<DOC>
[108 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:92146.wais]


                                                        S. Hrg. 108-792

      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 4818/S. 2812

AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, 
AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND 
                           FOR OTHER PURPOSES

                               __________

                         Part 2 (Pages 1-113)

                          Department of State
                       Nondepartmental Witnesses
          United States Agency for International Development
                         Department of Defense
                Department of Health and Human Services
                       Department of the Treasury
                   Executive Office of the President
                Overseas Private Investment Corporation
                           Export-Import Bank
                  U.S. Trade and Development Program

                               __________

         Printed for the use of the Committee on Appropriations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate


                               __________

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                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                    James W. Morhard, Staff Director
                 Lisa Sutherland, Deputy Staff Director
              Terrence E. Sauvain, Minority Staff Director
                                 ------                                

   Subcommittee on Foreign Operations, Export Financing, and Related 
                                Programs

                  MITCH McCONNELL, Kentucky, Chairman
ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont,
JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
ROBERT F. BENNETT, Utah              BARBARA A. MIKULSKI, Maryland
BEN NIGHTHORSE CAMPBELL, Colorado    RICHARD J. DURBIN, Illinois
CHRISTOPHER S. BOND, Missouri        TIM JOHNSON, South Dakota
MIKE DeWINE, Ohio                    MARY L. lANDRIEU, Louisiana
TED STEVENS, Alaska (Ex officio)     ROBERT C. BYRD, West Virginia (Ex 
                                         officio)

                           Professional Staff

                               Paul Grove
                         Tim Rieser (Minority)
                        Mark Lippert (Minority)

                         Administrative Support

                            LaShawnda Smith


                            C O N T E N T S

                              ----------                              

                        Thursday, April 8, 2004

                                                                   Page

Department of State: Office of the Secretary.....................     1

                       Wednesday, April 21, 2004

United States Agency for International Development...............   121
Department of State: Coordinator for Couterterrorism.............   134

                         Tuesday, May 18, 2004

Department of State: Office of the U.S. Global AIDS Coordinator..   201
Nondepartmental witnesses........................................   267

 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        THURSDAY, APRIL 8, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:30 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Specter, Bennett, DeWine, 
Stevens, Leahy, Harkin, Durbin, Landrieu, and Byrd.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF HON. COLIN L. POWELL, SECRETARY


             opening statement of senator mitch mc connell


    Senator McConnell. This hearing will come to order. We want 
to welcome the Secretary of State. After a couple of false 
starts, we are pleased to hold the first of three hearings on 
the fiscal 2005 budget request.
    On April 21, USAID Administrator Natsios and State Counter-
terrorism Coordinator Cofer Black will testify on foreign 
assistance and international terrorism. On April 28, HIV-AIDS 
Coordinator Tobias will appear before the subcommittee to 
discuss the fiscal year 2005 HIV-AIDS request.
    In the interest of time, Senator Leahy and I will make 
brief opening remarks, and I would request Secretary Powell, as 
usual, to summarize his testimony, which will be included in 
the record in its entirety. We will then move to 5-minute 
rounds of questioning, and the record will be kept open to 
ensure that all senators have an opportunity to have their 
questions addressed.
    Mr. Secretary, I want to begin by thanking you and the 
President's foreign policy team for your collective efforts to 
promote freedom across the globe and, in my judgment, nowhere 
is this more apparent than in Iraq and Afghanistan.
    Having traveled to the Middle East and South Asia myself, 
about 6 months ago, I can attest that the citizens of those 
countries are clearly better off today than they were under the 
repressive misrule of Saddam Hussein and the Taliban, 
respectively.


                                  IRAQ


    The recent BBC/ABC poll results in Iraq are fascinating. I 
wish Americans were as upbeat about America as Iraqis are about 
Iraq. If you watched U.S. television every day, you would think 
nothing but bad things are happening in Iraq, and surely the 
Iraqi people would be depressed about that. However, in the 
BBC/ABC poll--which was taken from February 9 to February 28--
in answer to the question, ``How are things going today, good 
or bad, in Iraq?'', 70 percent said good, 29 percent said bad. 
That is a question the President would love to see answered 
that way here. Compared to a year ago before the war in Iraq: 
56 percent responded things are better; the same, 23 percent; 
worse, 19 percent.
    In terms of the optimism factor, that is, how they will be 
a year from now, 71 percent of Iraqis thought things would be 
better, only 9 percent thought they would be the same, and only 
7 percent thought they would be worse. I think that pretty well 
sums up the results of a professional poll about how Iraqis 
themselves--those who experienced the murders of 300,000 of 
their own citizens during the Saddam Hussein regime--feel about 
their prospects, Mr. Secretary, as a result of your leadership 
and that of the President and others in liberating that country 
from the regime that had terrorized not only its own citizens 
but its neighbors for well over a quarter of a century.
    To be sure, the Islamic extremists are working hard to 
undermine the new-found freedoms; and, in desperation, are 
attacking soft targets: innocent men, women, and children. 
These terrorists know that each step toward democracy is yet 
another step in the death march for their hateful and 
intolerant ideology.
    In Iraq, we should expect increased terrorist activities in 
the days and months before the June 30 transition. We have been 
seeing that lately.
    Beginning July 1, and under your watchful eye at the State 
Department, I am confident that the Iraqi people will not only 
stay the course but continue to further consolidate the 
significant gains they have achieved in a relatively short 
period of time.
    However, freedom is not free. And we thank the many 
soldiers and civilians serving on the front lines of the global 
war on terrorism; whether American, Iraqi, or Afghani.
    Today's hearing affords this subcommittee an opportunity to 
glean additional information on the President's $21 billion 
budget request for the next fiscal year. And it would be 
helpful, Mr. Secretary, to have your insights as chairman of 
the Millennium Challenge Corporation.
    I know several of my colleagues share a concern with the 
proposed funding levels for SEED and FSA accounts. While we 
support graduation of countries from U.S. foreign assistance, 
we are troubled by developments in such places as Russia and 
Serbia. I want to commend you for giving voice to these shared 
concerns during your trip to Russia earlier this year, and for 
not certifying Serbia's cooperation on war crimes issues last 
week.


                          U.S. EMERGENCY FUND


    It would also be useful to have your views on the proposed 
$100 million U.S. Emergency Fund for Complex Foreign Crises. 
This strikes me as a good idea, given the need to respond with 
maximum flexibility to unanticipated events and opportunities, 
particularly in the Middle East and on the African continent. 
Libya comes readily to mind.
    Just a couple of observations, which will not surprise you, 
relating to Burma. Congress will begin the process of sanctions 
renewal in the next few weeks. I deeply appreciate the 
President's continued interest and leadership on this issue, as 
well as your own. I know we will be able to count on your 
support for continued sanctions, given the total absence of 
irreversible progress toward democracy in that country.
    It is simply not enough for Aung San Suu Kyi to be released 
or that she be given a last-minute seat at the table. We can 
pretend that the State Peace and Development Council is serious 
about a constitutional convention--as Thailand seems to be 
intent on doing--but I hope we will not have short or selective 
memories when it comes to that subject.
    Justice is certainly due for the May 30 attack on Suu Kyi 
and the NLD, and the regime ought to be held accountable for 
its actions.


                           PREPARED STATEMENT


    In that regard I would encourage you to renew and 
reinvigorate efforts to secure sanctions regimes from the 
European Union and other professed supporters of freedom around 
the world. Unfortunately, we are hearing that international 
financial institutions, particularly the World Bank and the 
Asian Development Bank, are keen on re-engaging in Burma. They 
do so at their own risks and should begin finding other funding 
sources for the upcoming fiscal year, because none will be 
forthcoming from this subcommittee.
    [The statement follows:]

             Prepared Statement of Senator Mitch McConnell

    Mr. Secretary, I want to begin my remarks this afternoon by 
thanking you and the President's foreign policy team for your 
collective efforts to promote freedom across the globe. Nowhere is this 
more apparent than in Iraq and Afghanistan.
    Having traveled to the Middle East and South Asia some six months 
ago, I can attest that the citizens of those countries are better off 
today than they were under the repressive misrule of Saddam Hussein and 
the Taliban, respectively.
    I saw this firsthand through bustling, free commerce in the 
streets, freedom of expression that takes many forms, and through the 
words of grateful Iraqis and Afghanis whose once bleak future now holds 
promise and hope.
    To be sure, Islamic extremists are working hard to undermine these 
new-found freedoms and in desperation are increasingly attacking soft 
targets: innocent men, women and children. These terrorists know that 
each step toward democracy is a yet another step in the death march for 
their hateful and intolerant ideology.
    In Iraq, we should expect increased terrorist activities in the 
days and months before the June 30 transition. Beginning July 1--and 
under your watchful eye at the State Department--I am confident that 
the Iraqi people will not only stay the course but continue to further 
consolidate the significant gains they have achieved in such a short 
time.
    However, freedom is not free. This Senator thanks the many soldiers 
and civilians serving on the front lines of the global war on 
terrorism--whether American, Iraqi or Afghani.
    Today's hearing affords this Subcommittee an opportunity to glean 
additional information on the President's $21 billion, fiscal year 2005 
budget request for foreign operations. It would helpful to have your 
insights into the request, both as Secretary of State and Chairman of 
the Millennium Challenge Corporation.
    I know several of my colleagues share my concern with the proposed 
funding levels for the SEED and FSA accounts, and while we support 
graduation of countries from U.S. foreign assistance we are troubled by 
developments in such places as Russia and Serbia. I want to commend you 
for giving voice to shared concerns during your trip to Russia earlier 
this year, and for not certifying Serbia's cooperation on war crimes 
issues last week.
    It would also be useful to have your views on the proposed $100 
million U.S. Emergency Fund for Complex Foreign Crises. This strikes me 
as a good idea given the need to respond with maximum flexibility to 
unanticipated events and opportunities, particularly in the Middle East 
and on the African continent. Libya comes readily to mind.
    Let me close with a few comments on Burma.
    Congress will begin the process of sanctions renewal in the next 
few weeks, and I deeply appreciate the President's continued interest 
and leadership on this issue. I hope--and expect--that we can count on 
your support, Mr. Secretary, for continued sanctions, given the total 
absence of irreversible progress toward democracy in that country.
    It is simply not enough that Aung San Suu Kyi be released, or that 
she be given a last minute seat at the table. We can pretend that the 
State Peace and Development Council (SPDC) is serious about a 
constitutional convention--as Thailand seems intent on doing--but we 
should not have short or selective memories.
    Justice is due for the May 30 attack on Suu Kyi and the NLD, and 
the SPDC must be held accountable for its actions.
    I encourage you to renew and reinvigorate efforts to secure 
sanction regimes from the European Union and other professed supporters 
of freedom around the world. Unfortunately, I am hearing that 
international financial institutions--particularly the World Bank and 
the Asian Development Bank--are keen on re-engaging Burma. They do so 
at their own risks, and should begin finding other funding sources for 
the upcoming fiscal year because none will be forthcoming from this 
Subcommittee.
    Again, welcome Mr. Secretary. I look forward to your testimony.

    Senator McConnell. With that, I turn to my friend from 
Vermont.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Mr. Chairman, I am glad you are 
scheduling this hearing. Incidentally, I would urge the members 
of this subcommittee to read the Op-ed piece that Senator 
McConnell had in the Washington Post yesterday about Egypt. I 
think that one does not have to be a great analyst to 
understand that there may be some changes in our approach to 
foreign aid there. And I commend the chairman for his article.
    Senator McConnell. Thank you.
    Senator Leahy. And, Mr. Secretary, of course, thank you for 
being here. You are one of the Cabinet members who regularly 
comes before our committees; not all of your colleagues are 
willing to and I am delighted that you do.
    We have a lot to talk about. Obviously, the situation in 
Iraq is of great concern. We had a discussion earlier this 
morning when we went over the violence and the number of 
casualties; and, of course, you have to feel for the families 
of our brave soldiers, and marines, who are over there. They 
are facing horrendous dangers.
    Your background is in the military. You have a better idea 
than all of us of what they are going through in combat; and 
also what their families go through when they are either killed 
or sometimes severely injured with lifetime injuries.

                          IRAQ RECONSTRUCTION

    We have appropriated more than $20 billion to rebuild Iraq. 
And that is, of course, in addition to the hundreds of billions 
of dollars we are spending there on the military operations.
    Last October, the President said the reconstruction money 
in the Iraq supplemental was an emergency. And we were told by 
the administration that the President needed every dime, he 
needed it immediately. And when some Members on both sides of 
the aisle tried to look at it, maybe split it up, here in the 
Appropriations Committee, we were told we had to pass it 
immediately.
    Five months later, only about a ninth of the money has 
actually been spent. In the meantime, the violence is spreading 
and we hear, as a strategy, only about sending more troops.
    Mr. Secretary, this is an election year and like all 
election years, partisanship up here is at a high--although I 
must say in my 29 years here, it is at an all-time high. But 
the situation in Iraq is not about Democrats or Republicans. It 
is a problem for all Americans. We need to work together to 
solve it.
    You and I have known each other for, I think, a couple of 
decades now. And I have always considered you as somebody who 
can bring people of different political persuasions together. I 
have seen you do that at meetings, where you have had people 
across the political spectrum. Well, we need unity today. We 
need it between the Congress and the White House. We need it 
among the American people. And we need it with our allies.
    I believe that the majority of Iraqis reject violence. They 
want to rebuild their country. But I do not think our strategy 
is working.
    Our forces can quash this latest uprising; they will. But 
what is happening in Iraq today does not bode well for the 
future. Just ``staying the course'' is not a viable strategy at 
this point, at least not to me.
    Using more force, or simply sending more troops, will not 
solve the problem, nor simply replacing the CPA with a giant 
U.S. Embassy.
    We need a broader, multilateral approach that has the 
support of a majority of the American people and the Iraqi 
people, as well as our allies and the international community, 
including as many Arab and Muslim nations as possible.

                            STRATEGY OPTIONS

    Let me suggest just a couple of ideas. I believe the 
President should immediately convene a bipartisan summit of his 
key Cabinet officials and bipartisan Members of the 
congressional leadership at the White House to discuss the 
strategy options for the coming months.
    Second, I believe the President should address the American 
people, explain his strategy in some detail and the difficult 
road ahead, and tell our families how long we can expect our 
soldiers to be in Iraq.
    Third, I believe the President should convene a summit of 
the world's major democracies, including those that opposed his 
decision to go to war. Because rebuilding Iraq poses a 
challenge not only for the United States, but for the rest of 
the world. And if civil war takes hold there, we know how 
disastrous the consequences could be.
    Fourth, the President should send you, Mr. Secretary, back 
to the U.N. Security Council, to seek a new resolution calling 
for increased support from other nations, aimed specifically at 
addressing the deteriorating security situation.
    That resolution, I believe, should also call for the 
appointment, by June 30, of a U.N. Administrator under the 
auspices of the Security Council, to work closely with the 
Iraqi Provisional Government to make clear that this is not 
simply a puppet government that answers to the United States.
    Finally, armed with a U.N. Security Council resolution, I 
believe the President should go back to NATO to ask our allies 
for additional troops and resources.
    Mr. Secretary, you may not agree with any of these 
suggestions but I hope you will at least consider them and give 
me your thoughts; because as the top diplomat in the government 
I believe you should be playing a bigger role.

                           PREPARED STATEMENT

    I do not offer these ideas as a Democrat or Republican. I 
offer these as somebody who has been in the U.S. Senate for 29 
years. And I have worked on a lot of things with a lot of 
different administrations in both parties. I really think this 
is the time to bring people together.
    Mr. Chairman, I have a lot more in my statement.
    Senator McConnell. Thank you.
    Senator Leahy. I will put that in the record.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    Mr. Chairman, thank you for scheduling this hearing, and thank you 
Mr. Secretary for being here.
    We have a lot to discuss today but the situation in Iraq is of 
great concern. We have all been shocked by the violence and the number 
of casualties in the past few days, and our deepest condolences go out 
to the families of those who have died.
    We have appropriated more than $20 billion to rebuild Iraq. That is 
in addition to the hundreds of billions of dollars we will spend on our 
military operations there.
    Last October, the President said the reconstruction money in the 
Iraq supplemental was an emergency. He said he needed every dime 
immediately. Five months later, only about one-ninth of the money has 
been spent. In the meantime, the violence is spreading and it is not 
clear what our strategy is, except possibly sending more troops.
    Mr. Secretary, this is an election year and partisanship up here is 
at an all time high. But the situation in Iraq isn't about Democrats or 
Republicans. It is a problem for all Americans and we need to work 
together to try to solve it.
    You and I have known each other for a couple of decades. I have 
always considered you someone who can bring people of all political 
persuasions together. We need unity today, between Congress and the 
White House, among the American people, and with our allies.
    I believe the majority of Iraqis reject violence and want to 
rebuild their country. But I don't think the President's strategy is 
working. Our forces can quash this latest uprising, but what is 
happening in Iraq today does not bode well for the future. Just 
``staying the course'' is not a viable strategy at this point, at least 
not to me. Using more force, or simply sending more troops, will not 
solve the problem, nor will simply replacing the CPA with a U.S. 
Embassy.
    We need a broader, multilateral approach that has the support of a 
majority of the American people and the Iraqi people, as well as our 
allies and the international community, including as many Arab and 
other Muslim nations as possible.
    Let me suggest a couple of possible ideas.
    First, I believe the President should convene a bipartisan summit 
of his key Cabinet officials and Congressional leaders at the White 
House to discuss strategy options for the coming months.
    Second, the President should address the American people, explain 
his strategy and the difficult road ahead, including how long we can 
expect our soldiers to be in Iraq.
    Third, the President should convene a summit of the world's major 
democracies, including those that opposed his decision to go to war. 
Rebuilding Iraq poses a challenge not only for the United States, but 
for the rest of the world. If civil war takes hold there, we know how 
disastrous the consequences could be.
    Fourth, the President should send you, Mr. Secretary, back to the 
U.N. Security Council, to seek a new resolution calling for increased 
support from other nations, aimed specifically at addressing the 
deteriorating security situation. That resolution should also call for 
the appointment, by June 30, of a U.N. Administrator, under the 
auspices of the Security Council, to work closely with the Iraqi 
Provisional Government to make clear that this is not simply a puppet 
government that answers to the United States.
    Finally, armed with a U.N. Security Council resolution, the 
President should go back to NATO to ask our allies for additional 
troops and resources.
    Mr. Secretary, you may not agree with any of these suggestions. But 
I hope you will at least consider them and give me your thoughts, 
because as the top diplomat in this government I believe you need to be 
playing a bigger role.
    Mr. Chairman, I have a longer statement that highlights a number of 
my other concerns, but in the interest of saving time I will ask that 
you include it in the record. Mr. Secretary, I hope you will take the 
time to review it.
    Recently, the Pew Research Center released the results of its 
survey on the way the United States is regarded around the world, more 
than two years after 9/11 when we were the focus of so much sympathy 
and good will. I am suer you know the results. In country after 
country, the majority of people have a negative opinion of the United 
States.
    Another Pew poll showed that support among the American people for 
the President's policy in Iraq has steadily declined. I think these 
polls are a telling measure of the shortcomings of this 
Administration's strategy against terrorism, and also of the 
unilateralism and high handedness that have too often characterized our 
dealings with the rest of the world.
    Turning to the fiscal year 2005 budget, the President's request 
would cut vital programs like Child Survival and Health which have 
strong bipartisan support. But not only that, it is doubtful we will 
receive an allocation from the Appropriations Committee that matches 
even the President's request.
    What this means is that we will, once again, have to rob Peter to 
pay Paul in order to restore the cuts the President made, because it is 
a zero sum game. This will cause problems for you and the people in our 
embassies who carry out the foreign policies of this country. Whatever 
you, the OMB Director, and the President can do to convince the 
Republican leadership here about the importance of this Subcommittee's 
allocation will be time well spent.
    I want to say how concerned I am by this Administration's handling 
of the Israeli-Palestinian conflict. I am sure you disagree with those 
who criticize the Administration for abandoning the Middle East peace 
process, but the fact is that neither we, nor Israelis, nor 
Palestinians have any reason to believe that President Bush will expend 
any political capital to move the process forward any time soon. Not 
only does this mean more bloodshed that might be avoided, but we will 
not succeed in stopping terrorism as long as we ignore this problem.
    You also know of my disappointment about the Administration's new 
landmine policy, which amounts to a pledge to get rid of, in 2010, a 
type of mine we haven't used since Vietnam, including in Korea. At the 
same time, it abandons the commitments I worked out with the Pentagon 
six years ago. It is another example, I believe, of unilateral 
arrogance in the place of leadership and international cooperation, and 
another reason why no one should be surprised by the results of the Pew 
survey.
    I want to commend you for not certifying that Serbia has cooperated 
with the Hague Tribunal. It sent an important message. On the other 
hand, I think you made the wrong decision on Colombia. I support 
President Uribe, but you have consistently certified Colombia's 
performance on human rights despite serious, continuing problems.
    Similarly, Charles Taylor must be brought before the Special Court 
for Sierra Leone. The United States supported the establishment of the 
Court, including proposing and voting for Security Council resolution 
1315. The Bush Administration has made an issue about the enforcement 
of U.N. resolutions, and the State Department, in a letter to me, said 
it is confident that Mr. Taylor will be brought before the Court. We 
need to make this happen, sooner rather than later, as the Court could 
close down as early as next summer.
    Finally, is the issue of corruption. Corruption is like a cancer. 
It is the biggest obstacle to development--from Indonesia to Guatemala, 
from Nigeria to Pakistan. For years we ignored it. But there are some 
leaders who are standing up to it, like President Bolanos of Nicaragua. 
I think we should do everything we can to support him and people like 
him, and make clear that there are severe consequences for government 
officials who engage in this conduct.
    Mr. Secretary, despite my disappointment with some of this 
Administration's policies, I join others here in commending you and 
your staff, who rarely get the credit they deserve.
    Thank you Mr. Chairman.

    Senator McConnell. Thank you, Senator Leahy. I see that our 
full committee chairman is here, Senator Stevens. Do you have 
any comments to make, Mr. Chairman?
    Senator Stevens. I am here to greet my old friend and 
cousin sitting at the table, and I am pleased to listen to him.
    Senator McConnell. Let me just inform everybody the vote on 
the pensions bill is at 2:45. I think what we will do, Mr. 
Secretary, is go ahead and get started.
    I am going to catch the vote right at the beginning, and 
hopefully we can just plow right on through. So, welcome, and 
we will look forward to hearing from you.

