris Yeltsin, so we can get more IMF 
money when for the first 7 years that IMF money was coming in you 
ignored us, you pretended we were not here? In fact, you called us 
thugs and rogues and thieves and yet now you want us to do what you 
call the responsible thing?
  I do not blame the Duma one bit. I would not come in and bail out a 
bunch of corrupt thieves that have siphoned off billions of dollars. 
When the members of the Duma, when the factions in the Duma see that we 
are willing to put some other principles down on the table, all of a 
sudden it is a different story because with these principles they see 
that we want the money to flow in a different direction. We want to 
recognize the regions. We want to help reward those regions that are 
doing good things. We want to have legislative oversight of where the 
money is going. When those things are done and the Duma understands, it 
must make the tough decisions. It must reform the budget process. It 
must collect taxes. It must make people pay for their electric and 
their housing, something that never happened in a Communist regime, and 
it must begin to privatize the land in Russia.

  The seventh principle, Mr. Speaker, was to create a joint U.S.-
Russian business-to-business relationship program, where we would 
identify as many CEOs in America as possible, at the small- and medium-
sized corporate level, and we would link them up directly with the 
corresponding Russian CEO of a small- to medium-sized enterprise so 
that we could identify for every enterprise and business in Russia an 
American CEO that would become a mentor so they could work together 
one-on-one, discuss profits, motivating employees, meeting bottom 
lines, marketing techniques, the kinds of things that Russian 
entrepreneurs have to learn to compete in today's market worldwide; 
establishing a one-on-one program where American business leaders can 
interact with Russian business leaders one-on-one.
  There are some efforts underway along that line but they are 
primarily at the upper, larger corporate level as opposed to small- and 
medium-sized manufacture and business establishment.
  The last principle, Mr. Speaker, was to say that within 3 years we 
would bring 15,000 young Russian students to America. These students 
would be both

[[Page H10166]]

 graduate and undergraduate students. They would be enrolled in 
American schools that are offering degrees in business, finance, 
accounting, and economics. The principles would allow them to get their 
degree and go back to Russia and create the next generation of free 
market leaders.
  Now there was a stipulation in this principle, Mr. Speaker. None of 
these students could stay in America and live. When they completed 
their degrees, they would have to go back to Russia to their 
communities, to their towns and cities and regions, and live to help 
Russia create a new generation of free market leaders.
  Mr. Speaker, I think this is the kind of approach that will allow us 
to help Russia help itself; not just pumping in billion after billion, 
uncontrolled as it has been done for the past 8 years.
  Mr. Speaker, the bill that outlined these principles was dropped in 
the House last week. As I said, it is H.R. 3027. I was proud when I 
dropped the bill into the hopper that I had 25 Democrat cosponsors and 
25 Republican cosponsors. Mr. Speaker, 50 Members of Congress made a 
statement last week and now we are up above 50 Members of Congress. I 
have had a couple more Democrats and more Republicans come on as 
cosponsors and come up to me and want to get more information, but when 
we dropped the bill last week, 25 Democrats and 25 Republicans said our 
policy needs to change. We need to deal with Russia in a new way.
  Yes, we need to work with Russia. Yes, we need to help Russia 
stabilize itself, but not the way we have done it in the past.
  I would encourage my colleagues, Mr. Speaker, to sign on as 
cosponsors of H.R. 3027, so that we can set a new course and a new 
direction in terms of our relationship with Russia and the Russian 
people, because the Duma, Mr. Speaker, in Russia feels the same way 
that we do. In fact, we will be taking a delegation probably to Russia 
sometime before the end of the year. As we all know, Russia is having 
their Duma elections in December. All of us are watching and hoping 
that those people who win in Russia will be people who want to continue 
a strong relationship with the West.
  Mr. Speaker, my policy of engaging Russia is one that allows me to 
consider myself to be a friend of the Russian people and the Russian 
Duma, but they know very well, Mr. Speaker, in the 19 times that I have 
been to Russia that I also can be their toughest critic because I am 
also convinced that part of our problem with Russia is that we have 
been so enamored again with President Yeltsin as the leader that we 
have been unwilling to ask the tough questions.
  Mr. Speaker, Ronald Reagan had it right. Back when he was in office 
during the midst of the Cold War and the Soviet Union was maintaining 
its huge empire of Eastern Bloc regions, Ronald Reagan stood up and 
gave a famous speech where he called the then Soviet Union an evil 
empire. People were aghast that the President of the United States 
would say that.
  Mr. Speaker, the 95 percent of the Russian people who were not 
members of the Communist party and benefiting from that system agree 
with him. So 95 percent of the people in Russia who were not communists 
understood Ronald Reagan when he said it was an evil empire because by 
not being members of the party they were not benefiting from the 
spoils. They saw that what Ronald Reagan said was true, and that is why 
today he still is very much revered in Russia.
  Russian people are very bright people. They respect honesty. They 
respect candor, and they respect consistency. In my opinion, Mr. 
Speaker, in the last 7 years we have given them none of that. We have 
pretended things are not what they are. We have so been enamored with 
Boris Yeltsin that any time something happened involving the theft of 
IMF money, economic turmoil, we pretended it did not happen. When we 
had intelligence reports that came before us that showed that there was 
evidence that Chernomyrdin had people supporting him that were corrupt, 
what did Vice President Gore do? He wrote the word ``bull'' across the 
report and sent it back to the intelligence community because he did 
not want to hear it because it was saying something he did not want to 
be true even though it was true.

