[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Pages 4003-4004]
[From the U.S. Government Publishing Office, www.gpo.gov]



                         SWORD TO PLOUGHSHARES

  Mr. DOMENICI. Mr. President, I rise today to discuss some efforts in 
defense conversion that are reaping great gains. In the book, ``The 
Idea of National Interest'', Charles Beard wrote:

       Government might legitimately take the initiative and 
     pursue some interests aggressively. Furthermore, it might 
     make use of its own citizens and their interests to advance 
     the national interest.
  Early on U.S. foreign policy for the Former Soviet Union, FSU, was 
designed to do just that: make use of U.S. citizens' interest to 
advance our national security objectives.
  Today, I would like to briefly underscore some successes, 
specifically in the realm of defense conversion. Before doing so, 
however, I wanted to offer some insights regarding the scope of the 
problem.
  First, the legacies of a command economy were prevalent in all 
nations behind the Iron Curtain. Such legacies included: a structure of 
production dominated by heavy industry, distorted factor and product 
prices, antiquated or obsolescent capital stock, inadequate skills to 
compete in a modern economy; a neglected infrastructure, severe 
environmental degradation, trade oriented towards other uncompetitive 
markets, and large volumes of non-performing loans and heavy foreign 
debt.
  The FSU was no exception with respect to inheritance of these burdens 
and impediments. And despite all these similarities with other eastern 
European states, the FSU, especially Russia, was unique in one very 
important way.
  For Russia, Ukraine, Belarus, and Kazakhstan ``heavy industry'' was 
that of defense. Fifty-two percent of Russia's industry was involved in 
military-related research, design and manufacturing. In Ukraine, 
Belarus, and Kazakhstan, the defense industry comprised about fifteen 
percent of their heavy industry.
  This distinction made the Soviet industry not merely an economic 
concern, but rather a central threat to international security. As 
Soviet central authority deteriorated, control over its massive 
military complex also crumbled. As such international security concerns 
are not limited to issues of control over nuclear weapons and material, 
but include attaining a degree of economic stability to offer stable 
employment to a vast number of persons in military and military-related 
occupations, especially scientists and engineers in that sector.
  The threat was apparent; the risk of inadequate action has been 
readily apparent. The national interest, indeed,

[[Page 4004]]