               SUMMARY STATEMENT OF HON. COLIN L. POWELL

    Secretary Powell. Thank you very much, Mr. Chairman, 
Senator Leahy. Thank you for your welcome and for your opening 
remarks.
    Uncle Ted, it is always a pleasure to see you in 
attendance, sir.
    Senator Stevens. Good to see you.
    Secretary Powell. Did you get the Flat Stanley picture I 
sent you, Uncle? Good.
    Senator Stevens. I will tell the committee, he did. He was 
gracious enough to have his photo taken with my granddaughter's 
Flat Stanley. If you do not know what a Flat Stanley is, go to 
his website.
    Secretary Powell. To show you how modern we are trying to 
be at the State Department, my website has a picture of Senator 
Stevens and me and Senator Hollings and a Flat Stanley. For 
those of you who do not know what a Flat Stanley is, if you 
want to yield any part of your 5 minutes of time, I will be 
happy to describe what a Flat Stanley is to you.
    But it is a wonderful children's story about a little boy 
who gets run over by a steamroller and becomes Flat Stanley, 
and who travels all over the world in an envelope. And Senator 
Stevens, in the spirit of the Flat Stanley doll, took the Flat 
Stanley to Asia on a recent trip.
    I met up with the good Senator in Pakistan and we took a 
picture of his traveling Stanley, and now children all over the 
world are going to the State Department website, www.state.gov 
for anybody watching, to take a look at Senator Stevens's Flat 
Stanley.
    With that serendipitous opening to my presentation, let me 
seriously thank all the members of the committee for the 
support you have provided to me and to the State Department 
over the last 3 years. I feel it is a privilege to be able to 
come before you to express my thanks; and also to lay before 
you what the President has asked for fiscal year 2005, and what 
the needs of the Department and the wonderful men and women of 
the Department need to do their jobs for the American people in 
fiscal year 2005.
    I might, before encapsulating my remarks, just say a word 
about Iraq. Senator McConnell, I did see that poll that you 
mentioned and they were very interesting numbers. The people of 
Iraq, what we want for them--they want for themselves. They 
want democracy. They want peace. They are so glad to be rid of 
this regime that filled mass graves, that murdered people, that 
had rape rooms and torture rooms. And they are through with it 
and it isn't coming back.
    Now, there are these remnants that will be dealt with and I 
can assure you of that. And I will continue, when Senator Leahy 
comes back, on the specific comments that the Senator was 
asking me about or questions he was posing to me. But for other 
members of the committee, let me just get started with my 
presentation.
    The President's fiscal year 2005 International Affairs 
Budget request for the Department of State, USAID, and other 
Foreign Affairs agencies totals $31.5 billion, broken down as 
follows: Foreign Operations, $21.3 billion; State Operations, 
$8.4 billion; Public Law 480 Food Aid, $1.2 billion; 
International Broadcasting, $569 million; and the United States 
Institute for Peace, $22 million.

                      WINNING THE WAR ON TERRORISM

    President Bush's top foreign policy priority is winning the 
war on terrorism. Winning on the battlefield with our superb 
military forces is just one part of this strategy. To eradicate 
terrorism altogether, the United States must help stable 
governments and nations that once supported terrorism, like 
Iraq, like Afghanistan; and we must go after terrorist support 
mechanisms as well as the terrorists themselves. And we must 
help alleviate conditions in the world that enable terrorists 
to find and bring in new recruits.
    To these ends, the 2005 budget will continue to focus on 
the reconstruction of Iraq and Afghanistan. We will continue to 
support our coalition partners to further our counter-
terrorism, law enforcement, and intelligence cooperation. And 
we will continue to expand democracy and help generate 
prosperity, especially in the Middle East.
    Mr. Chairman, 48 percent of the President's Budget for 
Foreign Affairs supports the war on terrorism. For example, 
$1.2 billion supports Afghanistan reconstruction, security, and 
democracy-building activities. More than $5.7 billion provides 
assistance to countries around the world that have joined us in 
the war on terrorism. Some $3.5 billion indirectly supports the 
war on terrorism by strengthening our ability to respond to 
emergencies and conflict situations. And finally, $190 million 
is aimed at expanding democracy in the Greater Middle East, 
which is crucial if we are to attack successfully the 
motivation behind people engaging in terrorism.
    Mr. Chairman, two of the greatest challenges confronting us 
today are the reconstruction of Iraq and Afghanistan. Let me 
begin with Iraq.
    Despite the headlines of the last several days, the 
Coalition Provisional Authorities (CPA) and the Iraqi Governing 
Council have made great strides in the area of security, in the 
area of economic stability and growth and democratization. 
Iraqi security forces now comprise more than half of the total 
security forces in the country.
    In addition, the CPA has established a new Iraqi army; 
still an army in its infancy but an army that will grow and 
become strengthened in the years ahead. They have issued a new 
currency, which is very stable, and refurbished and equipped 
schools and hospitals throughout the country. And as you know, 
the CPA is taking steps to help the Iraqis form a fully 
sovereign government this summer. We will keep to this time 
table, as the President indicated earlier this week.
    But much more work needs to be done. Working with our 
coalition partners, we will continue to train Iraqi police, 
border guards, the civil defense corps, and the army in order 
to ensure the country's security as we effect a timely 
transition to democratic self-governance and to a stable 
future.
    At the same time, we are helping provide critical 
infrastructure, including clean water, electricity, reliable 
telecommunications systems. These are all essential for meeting 
basic human needs, as well as for economic and democratic 
development within the country.
    As a definitive example of this progress, on March 8, the 
Iraqi Governing Council formally signed the Transitional 
Administrative Law, essentially an interim constitution for 
Iraq, and this was a remarkable milestone. The administrative 
law recognizes freedom of religion and expression, the right to 
assemble and to organize political parties, and other 
fundamentally democratic principles; as well, as at the same 
time, prohibiting discrimination of any kind based on gender, 
nationality, or religion.
    This is a huge step for the people of Iraq and for the 
region, a step towards constitutional democracy. It is a step 
that just a year ago, Iraqis would not have imagined possible; 
and with the poll results, the results that Senator McConnell 
mentioned earlier, you can see that they now believe that this 
is a real possibility for them in the future.
    The United Nations Secretary General's Special Advisor, 
Lakhdar Brahimi, is in Iraq now, having been invited to return 
by the Interim Governing Council. Working with the CPA, he will 
help the Iraqis determine what sort of transitional Iraqi 
Government will be developed and to prepare for elections that 
will be held at the end of this year or early in the next year.
    Creating a democratic government in Iraq will be an 
enormous challenge; but Ambassador Bremer, working with the 
Iraqi Governing Council, and with the United Nations and our 
coalition partners, is committed to success, and when the State 
Department assumes the lead role this summer in representing 
and managing U.S. interests in Iraq, we will carry on that 
commitment.
    We are already thoroughly involved. I was in Baghdad 3 
weeks ago. I met with Ambassador Bremer, with members of the 
Iraqi Governing Council, and spoke to some of our troops as 
well. I know how committed we all are, how committed they all 
are, and we will succeed.
    The recent rise in United States and coalition casualties 
is disquieting. We are saddened at every death but we will not 
be dissuaded or driven out. Whether we are confronted by an 
outlaw and his mobs claiming to themselves the mantle of 
religion, or by disgruntled members of the former tyrants' 
regime, or by foreign terrorists, we will deal with them.
    In that way, we are resolute. And Mr. Chairman, the 
coalition is resolute. I believe the vast majority of Iraqis 
feel the same way; the polls indicate such. They want 
livelihoods. They want security. They want freedom. They want 
to strive for their nation's democratic future within the best 
traditions of tolerance and harmony. And that is why we will 
win.
    Mr. Chairman, I know that many of the members are concerned 
about the transition from CPA under the Defense Department to a 
U.S. mission under the State Department. I can tell you that we 
have made significant progress in planning for this transition 
and in working on the challenges we will confront.
    To make sure we act in accord with your intent, we will be 
sending a number of members of my staff to the Congress over 
the coming weeks to brief you and to answer your questions. 
Before we make our final recommendations to the President, you 
will be kept fully informed and your advice and counsel will be 
sought.

                              AFGHANISTAN

    Afghanistan is another high priority for this 
administration. The United States is committed to helping build 
a stable and democratic Afghanistan that is free from terror 
and no longer harbors threats to our security. After we and our 
coalition partners defeated the Taliban government, we faced 
the daunting task of helping the Afghan people rebuild their 
country.
    We have demonstrated our commitment to this effort by 
providing over $3.7 billion in economic and security assistance 
for Afghanistan since 2001. Through our assistance and the 
assistance of the international community, the Government of 
Afghanistan is successfully navigating the transition that 
began in October 2001.
    Afghanistan adopted a constitution earlier this year and is 
preparing for democratic national elections this September. 
With technical assistance from the United States, Afghanistan 
successfully introduced a new and still stable currency in 
October 2002, and is working to improve revenue collection in 
the provinces.
    The lives of women and girls are improving as women pursue 
economic and political opportunities and as girls return to 
school. Since 2001, the United States has rehabilitated 205 
schools and 140 health clinics, and trained 15 battalions of 
the Afghan National Army, battalions that are out now in action 
helping to secure the countryside.
    Also, President Bush's commitment to de-mine and re-pave 
the entire stretch of the Kabul/Kandahar highway was fulfilled. 
The road had not been functional for over 20 years. What was 
once a 30-hour journey can be accomplished in just 5 or 6 
hours.
    This fundamentally changes all kinds of dynamics within 
Afghanistan. People can move around. The country can be brought 
back together with the simple act of completing this road. In 
the next building season, we will extend the road out to the 
west, as well as to the north, and try to create a ring road in 
this Central Asian nation that, then, can connect to the other 
Central Asian nations: to Pakistan, and through Pakistan, 
ultimately to India, which will put the Silk Road back into 
operation after so many years of misuse and no use.
    While the Afghanistan of today is very different from the 
Afghanistan of September 2001, there is still much left to 
accomplish. In the near term, the United States will assist the 
Government of Afghanistan in its preparations for elections 
this September to ensure that they are free and fair.
    The 2005 Budget contains $1.2 billion in assistance for 
Afghanistan, as I mentioned; and that money will concentrate on 
education, health, infrastructure, and assistance to the Afghan 
National Army.
    For example, the U.S. assistance efforts will focus on 
rehabilitation and construction of an additional 275 schools, 
150 health clinics, all by June 2004, and complete equipping of 
the 15 Afghan Army battalions, extend the road to Herat, as I 
mentioned.
    I might also mention that last week I attended a donors 
conference on Afghanistan that was hosted by our German friends 
in Berlin. There we raised $4.5 billion for President Karzai's 
fiscal year budget, 102 percent of what he sought.
    So I feel confident of our ability, working with the 
international community, to continue making progress in the 
reconstruction of that country.
    Mr. Chairman, the challenges we face in Iraq and 
Afghanistan are hugely complex, daunting and dangerous, and 
security and stability are two of our greatest needs. It is 
hard to rebuild with one hand and fight off attacks with the 
other. But we are making progress and we will continue until we 
have reached our objective: two countries that are on their way 
to good governance, tolerance, and economic recovery.

                                HIV/AIDS

    Mr. Chairman, as important as waging the war on terrorism 
is to America, there are many other priorities that are 
contained within this budget that are vital to our foreign 
policy agenda. Africa, for example, is high on our foreign 
policy agenda, particularly with respect to the devastating 
HIV/AIDS pandemic. When people are dying in the millions, 
particularly people of working age and younger, it is extremely 
difficult to make economic improvements in your society, in 
your country. It is President Bush's intent to fight even more 
aggressively against the pandemic of HIV/AIDS.
    Over the past year, we have worked with Congress to pass 
legislation laying the groundwork for this fight. Marking our 
progress, last month Ambassador Tobias, Secretary Thompson, 
USAID Administrator Natsios and I rolled out the strategy for 
this plan and announced the first dispensation of dollars. Some 
$350 million is now being applied to the fight by NGOs and 
PVOs, private organizations who are working at the grass-roots 
level.
    As a crucial next step, the 2005 budget request expands on 
the President's plan with $2.8 billion to combat AIDS in the 
most afflicted countries in Africa and the Caribbean.
    Together, the Department of State, USAID and the Department 
of Health and Human Services, will use the significantly 
increased resources quickly and effectively to achieve the 
President's ambitious goals in the fight against global AIDS.

                      MILLENNIUM CHALLENGE ACCOUNT

    Of course, there are other dimensions of economic success 
in Africa and around the globe; and they, too, are a part of 
our foreign policy agenda. For example, an innovative program, 
that you know full well, is the Millennium Challenge Account 
(MCA). In February 2003, we sent the Congress a budget request 
for the MCA and legislation to authorize creation of a 
corporation to administer these monies.
    The corporation designed to support our new and innovative 
development strategies and to ensure accountability, is now up 
and running. And as you know, I am the chairman of the board of 
that corporation, Under Secretary Al Larson is the interim CEO, 
and Mr. Paul Applegarth has been nominated by the President to 
be the approved CEO, and we're waiting for congressional action 
on his nomination now.
    Congress appropriated $1 billion for MCA for 2004. The 2005 
budget request of $2.5 billion makes a significant second year 
increase to the MCA, and paves the way to reaching the 
President's commitment of $5 billion in 2006. With these 
dollars, we will help those countries committed to helping 
themselves, commitment demonstrated by the fact that their 
governments govern justly, invest in their people, and 
encourage economic freedom.
    Mr. Chairman, these are two important accounts: the HIV/
AIDS account and the Millennium Challenge Account. We know that 
we are asking for significant funding in this second year of 
their existence. But the world is watching to see whether we 
are serious about HIV/AIDS, whether we are serious about this 
new way of providing development assistance. And I strongly 
encourage that you approve the amounts requested for both HIV/
AIDS and for the Millennium Challenge Account.
    Of course, Mr. Chairman, gentlemen, we can't deal with any 
of our foreign policy priorities successfully if State 
operations are not funded appropriately. I know that such 
operations are not this subcommittee's specific oversight 
responsibility, but the full Appropriations Committee will have 
to consider this funding.

                    DIPLOMATIC READINESS INITIATIVE

    So, just to touch on a few things that are of interest to 
me. First, the Diplomatic Readiness Initiative to hire new 
foreign and civil service employees. We have had great success 
in getting wonderful young men and women to apply for the 
Foreign Service and to come into the Department, and also to 
apply for the Civil Service and come into the Department. It is 
the first time in years that we invested in the manpower needs 
of the Department, and I ask for your continued support for the 
Diplomatic Readiness Initiative.
    We have also had tremendous success with our information 
technology upgrade, and I am very proud of what we have done to 
put the internet in every office everywhere in the world that a 
State Department officer is located in.
    I am also very pleased that we have done a great job in 
using the money given to us for securing our embassies. New 
embassy construction has been accelerated. We are going to 
bring 150 embassies and consulates up to standards over the 
next 14 years for a total cost of $17 billion.
    We owe our employees a safe environment in which to work, 
and we want to do more than just protect the embassy, but 
protect some of the other facilities we occupy in the cities in 
which we are located, to include schools, places of residence 
and other facilities that we use.
    Mr. Chairman and members of the committee, let me stop, at 
this point. You have my prepared testimony and I am ready for 
your questions. But before going to those questions, let me 
just say a word about the strategy that we are pursuing in 
Iraq, to follow up to Senator Leahy's comments a few moments 
ago.

                                  NATO

    The strategy has a number of dimensions to it. First of 
all, we do believe that the international community must play a 
significant and important and vital role in our efforts in 
Iraq. If you look at NATO, 17 of the 26 nations of NATO are in 
Iraq, standing alongside of us. They can't make as large a 
military contribution as we can but they are there within the 
limits of their capability. That, I think, is a statement of 
the international community.
    When I went to NATO last week for meetings, the NAC, North 
Atlantic Council, met at the foreign minister level. We talked 
about what NATO could do in these two places that are of such 
interest to us: Afghanistan and Iraq. In Afghanistan, NATO has 
taken over. NATO has shown its willingness to step forward. 
NATO is going to expand its presence as we get closer to the 
elections.
    NATO is also willing to consider a role for itself in Iraq. 
Afghanistan is its first priority but they are starting to look 
at Iraq. And I think that, in due course, we will be able to 
structure a role for NATO that may add to the number of nations 
that are there; but more significantly, will give a collective 
tone, an alliance tone, to what we are doing.
    Exactly what that is going to look like, I cannot tell you 
yet. But not one member of the Alliance, not one of the 25 
other members of the Alliance, has said, ``No, we will not 
consider it.'' Many of them are very enthusiastic about it.
    Some who were not with us a year ago--France and Germany, 
to be direct--are not opposing a NATO role. They are not sure 
whether they would actually send troops or how they might 
participate, but they are willing to listen to ideas. 
Especially after sovereignty transfers on the 1st of July, I 
think all sorts of new opportunities open up for NATO to 
participate, as well as, perhaps, other countries and 
organizations that are not part of NATO.
    We are interested, as we move forward toward the 1st of 
July and we get deeper into the process of setting up an 
interim government for the Iraqi people, we want the United 
Nations to play a more vital and important role.

                            U.N. RESOLUTION

    I have had conversations with the Secretary General about 
designating a senior representative of the Secretary General to 
perform that role, and we are starting to look at what 
resolution might be appropriate: a new U.N. resolution that 
would extend a hand to the new Iraqi government, that would 
deal with reconstruction activities of the whole international 
community, that would encourage other nations to get involved, 
that would structure a role for the United Nations.
    We are not resisting the United Nations. The President has 
said clearly, he has been saying it for quite a while, we want 
the United Nations to play a ``vital role.'' And we spend a 
great deal of time with the United Nations. I spoke to Lakhdar 
Brahimi this morning to see how he was doing in Baghdad, and 
his conversations with respect to the creation of an interim 
government.
    So, we want the international community to be involved. We 
are working on it. The President speaks to the American people 
on a regular basis about what his intentions are with respect 
to Iraq.
    It is a challenging environment right now because of these 
remnants, these terrorists, these individuals who do not want 
to see the Iraqi people achieve their dreams. They are not in 
this 70 percent and 56 percent and 71 percent you talk about, 
Senator McConnell, but we are doing this for that 70 percent, 
for that 56 percent and for that 71 percent. They deserve it 
and we are going to see that they get it. And we are not alone.

                           PREPARED STATEMENT

    We have coalition partners with us who are staying the 
course, even under the most difficult set of circumstances. And 
I think that over the next days and weeks, you will see that 
our superb armed forces will deal with the threats they are 
facing now. And when these insurgents have been cleared away, 
and then we can get back on track and continue the work that we 
have laid out: the creation of an interim government, a U.N. 
resolution, involvement of NATO and other organizations in 
transition from a CPA to an American mission.
    Mr. Chairman, members of the committee, let me stop at that 
point and make myself available for your questions.
    [The statement follows:]

               Prepared Statement of Hon. Colin L. Powell

    Mr. Chairman, members of the subcommittee, thank you for the 
opportunity to testify on the State Department's portion of the 
President's Budget Request for fiscal year 2005. Let me give you the 
overall budget picture first and, then, outline our foreign policy 
priorities. Finally, because the Department cannot carry out its 
foreign policy function without adequate funding for its own 
operations, I want to give you a summary of our highest priorities for 
State operations.
    The President's fiscal year 2005 International Affairs Budget for 
the Department of State, USAID, and other foreign affairs agencies 
totals $31.5 billion, broken down as follows:
  --Foreign Operations--$211.3 billion
  --State Operations--$8.4 billion
  --Public Law 480 Food Aid--$1.2 billion
  --International Broadcasting--$569 million
  --U.S. Institute of Peace--$22 million
    Mr. Chairman, the President's top foreign policy priority is 
winning the war on terrorism. Forty-eight percent of the President's 
budget for foreign affairs directly supports that priority by assisting 
our allies and strengthening the United States' diplomatic posture. For 
example: $1.2 billion supports Afghanistan reconstruction, security and 
democracy building, and more than $5.7 billion is provided for 
assistance to countries around the world that have joined us in the war 
on terrorism, and $3.5 billion indirectly supports the war on terrorism 
by strengthening our ability to respond to emergencies and conflict 
situations. Moreover, $190 million is aimed at expanding democracy in 
the Greater Middle East, in part to help alleviate the conditions that 
spawn terrorists.
    In addition, $5.3 billion is targeted for the President's bold 
initiatives to fight HIV/AIDS and create the Millennium Challenge 
Corporation, both of which will support stability and improve the 
quality of life for the world's poor--and, again, help to relieve 
conditions that cause resentment and despair.
    Mr. Chairman, let me elaborate on how some of these dollars will be 
spent.