  Mr. Speaker, for 7 years when it came to Russia abusing its money 
going in, we turned our head the other way because we did not want to 
embarrass Boris Yeltsin, but it is not just with the money, Mr. 
Speaker.
  Back in 1997, as I have mentioned on this floor in the past, one of 
our career Navy intelligence officers, Lieutenant Jack Daley was flying 
a reconnaissance mission in Seattle, with a Canadian pilot in a 
helicopter monitoring a Russian trawling ship that we knew was spying 
on our submarine fleet in Seattle, in Pugent Sound. Lieutenant Daley 
had a sensation in his eye while he was taking photographs of this 
trawler that they knew was a spy ship because we had boarded the ship 
in the past and we saw sonar buoys on the ship which are only used to 
spy on submarines, and we also knew that ship was a spy ship, by the 
way called the Kapitan Man, because there was no cargo being brought 
into port and no cargo being taken out of port. It was spying on our 
submarines.
  Lieutenant Daley had this sensation in his eye while flying on this 
helicopter mission and so the Canadian pilot, in this joint exercise, 
they landed their helicopter, they reported to the base infirmary and 
the doctor there said, ``You are suffering damage caused by a laser. 
Lieutenant Daley gave them the film from the camera and, sure enough, 
as they were taking photographs of this Russian trawler they were 
lasered from the ship.
  Mr. Speaker, that is damage by a foreign nation to one of our own, 
our flesh and blood, an American hero, one of our soldiers in uniform.
  What did we do? Well, the record speaks for itself, Mr. Speaker, but 
I can say in cables that have now been declassified, the Department of 
Defense cabled back to the State Department and got our current 
ambassador involved, Ambassador Collins, and the current Russian leader 
in the State Department, Strobe Talbott, and Bob Bell from the Security 
Council and each of them was consulted about what to do because this 
American pilot had been lasered by a Russian ship.
  Initially, they wanted no American to board that ship. They did not 
want an international incident created. The Department of Defense said, 
no, that is one of our people; we are going to go on that ship so the 
cable that came back said, only search the public areas of the ship.
  Now, Mr. Speaker, can you really believe that? That we are now going 
to board a Russian ship that we know is a spy vessel and we are going 
to look for a laser generator or a laser gun but the boarders that are 
going to go on the ship are being told only inspect the public portions 
of the ship?