the global interest, is in securing stability in the region. Stability 
in the region equates with global stability, especially in light of the 
potential leakage of knowhow from weapons complex.
  Our approach has come in fits and starts. We have not offered a 
integrated, comprehensive plan for U.S. economic assistance or 
nonproliferation programs. Increasingly, however, we are coming to 
recognize the interrelationship between these two elements of our 
Russia policy, even if we still haven't achieved a semblance of a 
strategy.
  I did, however, want to discuss some efforts that have succeeded. 
They are not sufficient in breadth, depth or financial means. 
Nonetheless, there are an exception to the rule in our efforts to 
provide meaningful, stable employment to former Soviet scientists and 
engineers.
  I begin with the efforts of the Cooperative Research and Development 
Foundation, CRDF. CRDF was created pursuant to Section 511 of the 
Freedom Support Act of 1992 in 1995. Its mission is to conduct 
innovative activities of mutual benefit with the countries of the FSU. 
Further, CRDF was to offer opportunities to former weapons scientists 
to achieve transition to productive civilian research. They have been 
remarkably successful.
  Since its inception, CRDF has expended $16 million of U.S. Government 
funds and $1 million from private foundations. The FSU, in turn, has 
committed $4.8 million to these activities. These funds have backed 597 
projects that supported a total of 4300 scientists and engineers.
  In addition, with major contracts from the DOE, DoD, NIH, and EPA as 
well as industry, CRDF is helping U.S. participants address issues of 
financial integrity in their dealings with the FSU. Over $30 million 
for over 500 projects has been managed by CRDF through these contracts.
  The Foundation has committed an additional $11.8 million to projects 
in five program areas.
  CRDF's industry programs reduce the risk for U.S. companies to engage 
FSU scientists. These grants have leveraged 300 percent of U.S. 
Government funds through in cash and in-kind contributions from U.S. 
industry.
  I would also note that more than 95 percent of the collaborations 
formed in CRDF awards will continue, whether with CRDF support or not. 
Over 100 U.S.-FSU teams are seeking commercial applications for the 
products of their collaborative research. Twenty-two teams have filed 
for patents, fourteen of which are joint.
  For over a year now CRDF has ensured financial integrity for 
Department of Energy projects under the Initiatives for Proliferation 
Prevention, IPP, program. The United States Industry Coalition, USIC, 
the industry-arm of the IPP program, now boasts 96 members throughout 
the U.S. and several substantial commercial successes with FSU 
partners. Through its cooperation with CRDF, USIC and the IPP program 
now can ensure that funding for FSU scientists involved in these 
research efforts avoids taxation by Russian or other officials. This 
aspect is critical for maximizing the impact of U.S. Government or 
industry investments to provide stable employment and a steady income 
to FSU scientists.
  Since 1994, the IPP program has engaged over 6,200 former weapons of 
mass destruction scientists. Importantly, USIC members usually surpass 
cost-sharing arrangements with DOE expenditures totaling $39.3 million 
versus the $63.4 million invested by U.S. industry. Currently, 75 of 
USIC's members are engaged in 120 cost-shared projects.
  I would like to briefly highlight a recent success story in my home 
state of New Mexico. On January 15, I participated in a technology 
demonstration and press conference to announce a $20 million 
international investment in technologies jointly developed by a small 
U.S. engineering company, a Russian nuclear weapons plant, and two of 
the Department of Energy's facilities.
  An entrepreneurial American company, Stolar Horizon of Raton, NM, a 
long-standing member of USIC, identified a Russian technology with 
market potential, then staked over $5 Million of its own money to 
develop it. Stolar Horizon worked in tandem with Sandia National 
Laboratories and the Kansas City Plant through the IPP program to test 
and refine the technology for commercial, peaceful applications.
  The result: Credit Suisse First Boston has committed $20 million in 
financing to take the product to the global market. An estimated 350 
new jobs will be created in New Mexico, and over 600 jobs await Russian 
nuclear scientists and technicians in Nizhny Novgorod at the Institute 
for Measuring Systems Research, NIIIS, are planned.
  I would remind everyone that U.S. appropriations in FY2001 for the 
IPP program is only $24.5 million. In this one example, Credit Suisse 
will provide an investment equal to 80 percent of our own in this 
fiscal year.
  The Stolar Horizon/NIIIS success is a concrete example of the 
original IPP vision: making the world a safer place through cooperative 
commercial efforts leading to long-term, well-paying jobs in both 
nations.
  The cooperative efforts of USIC members, DOE-IPP, other U.S. 
government agencies, and the scientific institutes of the NIS are 
revolutionizing the post-Cold War world, creating new opportunities for 
weapons scientists and engineers, and making our world more safe and 
secure.
  I return to the thoughts of Charles Beard. In pursuit of its 
interests, Government might make use of citizens' interests to advance 
the national interest. This is the foremost objective of 
nonproliferation programs that seek to create commercial opportunities 
in the FSU.
  The statistics and examples I've offered above underscore the 
successes we've achieved. Obviously, our attempts have frequently 
stumbled sometimes as a result of our own false starts and other times 
due to circumstances beyond our control. However, at the same time, we 
have never faced a situation similar to the collapse of the Soviet 
Union. We had never before legislated or formulated programs with the 
express intent of preventing proliferation through promotion of 
commercial opportunities. We had never confronted providing economic 
development aid to countries burdened by legacies of a command economy. 
From this perspective, we've made remarkable progress.
  Mr. President, I would conclude on the following note: each concrete 
successful commercial venture will have exponential benefits. I am 
convinced that these ventures will pay off--by mitigating immediate 
potential proliferation threats, contributing to a stable economy in 
the region, and advancing U.S. citizens' own monetary interests.

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