                      WINNING THE WAR ON TERRORISM

    Winning on the battlefield with our superb military forces is just 
one step in defeating terrorism. To eradicate terrorism, the United 
States must help create stable governments in nations that once 
supported terrorism, go after terrorist support mechanisms as well as 
the terrorists themselves, and help alleviate conditions in the world 
that enable terrorists to bring in new recruits. To this end, in fiscal 
year 2005 the State Department and USAID will continue to focus on the 
reconstruction of Iraq and Afghanistan, support our coalition partners 
to further our counterterrorism, law enforcement and intelligence 
cooperation, and expand democracy and help generate prosperity, 
especially in the Middle East.
Building a Free and Prosperous Iraq
    The United States faces one of its greatest challenges in 
developing a secure, free and prosperous Iraq. The USG is contributing 
almost $21 billion in reconstruction funds and humanitarian assistance 
to this effort. The World Bank and the International Monetary Fund are 
expected to provide another $4 to $8 billion in loans and grants over 
the next three years. These resources, coupled with the growing 
assistance of international donors, will ease the transition from 
dictatorship to democracy and lay the foundation for a market economy 
and a political system that respects human rights and represents the 
voices of all Iraqis.
    The Coalition Provisional Authority (CPA) and the Iraqi Governing 
Council (IGC) have made great strides in the areas of security, 
economic stability and growth, and democratization. Iraqi security 
forces now comprise more than half of the total security forces in the 
country. In addition, the CPA has established a New Iraqi Army, issued 
a new currency and refurbished and equipped schools and hospitals. And, 
as you know, the CPA is taking steps to help the Iraqi people form a 
fully sovereign government this summer.
    Much work remains to be done. Working with our coalition partners, 
we will continue to train Iraqi police, border guards, the Civil 
Defense Corps and the Army in order to ensure the country's security as 
we effect a timely transition to democratic self-governance and a 
stable future.
    At the same time, we are helping provide critical infrastructure, 
including clean water, electricity and reliable telecommunications 
systems which are essential for meeting basic human needs as well as 
for economic and democratic development. Thousands of brave Americans, 
in uniform and in mufti, are in Iraq now working tirelessly to help 
Iraqis succeed in this historic effort. Alongside their military 
colleagues, USAID, State Department and the Departments of the Treasury 
and Commerce are working to implement infrastructure, democracy 
building, education, health and economic development programs. These 
efforts are producing real progress in Iraq.
    As a definitive example of this progress, on March 8, the IGC 
formally signed the Transitional Administrative Law (TAL)--essentially 
an interim constitution for Iraq. This was a remarkable milestone. The 
TAL recognizes freedom of religion and expression, the right to 
assemble and to organize political parties, and other fundamentally 
democratic principles, as well as prohibiting discrimination based on 
gender, nationality or religion. This is a huge step for the people of 
Iraq and for the region--a step toward constitutional democracy. It is 
a step that just a year ago, Iraqis would not have imagined possible.
    The U.N. Secretary General's Special Advisor, Lakhdar Brahimi, is 
in Iraq now to help the Iraqis determine what sort of transitional 
Iraqi government will be developed and to prepare for elections at the 
end of this year or early in the next. Creating a democratic government 
in Iraq will be an enormous challenge--the recent increase in 
casualties magnifying that challenge. But Ambassador Bremer, working 
with the Iraq Governing Council and with the United Nations and our 
coalition partners, is committed to success. And when the CPA, funded 
and directed by the Department of Defense, goes out of business on June 
30 and the State Department assumes the lead role in representing and 
managing U.S. interests in Iraq, we will carry on that commitment. We 
are already thoroughly involved. I was just in Baghdad last month 
meeting with Ambassador Bremer, members of the IGC, and talking to some 
of our troops. I know how thoroughly involved we are. And we will all 
succeed.
    I also know that many of the members are concerned about the 
transition from CPA under the Defense Department to a U.S. Mission 
under the State Department. I can tell you that we have made 
significant progress in planning for this transition and in working on 
the challenges we will confront. To make sure we act in accord with 
your intent, we will be sending a number of people to the Congress over 
the coming weeks to brief and to answer your questions. Before we make 
recommendations to the President, you will be kept fully informed and 
your advice and counsel will be sought.
    Mr. Chairman, the recent rise in United States and coalition 
casualties in Iraq is disquieting and we are saddened at every death. 
But we will not be dissuaded or driven out. Whether we are confronted 
by an outlaw and his mobs claiming to themselves the mantle of 
religion, or by disgruntled members of the former tyrant's regime, or 
by foreign terrorists, we will deal with them. In that we are resolute. 
And Mr. Chairman, the coalition is resolute. I believe the vast 
majority of Iraqis feel the same way. They want livelihoods, security, 
freedom and the right to strive for their nation's democratic future 
within the best Iraqi traditions of tolerance and harmony. And that is 
why we will win.

Winning the Peace in Afghanistan
    Mr. Chairman, Afghanistan is another high priority for this 
Administration. The United States is committed to helping build a 
stable and democratic Afghanistan that is free from terror and no 
longer harbors threats to our security. After we and our coalition 
partners defeated the Taliban government, we faced the daunting task of 
helping the Afghan people rebuild their country. We have demonstrated 
our commitment to this effort by providing over $3.7 billion in 
economic and security assistance to Afghanistan since 2001.
    Through our assistance and the assistance of the international 
community, the government of Afghanistan is successfully navigating the 
transition that began in October 2001. Afghanistan adopted a 
constitution earlier this year and is preparing for democratic national 
elections in September. With technical assistance from the United 
States, Afghanistan successfully introduced a new stable currency in 
October 2002 and is working to improve revenue collection in the 
provinces. The lives of women and girls are improving as women pursue 
economic and political opportunities and girls return to school. Since 
2001, the United States has rehabilitated 205 schools and 140 health 
clinics and trained fifteen battalions of the Afghan National Army 
(ANA). Also, President Bush's commitment to de-mine and repave the 
entire stretch of the Kabul-Kandahar highway was fulfilled. The road 
had not been functional for over 20 years. What was once a 30-hour 
journey can now be accomplished in 5 or 6 hours.
    While the Afghanistan of today is very different from the 
Afghanistan of September 2001, there is still much left to accomplish. 
In the near-term, the United States will assist the government of 
Afghanistan in its preparations for elections in September to ensure 
that they are free and fair. To demonstrate tangible benefits to the 
Afghan people, we will continue to implement assistance on an 
accelerated basis. The fiscal year 2005 Budget contains $1.2 billion in 
assistance for Afghanistan that will be focused on education, health, 
infrastructure, and assistance to the ANA, including drawdown authority 
and Department of Defense ``train and equip''. For example, U.S. 
assistance efforts will concentrate on rehabilitation and construction 
of an additional 275 schools and 150 health clinics by June 2004, and 
complete equipping of the fifteen army battalions. The United States 
will also extend the Kabul-Kandahar road to Herat so that people and 
commerce will be linked East and West across Afghanistan with a ground 
transportation link between three of the largest cities.
    Near the end of last month, when I was in Kabul to meet with 
President Karzai and his team, I had the chance to visit a voter 
registration site. I saw how far Afghanistan has progressed, in only 
two years, along the path to constitutional democracy. I saw also clear 
evidence of the Afghan people's commitment to continue on that path 
despite the many challenges ahead. I met 9 or 10 women at the site and 
they knew what was at stake in their country. They were eager for the 
free and fair elections called for in the Bonn Agreement and I assured 
them that America was solidly behind them. I told them that as long as 
they are committed to building a new, democratic Afghanistan, we will 
stand shoulder to shoulder with them.
    In that regard, Mr. Chairman, last week I attended the Berlin 
Afghanistan Conference. There, we raised $4.5 billion for President 
Karzai's fiscal year budget--102 percent of what was sought. So I feel 
confident of our ability to continue making progress in the 
reconstruction of that country.

Support for Our Coalition Partners
    As part of the war on terrorism, President Bush established a clear 
policy to work with other nations to meet the challenges of defeating 
terror networks with global reach. This commitment extends to the 
front-line states that have joined us in the war on terrorism and to 
those nations that are key to successful transitions to democracy in 
Iraq and Afghanistan.
    Our assistance enables countries cooperating closely with the 
United States to prevent future attacks, improve counter-terrorism 
capabilities and tighten border controls. As I indicated earlier, the 
fiscal year 2005 Budget for International Affairs provides more than 
$5.7 billion for assistance to countries around the world that have 
joined us in the war on terrorism, including Turkey, Jordan, 
Afghanistan, Pakistan, Indonesia, and the Philippines.
    U.S. assistance has also resulted in unparalleled law enforcement 
and intelligence cooperation that has destroyed terrorist cells, 
disrupted terrorist operations and prevented attacks. There are many 
counterterrorism successes in cooperating countries and international 
organizations. For example:
  --Pakistan has apprehended more than 500 al Qaeda terrorists and 
        members of the Taliban through the leadership of President 
        Musharraf, stronger border security measures and law 
        enforcement cooperation throughout the country. Last month, Mr. 
        Chairman, you no doubt noted the fierce fighting in the border 
        area between Pakistan and Afghanistan and the casualties 
        inflicted on the Pakistanis as they took the fight to the al 
        Qaida and other terrorists in those areas. Pakistan is in this 
        struggle for the long-haul.
  --Jordan continues its strong counterterrorism efforts, including 
        arresting two individuals with links to al Qaeda who admitted 
        responsibility for the October 2002 murder of USAID Foreign 
        Service officer Lawrence Foley in Amman.
  --The North Atlantic Treaty Organization has endorsed an ambitious 
        transformation agenda designed to enhance its capabilities by 
        increasing deployment speed and agility to address new threats 
        of terrorism.
  --Colombia has developed a democratic security strategy as a 
        blueprint for waging a unified, aggressive counterterror-
        counternarcotics campaign against designated foreign terrorist 
        organizations and other illegal, armed groups.
  --The United States and its Southeast Asian allies and friends have 
        made significant advances against the regional terrorist 
        organization Jemaah Islamiyah which was responsible for the 
        Bali attack in 2002 that killed more than 200 people. In early 
        August 2003, an Indonesian court convicted and sentenced to 
        death a key figure in that bombing.
    Since September 11, 2001, 173 countries have issued orders to 
freeze the assets of terrorists. As a result, terror networks have lost 
access to nearly $200 million in more than 1,400 terrorist-related 
accounts around the world. The World Bank, International Monetary Fund 
and other multilateral development banks have also played an important 
role in this fight by strengthening international defenses against 
terrorist finance.
    While progress has been made attacking terrorist organizations both 
globally and regionally, much work remains to be done. The fiscal year 
2005 President's Budget strengthens our financial commitment to our 
coalition partners to wage the global war on terror. Highlights of the 
President's request include $700 million for Pakistan to help advance 
security and economic opportunity for Pakistan's citizens, including a 
multi-year educational support program; $461 million for Jordan to 
increase economic opportunities for Jordanian communities and 
strengthen Jordan's ability to secure its borders; and $577 million for 
Colombia to support President Uribe's unified campaign against drugs 
and terrorism.
    In September 2003, at the United Nations, President Bush said: 
``All governments that support terror are complicit in a war against 
civilization. No government should ignore the threat of terror, because 
to look the other way gives terrorists the chance to regroup and 
recruit and prepare. And all nations that fight terror, as if the lives 
of their own people depend on it, will earn the favorable judgment of 
history.'' We are helping countries to that judgment.
    Mr. Chairman, one of the aspects of the War on Terrorism that gives 
us a particular sense of urgency is proliferation of weapons of mass 
destruction. These terrible weapons are becoming easier to acquire, 
build, hide, and transport.
    On February 11, President Bush spoke at the National Defense 
University (NDU) and outlined the Administration's approach to this 
growing danger. The President described how we have worked for years to 
uncover one particular nefarious network--that of A.Q. Khan.
    Men and women of our own and other intelligence services have done 
superb and often very dangerous work to disclose these operations to 
the light of day. Now, we and our friends and allies are working around 
the clock to get all the details of this network and to shut it down, 
permanently
    We know that this network fed nuclear technology to Libya, Iran, 
and North Korea.
    At NDU, President Bush proposed seven measures to strengthen the 
world's efforts to prevent the spread of WMD:
  --Expand the Proliferation Security Initiative (PSI) to address more 
        than shipments and transfers; even to take direct action 
        against proliferation networks.
  --Call on all nations to strengthen the laws and international 
        controls that govern proliferation, including passing the UNSCR 
        requiring all states to criminalize proliferation, enact strict 
        export controls, and secure sensitive materials.
  --Expand our efforts to keep Cold War weapons and other dangerous 
        materials out of the hands of terrorists--efforts such as those 
        accomplished under Nunn-Lugar.
  --Close the loophole in the Nuclear Nonproliferation Treaty that 
        allows states such as Iran to produce nuclear material that can 
        be used to build bombs under the cover of civilian nuclear 
        programs.
  --Universalize the IAEA Additional Protocol.
  --Create a special committee on the IAEA Board of Governors to focus 
        on safeguards and verification.
  --And, finally, disallow countries under investigation for violating 
        nuclear nonproliferation treaties from serving on the IAEA 
        Board of Governors.
    As the President said at NDU, the nexus of terrorists and WMD is a 
new and unique threat. It comes not with ships and fighters and tanks 
and divisions, but clandestinely, in the dark of the night. But the 
consequences are devastating. No President can afford to ignore such a 
threat. And President Bush will not ignore it.

Expansion of Democracy in the Middle East
    We believe that expanding democracy in the Middle East is critical 
to eradicating international terrorism. But in many nations of the 
Middle East, democracy is at best an unwelcome guest and at worst a 
total stranger. The United States continues to increase its diplomatic 
and assistance activities in the Middle East to promote democratic 
voices--focusing particularly on women--in the political process, 
support increased accountability in government, assist local efforts to 
strengthen respect for the rule of law, assist independent media, and 
invest in the next generation of leaders.
    As the President emphasized in his speech last November at the 
National Endowment for Democracy (NED), reform in the Middle East is of 
vital importance to the future of peace and stability in that region as 
well as to the national security of the United States. As long as 
freedom and democracy do not flourish in the Middle East, resentment 
and despair will continue to grow--and the region will serve as an 
exporter of violence and terror to free nations. For the United States, 
promoting democracy and freedom in the Middle East is a difficult, yet 
essential calling.
    There are promising developments upon which to build. The 
government of Jordan, for example, is committed to accelerating reform. 
Results include free and fair elections, three women holding Cabinet 
Minister positions for the first time in Jordan's history, and major 
investments in education. Positive developments also can be found in 
Morocco, which held parliamentary elections last year that were 
acclaimed as free, fair and transparent.
    In April 2003, the Administration launched the Middle East 
Partnership Initiative (MEPI), an intensive inter-agency effort to 
support political and education reform and economic development in the 
region. The President continues his commitment by providing $150 
million in fiscal year 2005 for these efforts.
    To enhance this USG effort with a key NGO, the President has 
doubled the NED budget to $80 million specifically to create a Greater 
Middle East Leadership and Democracy Initiative. NED is a leader in 
efforts to strengthen democracy and tolerance around the world through 
its work with civil society. We want that work to flourish.
    As President Bush said in his November speech at NED: ``The United 
States has adopted a new policy, a forward strategy of freedom in the 
Middle East. This strategy requires the same persistence and energy and 
idealism we have shown before. And it will yield the same results. As 
in Europe, as in Asia, as in every region of the world, the advance of 
freedom leads to peace.''

Public Diplomacy in the Middle East
    And the advance of freedom is aided decisively by the words of 
freedom.
    Democracy flourishes with freedom of information and exposure to 
diverse ideas. The President's fiscal year 2005 Budget promotes 
expansion of democracy in the Middle East by providing public access to 
information through exchange programs and the Middle East Television 
Network.
    New public diplomacy efforts including the Partnerships for 
Learning (P4L) and Youth Exchange and Study (YES) initiatives have been 
created to reach a younger and more diverse audience through academic 
and professional exchange programs. In fiscal year 2005, the P4L and 
the YES programs, funded at $61 million, will focus more on youth of 
the Muslim world, specifically targeting non-traditional, non-elite, 
often female and non-English speaking youth.
    U.S. broadcasting initiatives in the Middle East encourage the 
development of a free press in the American tradition and provide 
Middle Eastern viewers and listeners access to a variety of ideas. The 
United States revamped its Arabic radio broadcasts in 2002 with the 
introduction of Radio Sawa, which broadcasts to the region 24 hours a 
day. As a result, audience size for our Arabic broadcasting increased 
from under 2 percent in 2001 to over 30 percent in 2003. Based on this 
successful model, the United States introduced Radio Farda to broadcast 
to Iran around the clock. Building on this success, the fiscal year 
2005 President's budget request provides over $70 million for Arabic 
and Persian radio and television broadcasts to the Middle East. In 
February, the United States launched the Middle East Television 
Network, an Arabic language satellite network that will have the 
capability of reaching millions of viewers and will provide a means for 
Middle Easterners to better understand democracy and free market 
policies, as well as the United States and its people. This network 
kicked off on February 14 with 9 hours per day of broadcasting. Now the 
broadcasting is 24/7. The network--Al-Hurra, or ``the Free One''--
reaches 22 countries, including Iraq. President Bush has already 
appeared on the network and I did an interview in late February.

                 OUR NEW APPROACH TO GLOBAL PROSPERITY

   President Bush's approach to global economic growth emphasizes 
proven American values: governing justly, investing in people, and 
encouraging economic freedom. President Bush has pledged to increase 
economic engagement with and support for countries that commit to these 
goals through an ambitious trade agenda and new approaches to 
development assistance focusing on country performance and measurable 
results.

The Millennium Challenge Account (MCA)
    In February 2003, we sent the Congress a budget request for the MCA 
and legislation to authorize the creation of the Millennium Challenge 
Corporation (MCC), the agency designed to support innovative 
development strategies and to ensure accountability for results.
    The MCC will fund only proposals for grants that have clear, 
measurable objectives, a sound financial plan and indicators for 
assessing progress.
    The Congress appropriated $1 billion for MCA for fiscal year 2004. 
The fiscal year 2005 Budget request of $2.5 billion makes a significant 
second year increase to the MCA and paves the way to reaching the 
President's commitment of $5 billion in fiscal year 2006.

Trade Promotion Authority (TPA)
    President Bush recognizes that the fastest, surest way to move from 
poverty to prosperity is through expanded and freer trade. America and 
the world benefit from free trade. For this reason, one of his first 
actions upon taking office in 2001 was to seek TPA, allowing him to 
negotiate market-opening agreements with other countries. The President 
aims to continue vigorously to pursue his free trade agenda in order to 
lift developing countries out of poverty, while creating high-paying 
job opportunities for America's workers, businesses, farmers and 
ranchers and benefiting all Americans through lower prices and wider 
choices. As the President said in April 2001 at the Organization of 
American States: ``Open trade fuels the engines of economic growth that 
creates new jobs and new income. It applies the power of markets to the 
needs of the poor. It spurs the process of economic and legal reform. 
It helps dismantle protectionist bureaucracies that stifle incentive 
and invite corruption. And open trade reinforces the habits of liberty 
that sustain democracy over the long term.''
    Since receiving TPA in 2002, the President has made good on his 
promise, completing free trade agreements with Chile and Singapore, 
which were quickly approved by Congress and went into effect on January 
1. We have recently completed negotiations with five Central American 
countries on the Central America Free Trade Agreement (CAFTA) and our 
work to bring the Dominican Republic (DR) into that agreement concluded 
successfully on March 14 with the signing of an FTA with that country. 
Now, the DR can join CAFTA. In February, we announced the conclusion of 
an agreement with Australia. More recently, negotiations have been 
completed with Morocco and an agreement announced, and negotiations are 
ongoing with the Southern African Customs Union (SACU), Bahrain, and on 
the Free Trade Agreement of the Americas (FTAA). We are concluding 
comprehensive agreements that include market access for goods and 
services, strong intellectual property and investment provisions, and 
include commitments for strong environmental and labor protections by 
our partners. These arrangements benefit Americans and our trading 
partners.
    Building on this significant progress, the President intends to 
launch free trade negotiations with Thailand, Panama, and the Andean 
countries of Colombia, Ecuador, Bolivia and Peru. The President has 
also stated his vision for a Middle East Free Trade Area by 2013, to 
ignite economic growth and expand opportunity in this critical region. 
Finally, the President is committed to wrapping up successfully the 
World Trade Organization's Doha agenda. The United States has taken the 
lead in re-energizing these negotiations following the Cancun 
Ministerial.

             CARING FOR THE WORLD'S MOST VULNERABLE PEOPLE

Emergency Plan for AIDS Relief
    When President Bush took office in January 2001, the HIV/AIDS 
pandemic was at an all time high, with the estimated number of adults 
and children living with HIV/AIDS globally at 37 million, with 68 
percent of those individuals living in sub-Saharan Africa. From fiscal 
years 1993 to 2001 the total U.S. Government global AIDS budget was 
about $1.9 billion. As part of the Emergency Plan for AIDS Relief, the 
President proposed $2 billion in fiscal year 2004 as the first 
installment of a 5-year, $15 billion initiative, surpassing nine years 
of funding in a single year. The President's Emergency Plan for AIDS 
Relief represents the single largest international public health 
initiative ever attempted to defeat a disease. The President's Plan 
targets an unprecedented level of assistance to the 14 most afflicted 
countries in Africa and the Caribbean to wage and win the war against 
HIV/AIDS. In addition, programs will continue in 75 other countries.
    By 2008, we believe the President's Plan will prevent seven million 
new infections, treat two million HIV-infected people, and care for 10 
million HIV-infected individuals and those orphaned by AIDS in 
Botswana, Cote d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, 
Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zambia.
    Announced during President Bush's State of the Union address on 
January 28, 2003, the Emergency Plan provides $15 billion over five 
years for those countries hardest hit by the pandemic, including $1 
billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria. 
The fiscal year 2005 Budget provides $2.8 billion from State, USAID, 
and the Department of Health and Human Services (HHS) to combat global 
AIDS, more than tripling funding for international HIV/AIDS since the 
President took office.
    Over the past year, we have worked with the Congress to pass 
legislation laying the groundwork for this effort and to appoint a 
senior official at the State Department to coordinate all U.S. 
Government international HIV/AIDS activities. Ambassador Randall Tobias 
has been confirmed by Congress and has now taken steps to assure 
immediate relief to the selected countries.
    On February 23, Ambassador Tobias, Secretary Thompson, USAID 
Administrator Andrew Natsios, and I rolled out the strategy for this 
plan and announced the first dispensation of dollars--$350 million in 
contracts to some of the NGOs and PVOs who will be carrying out the 
fight at the grass-roots level. It was a thrilling moment, I can assure 
you.
    As a crucial next step, the fiscal year 2005 Budget Request expands 
on the Emergency Plan. By working together as a highly collaborative 
team, and placing primary ownership of these efforts in the hands of 
the countries that we are helping--just as you will recall the Marshall 
Plan did so successfully in post-WW II Europe--the Department of State, 
USAID and HHS can use significantly increased resources quickly and 
effectively to achieve the President's ambitious goals in the fight 
against global AIDS.
    Mr. Chairman, President Bush summed it up this way in April of last 
year, ``There are only two possible responses to suffering on this 
scale. We can turn our eyes away in resignation and despair, or we can 
take decisive, historic action to turn the tide against this disease 
and give the hope of life to millions who need our help now. The United 
States of America chooses the path of action and the path of hope.'' 
These dollars put us squarely on that path.