                              {time}  2130

  Do we really think the Russians are that stupid to leave the laser 
generator out in the open? So obviously we boarded the ship, and we saw 
nothing.
  Lieutenant Daley was taken down to San Antonio for further medical 
evaluation, and, in fact, it was determined that he had serious laser 
damage done to his eyes.
  The outrage here, Mr. Speaker, is Jack Daley did nothing but do his 
job as a 16-year career Navy officer doing naval intelligence. He made 
the mistake of asking for his country to defend him when a foreign ship 
and its crew lasered him in the eye.
  What did our administration do? We did not want to offend Boris 
Yeltsin. We did not want to make an incident here. So the State 
Department cabled back and tried to quash this thing.
  Jack Daley was passed over for promotion right after that incident 
and a second time this past July. Even though his career had been an 
outstanding career with all positive evaluations, twice since that 
incident, he was bypassed for promotion.
  This is what Jack Daley's commanding officer said to him, Mr. 
Speaker, in Jack Daley's own words. He said, ``Jack, you do not know 
the pressure I am under to get rid of your case. Jack, you do not know 
the pressure I am under to get rid of your case.'' A career Navy 
intelligence officer being told by his superior that they have to get 
rid of the case because we do not want to embarrass Boris Yeltsin.
  Do we really think the Russians respect us? They are not stupid, Mr. 
Speaker. How about arms control violations? I did a floor speech last 
June a

[[Page H10167]]

year ago where I documented, based on a work done by the Congressional 
Research Service, not by me, and my colleagues know they serve both 
sides of the aisle, they are nonpartisan, they documented 17 cases, 17 
cases since 1991 of arms control violations by Russian entities where 
technology was sent to Iran, Iraq, Syria, Libya, North Korea, China, 
and India. We imposed sanctions that are required by arms control 
treaties zero times, zero times.
  Mr. Speaker, I was in Moscow January 1996. The previous December, the 
Washington Post carried a front page story above the fold, front page, 
headline: ``Russians caught transferring guidance systems to Iraq''.
  So I am in Moscow in January. I said to Ambassador Pickering who is 
now the third ranking leader in the State Department, ``Mr. Ambassador, 
what did the Russians say when you asked them about this transfer of 
these guidance systems, because you know that is a violation of the 
missile technology control regime.'' He said, ``Congressman Weldon, I 
have not asked them yet.'' I said, ``Well, why have you not asked 
them?'' He said, ``That has got to come from Washington.''
  So, Mr. Speaker, I came back, and I wrote a three-page letter to 
President Clinton at the end of January 1996. I said, ``What is the 
story, Mr. President? You saw the Washington Post headlines. If this 
occurred, it is a violation of an arms control treaty, and that 
requires us to act.'' The President wrote me back in March or April 
that year; I still have the response.
  He said, ``Dear Congressman Weldon, you are right. If this violation 
took place, it is serious. If it took place, it would be a violation of 
the missile technology control regime. But, Congressman Weldon, we have 
no evidence.''
  Mr. Speaker, I was not aware at the time, but I am now, in fact I 
carry a set of these around with me most of the time, the Russians 
transferred three different times over 100 sets of these devices to 
Iraq. These devices are used to make Iraq's missiles more accurate.
  Mr. Speaker, 17 times Russian entities violated arms control 
treaties, and we did nothing. Do we really think the Russians are going 
to respect us? Do we really think when we abandon Jack Daley that they 
are going to respect us? Do we really think when we ignore billions and 
billions of fraud with our IMF money that they are going to respect us? 
I would not respect us, Mr. Speaker. That is the failure of this 
administration.
  Now, why would this be the case? Well as I said at the outset, Mr. 
Speaker, our policy has been wrong-headed. We have been so preoccupied 
with Boris Yeltsin's success that nothing else mattered. That is a 
pretty hefty statement that I would make. How can I back that up?
  Mr. Speaker, I would encourage my colleagues, if they have not yet 
read the book by Bill Gertz, who is probably the toughest foreign 
policy and defense investigative writer in this city for the Washington 
Times, get a copy of this book Betrayal or simply turn to the back of 
the appendix section, because in the back of this, Mr. Speaker, there 
are two things that the American people and our colleagues need to see.
  First of all, on page 219 of this book, a document that was 
classified top secret, I do not know how Gertz got it because it was 
top secret, now the American people can read it, my colleagues will get 
the full chronology of the State Department cables of the Jack Daley 
case. So my colleagues can see for themselves that what I am saying 
about Jack Daley and the involvement of our State Department in trying 
to keep this thing quiet is right there in the State Department's own 
words, now declassified in a book that we can buy off the shelf at a 
bookstore.