Emergency Humanitarian Assistance--Helping Others in Need
    The President's Budget Request reflects a continued commitment to 
humanitarian assistance. The request maintains U.S. leadership in 
providing food and non-food assistance to refugees, internally 
displaced persons, and other vulnerable people in all corners of the 
world. In addition, the budget reflects the findings of the Program 
Assessment Rating Tool (PART) evaluations completed for the United 
Nations High Commissioner for Refugees and for USAID's Public Law 480 
Title II international food assistance, which confirmed a clear purpose 
for these programs.
    In 2003, the Administration provided funding to several 
international and non-governmental organizations to assist nearly 
200,000 Angolan refugees and internally displaced persons return home 
after decades of civil war.
    In an Ethiopia enveloped by drought, the Administration led 
international efforts to prevent widespread famine among 13 million 
vulnerable people, providing over one million metric tons of emergency 
food aid (valued at nearly half a billion dollars) to the World Food 
Program and NGOs, funding immunizations for weakened children, and 
supplying emergency seeds to farmers.
    In Sudan, the Administration worked with the United Nations and the 
Government of Sudan so that vital assistance could be delivered to the 
Sudanese people. This year the United States will provide about $210 
million in vital assistance to the people in the south, including 
approximately 125,000 metric tons (valued at nearly $115 million) in 
food aid, as well as non-food assistance, such as sanitation and water. 
We anticipate that a comprehensive peace agreement in Sudan will allow 
us to expand significantly our development assistance to help the 
Sudanese people in effecting a long-awaited recovery following decades 
of civil war. The fiscal year 2005 Budget includes $436 million in 
humanitarian and development, economic, and security assistance 
funding, much of which will be contingent upon a peace settlement 
between the government and the south.
    The fiscal year 2005 Budget ensures that the Administration can 
continue to respond quickly and appropriately to victims of conflict 
and natural disasters and to help those in greatest need of food, 
shelter, health care and other essential assistance, including those in 
areas starting to recover from conflict and war, such as Liberia. In 
particular, the budget requests funding for a flexible account to give 
the President the ability to respond to unforeseen emergency needs, the 
Emergency Fund for Complex Foreign Crises, funded at $100 million.
    Mr. Chairman, I know State Operations are not a part of this 
subcommittee's specific oversight responsibilities, but funding these 
operations is essential to our being able to carry out America's 
foreign policy. So let me turn briefly to the State Department 
operations portion of the President's Budget Request which, as you will 
recall, totals $8.4 billion.

               KEEPING AMERICANS SAFE AT HOME AND ABROAD

    The State Department has the responsibility to protect more than 
60,000 U.S. Government employees who work in embassies and consulates 
abroad. Since the 1998 bombings of two U.S. embassies in East Africa, 
the State Department has improved physical security overseas; however, 
as many of you are well aware, many posts are still not secure enough 
to withstand terrorist attacks and other dangers. To correct this 
problem, in 1999, the State Department launched a security upgrade and 
construction program to begin to address requirements in our more than 
260 embassies and consulates.

Capital Security Cost Sharing Program
    Working with the Congress, President Bush has accelerated the pace 
of improving and building new secure facilities. Moreover, we have 
reorganized our Overseas Buildings Operations to manage the effort with 
speed, efficiency, and effectiveness. Within the budget, we are 
launching a plan to replace the remaining 150 embassies and consulates 
that do not meet current security standards over the next 14 years, for 
a total cost of $17.5 billion. To fund construction of these new 
embassy compounds, we will begin the Capital Security Cost Sharing 
(CSCS) Program in fiscal year 2005. We will implement this program in 
phases over the next five years.
    Each agency with staff overseas will contribute annually towards 
construction of the new facilities based on the number of positions and 
the type of space they occupy. We arrived at the cost shares in the 
fiscal year 2005 President's Budget Request in consultations with each 
agency and the State Department's Overseas Buildings Operations.
    CSCS is also a major component of the President's Management Agenda 
Initiative on Rightsizing. Along with securing facilities, we have 
focused on assuring that overseas staffing is deployed where they are 
most needed to serve U.S. interests. As agencies assess the real cost 
of maintaining staff overseas, they will adjust their overseas staffing 
levels. In this way, new embassies will be built to suit appropriate 
staffing levels. The program is already producing rightsizing results. 
Agencies are taking steps to eliminate unfilled positions from their 
books to reduce any unnecessary CSCS charges, which in turn is leading 
to smaller embassy construction requirements.

Border Security
    Prior to September 11, 2001, the State Department's consular 
officers focused primarily on screening applicants based on whether 
they intended to work or reside legally in the United States. In 
deciding who should receive a visa, consular officers relied on State 
Department information systems as the primary basis for identifying 
potential terrorists. The State Department gave overseas consular 
officers the discretion to determine the level of scrutiny that should 
be applied to visa applications and encouraged the streamlining of 
procedures.
    Today, Consular Affairs at the State Department, working with both 
Customs and Border Protection and the Bureau of Citizenship and 
Immigration Services at the Department of Homeland Security, are 
cooperating to achieve our goals more effectively by sharing 
information and integrating information systems.
    The Department of State has invested substantial time, money, and 
effort in revamping its visa and passport process as well as its 
provision of American Citizen Services. The Department has more than 
doubled its database holdings on individuals who should not be issued 
visas, increased training for all consular officers, established 
special programs to vet applications more comprehensively, increased 
the number of skilled, American staff working in consular sections 
overseas, and improved data-sharing among agencies. The State 
Department, along with the Department of Homeland Security, is 
currently developing biometrics, such as fingerprints, digital 
photographs or iris scans, for both visas and passports in order to 
fulfill requirements of the Patriot and Border Security Acts and the 
International Civil Aviation Organization.
    As a part of the State Department's efforts to screen visa 
applicants more effectively, and in particular to ensure that a 
suspected terrorist does not receive a visa to enter the United States, 
we will be an active partner in the Terrorist Screening Center (TSC). 
The TSC, established in December 2003, will maintain a single, 
consolidated watchlist of terrorist suspects to be shared with Federal, 
state, local and private entities in accordance with applicable law. 
The Department of State will also participate in the Terrorist Threat 
Integration Center (TTIC), a joint-effort aimed at reducing the 
potential of intelligence gaps domestically and abroad.
    To achieve our goal of secure borders and open doors, in fiscal 
year 2005 the State Department plans to expand the use of biometrics to 
improve security in the visa and passport processes; more effectively 
fill gaps worldwide by hiring people with specific skills including 
language expertise; improve and maintain all consular systems; and more 
broadly expand data sharing with all agencies with border control or 
immigration related responsibilities. The budget in fiscal year 2005 
includes $175 million for biometric projects including photographs and 
fingerprints to comply with Border Security and Patriot Acts.
    The Border Security program underwent a PART analysis in the 
development of the fiscal year 2004 and fiscal year 2005 budgets and 
this budget request reflects the results of those analyses. The 
Department is moving ahead on program management improvements that 
clearly link to the Department of Homeland Security goals related to 
visa policy.

The Critical Importance of Diplomatic Readiness
    You will recall, Mr. Chairman, members of the subcommittee, that we 
created the Diplomatic Readiness Initiative (DRI) in 2002 to address 
staffing and training gaps that had become very adverse to the conduct 
of America's diplomacy. The goal of DRI was to hire 1,158 new foreign 
and civil service employees over a three-year period. These new hires, 
the first over-attrition hires in years, would allow us to provide 
training opportunities for our people and greatly improve the 
Department's ability to respond to crises and emerging priorities 
overseas and at critical domestic locations. To bring these new people 
on board--and to select the best men and women possible--we 
significantly improved Department hiring processes, to include 
recruiting personnel from more diverse experience and cultural 
backgrounds and people who could fill critical skill gaps. In the 
process, we broke records in recruiting and thus had the best and the 
brightest from which to select. The Department of State will be reaping 
the benefits from this process for many years to come. We also created 
new mandatory leadership and management training, enhanced public 
diplomacy and consular training, and made significant increases in the 
amount of language training available for new Foreign Service Officers. 
DRI hiring has supported the Department's efforts in responding to 
crises since September 11 and provided the additional resources 
necessary to staff overseas locations that truly represent the front 
line in the war on terrorism.
    Some of these positions, however, are being diverted to support new 
requirements not envisioned by DRI, such as permanently staffing new 
embassies in Afghanistan, Iraq, Sudan, and possibly in Libya. Because 
of this, the fiscal year 2005 Budget Request provides additional 
resources to continue our DRI commitment.
    DRI has allowed the Department to focus on recruiting, training and 
retaining a high quality work force, sized to requirements that can 
respond more flexibly to the dynamic and demanding world in which we 
live. We need to continue it.
    USAID has begun a similar effort to address gaps in staffing in 
technical skills, calling it the Development Readiness Initiative. 
USAID plans to hire approximately 40 Foreign Service Officers in fiscal 
year 2004 under this initiative. This Budget Request includes authority 
for USAID to hire up to 50 additional Foreign Service Officers in 
fiscal year 2005, in order to fill critical skill gaps identified 
through a comprehensive workforce analysis.
    Mr. Chairman, I have focussed your attention for long enough. There 
is more in the President's Budget Request for fiscal year 2005; but 
what I have outlined above represents the top priorities for the State 
Department. I will be pleased to answer any questions you have about 
these priorities or about any other portion of the budget request in 
which you are interested. If I cannot answer the question myself, I 
have a Department full of great people who can; and I will get you an 
answer for the record.
    Thank you.

    Senator McConnell. Mr. Secretary, I have one member here 
who has severe constraints on time. I am going to go out of 
order and let the Senator from Pennsylvania have one question, 
because I understand he will not be able to return. Senator 
Specter.
    Senator Specter. Well, thank you very much, Mr. Chairman 
for yielding to me, and thank you, Mr. Secretary, for the 
outstanding job you have done in providing real balance on our 
foreign policy. I will be submitting questions for the record 
on Iraq, Iran, AIDS, terrorism, the Saudi Accountability Act. 
But in your opening comments, you did not make any reference to 
the situation in Israel. And I note that there is a request for 
$2.6 billion.

                              ISRAEL FENCE

    My question to you relates to the fence and Israel's 
assertion of its right to make decisions on its own national 
security as it sees fit. And my question is: What is the 
administration view on Israel's sole determination of the 
fence? And are there--is there any thinking about restricting 
any aid or foreign loan guarantees or any other financial 
support to Israel by virtue of what Israel is doing with the 
fence?
    Secretary Powell. Well, as you know, Senator Specter, we do 
have a policy of discussing with Israel their settlement 
activities and some restrictions on loans as a result of 
settlement activities.
    With respect to the fence, Israel has a right to build a 
fence to protect itself if it feels that is what it needs to 
keep the terrorists from getting into Israel. We have expressed 
concern to the Israelis over time about the route of the fence 
and whether it intrudes into Palestinian territory more deeply 
than is necessary for the legitimate right of self-defense.
    The Israelis have made some adjustments to the fence over 
time and they have taken the fence down in some places once 
they have had a chance to take a second look at the impact that 
the fence has had. But at the moment we do not have any plans 
to dock them over the route of the fence.
    Senator Specter. Thank you.
    Thank you, Mr. Chairman.
    Senator McConnell. Mr. Secretary, one of our colleagues 
just recently compared Iraq to Vietnam. You served in Vietnam. 
Are there any similarities?
    Secretary Powell. Not in my judgment, Senator. And I do not 
think these kinds of comparisons are terribly helpful. Vietnam 
was another part of the world, another time in history; and we 
ought to see the situation for what it is today and not try to 
find comparisons that can then be painted in a negative light.
    I think this is quite different. I think that we have an 
Army over there that knows what it is doing. We have a people 
that want to be free and in a democratic society. We do not 
have huge state sponsors outside of Iraq flooding the place 
with weaponry and manpower of any kind. And I think it is not a 
swamp that is going to devour us.
    It is a problem that is solvable and manageable and we need 
to stay the course and not contaminate the good work we are 
doing by comparisons to Vietnam.
    Senator McConnell. What kind of entity will we be handing 
authority to on July 1?
    Secretary Powell. It has not been determined yet. As you 
know, we have a governing council now. One model says leave it 
as it is. Another model says expand it to give it broader 
representation.
    There are other ideas that say, maybe you should try to 
have some sort of mini-Loya/Jirga-like process such as 
Afghanistan but on a smaller scale, although there is not quite 
a tradition of that in Iraq. Or a Shira, some sort of meeting 
where people would elect their representatives.
    So Ambassador Brahimi is looking at all of these, along 
with Ambassador Bremer and his staff and my staff; but no 
decisions have been made yet as to which one of these models 
will be settled upon.
    I think the model that is getting the most attention right 
now and seems the most practical one in terms of the time 
available to us would be some form of expanded governing 
council; but that is just sort of the lead horse at the moment. 
No decisions have been made.
    Senator McConnell. Until recently, the Shi'a were 
relatively comfortable with the transition process and were 
relatively content with their fair shot at winning elections 
during the formation of a new government, while the violence 
was largely a Sunni phenomenon. What do you make of the Sadr 
uprising, his militia, and what it may say if anything about 
the broader Shi'a population, and their views about which way 
we ought to go from here?
    Secretary Powell. I think the administrative law that was 
approved last month recognized the fact that the Shi'a are the 
majority in the country; 60 percent of the people are Shi'a. 
And so in a democratic system where a representative government 
is what we are talking about, they will have the greatest 
representation in the assembly, and that will pass through to 
the executive institutions as well.
    The important point, though, was that the administrative 
law also protected the rights of those who are not in the 
majority, the Sunnis, the Kurds, and the other groups within 
the country. And so we think we have found a good 
representative balance.
    Now, there are still questions about this and not all 
parties are satisfied with it but that is why we are going to 
go forward and write a constitution. And changes could be made 
as you go forward toward the constitution.
    I think this satisfied most Shi'a. All Shi'a members of the 
Governing Council went along with it. The Ayatollah Sistani--
who is seen in the Shi'a population as the leading ayatollah, 
and has great weight when he speaks--has some reservations 
about it but he did not firmly object to the TAL. The Shi'a in 
the governing council went and saw him and said, ``Look, this 
is pretty good. Let us move in this direction.'' And he 
understood that. He has reservations and those reservations 
will have to be dealt with as we go forward.
    The fellow who is causing the trouble now, al-Sadr, is a 
young radical who is not considered a leading figure in the 
Shi'a community. But he does have the loyalty of the Mahdi 
militia, and he is stirring up a great deal of trouble. He has 
been indicted for the worst kinds of crimes and he has to be 
brought to justice eventually.
    Senator McConnell. Do you think he is getting any support 
from outside the country--from Iran, for example?
    Secretary Powell. There may be some support coming in the 
country. I cannot say it is not the case but I do not sense 
that he is enjoying great support from other Shi'a groups, 
other than his own within the country; or for that matter, from 
outside the country.
    I think he is a finite definable problem. And what we want 
to do is deal with this in the very near future so that he does 
not start to take on more of an aura and more of an influence 
than is deserving of his state and position in the Shi'a 
community.
    Senator McConnell. Final question and then I will turn to 
Senator Leahy. So, your view is that his following is small and 
stable, and not small and growing?
    Secretary Powell. It is small and stable. We do not want to 
see it grow. And that is why our military forces now are 
engaging the Mahdi militia.
    Senator McConnell. Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman. And Secretary 
Powell, thank you for the comments you made regarding what I 
said in my opening statement. And you and your staff will have 
a copy of my whole statement. I go into a number of things, 
Liberia, the Charles Taylor situation in Sierra Leone, 
Colombia, Indonesia, and others.
    I ask that you take a look at it because, if anything, it 
is a road map of what I intend to focus on in this subcommittee 
this year.
    I appreciate the other troops besides ours involved in the 
reconstruction of Iraq. The British led the way with, I 
believe, 11,000 troops. We have got about 130,000.
    The other 32 nations provide less than 10 percent of the 
troops. They provide less than 1,000 soldiers each, including 
11 of our NATO allies. We have police departments that are a 
lot larger than what they have put in there. And the Spanish, 
of course, are planning to withdraw.
    Mr. Brahimi is only a special adviser. He is not a U.N. 
administrator with all those powers.
    The British have given $1 billion for reconstruction aid. 
Ours is over $20 billion.
    So, we have others in there but we are carrying by far the 
lion's share.
    George Will suggested in a column--and it probably will 
shock him to know I quoted his column--but he said in The 
Washington Post yesterday:

    The transfer of power in Iraq is to an institutional 
apparatus that is still unformed. This is approaching at a 
moment when U.S. forces in Iraq, never adequate for post-war 
responsibilities are fewer than they were.
    U.S. forces are insufficient for that mission; unless the 
civil war is quickly contained, no practicable U.S. deployment 
will suffice. U.S. forces worldwide cannot continue to cope 
with Iraq as it is, plus their other duties--peacekeeping, 
deterrence, training--without stresses that will manifest 
themselves in severe retention problems in the reserves and 
regular forces.

    You have a military background. Do you disagree with him? 
Do we have enough troops there if civil war spreads. Do we have 
enough to contain it?
    Secretary Powell. The commanders believe that there are 
enough forces but, because of the recent spike in activity, 
Secretary Rumsfeld and General Abizaid are--I think the way to 
put it--delaying the transfer out of those who were scheduled 
to leave in the very near future in order to keep an increased 
density of troops.
    Senator Leahy. And continue to transfer in so that you----
    Secretary Powell. Yes.
    Senator Leahy [continuing]. Raise the overall number.
    Secretary Powell. The overall number goes up, rather than 
goes down for some period of time. I do not know how long that 
will be. It is up to Don Rumsfeld and John Abizaid.
    What is interesting is that, although I do not have the 
total access to these numbers as I used to have on a daily 
basis, the re-enlistment rates among those units that have been 
there remain high.
    Senator Leahy. Well----
    Secretary Powell [continuing]. The troops know that they 
are doing something that is important and, even with the 
knowledge that they may have to go back, they are re-enlisting.
    Senator Leahy. I have gone out to visit our--some of our 
wounded out at Walter Reed, and I am talking to a man who has 
lost his leg. He has got a new, very high-tech prosthetic. He 
is showing it to me.
    So I say: ``What are you going to--now what do you--plan to 
do once you get out of here?'' And he looked at me----
    Secretary Powell. Go back to his unit.
    Senator Leahy [continuing]. Said, ``I want to go back. I 
want to go back to the Army.''
    It was very moving. My wife, as you know, is a nurse. She 
has talked with a number of very severely wounded--the same 
thing. And you have to admire their courage.
    Secretary Powell. Well, if I may, Senator Leahy, when I was 
over there a couple of weeks ago, I spoke to a large group of 
troops in one of the rooms. There must have been 500 or 600 in 
the room. And after saying a few words to them, and thanking 
them, and telling them how proud we all were of them, I was 
walking through the crowd, shaking hands, and taking pictures--
and you are familiar with the scene.
    As soon as I got in the crowd, some young GI stuck his hand 
out and grabbed my hand. He did not want a picture. He did not 
want a signature. He just said, ``Tell the President to stay 
the course.''
    Senator Leahy. Yes.
    Secretary Powell. And these are the young men who are over 
there, not getting showers every day, and living in the mud, 
and living in the dirt, and living in the sand.
    Senator Leahy. You have been there.
    Secretary Powell. I have been there; I know what it is 
like. And they know what they are doing is important. That is 
why they are telling all of us, ``Stay the course.''
    Senator Leahy. None of us have a crystal ball; and if we 
did, maybe this whole thing might have been handled 
differently, maybe Afghanistan might have been handled 
differently, maybe post- or pre-September 11 might have been.
    But let us talk about after June 30. We now have a new 
Iraqi Government. Suppose they take a position that we strongly 
disagree with, suppose they want an Iranian-style theocracy 
instead of a democracy; a theocracy that will not respect 
minority rights, whether it is women or other minority 
religions. Do we have veto power to block it?
    What if they say to the American soldiers, ``Out, right 
now, today,'' or within the few days it might take to leave? 
Can we refuse to leave?
    Secretary Powell. Sovereignty means sovereignty. But before 
they get sovereignty handed over to them or at the time that 
sovereignty is handed over to them, we will have made 
arrangements with respect to what our troops are doing there 
and for what purpose. And the least of my worries is that they 
are going to tell us prematurely to leave.
    Senator Leahy. Why?
    Secretary Powell. Because they are going to need us for 
security for some time to come. This is still a work very much 
in progress. This will be a new government that is still 
getting its sea legs, that is still developing institutions of 
democracy, that has not yet finished a constitution, and has 
not yet held an election to give it full legitimacy. And it 
will be challenged.
    It will be challenged by the kinds of forces that you see 
challenging us today. And for that reason, I am quite confident 
that we will not have a dispute with the Interim Government 
over us keeping our troops in their country. They will need 
that kind of protection.
    Even though sovereignty will be returned to them, the 
troops will remain under our control. And we believe we can 
have an understanding with the Interim Government based on what 
we have discussed with the Governing Counsel, now that Iraqis 
troops will also be under our command. That is our preference 
in order for there to be unity of command.
    If the Interim Government starts to move in a way that is 
totally inconsistent with democracy, or starts to create a 
theocracy, or take away the rights from people, then we have a 
very brand-new and difficult situation. But we do have some 
considerable influence over such a thing by the money that we 
are providing for the reconstruction of the country, by the 
political relationship we will have with them, by the 
international organizations that we hope will be there with us, 
and hopefully perhaps by the U.N. resolution that will help 
establish their interim legitimacy until they go to elections.
    But they will be sovereign. I think as a result of 
agreements and a result of, hopefully, resolutions that are 
passed, there will be some constraints on the power of this 
sovereign government.
    Senator Leahy. I will submit my other questions for the 
record.
    Senator McConnell. Thank you, Senator Leahy. Chairman 
Stevens.
    Senator Stevens. Thank you very much. I just have a couple 
of questions, Mr. Secretary.

                             WEAPONS DUMPS

    When we were in Iraq, I received estimates of the number of 
weapons dumps. Now, these are a mass of weapons of destruction, 
not the weapons of mass destruction, but the estimate I 
received was from 1,000 to 7,000 of these dumps full of 
artillery shells, hand-held weapons, and shoulder-held weapons. 
We have asked the Congressional Research Service and other 
agencies to try and determine when they were paid for. It is my 
understanding that debt that was incurred after the agreement 
was signed at the end of the gulf war, after the sanctions went 
into effect is invalid. Now, I do not know whether you can 
affirm that but that is my understanding.
    We fear that some of these nations are claiming that the 
bills that are owed are legitimate debts but they were for 
weapons that came to Iraq after Saddam Hussein agreed not to 
purchase any additional weapons.
    Do you think you can ask the Department of State to find 
out if they--know anything about the origin of those weapons, 
these mass deposits of weapons, and their relationship to the 
debt that these people claim?
    I understand Saudi Arabia claims $30 billion; Russia, $6.9 
billion; France, $5.9 billion; Germany, $4.8 billion, and it 
goes on up to $125 billion--$125 billion in total debt. I am 
hoping we can get someone--maybe you could do it--to ask the 
United Nations to step in and help the world destroy these 
enormous deposits of weapons.
    They are out on the ground, no fences around them, and very 
few of them are guarded. I talked to some of the people 
involved in non-government security, the people that were 
involved in Fallujah.
    I asked: ``Have you ever taken weapons from these dumps,'' 
they said: ``Well, that would be illegal.''
    I said: ``Well, you mean, illegal for us but not illegal 
for Iraqis?''
    He said: ``Well, we borrow a few now and then.''
    Now, they are just dumps that anyone with a truck can go by 
and pick up artillery shells, all sorts of equipment. I think 
someone has to take responsibility for destroying them.
    Right now, the military does not have enough people to 
guard them. One of them was 5 miles square and piled up about 
10 feet high of weapons.
    These weapons dumps are just totally being ignored. I had 
to apologize to Senator Diane Feinstein when she raised it last 
year. I did not know the scope and extent of it, and she wanted 
us to add some money to the defense appropriations bill. We 
added a little money but we do not have enough money to deal 
with this issue and keep our troops in Iraq, too.
    So, I urge you to help us find some way to determine who 
brought weaponry to Iraq and if they are claiming that they 
have a debt that is owed by the new Iraq, whether weapons were 
brought in illegally after 1991. In any event, please think 
about who can help us get rid of them. That is my message to 
you, my friend.
    I do not think I have ever seen a more difficult problem in 
a battlefield in my life. And I have seen a lot of them, as you 
have. I cannot believe that we can live with the fact that 
anyone can go pick up weapons.
    If they are going to be available on a no-cash and come-
carry basis, there is no way we can deal with this. I do not 
think we should expose our people to that kind of weaponry, 
totally unguarded and totally available to anyone who wants to 
use it in an unconventional way.
    Secretary Powell. Thank you, Senator. The whole country 
was--is an ammo dump.
    Senator Stevens. Yes.
    Secretary Powell. There are facilities all over the place. 
Some were destroyed during both the gulf war and the current 
war. Others were destroyed after the war, but it was still a 
huge problem, because of the number of facilities.
    I know that Secretary Rumsfeld is working with Ambassador 
Bremer and our military commanders over there to try to get 
some kind of control over these facilities, so we do not have 
the kind of the problem you describe.
    With respect to debt, I am going to ask my lawyers to give 
you an answer for the record, because I do not want to guess at 
it as to if a country sold weapons to Iraq that were sold in 
violation of U.N. resolutions, why should there be a legitimate 
debt against the Iraqi people for such sales? But I need to 
give you a formal answer for the record on that.
    [The information follows:]

                         United States Department of State,
                                    Washington, DC, April 29, 2004.
Hon. Ted Stevens,
Chairman, Committee on Appropriations, U.S. Senate.
    Dear Mr. Chairman: This is in response to the question that you 
raised during Secretary Powell's testimony on April 8, 2004 concerning 
the Administration's fiscal year 2005 budget request. Specifically, you 
inquired whether, in light of the mass deposits of weapons found in 
Iraq, any of the debt claims that are being made against Iraq by 
various creditor countries derived from weapons sales that violated the 
Iraqi arms embargo instituted under United Nations Security Council 
Resolution 661 and subsequent related resolutions.
    The vast majority of these bilateral official claims against Iraq 
appear to pre-date the Iraq sanction regime and therefore could not 
derive from sales of weapons in violation of that sanction regime. Of 
the small amount of official claims that post-date the sanctions 
regime, we are not aware of any such claims that derive from illegal 
arms sales. Although Iraqi authorities, working with the CPA and with 
the IMF and Paris Club, have made great progress in identifying the 
amounts of debt outstanding, much of the Iraqi documentation is 
missing. The Iraqi authorities will have to ask Iraq's creditors for 
documentation to substantiate their claims. Until this process is 
completed, we will not be able to completely rule out the possibility 
that some claims derive from illegal military sales. Given the 
knowledge that we have so far, however, we have no reason to believe 
that the debt claims derive from sales of weapons in violation of U.N. 
sanctions.
    Prior to the institution of the Iraqi sanctions regime in late 
1990, Iraq had accumulated a very large external debt as a result, 
inter alia, of the costs of the Iran-Iraq war. While we believe that a 
significant portion of that debt derived from arms sales, such sales 
were not in violation of any U.N.-sanctioned embargo at the time. It is 
possible that a significant portion of the mass deposits of weapons 
recently found in Iraq derived from such pre-sanctions sales.
    We hope that this information is helpful to you and the other 
members of the Senate Appropriations Committee. Please do not hesitate 
to contact us if we can be of further assistance.
            Sincerely,
                                             Paul V. Kelly,
                          Assistant Secretary, Legislative Affairs.

    Senator Stevens. That is totally logical but, very clearly, 
if they sent it in as canned Spam and they are weapons, that is 
the problem.
    Secretary Powell. Yes, sir.
    Senator Stevens. I hope we can find some way to identify 
it. I asked the Iraqis, and they said all those records were 
destroyed in the war.
    Secretary Powell. It may be hard to get all the answers, 
Senator.
    Senator Stevens. I do think, though, that the United 
Nations ought to be involved. If they want to come in and do 
something that is not violent and not too exposed to danger, 
that is one job they can take on. They are out west, they are 
north, they are south, and they are east. There are 1,000 to 
7,000 dumps. Something has to be done at least to put them 
under some type of security until we can figure out what to do 
with them--until the Iraqis figure out what to do.
    Lastly, I do not think there ought to be an Iraqi Army. I 
think there ought to be a self-defense force, and that we ought 
to limit the number of weapons of this type they have access 
to. But today they have open access to weapons that are just 
horrendous in terms of their capability. Thank you, my friend.
    Secretary Powell. Thank you, Senator.
    Senator McConnell. Thank you, Senator Stevens. The order 
remaining is Senator Harkin, Senator Bennett, Senator DeWine, 
Senator Landrieu, and Senator Byrd.
    Senator Harkin.
    Senator Harkin. Thank you very much, Mr. Chairman. Mr. 
Secretary, you may recall that at last year's hearing, I asked 
you what the Department of State was doing to ensure that the 
needs of people with disabilities were being addressed in our 
foreign assistance programs in Iraq, Afghanistan, and other 
countries. Now, this came about because it had been reported 
back to me that many of our dollars that were used for 
reconstruction in Bosnia, for example, and places like that, 
that the schools were rebuilt and things were inaccessible, 
just totally inaccessible. And I thought, ``Wait a minute. We 
are using U.S. dollars to do that, and we are not providing any 
accessibility.''

                        PEOPLE WITH DISABILITIES

    So then, I began to look at it more and found that we 
really did not have much of a focus in our policies regarding 
people with disabilities. So since we last met, Congress has 
passed the following legislation. One, we required the 
coalition provisional authority to promote the inclusion of 
people with disabilities. Second, we instructed USAID to 
develop access standards. And third, we included disability-
related criteria for the Millennium Challenge Account. Those 
three things have been passed by Congress.
    I need not tell you, Mr. Secretary, the United States is, I 
think, is in a unique position to lead the world in 
demonstrating the tremendous potential of people with 
disabilities when those barriers are removed. Last week, I met 
with Under Secretary Paula Dobriansky and Assistant Secretary 
Lorne Craner to discuss these international disability 
initiatives.
    I am pleased to learn the Department of State will be 
improving documentation of disability rights in the human 
rights reports. So, that is one good step.
    However, I have proposed the formation of an inter-agency 
panel or task force, within the Department of State, to raise 
awareness and coordinate the government's international 
disability programs. I have stressed the need for a permanent 
staff to focus on disability issues. Because if you do not have 
some inter-agency task force, it just doesn't happen, as I 
found in the last year. You expressed an interest in it a year 
ago. You said you were very sensitive to the issue; I believe 
you are. But you have got a lot on your plate. And you have got 
a lot of things to think about. And this falls by the wayside.
    So, can you just tell me now what are we going to do? Is 
there any hope that we can have some kind of a panel or 
something like that at the State Department?
    Secretary Powell. I think there is. Whether it needs a 
permanent secretariat or not, or an inter-agency secretariat of 
some kind on a permanent basis and how large it should be, I 
would have to sit and discuss this with Under Secretary 
Dobriansky and others.
    But we are sensitive to it, especially with respect to the 
new Millennium Challenge Account and the Millennium Challenge 
Corporation. And I think you have had discussions with Under 
Secretary Dobriansky about how we can approach that problem. 
So, we are sensitive to it.
    I have not discussed the idea of a permanent panel with a 
secretariat, with Under Secretary Dobriansky.
    Senator Harkin. Well, again, I thank you for your 
sensitivity to it; but you were sensitive to it last year, too. 
And I mean it, I am not just saying that, I know you are. But 
there has to be someone in your operation to whom people go 
when these issues come up, whose task it is to ensure that 
disability rights, the things that we have passed in the last 
year, are actually carried out. If there is no one there to do 
that, it just gets muddled and no one ever takes care of it.
    So I do not know the phrases ``secretariat'' and such. I do 
not understand that phrase but these----
    Secretary Powell. No. Your suggestion being we ought to 
have a permanent staff of some kind?
    Senator Harkin. Somebody.
    Secretary Powell. That is what I am talking about.
    Senator Harkin. Some permanent staff some place whose 
focus--I mean, you have it on a number of different other 
areas.
    Secretary Powell. Yes.
    Senator Harkin. Women's issues, other issues like that, you 
have permanent people that someone knows there is an officer, 
someone to go to for guidance, direction, consultation, that 
type of thing when you are dealing with disability rights 
issues. So, I hope that you can take a look at that again.
    Secretary Powell. Thank you, Senator. I will.
    [The information follows:]

                         United States Department of State,
                                     Washington, DC, March 1, 2004.
Hon. Tom Harkin,
U.S. Senate.
    Dear Senator Harkin: This is in response to your January 21 letter 
to Secretary Powell urging that our foreign policy promote ``the rights 
and inclusion of people with disabilities.'' Thank you for your 
thoughtful letter. We are aware of your leadership in this area and 
appreciate your strong commitment to the disability community.
    We have attached for your review the annual Country Reports on 
Human Rights Practices, which was released on February 25th. In Section 
5 of each country chapter, we report on the constitutional (legal) 
prohibitions on discrimination based on disability, and whether the 
government of each country effectively enforces those prohibitions. In 
countries where we find societal violence, we report on efforts by non-
governmental entities to incite violence based on these issues, as well 
as to identify any laws, administrative regulations, or government 
practices that are inconsistent with equal access to housing, jobs, 
education and/or health care. We note any mechanisms available for 
redress of discrimination and whether such mechanisms are effective, 
and report any discrimination against disabled persons in employment, 
education or the provision of other state services. We report whether 
the law mandates building access and whether the government effectively 
enforced the law. We also report abuses in governmental mental health 
facilities, including inhuman and degrading treatment, arbitrary 
commitment, abuse of physical restraints, unhygienic living conditions, 
inadequate medical care, lack of safeguards against dangerous treatment 
and lack of protection against sexual or other violence.
    Our embassies gather information throughout the year from a variety 
of sources across the political spectrum, including government 
officials, jurists, armed forces sources, journalists, human rights 
monitors, academics, and labor activists. This information gathering 
can be hazardous, and our officers regularly go to great lengths, under 
trying and sometimes dangerous conditions, to investigate reports of 
human rights abuses and come to the aid of individuals at risk. 
Disability organizations around the globe are also welcome to provide 
information through this process.
    In addition, the Democracy, Human Rights and Labor Bureau (DRL) has 
been pleased to meet--on more than one occasion--with U.S. disabilities 
NGOs, including those referred by your staff. In September, DRL 
provided disability NGOs with a database that includes the names and 
addresses of 805 disability organizations we have identified in 172 
different countries.
    More recently, the DRL Senior Coordinator for Democracy and Human 
Rights Promotion met with NGO representatives referred by your office 
to discuss grant possibilities under DRL's Human Rights and Democracy 
Fund (HRDF). These individuals were briefed on the types of proposals 
DRL funds, and were invited to submit an unsolicited proposal. HRDF 
funds are used to promote innovative programming that upholds 
democratic principles, supports democratic institutions, promotes human 
rights and builds civil society in countries of strategic importance. 
HRDF finds unique, timely, cutting-edge projects that do not duplicate 
other efforts, as opposed to simply contributing to larger projects. 
Also, HRDF is used to fund pilot projects, or ``seed funds'' that will 
have an immediate impact but that have potential for continued funding 
beyond HRDF resources.
    The Department of State, including the Bureau of Political-Military 
Affairs, works closely with the U.S. Agency for International 
Development (USAID) and other agencies, on humanitarian demining 
programs to clear landmines and promote mine risk education in some 30 
countries. Landmines and other explosive remnants of war have created 
thousands of maimed and disabled people around the world. Through our 
partnership program we support NGOs that treat landmine victims and 
operate prosthetic clinics. Many of them also serve as advocates for 
disabled persons in their communities. In partnership with Warner Bros. 
animation we produced public service announcements (PSAs) for Cambodia 
that warn children about the dangers of landmines. These PSAs also 
carry a message of respect for and acceptance of people with 
disabilities.
    USAID has been working since 1989 to assist people with 
disabilities in their development efforts. We are enclosing a copy of 
their ``Third Report on the Implementation of the USAID's Disability 
Policy.''
    On behalf of USAID, The Department of State Bureau of Population, 
Refugees and Migration (PRM) has awarded grant agreements to NGOs for 
distributing wheelchairs to persons of need throughout the world, 
regardless of race, religion, or political affiliation.
    The Office of the U.S. Global AIDS Coordinator has responsibility 
for all HIV/AIDS programs of the United States government overseas, 
including in 14 focus countries where we will provide extensive new 
resources for prevention, treatment and care. U.S. programs will offer 
a high degree of flexibility in order to provide the most appropriate 
methods of prevention, treatment, and care for groups and individuals, 
including those with disabilities.
    The Department of State is taking effective action in a variety of 
areas. As we mentioned during the February 26th meeting with your 
staff, we do not believe that the establishment of a new special 
coordinator position is warranted at this time.
    Thank you for your letter and please feel free to let us know if 
you have additional suggestions. We look forward to working with you on 
this issue of great importance.
            Sincerely,
                                             Paul V. Kelly,
                          Assistant Secretary, Legislative Affairs.

Note.--``Third Report on the Implementation of the USAID's Disability 
            Policiy.'' The full text of the Annual Human Rights Report 
            can be found at http://www.usaid.gov/about/disability/
            third_report.pdf

    Senator Harkin. I appreciate that.
    Secretary Powell. Thank you.

                                 HAITI

    Senator Harkin. One last thing, Mr. Secretary, I--maybe if 
I get some more time on the second round, you and I have spoken 
a number of times about the situation in Haiti. And I thank you 
for your speaking with me during that very tense period of 
time; and you were very kind and generous with your time with 
me and I appreciate that.
    I know you were there on Monday. I'd like to note that you 
didn't mention the crisis in Haiti in either your opening or 
written statements. I just wanted to point out the crisis in 
Haiti didn't just happen overnight. Since 2001, the OAS has 
worked to resolve the political situation in Haiti. Your office 
has been working with them since 2001.
    A year ago, the United Nations warned the international 
community of a looming political and humanitarian crisis in 
Haiti. Despite this and other forewarnings, the administration 
was left scrambling to respond in February when armed thugs 
took to the streets in Haiti.
    As late as February 13, Mr. Secretary, at a press briefing 
with other foreign ministers, you stated: ``We will accept no 
outcome that in any way illegally attempts to remove the 
elected president of Haiti. At the same time, we believe both 
sides need to come together and find a political solution, a 
peaceful political solution, using the CARICOM proposal.'' That 
is February 13.
    When asked at that briefing how you hoped to convince the 
Haitian opposition to accept the CARICOM plan, which President 
Aristide accepted immediately, you said--and again I quote--
``We think that the CARICOM plan has opportunities for both 
sides. President Aristide was elected by the Haitian people and 
his departure from the scene as president can only be by 
democratic constitutional means.'' I am quoting you.
    ``And it would not be appropriate. It would be inconsistent 
with a plan to attempt to force him from his office against his 
will. And that is what you have heard us clearly say today is 
unacceptable outcome.'' Your quote, February 13.
    On February 19, you told Sam Donaldson, ``What we have to 
do now is stand with President Aristide--he is the elected 
President of Haiti--and do what we can to help him.''
    Asked about President Aristide's stepping down, you said, 
``That is not an element of the plan because, under the 
constitution, he is the President for some time to come.'' Your 
quotes.
    Well, 7 days later, February 27, you begin to indicate that 
one democratic element, President Aristide, should leave. In a 
CNN interview, you said that President Aristide should do what 
he thinks is best for his country. But when asked whether he 
could survive politically, you stated, ``There is such strong 
resistance now to his presidency that I am not quite sure if we 
are going to be able to find a way forward.''
    Mr. Secretary, President Aristide did what we asked him to 
do, maybe not as quickly as we would have liked; but on January 
31, he accepted the U.S.-supported CARICOM plan.
    But it gets worse. Not only did we withdraw support from 
this elected president, but on February 28, the White House 
began blaming President Aristide for ``this long simmering 
crisis.''
    I am quoting a statement from the White House. ``His 
failure to adhere to democratic principles has contributed to 
the deep polarization and violent unrest that we are witnessing 
in Haiti today. His own actions have called into question his 
fitness to govern--continue to govern Haiti.''
    Then finally on February 29, President Bush stated, ``This 
is the beginning of a new chapter in the country's history.''
    What happened, Mr. Secretary? In 7 days, what happened?
    Secretary Powell. We could not keep it going, Senator. We 
could not get the sides to agree to the CARICOM plan. We could 
not keep the process moving forward that would have given us 
the solution as laid out exactly in the CARICOM plan.
    The situation was deteriorating rapidly. And to a 
considerable extent, President Aristide's shortcomings and 
actions over a long period of time contributed significantly to 
our ability to find a political solution.
    We did not ignore it. We worked with the OAS. We sent 
people down to talk. We worked with the OAS, sending a 
distinguished American ambassador down last fall to try to find 
a solution. The solution kept eluding us.
    Then the Haitian legislature was allowed to expire because 
President Aristide wasn't able to bring himself to create 
circumstances which would resolve the political impasse that 
existed.
    We finally found that on the last weekend in February, we 
had a catastrophe on our hands about to happen. When forces 
were lining up, illegal forces supported by President Aristide, 
the Shamirs, who were arming themselves all over Port-au-
Prince. Both the north and south portions of the country had 
fallen, and President Aristide was worried about his personal 
security, and it was becoming----
    Senator McConnell. Let me just say, Senator Harkin, that 
you are over the 5 minute time limit. Can we bring this to a 
conclusion?
    Secretary Powell. We were not prepared, nor were any of our 
colleagues, France, Canada, or anyone else prepared to send in 
armed forces to be on the side of President Aristide, 
essentially to keep him in power. And they would have been 
there for a very long period of time. We had made that clear 
throughout the period.
    So, his situation became untenable. A solution appeared on 
that Saturday evening, when he decided that his own security 
was at risk, and he asked if we could help him out of the 
country.
    Senator Harkin. I was on the phone with him that day.
    I was on the phone with you that day, too.
    Secretary Powell. I remember very vividly, Senator.
    Senator Harkin. I remember it vividly, too.
    Secretary Powell. Well, what I am saying, Senator, is at 9 
o'clock that night, Saturday night, I was minding my own 
business, not knowing how this thing was going to play out, 
except hundreds of people were about to be caught up in a 
maelstrom.
    After I spoke to you, I think, late afternoon----
    Senator Harkin. Right.
    Secretary Powell [continuing]. It was about 9 o'clock that 
night when I got a call from my ambassador, Ambassador Foley, 
who said his security people have told him that it is no longer 
sustainable and he wants to talk to me. And he wants to talk to 
me and he wants to talk to me about where he is going to go and 
who might come with him. Should I talk to him?
    I said, ``See what it is he is asking for.''
    What he asked for was an opportunity to leave the country 
and he was going to resign. And over the next several hours, 
that was arranged.
    When I spoke to you, Senator, that was the furthest thing 
from my mind. I did not know I was going to get that call at 9 
o'clock that night. And we did not put a gun to his head. We 
did not kidnap him, or put chains around him, or do anything 
else.
    Senator Harkin. I believe that. I believe--you are 
absolutely right on that.
    Secretary Powell. Yes. Let me also say that I went to Haiti 
this past Monday, met the new Prime Minister, interim, and he 
made some statements on Monday. One, a new corruption czar; 
two, a truth and reconciliation commission; three, elections in 
2005; and nobody in the current government will run in those 
elections in 2005. And he made some other promises with respect 
to economic development and the development of the Haitian 
national police.
    This is a country in deep trouble. The one thing I will 
never regret, Senator, is that no killing took place and Port-
au-Prince is stable now, and we are slowly creating stability 
in other parts of the country, and we are working with the 
United Nations to bring in a peacekeeping force.
    I have no ill will toward President Aristide. I am the one, 
along with Senator Nunn and President Carter, who got him back 
in 1994.
    Senator McConnell. We are going to have to move along or 
other Senators are going to miss their opportunity to ask 
questions.
    Senator Bennett.
    Senator Bennett. Thank you very much, Mr. Chairman. It is 
fascinating to sit here and listen to all this go back and 
forth. And I would like to comment on all of it but I do not 
have time.
    I do remember Senator Nunn reporting your role in helping 
remove Mr. Cedras and replacing him with Aristide. My own 
reaction to that was that we were in the process of replacing a 
brutal dictator much beloved of American conservatives, with a 
brutal dictator much beloved of American liberals. And I think 
that is kind of where we ultimately came out.
    Mr. Secretary, this will be the last time you formally 
appear before this subcommittee. And at the mercy of the 
voters, it may be the last time I am here.
    So, let me take the opportunity to, first, hope that there 
is a, from our point of view, successful outcome in the 
election, and we both may be here another year. But if that is 
not the case, let me take the opportunity to thank you for your 
service, not only as Secretary of State but a lifetime of 
service to your country. It should be duly noted for the 
record, even though we take it for granted.
    I have written you about a number of issues that are 
important to me, tuberculosis, AIDS, malaria, microloans.
    I am very pleased that your opening statement talks about 
all of these issues with the exception of microloans. I do not 
take that exception as an indication of lack of interest. But I 
feel these kinds of things that do not get the headlines with 
the State Department, nonetheless, are very important over 
time.
    I appreciate your willingness to be as supportive of them 
as you have been, and assure you once again of my interest in 
it, particularly the microloan effort, which I know some of the 
bureaucrats at State do not like, because they do not control 
the money. But I have seen the results of that as I have moved 
around the world, and it is very dramatic, and very important.
    Let me get to the issue that has dominated here when we 
talked about Iraq. First following up on the comment of our 
chairman that this is not Vietnam, go back to your experience 
that you told us as you walked through the GIs and the troops 
saying to you, ``Tell the President to stay the course.''
    My military service was after Korea and before Vietnam, so 
I never saw a shot fired in combat. But my memory is that there 
was very little of that feeling in Vietnam, that the GIs were 
not telling their leadership in Vietnam, ``We are glad we are 
here. We feel we have done a good job and this is what we ought 
to stay doing.'' Is that one of the--would that be one of the 
differences between this and Vietnam?
    Secretary Powell. Yes, sir. By the late 1960s--I was there 
in the early 1960s and I was there in the late 1960s--by the 
late 1960s that kind of spirit was drying up. All of our 
youngsters were wonderful young men and women. They served 
their Nation at their Nation's call but they had serious doubts 
about our staying power. And they had serious doubts about the 
mission we were trying to accomplish.
    Senator Bennett. Yes. I think it is important for us to 
underscore those differences.
    Now, the call has gone out for a U.N. administrator to 
replace Ambassador Bremer on the 1st of July. I have contacts 
in Iraq, independent of the government, people who do business 
there or travel there or have relatives there, et cetera. They 
tell me that the Iraqis view the United Nations with as much 
suspicion as they might view the United States.