  Further back in this appendix, Mr. Speaker, on page 275, is a two-
page document called ``confidential''. I do not know how Bill Gertz got 
this either, Mr. Speaker. But this confidential document is 
interesting. It is a cable summarizing a personal meeting between Bill 
Clinton and Boris Yeltsin. Guess what year it was written, Mr. Speaker? 
1996, Mr. Speaker, which is the same year that Boris Yeltsin is running 
for reelection as the President of Russia.
  Let me just read one of the paragraphs, Mr. Speaker, of this now 
publicized cable between our President and the Russian president. ``The 
President'', our President Clinton, ``indicated that there was not much 
time, but he wanted to say a few things about the Russian elections. 
First of all, he wanted to make sure that everything the United States 
did would have a positive impact, and nothing should have a negative 
impact. He was encouraged that the Secretary of State was heading to 
Moscow to meet with Mr. Primakov, and he wanted the April summit to be 
a positive event. The United States will work to Russia to ensure this 
so that it would reinforce everything that Yeltsin had done in this 
regard.''
  It goes on to say that the President wanted to make sure that America 
would not let anything surface that will allow Yeltsin's election to go 
the wrong way.
  Do we wonder why we have a problem, Mr. Speaker? We were so enamored 
with Boris Yeltsin that institutions did not matter. Yeltsin was our 
support, not Russian democracy, not Russian capitalism. Do we wonder 
why today, with Yeltsin's popularity at 2 percent, that the Russian 
people and their parliament have no respect for us?
  Mr. Speaker, in dealing with Russia, we must work in a proactive way, 
because Russia still has tens of thousands of warheads on tens of 
thousands of missiles that are aimed at America's cities. We do not 
need a destabilized Russia anymore that sells off this technology to 
rogue states and rogue terrorist groups.
  But it does not mean, Mr. Speaker, that we ignore the reality of what 
Russian individuals and entities are doing. I am not saying that 
everybody in Russia is corrupt. But when things are going wrong in 
Russia, we must challenge them. When Russia is not being honest with 
us, we must challenge Russia. We must let them know that we want 
transparency, just as Ronald Reagan did. When they do not give us 
transparency, they must know there is a price to pay.
  So along with working in a new direction with Russia, I want to 
underscore and reinforce to our colleagues that we must also challenge 
Russia and what is happening there and whether or not there are forces 
within Russia that are looking to create instability in our 
relationship with that Nation.
  Now, I am convinced that there are many positive leaders in Russia, 
many of whom are my good friends. I hope that they win their 
reelections come December of this year.
  But I want to tell my colleagues, Mr. Speaker, there are some things 
that trouble me greatly about Russia that we just do not know enough 
about and that this administration is not asking Yeltsin to explain 
because they do not want to embarrass him.
  Some examples. Ken Alibek, Mr. Speaker, was for years the head of the 
Russian's biological weapons program. Under the Soviet Union, Ken 
Alibek lived in Russia. His job was to monitor and to oversee the 
entire biological weapons program for the Soviet Union.

  I have met with Ken Alibek five or six times. This is his book called 
Biohazard. He is convinced that Russia's biological weapons program 
continues today.
  Mr. Speaker, we need leadership that is willing to challenge Russia 
on these issues. When someone like Ken Alibek comes forward, yes, we 
must work to help stabilize Russia, but we must tell the Russians that 
we want to know whether or not what he is saying is true. We are not 
doing that today, Mr. Speaker. We are not asking the tough questions.
  Or how about Stanislav Lunev? Mr. Speaker, I had Stanislav Lunev, as 
I mentioned earlier, testify before my committee 3 years ago, as the 
highest ranking GRU defector ever from the Soviet Union. We had to put 
him behind a screen, and he had to wear a mask over his head because 
there is a price on his head from certain aspects of the Russian 
leadership because of what he has told.
  Part of what he said in my hearing 3 years ago was that his job when 
he worked for the intelligence for Russia, the Soviet Union, and his 
cover was that he was a correspondent for, I think it was, Tass here at 
the Soviet Embassy, that one of Lunev's jobs was to look for sites 
where the Soviet Union could preposition military hardware and 
equipment on American soil.