                              OIL FOR FOOD

    They are very much aware of the details of the Oil for Food 
scandal, the enormous corruption that surrounded the U.N. 
activity in overseeing Oil for Food, and that the United 
Nations in its role, in Iraq under Saddam Hussein, seriously 
failed the Iraqi people.
    This gives me pause at the idea that the United Nations 
might be seen as the beneficent--disinterested as opposed to 
uninterested--disinterested and therefore an even-handed party 
here who needs to come in and remove the stain of some American 
stigma of being an occupation force, that there are many Iraqis 
who feel that the United Nations would be an occupation force, 
and might take them back to the bad old days of arms deals 
under the table, bribes paid to officials, not only to U.N. 
officials, but to officials of other governments that profited 
enormously during the Oil for Food scandal.
    We do not seem to be paying much attention to the Oil for 
Food scandal but I think it is the biggest example of official 
corruption that we have seen really in my memory. Dollar-wise, 
I cannot think of an area of corruption that begins to approach 
it.
    Do you have any information you can share with us, or 
anything that you think is legitimate for us to know about, 
with respect to that scandal and how it is being examined? The 
only leverage we have on the United Nations, which we have 
exerted in the past, is withholding of our dues to try to clean 
up some of the corruption within the U.N. bureaucracy years 
ago.
    I supported resumption of payment of dues, because there 
was some movement towards cleaning up corruption in the United 
Nations; but the corruption in the United Nations has exploded 
again, maybe not on the front pages of The New York Times, but 
elsewhere the corruption of the United Nations has exploded 
again. And as we are talking about a U.N. role in this vitally 
important, very sensitive, and very delicate situation, which 
could still go south on us.
    We have no guarantee we are going to succeed in Iraq. We 
have a determination and resolve that we are going to succeed 
but we have no guarantee. And inserting into that equation, the 
United Nations, at this particular point when the Oil for Food 
scandal and the level of corruption in it is so enormous, is 
something that concerns me. And I would like to get your 
reassurance that it is under control, or that it is being 
investigated, or that we have some leverage, or whatever you 
might have to say.
    Secretary Powell. Let me begin, first, Senator, by saying 
that the term, U.N. Administrator, which has been used by some, 
or High Commissioner, suggests that we are going down the road 
of turning the whole country over to some U.N. trustee 
arrangement. That is not the case.
    We think there is a role, however, for a senior 
representative of the Secretary General to be there, to assist 
with preparing the country for elections--the United Nations 
brings great expertise to that--in providing advice to the 
governing council, the way in which Ambassador Brahimi did 
earlier this year in getting to an agreement on the 
administrative law. So, I think the United Nations does have a 
role to play.
    A second point, there are concerns among many Iraqissa 
about the role played by the United Nations in the past. It is 
not exactly a love-in. It is not going to be a love-in. But I 
think most Iraqis understand that the United Nations does bring 
assets to the table.
    But there will be questions raised about the Oil for Food 
program. I do not know the dimensions of the problem. I read a 
number of articles about the alleged dimensions of the problem. 
I just do not know how bad it is but it is a bad problem.
    Ambassador to the United Nations, Ambassador Negroponte, 
and Assistant Secretary Kim Holmes testified before Senator 
Lugar and his committee yesterday. We are making an assessment 
now of what documentation we have, that we can make available 
to the investigators and to members of Congress who ask for 
documentation. We do have access to some of the documents, some 
of the contracts that came through our system.
    I have had a number of conversations with Kofi Annan about 
it. I know he is seized with it. He knows that this is a major 
problem that has the potential for being a huge black eye for 
the United Nations. And I know that he is reaching out to find 
people who can assist him in the investigation.
    The United Nations is sort of constrained in that they can 
only investigate themselves, not other countries. But we are 
trying to design a model for them that will allow somebody to 
investigate other countries and bring it all together.
    Ambassador Bremer has taken action to freeze records and to 
have the Governing Council freeze all records in Baghdad so 
they can be made available for inquiries and investigations as 
we move forward.
    So, we are taking the Oil for Food program problem very, 
very seriously. Ambassador Bremer is, the governing council is, 
and now, I believe, Kofi Annan is, as well.
    Senator McConnell. Thank you, Senator Bennett. In order of 
arrival, we will continue with Senator DeWine, followed by 
Senator Landrieu, Senator Byrd, Senator Durbin.
    Senator DeWine.

                                 SUDAN

    Senator DeWine. Mr. Secretary, thank you very much for 
being with us. And I want to follow up on what--the list of 
thank yous that Senator Bennett was listing and add to that 
your commitment and push for a comprehensive peace agreement in 
Sudan. I know you have been very concerned about that and have 
done a lot of work on that, getting close as you have indicated 
there.
    I also appreciate very much the fact that the President 
called on Sudanese Government to stop the militias, in the 
Darfur region, from committing atrocities against the local 
population. That was certainly very much appreciated and 
certainly very, very needed.
    Let me turn, if I could, to Haiti. I know you, as you said, 
you were down there this week. And I just want to say that, you 
know, my sources in Haiti indicate that our troops are doing 
just a bang-up job down there. They are making a big 
difference.
    If I could, I will just quote from a friend of mine who has 
worked in Haiti, doing humanitarian work for a number of years. 
I got an e-mail from this person the other morning, and this 
person said, and I quote, ``The military is doing a good job. 
God bless them. The people have a new spirit. You can feel it. 
There are many organizations considering coming into City 
Soleil for the first time. We are giving out large amounts of 
food. Our schools are open,'' and this continues on, the e-
mail.
    But it is better there than it has been for years. And it 
is because our troops are there, and the gangs are not 
operating, and there is, you know, the security that is 
necessary for that country to, again, have the opportunity for 
decent peace and some things to start--good things to start 
happening.
    Let me ask a couple of questions, if I could, and I will 
give you a chance to respond. When you were in Haiti, you 
indicated your support for our HERO bill, our trade bill, a 
bill that we--several of us have sponsored here in the Senate, 
and Clay Shaw in the House of Representatives has sponsored. We 
think it would create an awful lot of jobs in Haiti at a time 
when it is clearly very, very necessary for that to happen and 
for some good news to occur down there. I would like for you to 
comment on that, if you could.
    Second, I wonder if you could comment on the 
Administration's plan in regard to Haiti. And I will be very, 
very candid with you. And I have said this publicly before. We 
have been, for the last several years, in the $50 million level 
of support and aid. That does a lot of good.
    We have been--I think of necessity--had to give that money 
to the NGO's. We have not been able to give it to the 
government of Haiti.
    Now, we are in a position where we will be able to channel 
that through the government of Haiti, we hope, and to help 
build up the institutions of that new government of Haiti.
    But when I go through, Mr. Secretary, and look at the needs 
and the things that we are going to have to do, and that we 
hope the international community will assist us in doing. You 
start with the rebuilding of the police, reconstituting of the 
police. You go from there to the courts and the rule of law, 
building up the rule of law.
    The debt, servicing of the debt has to be dealt with one 
way or the other. I would like to see it forgiven but they tell 
me that is going to be a kind of difficult thing to do. But it 
has got to be dealt with one way or the other, either through 
the service or the getting rid of the debt.
    You look at the health structure. You know, agriculture 
development in that country has to take place. You know, 97 to 
98 percent of the country, the topsoil is gone. We all know it 
is an ecological disaster.
    We just go on and on and on. Let alone, the normal 
humanitarian concerns, most of our money today that goes to 
Haiti is just basically for food and medical and other basic 
humanitarian supplies. There is no way, Mr. Secretary, that 
this can happen for a bare minimum $150 million a year. How are 
we going to put that together?
    So those are my two questions.
    Secretary Powell. Okay. First, sir, with respect to the 
troops, thank you very much, and I will pass it on to their 
commanders, but they are not just U.S. troops. We have great 
troops from Chile, from Canada, and from France.
    It was quite a coalition that came together rather quickly 
over a period of a few days. And they went in there and they 
did a good job.
    Senator DeWine. They are doing a great job.
    Secretary Powell. I will never regret the way in which this 
unfolded, because the killing stopped in Port-au-Prince. We 
would have had a bloodbath in Port-au-Prince. And I think 
President Aristide made the right decision that night.
    We now have to spread out to other parts of the Island, but 
the humanitarian aid is now starting to flow throughout, both 
the north and south sides of the Island, as well as in Port-au-
Prince.
    We do support your HERO bill. I am pleased to, again, say 
it here today. As you know there are some difficult issues 
associated with the legislation but I think it is something 
Haiti needs.
    With respect to the money, we have about $55 million in 
2004. But the need is much, much greater. Frankly, $150 million 
a year would almost be a modest sum.
    Senator DeWine. It would be a modest sum.
    Secretary Powell. But I have got to figure out what other 
resources I have that can be used for this purpose, and what we 
are going to have to do as we get into the next fiscal year, 
and what additional monies may be required.
    This is a country that has been, once again, run into the 
ground. And it needs everything. It needs to be fed. It needs 
the agricultural sector restored, debt dealt with, and perhaps 
number one is the Haitian National Police, once again, rebuilt 
and made honest and non-corrupt in the way we did it in 1994 
and 1995.
    But then it got run into the ground again by cronies of Mr. 
Aristide being put in place.
    Senator DeWine. I would just--my time is up, Mr. Secretary, 
but I would just add, you know, I saw that very closely when 
the police were being reconstituted. And we had some great 
Haitian-Americans from Los Angeles, from New York, from 
Chicago, who went down there and who were mentoring those 
police. We had people from the Justice Department who were 
helping with the courts. Great progress was being made. And 
just to see the pride that these Haitian-Americans took in 
mentoring these young 18-, 19-, 20-year-old Haitians was a 
great thing to see.
    For the reasons that you have cited, all that work started 
to go downhill and went the wrong way. But there is no reason 
to think that that cannot happen again. And with the right 
political leadership in Haiti that--that can be sustained this 
time. And I hope that we can help put that together. Thank you 
very much.
    Secretary Powell. Thank you, Senator.
    Senator McConnell. As you know, Mr. Secretary, there is no 
one in the Senate who has spent more time on the Haiti issue 
than Senator DeWine.
    Secretary Powell. Sure.
    Senator McConnell. He is a real expert and we commend him 
for his attention to this poor beleaguered country.
    Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman, and thank you, 
Mr. Secretary, for the work you do for our country----
    Secretary Powell. Senator.
    Senator Landrieu [continuing]. And for our men and women in 
uniform and for our diplomat corps. I really appreciate it. We 
all do.
    I have three questions. I am going to try to be very brief, 
so we can get these answers.
    One is about the cost of staying the course. As you, I am 
sure, are well aware, $168 billion, which is the amount of 
money that we have already appropriated for military and 
reconstruction operations in Iraq since 2003, actually equal 
the entire amount of money this country spends to fund our 
education initiatives including the Department of Health and 
Human Services, and including all that we spend on Homeland 
Security. So, it is a significant amount of our Treasury, as 
you know, that we are committing to stay the course.
    The World Bank has estimated that another $55 billion is 
going to be required. Our own Congressional Budget Office says 
that that figure may be too low; they think it is $100 billion.
    The other nations have only pledged and not given, but only 
pledged $36 billion.
    Given that we were so wildly off the mark in the last year, 
sort of leading up to this conflict, and I just quickly will 
quote Paul Wolfowitz on February 28, ``If we have to occupy 
Iraq for years, as some people are foolishly suggesting, it is 
one cost. As Secretary Rumsfeld says, if it lasts 6 days, it is 
one cost. If it lasts another 6 months, we are going to be 
greeted as liberators. And if so, the cost will be much 
lower.''
    Donald Rumsfeld said, ``I do not know that there is much 
reconstruction to do,'' on April 10, 2003.
    Additionally on September 22, Paul Bremer told the Senate 
Appropriations Committee that, ``Little or no money would be 
needed for Iraq beyond fiscal year 2004 supplemental.'' Now, 
clearly, we were wildly off the mark in this pattern of 
testimony.
    Since you, Mr. Secretary, are going to--I think under the 
administration's plan--take responsibility on June 30, it moves 
from Defense to State, when the coalition comes into power, how 
are you readjusting these estimates and how are we going to 
stay the course by staying in the budget? Or are we going to 
stay the course out of the budget?
    Secretary Powell. The $18 billion that was appropriated in 
the supplemental is just now starting to flow. Less than one-
ninth of that money has been used.
    So, I think that amount will certainly sustain us through 
the rest of this year and well into the next calendar year. And 
it was for that reason we made no special requests for 2005. I 
think this is a pretty substantial amount that will deal with 
most of the needs that Ambassador Bremer came in and presented 
to the Congress.
    The estimates are much higher than originally thought, 
because once we got into the country and realized the problems 
that were caused by Saddam Hussein's leadership over time, and 
what would be needed to put this country on a solid footing so 
that democracy could take root, and so that the economy can get 
started again, and the oil sector rebuilt so that soon the 
country can be viable, and live on its own revenue; we realized 
that the situation required this large infusion of funds.
    But at the moment, based on what I know and based on the 
work that my staff has done, I do not anticipate this kind of 
supplemental requirement being needed in the future.
    Senator Landrieu. But do you know a portion--following up 
on the, I think, very good line of questioning of Senator 
Stevens, about the now found and extremely worrisome ammunition 
deposits, dumps, are you saying that in this figure, there is 
enough money to take care of that issue, which seems to be much 
more extensive than we thought? Or are there going to be 
additional requirements for that?
    Secretary Powell. I would have to go back and see whether 
it is provided for in the supplemental or whether it is being 
handled by the Defense Department through other accounts and 
other means.
    Senator Landrieu. Okay. My second question, quickly, it was 
clear that there was a difference of opinion about post-
military plans between Secretary Donald Rumsfeld and the State 
Department. There was, in fact, a plan that I think the State 
Department began called the Future of Iraq project----
    Secretary Powell. Yes.
    Senator Landrieu [continuing]. Where Defense individuals 
were prohibited from participating because there was a 
difference of opinion.
    My question now that you will come back basically into more 
control, do you plan to re-institute some of the provisions of 
the Future of Iraq project? Or is that scrapped for good?
    Secretary Powell. No. The Future of Iraq project was a 
year-long study effort that was conducted by the State 
Department, with interagency participation. It was well under 
way long before the war started.
    I would have to go back and check. I do not remember any 
prohibition of Defense people from participating. There may 
have been some reluctance on the part of Defense to 
participate. I do not remember.
    But the whole plan was made available to the Defense 
planners, as they got ready for the post-conflict period. And 
there are elements of that plan that are still, I think, quite 
appropriate to the challenges we are facing. And I will use 
elements of that plan or any other plan. Some fine work has 
also come out of other think tanks and agencies that I would 
take advantage of, as well.
    Senator Landrieu. Well, my point being that my information 
is that the DOD employees were prohibited from participating in 
that plan; and had some of the elements of that plan been 
followed, we perhaps would have had more accurate information.
    I know my time is up, so I will just ask this question. You 
can respond in writing.

                      ROLE OF WOMEN IN AFGHANISTAN

    I have now had a chance to read the new constitution of 
Afghanistan, which is right here, in preparation for this 
meeting. One of the big concerns of many Members of Congress 
has been the role of women since they were so brutally 
oppressed. And one of the reasons that, you know, we responded 
the way we did to the attacks was to liberate them and give 
them hope for a better life.
    I cannot read in this document where they are, in fact, 
implied as citizens. I know it is our intent but I could not 
find the language. So, I am going to submit this in writing and 
also some questions about their role in the Iraqi constitution, 
which continues to say that we will be governed by the religion 
of Islam and no law can be developed to the contrary. And we 
know under that religion--and others, not just Islam--but 
women's roles in terms of freedoms have been severely 
restricted.
    I remain very concerned, Mr. Secretary. And I do not doubt 
your personal commitment. Let me say that. You have been a 
stalwart of that and I appreciate it. But I still would feel 
better, I guess, if I saw it in writing; and I will submit the 
question to you.
    Secretary Powell. Let me look at both documents. I think in 
the Iraqi Administrative Law, it said that Islam was the source 
of law.
    The Afghan constitution recently approved by the Loya-
Jirga--I would have to read it again--but when I was in 
Afghanistan 3 weeks ago, I went to a registration site at a 
school for women, and they were lined up to register to vote. 
And they had to demonstrate that they were a citizen in order 
to get their laminated registration card.
    The statistics I got during that visit was 28 percent of 
the women who have registered, to date throughout the country, 
28 percent of the registrants to date are women. And in the 
western regions, it is up to 45-or-thereabouts percent. So, 
they are coming out as citizens getting ready to vote.
    But I will look at the exact language to make sure they 
have all rights of citizenship besides just registering to 
vote.
    [The information follows:]

                         United States Department of State,
                                    Washington, DC, April 27, 2004.
Hon. Mary Landrieu,
U.S. Senate.
    Dear Senator Landrieu: On 8 April, at the Foreign Operations 
Appropriations Hearing for the fiscal year 2005 Budget Request, you 
raised a question to Secretary Powell regarding citizenship provisions 
for women in the Iraqi and Afghan constitutions. The Secretary has 
asked that I reply on his behalf.
    With regard to Afghanistan, Article 22 of the Afghan Constitution 
reads as follows. ``Any kind of discrimination and privilege between 
the citizens of Afghanistan are prohibited. The citizens of 
Afghanistan--whether man or woman--have equal rights and duties before 
the law.'' This specific reference of women's equality in the 
constitution was a significant change from previous drafts. During the 
Constitutional Loya Jirga in December, the women delegates built 
support for the provision and had it included in the final draft, which 
was a major victory for women's rights in Afghanistan.
    In Iraq, as you know, there is yet no constitution, only the 
Transitional Administrative Law. In this document, Article 12 
guarantees the following:

    ``All Iraqis are equal in their rights without regard to gender, 
sect, opinion, belief, nationality, religion, or origin, and they are 
equal before the law. Discrimination against an Iraqi citizen on the 
basis of his gender, nationality, religion or origin is prohibited.''

    The U.S. Government has worked with the Iraqi Governing Council and 
will continue to work with the Iraqi Interim Government and Iraqis to 
ensure that such stipulations are reflected in the permanent 
constitution.
    I hope you find this information useful. The State Department 
remains committed to the development of Afghanistan and Iraq as free 
and equal democratic societies. We welcome your inquiries and 
suggestions.
            Sincerely,
                                             Paul V. Kelly,
                          Assistant Secretary, Legislative Affairs.

    Senator McConnell. Senator Byrd.
    Senator Byrd. Thank you, Mr. Chairman.
    Mr. Secretary, I want to follow up on a discussion that we 
had during the CJS hearing 2 weeks ago.

                    RECONSTRUCTION PROGRAMS IN IRAQ

    We talked about the State Department taking control of U.S. 
reconstruction programs in Iraq after the June 30 deadline. I 
have in front of me a copy of a table from the most recent 
report submitted to Congress by OMB.
    It shows that as of March 1, 2004, nearly 4 months after 
the Iraq supplemental was enacted, only $2.2 billion of the 
$18.4 billion had been obligated. Moreover, at a time when 
security is the most critical issue in Iraq, the report showed 
that only $381 million of the $3.24 billion for security and 
law enforcement had been obligated, around 10 percent of the 
total appropriated. What has happened to the reconstruction 
money?
    Secretary Powell. The money is available. It just has not 
been obligated as quickly as we might have hoped. And the 
Defense Department and other agencies responsible for 
contracting out these funds are being cautious and judicious in 
how the funds are being spent.
    I expect that in the next several months, the rate of 
obligation will increase significantly.
    Senator Byrd. If it was as urgently needed as the President 
told Congress, back when we were considering the supplemental, 
why is the money not being obligated at a faster pace?
    Secretary Powell. There are contracting issues, there are 
security issues. I expect it to be obligated at a pace that 
would probably take us to the point that by the 1st of July 
when the Chief of Mission assumes responsibility, our estimate 
right now is $14 billion of the $18 billion will have been 
obligated at that point.
    We wanted to keep some of it unobligated so that the new 
ambassador coming in and the new interim government coming in 
have some flexibility as to how the last $4 billion might be 
spent.
    Senator Byrd. When do you anticipate that the 2004 
supplemental funds will be exhausted?
    Secretary Powell. I do not know that I can answer that 
question without talking to my staff, and I am not sure they 
know, because we are trying not to obligate it all so that 
there is flexibility when the Interim Government takes 
sovereign responsibility on 1 July and the new Chief of Mission 
comes in. But I would hope that it would all be obligated by 
the end of the year or early in calendar year 2005 at the 
latest.
    Senator Byrd. In the event that some 2004 funds remain 
unobligated at the end of the fiscal year, do you anticipate 
asking for additional Iraq reconstruction funds in a 2005 
supplemental?
    Secretary Powell. I do not anticipate that at this point. 
At the moment we, of course, have no plans for any more 
requests in 2004. And we will have to see where we are in 2005.
    I believe the $18 billion was a surge of money to go into 
this broken country to get things up and going; and we are 
going to take care of all of our requirements through this year 
and into the beginning of 2005. And then when we get into 2005, 
we can make a judgment on not just Iraq, but on all the other 
things the nation may be facing at that time.
    Senator Byrd. Press reports indicate that the 
administration will seek a new U.N. Security Council resolution 
ahead of the proposed June 30 handover of power in Iraq. This 
seems to make sense, as the United States needs to set a new 
course and tone for the occupation mission.
    In a similar vein, Congress might want to take a fresh look 
at the 2002 Use of Force Authorization, which characterizes 
Iraq as a tyrannical country that may be plotting to attack the 
United States and which fails to take into account the changes 
that have taken place in the last 18 months.
    Secretary Powell, what are the administration's goals for a 
new U.N. resolution?
    Secretary Powell. We just started to examine what might be 
in such a resolution, speculating on the kinds of elements that 
would be in the resolution: some statement with respect to the 
interim government and its authority; some statement of the 
role expected of the United Nations to play; something having 
to do with the presence of military forces from the coalition 
remaining in the country. Remember, 1511 deals with that now.
    What we would have to do is go through the principal 
resolution we are using now, 1511, and see what has changed 
over the several months since 1511 was passed. But we do not 
have a written resolution yet.
    Senator Byrd. Let us look at it this way. Is it just to 
legitimize the U.S. military occupation after the hand-over of 
power or do you seek to elevate the United Nations to have it 
play the central role in Iraq's reconstruction?
    Secretary Powell. We believe that the Interim Government 
should play the central role in the political process going 
forward. We believe that the United Nations has a vital role to 
play but does not become the administrator of the country, and 
does not become responsible for how we would spend our $18 
billion. That remains entirely within U.S. hands, supervised by 
our ambassador, the chief of mission.
    Senator Byrd. Do you expect to obtain more contributions of 
foreign troops for the occupation mission, and, if so, how many 
and from which countries?
    Secretary Powell. I cannot give you a number. My colleagues 
at the Pentagon might be able to give you some estimates but 
they would be nothing but estimates.
    But with sovereignty returned and with a new U.N. 
resolution, there are other countries in the world--not 
necessarily in NATO but other countries in the world--that 
might be willing to provide troops with a new U.N. resolution 
and with sovereignty returned.
    I cannot give you a specific list of which ones but there 
are some--some that have considerable forces. In Asia, the 
Pakistanis have kept the idea open. The Indians have kept the 
idea open. Bangladesh has kept the idea open. Whether or not 
they would in the event actually contribute remains to be seen.
    But they have been interested in contributing under the 
right set of circumstances with respect to U.N. support and 
with respect to sovereignty being returned.
    Senator McConnell. Thank you, Senator Byrd. Now, the 
Secretary, I am told, has about 8 more minutes, so we will see 
how far we can get. I know Senator Harkin is anxious to have 
his say again.
    Let me just ask quickly, Mr. Secretary: Do you support the 
extension of import sanctions against Burma?
    Secretary Powell. Yes, sir.
    Senator McConnell. Why should U.S. taxpayers support a 
flawed Khmer Rouge tribunal that relies in part upon Cambodia's 
broken judicial system, one that is largely incapable of 
delivering justice for human rights abuses committed in that 
country today?
    Secretary Powell. The only reason, Senator, is that it is 
the only game, judicial game, in town. I have the same concerns 
you have about the preponderance of judges as being Cambodians. 
They might not mete out justice the way we would like to see it 
meted out, but we will have international judges on that court 
as well.
    So, at least these aging defendants will be brought before 
a tribunal. Whether or not they are convicted, I cannot say, 
and I would not even suggest that they would be convicted. But 
they will be brought before a court if this court gets up and 
running and functional.
    Senator McConnell. Yes. As you know, the local population, 
much of it, is not very optimistic. This has got to be done in 
a credible fashion.

                           VOICE FOR HUMANITY

    One parochial matter: I want to take a moment to bring your 
attention to the efforts of Voice for Humanity, which is 
referred to as VFH. It is an NGO, based in my State, that uses 
information technology to educate and inform illiterate and 
semi-literate people.
    They are in the process of initiating pilot programs in 
Afghanistan and Iraq. Ambassador Bremer and Iraqi authorities 
readily understand the utility and value of this technology.
    I would like to propose that someone from VFH brief your 
staff on their ongoing pilot programs and requests that our 
U.S. ambassador to Afghanistan find time to meet with them, as 
well.
    Secretary Powell. Okay.
    Senator McConnell. Let me add that VFH is awaiting USAID 
funding for HIV/AIDS education activities in Nigeria, and the 
application of this particular technology is limitless and, 
again I repeat, it is an NGO.
    Senator Leahy, do you want to make any additional 
observations?
    Senator Leahy. I do. Yes, I was thinking, Mr. Secretary, 
you have been here many times. We all know each other. And I 
think the rest of the country hears everybody saying, ``All is 
well. Everything is going fine. We have a few bumps in the 
road, but stay the course.'' We are polite with each other and 
all that.
    Now, I have been to a couple of briefings today, several 
this week, and each time I hear that things are going well. We 
read polls. Some polls say they love us. Some polls say they do 
not love us but the reality is people know some things are not 
going well.
    This morning, the New York Times said this:

    United States forces are confronting a broad-based Shiite 
uprising that goes well beyond supporters of one militant 
Islamic cleric, who has been the focus of American counter-
insurgency efforts, United States intelligence officials said 
Wednesday.
    That assertion contradicts repeated statements by the Bush 
Administration and American officials in Iraq. On Wednesday, 
Secretary of Defense Donald Rumsfeld, General Richard Myers 
said that they did not believe the United States was facing a 
broad-based Shiite insurgency.
    But intelligence officials now say that there is evidence 
that the insurgency goes beyond Mr. Sadr and his militia. And 
that a much larger number of Shiites have turned against the 
American-led occupation of Iraq.

    If it is the latter, we are in a heap of hurt. And it is 
going to continue beyond just a few firefights and blowing up a 
mosque and arresting one person. Now, which is it? Are these 
intelligence sources correct or is Secretary Rumsfeld correct?
    Secretary Powell. Many times in my career, I have seen 
``intelligence officials'' who are unidentified, who say things 
to reporters, who then say this is the truth. But I do not know 
that these intelligence officials represent the truth.
    Senator Leahy. Well, without even knowing the names, is 
what they have reputed to have said, is it true to your 
knowledge?
    Secretary Powell. I have no idea what they--I cannot go to 
what they are reputed to have said to a reporter.
    Senator Leahy. Is it----
    Secretary Powell. I will say this----
    Senator Leahy. Is it true that it goes beyond--that this is 
a Shiite uprising----
    Secretary Powell. It is----
    Senator Leahy [continuing]. That is going beyond Sadr and 
his immediate followers?
    Secretary Powell. It is an uprising that was originated by 
Sadr and his following and the Mahdi militia, which responds to 
him. Whether it is extended into the larger part of the Shiite 
community is not established.
    Now, has he picked up some additional individuals who were 
not with them a week ago? He may have. But has he picked up the 
whole Shiite community? He has not. Because there are a number 
of senior officials in the Shiite community who are saying, 
``Let us have calm,'' including Mr. Sistani.
    So, I think it is not correct to say that what we are 
seeing in the southern part of the country right now, in Al-Kut 
and Najaf and places like that, represents a massive Shiite 
uprising and rebellion. For the most part, it reflects the 
activities of Muqtada al-Sadr and his Mahdi militia.
    Senator Leahy. You understand there is skepticism in the 
country?
    Secretary Powell. Yes. I am sure there will be.
    Senator Leahy. I mean, our country----
    Secretary Powell. Yes, I understand that.
    Senator Leahy [continuing]. To say nothing about Iraq.
    Secretary Powell. Yes. You just expressed it, so I accept 
it. I know there is skepticism.
    The fact of the matter is: It is not an either/or issue. We 
know who started this. And it happened in the last couple of 
weeks. This is an individual we have been worried about for 
some time. Somebody who has been indicted, somebody who has 
murdered or caused the murder of other individuals, and he has 
a following.
    Now, what we do not want to do is see this following grow. 
And the way we will keep it from growing is to smash the Mahdi 
militia and bring this situation under control. And that is 
what the military strategy is and that is what we are about 
doing.
    Senator Leahy. Well, my time is up. I realize you have to 
leave. I do have some follow-up questions.
    These questions are serious ones. If we were going to stay 
here, I would be prepared to stay all evening long to ask them, 
because they are things I am concerned about, everything from 
the millions of dollars we are paying for private security 
guards, on through.
    Senator McConnell. I think we have a couple of minutes 
left. Senator Harkin, do you want to try to get your questions 
in, right here at the end?
    Senator Harkin. Thank you, Mr. Chairman. I appreciate it.

                                 HAITI

    We are a signatory, Mr. Secretary, to the Santiago 
agreement, are we not? And we are a member of the Organization 
of American States, correct? We are a signatory to that, 
international agreement, as is Haiti. The agreement states that 
member nations, which we say that we agree with these other 
countries, that we are going to have collective action in the 
case of a sudden or irregular interruption of the democratic 
political institutional process in member states. We are a 
signatory of that and we did not abide by this international 
agreement in Haiti.
    Second, Amnesty International, according to a press 
release, has spent a couple of weeks in Haiti. They point out, 
that the interim government is targeting Lavalas supporters 
while convicted human rights abusers have not been arrested. 
The government is sending the wrong message.
    Amnesty Intenational points out that Louis-Jodel Chamblain, 
one of the main rebel leaders, was convicted in absentia and 
sentenced to two life terms for killing Antoine Izmery and for 
his involvement in the 1994 Rabateau massacre. The new justice 
minister, Bernard Gousse, said Chamblain--this same man--could 
be retried under Haitian law but that the government could also 
pardon him.
    Jean Tatoun, another rebel leader, sentenced to life--
Tatoun was in prison. He was released by a street gang last 
year. Tatoun and Chamblain are free, to terrorize the Haitian 
people. And yet Aristide's supporters are being, according to 
Amnesty International, arrested and harassed.
    Last, I want to cite a quote from Mr. Noriega, who works 
for you. On March 1, Mr. Noriega said: ``The last 10 years were 
all about Aristide. It was all about making apologies for his 
mistakes, excuses for his violations, and compensating, 
accommodating his pathological behavior, quite frankly. He is 
not a typical Haitian, thank God.''
    Mr. Secretary, it is below the dignity of any government 
official to use those words; and certainly an assistant 
secretary of state. I hope you realize how obnoxious those 
words are.
    What if someone were to say about Mr. Noriega, ``You are 
not a typical Mexican-American. You, Mr. Secretary, are not a 
typical African-American.'' This is below the dignity of anyone 
that works in your office.
    I will just say this, I agree with you that you--no one 
handcuffed Aristide--he was not kidnaped. You were right on 
that. I have said so publicly. But I do believe, after my 
conversations with him and with you on that day that, he was 
left with no choice.
    He was told that we would not live up to our international 
agreements under the Santiago agreement, that we would not 
protect him from these armed thugs. Aristide disbanded the Army 
in 1994, as you know, because he wanted to be like Costa Rica.
    I just think that what is happening in Haiti now is a 
return--as you said to me, of the rich people on the hill. The 
poor people in Haiti are once again being subjugated.
    From what I just heard you say a little bit ago, I thought 
I heard that the Lavalas party will not be permitted to field 
candidates in the next election. Is that true?
    Secretary Powell. I did not say that, Senator.
    Senator Harkin. I thought you said Aristide's people--
government----
    Secretary Powell. No, I did not.
    Senator Harkin. [continuing]. Would not be permitted to 
run?
    Secretary Powell. No. I said those in the government now, 
in the transition government, will not be running for office in 
2005. That is what the interim Prime Minister told me.
    Senator Harkin. But they could?
    Secretary Powell. They have made a commitment that the 
ministers who are in this interim government, which is 
essentially a technocratic government, they all met, and all 
the opposites--met with all of the parties the night before I 
got there, Sunday night, and agreed that they would have 
elections for a new legislature and a new president in 2005.
    Whatever municipal elections are appropriate and needed and 
that those members of the interim government now, Prime 
Minister Latortue and other Ministers who are in office now, 
would not be candidates in that election, because they want to 
be seen as a generally non-political, technocratic government 
providing a bridge back to full political participation.
    Now, President Aristide resigned and in a manner that was 
constitutional. The resignation was given--the resignation was 
given to the gentleman who was next in line of succession and 
he became the president. And I met with him on Monday as well, 
President Alexandre.
    Senator Harkin Yes.
    Secretary Powell. And then we have been following the 
original CARICOM plan of putting together a group of 
distinguished individuals who selected a larger group, who then 
selected an interim prime minister, Mr. Latortue, who came down 
from Florida to act as this bridge back to a solid political 
system, we hope.
    It is going to take time. It is going to take a great deal 
of money. Nobody wished President Aristide more good fortune 
than I did.
    When I put, frankly, my life at risk, as did President 
Carter, as did Senator Nunn, we went down there on a September 
weekend in 1994, and spent 2 days with General Cedras and 
General Biamby and the others, with hand grenades rolling all 
over the place and guns in every corner and talked them out 
while the 82nd Airborne was in the air, heading to Haiti.
    At the same time, we were trying to cut the deal. We cut 
the deal. The 82nd landed without a shot being fired and 
President Aristide got a new opportunity.
    I regret to say that we spent a lot of time building the 
Haitian National Police. I was there a year later watching them 
being built. I also watched them being torn apart by corruption 
and by putting in people who were not competent.
    I wish it had turned out differently. And I tried to stay 
with this as long as I could, until finally it became clear 
that President Aristide's actions, over a period of years, had 
so contaminated the--I am sorry, Senator?
    Senator Harkin. I am sorry. He was not even in office 
during that period; Preval was in office.
    Secretary Powell. No. Senator, he was in office from 1994 
until he left.
    Senator Harkin. 1995, 1 year.
    Secretary Powell. He was not in office for the next several 
years; but, Senator, you and I both know that he really was the 
man behind the curtain during that period of time, until he 
came back in--we could go through the history of the elections 
of the early 2000 and that period.
    Senator Harkin. I am familiar with it.
    Secretary Powell. But we need not--I do not think we need 
to belabor that now.
    But I mean, he started to rule through the use of Shamirs. 
The Haitian police was no longer effective and, essentially, 
what we were being--what the international community was being 
asked to do and what it wouldn't do was essentially put our 
troops at his disposal, put French troops at his disposal, 
Canadian troops at his disposal, CARICOM troops at his 
disposal. And it was not going to happen.
    Senator Harkin. Would you ask the----
    Senator McConnell. Okay. Senator Harkin----
    Senator Harkin. Prime Minister Latortue about Chamblain----
    Secretary Powell. We have made clear--I did not ask about 
the specific names but I know the names well.
    Senator Harkin. I know you do.
    Secretary Powell. We have made it clear--two final points, 
we had made it clear to the Prime Minister that these are not 
individuals we can accept in any position in public life.
    Now, how they will be dealt with over time remains to be 
seen. And I have no evidence that is available to me or 
anything I saw in Haiti to suggest that we are seeing summary 
executions on the part of the government against Lavalas 
members.
    Now, there is still violence in the island. Although Port-
au-Prince is relatively quiet, there are still hot spots 
throughout the island that our military forces are moving into. 
But summary executions by the government of Lavalas members--if 
you will give me the Amnesty International information, I will 
look at it.
    Senator Harkin. Yes, you have your staff--I am just reading 
from the Amnesty----
    Senator McConnell. Yes. Well, thank you, Mr. Secretary----
    Senator Harkin. Thank you, Mr. Secretary.
    Senator McConnell [continuing]. For extending beyond the 
time we thought we would get you.
    I am going to be submitting questions for the record on the 
Aristide government's involvement in the drug trade and other 
questions that we were unable to get to today.
    Thank you, again, as we have all said----
    Secretary Powell. Thank you, Mr. Chairman.
    Senator McConnell [continuing]. For your extraordinary 
service to your country.