[[Page H10168]]

 Now, Mr. Speaker, it is a pretty provocative statement.
  What Lunev said several years ago was that the Soviet Union through 
its intelligence service deliberately, in a very provocative way, put 
military equipment and hardware on American soil in predetermined 
locations. In fact, he told us that that was part of his assignment. In 
fact, Mr. Speaker, later on this week, I will join Mr. Lunev in looking 
at one of those sites right outside of Washington where he looked, as a 
career intelligence officer for the Soviet Union, and scoped out for a 
drop by the Soviet military and intelligence services.
  But not much has come about since Lunev made his comments until 1 
month ago. One month ago, Mr. Speaker, this book came out. It is called 
the Mitrokhin Archive. It seems as though, for 30 years, the chief 
archivist of the KGB in Moscow did not like the KGB and what it was 
doing. Very quietly, for 30 years, this Russian gentleman, day by day, 
wrote down and copied every memo that he was putting in the KGB 
archives in Moscow. He snuck them out of work every day inside of his 
clothing, took them to his home and buried them under the floorboards 
of his house.
  In 1992, after the Soviet Union collapsed, he emigrated through the 
Baltic States. His first trip was to a U.S. embassy, and we turned him 
down when he told us that he had secret documents from the KGB. He then 
went to the Brits. The Brits took him in, gave he and his family 
complete asylum where he lives in Britain today under an assumed name.
  The British intelligence then had Mitrokhin link up with Christopher 
Andrew, who is a Cambridge scholar and an outstanding expert, probably 
the number one expert in the world on the Soviet KGB. For 6 years, Mr. 
Speaker, Christopher Andrew translated the Mitrokhin archives and 
files. This book is the first edition of documenting those files.
  On October 26, Mr. Speaker, Christopher Andrew and Gordievsky, 
another high-ranking KGB defector will travel to Washington, and they 
will testify before my committee. The American people then can see for 
themselves and hear the kinds of things that were done during the 
Soviet era that we need to make sure are not happening today in Russia 
and that we need to have the will and the tenacity to question the 
Russian leadership about, not worrying about embarrassing Boris 
Yeltsin, but whether or not the KGB leadership still continues to do 
the kinds of things that were done under the Soviet era.

                              {time}  2145

  Why is this so critical? Because in the document by Christopher 
Andrew in the Mitrokhin files, as a follow-up to what Lunev said, they 
actually give the locations in countries around the world where the 
Soviet Union prepositioned military equipment. And guess what, Mr. 
Speaker? There are sites in the U.S. that are identified in the KGB 
files where the Soviet Union prepositioned military equipment and 
buried it and booby-trapped each site.
  Now, in the book are photographs in the center where one such site 
was identified in Switzerland. There are the photographs of that site. 
The Swiss authorities realized it was booby-trapped, which it was. When 
they dug down, they found exactly where the KGB files had stated was 
military hardware that the Mitrokhin files said would be there.
  The question, Mr. Speaker, is: Where are these devices on American 
soil? What towns and cities and park lands currently have in place 
military equipment and hardware prepositioned by the KGB?
  This administration, Mr. Speaker, that has known about these files 
for 6 years should have been asking those questions of Russia's 
leadership. We are going to ask those questions now, Mr. Speaker, and 
we are going to find out if, once again, we have been afraid to ask the 
tough questions because we do not want to embarrass Boris Yeltsin.
  Mr. Speaker, there is just one overriding thought here in this whole 
relationship. We want Russia to succeed. We want the Russian people to 
have a free democracy. We want Russia to have the institutions that we 
have in America. But you cannot get there when we deny reality, when we 
pretend things are something they are not. Because the only thing that 
occurs then is the other side loses respect for you. I am convinced 
that is the problem with Russia today. They have lost respect for 
America.
  The Congress, with H.R. 3027, and our new vision for Russia, is 
outlining a new direction based on three simple premises: Strength, 
consistency, and candor. Help create the institutions of a true 
democracy, a strong middle class, a strong parliament, and a strong 
constitution that will survive individual personalities. If we want 
Russia to succeed, we must follow these steps, Mr. Speaker. This is the 
only way that America and Russia can work together and thrive in the 
21st century.

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