                     ADDITIONAL COMMITTEE QUESTIONS

    There will be some additional questions which will be 
submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
             Questions Submitted by Senator Mitch McConnell
    Question. What pressure has the State Department placed on the 
European Union and Burma's regional neighbors to take a harder line--
including sanctions--against the SPDC?
    Answer. The Administration continues diplomatic efforts, at all 
levels, to encourage other nations to sustain pressure on the SPDC. We 
have delivered demarches to and had senior-level exchanges with both 
European Union (EU) member states and countries in the region, urging 
them to use their influence to convince the SPDC to accept reform. In 
public and private remarks, we have stated that the SPDC and its 
policies represent an embarrassment for the region and its regional 
organizations.
    In 2003, the EU expanded its existing visa and travel restrictions 
and its asset freeze list to identify a broader set of Burmese who 
benefit from the oppressive policies of the SPDC. The EU also has in 
place a ban on arms sales and limits on assistance to the government. 
The EU has traditionally drafted the annual General Assembly and 
Commission on Human Rights resolutions on Burma (which we have 
supported). EU ``troika'' visits to Burma have drawn attention to the 
continuing lack of progress on democracy and human rights issues. The 
United Kingdom has called on its companies to review their investments 
in Burma; two major British investors, British American Tobacco Company 
and Premier Oil, have sold their investments in the country to outside 
parties in the past year, and at least 18 UK companies cut ties with 
Burma in 2003. No EU member state has followed our lead and imposed 
economic sanctions.
    ASEAN nations issued an unprecedented call for change from fellow 
member state Burma at their June 2003 ministerial meeting. In mid-June, 
then Malaysian Prime Minister Mahathir issued a statement indicating 
the Burmese government's actions were creating a ``dilemma for the 
[ASEAN] organization.'' However, at their October 2003 meeting in Bali, 
ASEAN states took a different path and welcomed ``positive 
developments'' in Burma, including the SPDC's road map to democracy. 
The United States continues its dialogue with countries in the region 
and has made clear the important role that ASEAN has to play in 
encouraging reform. Administration officials have noted to ASEAN 
counterparts that there would not be high-level United States 
participation in ASEAN events hosted by the SPDC in 2006 unless it 
adopts significant reforms.
    Question. How many internally displaced persons are in Burma, and 
what is the United States doing to provide them with security and 
humanitarian assistance?
    Answer. There are an estimated 600,000 internally displaced persons 
in Burma. We remain very concerned about the situation faced by these 
persons.
    The United States does not currently fund organizations or 
individuals for work inside Burma among IDPs, although some projects 
operating along the Thailand-Burma border, including health and 
educational programs, do provide spillover benefits to those still in 
Burma. The Burma earmark in the Fiscal Year 2004 Foreign Operations 
Appropriations Act extended authorization to provide humanitarian 
assistance to internally displaced persons along Burma's borders. 
Although access to this population is limited, we intend to work with 
USAID to try and identify opportunities to provide limited humanitarian 
assistance to internally displaced persons along the border areas, 
where possible.
    We also support the work of international organizations, such as 
the International Committee of the Red Cross, the International Labor 
Organization, and the United Nations High Commissioner for Refugees 
(UNHCR) that have access to these areas. In February 2004, the UNHCR 
gained SPDC permission to begin work for the first time in eastern 
Burma and assess conditions for the eventual repatriation of refugees 
and return home of internally displaced persons. A great amount of 
infrastructure will need to be in place before these persons can return 
in a secure fashion.
    Question. Is North Korea providing Burma with missiles or nuclear 
weapons technology?
    Answer. For well over a decade, there have been reports from 
various sources about North Korean arms sales to Burma. These reports 
have covered numerous items, including small arms, ammunition, 
artillery, and missiles. We have made clear our concerns on this issue 
to the Burmese Government.
    Although North Korea has threatened to export nuclear materials and 
their nuclear ``deterrent,'' we have seen no indication that North 
Korea is providing nuclear weapons technology to Burma.
    Further details on Burma and North Korea's relationship are 
available in a classified report to Congress. We continue to monitor 
the relationship between the two nations.
    Question. Is Burma seeking to acquire a nuclear research reactor?
    Answer. Burma is interested in acquiring a nuclear research 
reactor. The Russians have offered to negotiate an agreement to 
construct a nuclear research facility, including a reactor. Such a 
facility would be placed under IAEA safeguards. To date, an agreement 
has not been concluded.
    Question. How can we convince the EU that its ``wait and see'' 
approach is flawed? (i.e., Daw Aung San Suu Kyi's release is not the 
benchmark by which progress in Burma should be measured)
    Answer. We have made formal demarches to and held frequent 
discussions with EU counterparts on Burma and have urged them to 
consider additional measures. While the EU shares our objective of a 
democratic Burma and has taken a strong stand by imposing an asset 
freeze and visa restrictions, its approach to advancing democracy in 
that country differs from ours. No country followed our lead in 
imposing an array of economic sanctions after the May 30 attack on Aung 
San Suu Kyi's motorcade.
    Question. What pressure can the United States exert on India--a 
professed democracy--to support the struggle of freedom in Burma?
    Answer. We continue to raise our concerns regarding the lack of 
progress toward national reconciliation in Burma with Indian officials. 
We have noted that continued instability in the form of the current 
government is not in India's interests and have encouraged the Indian 
Government to speak in favor of the release of Aung San Suu Kyi and 
other political prisoners and to urge the SPDC toward democratic 
reform. Indian officials have indicated that they share our concerns 
about and goals for democracy in Burma, but they must also address 
strategic realities such as China's influence in Burma. India also 
confronts specific issues such as narcotrafficking and cross-border 
insurgences.
    Question. How do you explain the actions of Thailand, and in 
particular Thai Prime Minister Thaksin Shinawatra, to undermine a tough 
approach to Burma?
    Answer. In our discussions with the Royal Thai Government (RTG), we 
have emphasized that the SPDC must release Aung San Suu Kyi and all 
other political prisoners, allow all parties and ethnic groups to 
participate fully in the political process, and establish a realistic 
timeframe for movement towards democracy in Burma.
    Thailand has called for Aung San Suu Kyi's release and has worked 
with other countries to encourage reform and democracy in Burma. The 
``Bangkok Process'' has been organized by Thailand as a means to 
finding a way forward in Burma. The SPDC, however, has not wished to 
participate following the first session, where participants urged Burma 
to release Aung San Suu Kyi and other political prisoners and engage in 
substantive dialogue with the political opposition and ethnic groups.
    Thailand is unlikely to change its policies or adopt sanctions 
against Rangoon. It is engaged in a fundamental effort to improve 
relations with each of its neighbors. In the case of Burma, under Prime 
Minister Thaksin, the RTG has sought cooperation with Rangoon to 
address numerous problems Thailand faces with its neighbor: narcotics 
trafficking, migrant labor, trafficking in persons, and refugees.
    Some Burmese political groups and a few NGOs have reported an 
increase of official checks for proper immigration documents and of 
political meetings being interrupted; however, most Burmese people and 
related NGOs continue to work within Thailand without such difficulty. 
Thailand continues to host approximately 140,000 Burmese refugees in 
border camps. Thailand has cooperated freely with our resettlement 
program for Burmese refugees that have been provided letters of concern 
by UNHCR, the so-called ``urban Burmese.''
    We have also encouraged Thailand to improve its migrant worker 
policies, and in late April of this year, the RTG cabinet approved a 
new migrant labor policy intended to match labor supply and demand 
while extending basic human rights protections to the 800,000 to 2 
million foreign workers from Burma, Laos, and Cambodia believed to be 
in the country.
    Question. What investments, including projects and activities 
related to iPSTAR, do Shin Satellite and Shin Corporation have in 
Burma, and/or planned for Burma?
    Answer. In May 2002, Bagan Cybertech, a semi-governmental 
telecommunications company in Burma, signed a $13 million agreement 
with Shin Satellite to purchase a ground equipment package for the 
iPSTAR satellite, including 5,000 user terminals. iPSTAR is a 
subsidiary of Shin Satellite which is majority-owned by the Shin 
Corporation, a Thai conglomerate largely owned by the Shinawatra 
family. Once launched and operational in 2004, iPSTAR will provide 
broadband Internet services to 14 countries, including India, China, 
Korea, Australia, New Zealand, Japan, Malaysia, Indonesia, Singapore, 
and Burma. According to a Shin Corporation spokesman, iPSTAR's expected 
revenues from Burma are small compared with those in larger and more 
developed markets in the region.
    In addition to iPSTAR, Shin Satellite has contracts worth 
approximately $2.5 million per year with two Burmese entities. This 
represents a small portion of Shin Satellite's total annual revenue of 
$150 million.
    The Thailand government's policy toward Burma is driven by many 
factors including concern about Burmese refugees, an inflow of illegal 
immigrants, the spread of disease, a history of border disputes, and 
the flow of narcotics into Thailand. We doubt that this satellite deal 
has much effect on Thailand's policy toward Burma.
    Question. Given that Burma previously held a constitutional 
convention in 1995 that was rendered meaningless by the SPDC, what 
makes this one any different?
    Answer. The Administration has noted consistently that for a 
convention to be successful, the political opposition and ethnic groups 
must support it and must be fully involved.
    Question. Why should U.S. taxpayers support a flawed Khmer Rouge 
Tribunal that relies, in part, upon Cambodia's broken judicial system--
one that is largely incapable of delivering justice for human rights 
abuses committed today?
    Answer. The Government of Cambodia originally requested assistance 
from the United Nations in June 1997 to bring to justice those leaders 
of the Khmer Rouge who bear responsibility for serious atrocities 
committed between 1975 and 1979. Our longstanding policy has been to 
support credible efforts to seek accountability for the atrocities of 
the Khmer Rouge regime, under which an estimated 1.7 million people 
died. Seeking justice for these egregious crimes is a critical part of 
ending impunity in Cambodia.
    We share your concerns about the serious flaws in the Cambodian 
judiciary and continue to speak out strongly against political 
violence, corruption, and the climate of impunity in Cambodia. The 
proposed Khmer Rouge Tribunal, however, is designed to operate as an 
Extraordinary Chambers outside of the regular Cambodian judicial 
system. It will be comprised of both international and Cambodian judges 
and prosecutors.
    We recognize that achieving credible justice will not be easy. 
Strong international support will be needed to help ensure that the 
Tribunal exercises its jurisdiction in accordance with international 
standards of justice, fairness, and due process. If we do not help this 
Khmer Rouge Tribunal succeed, we may not have another opportunity to 
bring the Khmer Rouge perpetrators to justice as many are advanced in 
age or already deceased.
    Question. Do Cambodian judges and legal staff have the training, 
professionalism, competence and independence to effectively participate 
in a tribunal of such import?
    Answer. The Cambodian judicial system suffers from a lack of 
resources, low salaries, and poor training. Through assistance from 
NGOs and foreign governments, there have been some improvements over 
the last several years. Last year, the Royal School for Judges and 
Prosecutors reopened and accepted its first class of students since the 
1960s. Moreover, there has been an increase in the number of lawyers, 
which has resulted in significant improvements for those defendants 
provided with counsel.
    We are concerned about the limited capabilities of the Cambodian 
judicial system. With a mix of international and Cambodian judges, 
however, the Khmer Rouge Tribunal should be able to attain 
international standards of justice. The Tribunal contains provisions 
that are strong enough to protect the integrity of the judicial 
process. Decisions in the two chambers of the Tribunal will be taken by 
a majority of four in the trial court and five judges in the Supreme 
Court respectively and will require the concurrence of at least one 
international judge. Defendants will also have the right to counsel of 
their own choosing, including foreign counsel.
    Question. Is the Cambodian judicial system independent (in 
practice) and free of interference from the Cambodian People's Party?
    Answer. While the Cambodian Constitution provides for an 
independent judiciary, in practice the courts are subject to influence 
and interference by the Executive Branch. The Cambodian People's Party 
is the senior partner in the coalition government that has governed 
Cambodia since the 1998 elections and in a caretaker fashion since the 
2003 elections.
    We recognize that achieving a credible process will not be easy 
given the state of the judiciary in Cambodia today. It is our hope that 
with U.N. participation and strong international support the Khmer 
Rouge Tribunal will be able to carry out its mandate in accordance with 
international standards of justice, fairness, and due process.
    Question. Does the State Department intend to facilitate the return 
of the FBI to Cambodia, (as encouraged by Senators McCain, Daschle, 
Leahy, McConnell, Miller, and Chambliss) and provide support throughout 
the investigation?
    Answer. Should the FBI seek to return to Cambodia with regard to 
this case, the State Department would cooperate fully and provide all 
possible support and assistance.
    Question. Should senior officials of the ruling Cambodian People's 
Party (CPP) be determined to be the perpetrators of that terrorist 
attack, what action will the State Department take to ensure that 
justice and accountability prevail?
    Answer. We are not in a position to speculate on the outcome of any 
investigation or what action we might hypothetically be in a position 
to take at some future time.
    Question. The Vietnam conflict has yet to end for 1,800 stateless 
Vietnamese refugees in the Philippines--what is the administration 
doing to resolve this tragedy?
    Answer. Following talks in Manila in March 2004, the United States 
and the Government of the Philippines reached an agreement to offer 
durable solutions for certain Vietnamese nationals living in the 
Philippines. Most of this group are former asylum seekers who arrived 
in the Philippines in the late-1980s and early-1990s but were 
previously found ineligible (screened-out) for refugee resettlement in 
a third country.
    In 1996, the Philippine Government decided to permit some 1,400 of 
the screened-out Vietnamese to remain in the Philippines. Over the 
years, there have been several Philippine legislative initiatives to 
regularize the status of these individuals. To date none of these 
initiatives has borne fruit.
    Following the Manila talks, the USG announced it would offer 
resettlement interviews to the majority of the group, many of whom have 
relatives living in the United States. Vietnamese married to Filipino 
citizens and their children will not be eligible for this program. In 
addition, Vietnamese previously found to be ineligible for admission to 
the United States because of fraud or who have a record of criminal 
activity will not be considered for United States resettlement.
    The Philippines has agreed, consistent with its law, to offer 
residency to those Vietnamese married to Filipino nationals and to make 
best efforts to offer residency to other Vietnamese ineligible or 
inadmissible for resettlement in the United States.
    Question. How would you characterize Pakistan's efforts to 
militarily engage Taliban Remnants and Foreign Fighters on Pakistani 
soil?
    Answer. Pakistan has shown its willingness to take on Taliban and 
al-Qaeda forces long entrenched in the tribal community of the 
Federally Administered Tribal Areas (FATA) when it conducted its South 
Waziristan operation in mid-March 2004. With a force of about 17,000 
troops, Pakistan conveyed its seriousness to tribal chiefs who in the 
past were prone to disregard demands from Islamabad. The operation cost 
Pakistan over 50 troops, and while it did not succeed in capturing high 
value targets, it did disrupt Taliban/al-Qaeda attacks on Operation 
Enduring Freedom forces. The Government of Pakistan has publicly stated 
that the current pause is tactical and that the operation will continue 
until all foreign militants in the region are accounted for.
    Question. Has the United States been given direct access to the 
``father'' of Pakistan's nuclear bomb A.Q. Khan?
    Answer. The Government of Pakistan is conducting its own 
investigation of the A.Q. Khan network. It has shared with us--and 
agreed to continue to share with us--information it develops from that 
investigation.
    Question. Do we have a complete understanding of the extent of 
Khan's illicit activities?
    Answer. We have extensive knowledge of the A.Q. Khan network, but 
we do not yet assess that we have a complete understanding. As the 
President has said, the information we know about the A.Q. Khan network 
was pieced together over several years by American and British 
intelligence officers, who identified the network's key experts, 
agents, and money men and mapped the extent of its operations. Other 
governments around the world have also worked closely with us to 
unravel the network and put an end to its activities. In particular, 
the Government of Pakistan has shared with us--and agreed to continue 
to share with us--information it develops from its investigation into 
the A.Q. Khan network. We have learned much about this network and the 
international black market in weapons of mass destruction and related 
technologies. We continue to gather information to develop a complete 
picture of Khan's activities and the damage they have caused.
    Question. President Musharraf has been the target of several 
assassination attempts--do we know who is behind these attacks and who 
is the likely successor to Musharraf should he be incapacitated?
    Answer. Pakistan is actively investigating the two attempted 
assassinations of President Musharraf, but no charges have been filed, 
as of yet. The Pakistani Constitution calls for the Speaker of the 
National Assembly to succeed the President should the latter be 
incapacitated. President Musharraf is also Chief of Army Staff. Since 
army succession in Pakistan closely follows seniority, he would be 
succeeded in that office, should he be incapacitated, by the Chief of 
Army Staff.
    Question. How do you assess the state of democracy in Pakistan 
today?
    Answer. Democracy in Pakistan remains in a nascent stage, a work in 
progress. We believe that President Musharraf and the Government of 
Pakistan have taken some positive steps in bolstering democracy, but 
certainly much more work lies ahead. Pakistan held national elections 
in October 2002, which albeit flawed, brought elected representatives 
back into Pakistan's Government.
    After more than a year of wrangling over the legality of the Legal 
Framework Order that enabled President Musharraf to concurrently serve 
as president and remain as the Army Chief of Staff, the Government and 
political opposition reached a compromise, setting the stage for the 
return of parliamentarians in early 2004. A similar compromise was 
reached on the newly established National Security Council. We note 
that President Musharraf has pledged to give up his Army Chief of Staff 
position by the end of 2004.
    The only significant legislation passed by the new legislature so 
far has been passage of the annual budget bill, but we are hopeful that 
legislators will soon pass other important bills, including anti-money 
laundering and fiscal responsibility laws. New elections are scheduled 
for 2007 and we are working to ensure that they will be conducted in a 
fair and transparent manner in accordance with international standards.
    We have called on the Government of Pakistan to continue efforts to 
bolster democracy, and have encouraged Pakistan to expedite 
implementing its ``devolution'' plan to devolve political power and 
budget resources from the central government to provincial and local 
governments. We remain concerned about reports of Pakistan's 
intimidation of opposition political leaders and journalists. We have 
urged the Government of Pakistan to ensure that opposition political 
leader Javed Hashmi, recently sentenced to seven years in prison 
following a sedition conviction, receive fair and transparent justice 
while his appeals process continues. Helping Pakistan build democracy 
remains a core concern, and along with healthcare, education, and 
continued economic reforms, is the focus of our USAID assistance 
program. One program is helping to train newly elected female 
parliamentarians to effectively draft and pass legislation reflecting 
constituents' concerns. Our Bureau of Democracy, Human Rights and Labor 
also is coordinating with USAID and our Embassy in Islamabad to work on 
additional reforms.
    Question. What portion of economic assistance continued in the 
fiscal year 2005 budget request for Pakistan is intended as budget 
support for the government of Pakistan?
    Answer. To support President Musharraf's vision of a moderate, 
democratic, and prosperous Pakistan at peace with itself and its 
neighbors, we are providing substantial assistance to Pakistan, 
including a request by the President for a multi-year security 
assistance/development package to address short and long-term needs. 
Following the President's June 2003 meeting with Musharraf, he pledged 
to work with Congress to provide Pakistan $3 billion in assistance for 
fiscal year 2005-fiscal year 2009, half for security assistance and 
half for economic support and social programs. Our plan for fiscal year 
2005 would provide up to $200 million/year in ESF for non-project 
assistance (budgetary support and/or possibly debt relief), at least 
$100 million for social sector programs, and $300 million in FMF to 
improve Pakistani military/counter terror capabilities. Thus, two-
thirds of the $300 million in development-focused funds would be 
provided as budget support and one-third would be provided for similar 
development objectives through USAID's ongoing bilateral programs, 
which focus on improving education, healthcare, democracy, and economic 
development. Discussions with the Government of Pakistan continue on 
how to use the proposed assistance most effectively.
    Question. How will the United States monitor the use of likely 
budget support funds to ensure that they are used as intended?
    Answer. Shortly after the President proposed a multiyear assistance 
package in June 2003, the USG initiated a series of discussions with 
the Government of Pakistan on how to best ensure that budget support is 
most effectively and properly used, drawing on lessons learned in 
providing a $600 million non-project grant in the fall of 2001. While 
these discussions are ongoing, we have developed a series of shared 
objectives that build upon the Pakistan Government's own Poverty 
Reduction Strategy Plan (PRSP). The PRSP focuses on many of the same 
issues of chief concern to the United States, seeks to resolve 
pervasive long-term poverty by improving Pakistan's under-funded basic 
education and health sectors, and recognizes the need to continue 
disciplined budget policies. We also are coordinating with the British, 
Japanese, and World Bank in setting development goals in our shared 
objectives. In addition to tracking funds using traditional USAID 
audits, we envision using an interagency review process in conjunction 
with Pakistan's annual Development Forum meetings to track Pakistan's 
progress on achieving the agreed upon goals.
    Question. How supportive have Arab states been in pledging--and 
fulfilling pledges--for the reconstruction of Afghanistan?
    Answer. According to the most recent figures compiled by the 
Government of Afghanistan (GOA), Saudi Arabia has pledged the most 
among Gulf States--$230 million from 2001-2004, mostly in the form of 
concessional loans--but only a small portion--about $42 million--has so 
far been disbursed. We remain hopeful that Saudi Arabia will follow-
through on its previous commitment to provide $30 million in 
concessional loans for road construction of a segment along the 
Kandahar-Herat highway.
    Kuwait, Qatar, and UAE have all made offers of assistance to 
Afghanistan, but only a small fraction of these pledges have 
materialized into actual project assistance. However, in some cases 
direct bilateral humanitarian aid and assistance-in-kind has been 
substantial.
    We remain actively engaged on this issue and are involved in 
ongoing efforts to encourage increased assistance from the Gulf States 
to Afghanistan.
    Question. According to Afghan Finance Ministry figures, France 
pledged a paltry $99.4 million for the reconstruction of Afghanistan 
through March 2009 (only $24 million more than the PRC). Should France 
shoulder a greater burden in this effort?
    Answer. The French generally do not make out-year pledges of 
assistance to third countries. The $99.4 million reflects the amounts 
that the French Government has pledged through 2004. We expect the 
French will make additional contributions in the coming years. In 
addition, the French Government intends to give euros 1 million to 
Afghanistan via the UNDP to assist with the ``electoral process.''
    Question. Are al-Qaeda or other terrorist groups profiting from the 
drug trade in Afghanistan, where 2003 estimates for the opium poppy 
crop topped 61,000 hectares?
    Answer. We do not know to what extent al-Qaeda profits from the 
drug trade in Afghanistan. U.S. Government agencies have anecdotal 
reports of drug trafficking by elements of al-Qaeda, but there is no 
evidence that such activities are centrally directed. Al-Qaeda 
continues to rely on private donations and funding sources other than 
narco-trafficking for most of its income, and there is no corroborated 
information in U.S. Government holdings to suggest that drug 
trafficking provides a significant percentage of al-Qaeda's income. We 
remain deeply concerned about the possibility that substantial drug 
profits might flow to al-Qaeda, however, and continue to be vigilant 
for signs that this is occurring.
    The involvement of anti-government Afghan extremists in the drug 
trade is clearer. U.S. troops in 2002 raided a heroin lab in Nangarhar 
Province linked to the Hizb-I Islami Gulbuddin and officials from the 
United Nations and the Afghan Government report that the Taliban earns 
money from the heroin trade. Based on the information available, 
however, we cannot quantify how much these groups earn from the drug 
trade, nor can we determine what percentage of their overall funding 
comes from drugs.
    In addition, extremists and terrorists in Afghanistan may sometimes 
turn to the same network of professional smugglers used by drug 
traffickers for help moving personnel, material, and money.
    Question. What is the proposed fiscal year 2005 U.S. contribution 
to counter-narcotics efforts, and does this amount represent our ``fair 
share'' given that the vast majority of drugs are destined for Europe?
    Answer. The State Department's fiscal year 2005 budget request to 
Congress contains $90 million for International Narcotics and Law 
Enforcement (INCLE), $22 million of which will be devoted and used 
specifically for counter-narcotic programs.
    The United States Government, working closely behind the lead of 
the United Kingdom, has taken an active stance against poppy 
cultivation, narcotics production, and trafficking. Drug cultivation 
and trafficking undermine the rule of law and provide an income source 
for terrorist activities. The drug trade is hindering the ability of 
the Afghan people to rebuild their country and rejoin the international 
community, and it is having deleterious effects on the abilities of 
neighboring countries to control their borders and exercise effective 
law enforcement measures. It is in the interest of all nations to fight 
the drug trade.
    Question. Do you share my view that the people of Afghanistan are 
better off today than they were under the Taliban?
    Answer. Absolutely. Afghanistan is in the midst of a historic 
transition. Less than three years ago the Taliban ruled over all of 
Afghanistan through a rigid Islamic absolutism that denied many 
fundamental human rights, including allowing women to work or go to 
school. Today, under the steady leadership of President Karzai, the 
country has taken enormous strides and now looks ahead to September 
elections that will mark another milestone on Afghanistan's journey as 
a stable, contributing member of the global community.
    In January, an ethnically and gender diverse Loya Jirga adopted a 
new, progressive constitution that guarantees human rights, including 
those of women. Hundreds of schools and health clinics have been 
constructed and rehabilitated, and school attendance for girls and boys 
increased to a record three million last year. Infrastructure 
improvements are also in full force, the most prominent evidence of 
this being the December 2003 completion of the 389 km Kabul-Kandahar 
highway, a U.S.-led project linking Afghanistan's two largest cities; 
construction is soon to begin on the next phase, Kandahar to Herat.
    The results of Afghanistan's improved security environment are also 
becoming more visible. The Afghan National Army is steadily coalescing 
into a true national defense force. Police are being trained to provide 
day-to-day security in the provinces and in Kabul. And last August NATO 
assumed leadership of the ISAF peacekeeping force, an unprecedented 
move for the alliance that subsequently led to the first step of ISAF 
expansion outside Kabul with the decision by Germany to staff the 
Provincial Reconstruction Team (PRT) in Konduz with troops. In total, 
thirteen PRTs have now been established to provide a security and 
reconstruction presence in the provinces, and more are scheduled to 
open within the next six months.
    Question. What is the current strength of the Afghan National Army 
(ANA), and what do you expect the anticipated strength of the ANA to be 
a year from now?
    Answer. The total ANA force now numbers 8,900 troops. At the 
current training rate, the ANA force should grow within one year to 
approximately 18,000 so long as the necessary resources remain 
available to train, equip, arm, and provide infrastructure for new 
troops.
    Question. What is your view of the professionalism and capabilities 
of the ANA, and what are the retention rates?
    Answer. The ANA has been positively received by Afghans across the 
nation. Ethnically diverse and demonstrating a level of professionalism 
most Afghans are not familiar with from their experiences with armed 
militias, ANA troops are often initially mistaken by the population as 
a foreign army.
    The ANA has performed admirably in successfully carrying out recent 
stability operations for the Afghan central government in Herat and 
Faryab provinces. They have also helped with removing heavy weapons 
from Kabul (part of the disarmament, demobilization, and reintegration 
(DDR) process), and have participated alongside OEF forces in missions 
in the East and South.
    As the ANA has gradually gained institutional momentum and general 
acceptance of it as the new national army has grown, attrition rates 
have stabilized at around 2 percent.
    Question. Do you believe that the recent interpretation of the 
Basic Law by the National People's Congress in Beijing that gives the 
NPC total control over direct elections in Hong Kong undermines the 
premise of ``One Country, Two Systems?''
    Answer. Hong Kong continues to have day-to-day authority over its 
affairs under the ``One Country, Two Systems'' formula. The NPC's 
decision does, however, have important implications for the dialogue 
among the Hong Kong Special Autonomous Region (SAR) Government, the 
Chinese government, and the Hong Kong people over the future of Hong 
Kong's electoral process. As the people of Hong Kong have shown in the 
past through the July 1, 2003 and January 1, 2004 demonstrations--a 
well informed electorate will continue to make its voice heard on 
issues that affect the future governance of the territory. We hope the 
authorities in Beijing and the Hong Kong SAR will make meeting the 
aspirations of the people of Hong Kong for democratization a top 
priority.
    Question. How will this interpretation of the Basic Law by the NPC 
impact cross Strait relations--can you think of any reason why 
Taiwanese will believe in the ``one country, two systems'' mantra?
    Answer. It will not have a positive effect. Taiwan's Mainland 
Affairs Council issued a statement on April 7 warning that China's 
efforts to apply its authority vis-a-vis Hong Kong's political reforms 
will undermine freedom in the special administrative zone.
    In the final analysis, the Taiwan issue is for people on both sides 
of the Strait to resolve. This is the only way a peaceful and durable 
solution can be found. We continue to urge Beijing and Taipei to pursue 
dialogue as soon as possible through any available channels, without 
preconditions.
    In the absence of a political dialogue, we encourage the two sides 
to increase bilateral interactions of every sort.
    Question. What additional programs and activities does the United 
States fund to support the advancement of democracy in Hong Kong?
    Answer. The United States supports a variety of programs in Hong 
Kong that reach out to the political, economic, and academic leadership 
to promote the democratization process. For example, Consul General 
James Keith proactively and frequently engages Hong Kong media to 
support the advancement of democracy in Hong Kong, and his interviews 
and editorials consistently reach mass audiences. Further, the United 
States has programmed close to 30 United States speakers since May 2003 
to help promote democracy in Hong Kong; the United States Fulbright 
program in Hong Kong is especially active; and the International 
Visitor exchange program is renowned among Hong Kong's professional 
civil service. In addition to these programs, the United States 
recently opened an American Corner at the University of Macau to expand 
public diplomacy outreach throughout the region.
    Question. Do you believe, as mainland China asserts, that the 
United States is interfering in Hong Kong's ``internal affairs?''
    Answer. Our engagement reflects our well-established commercial, 
social and cultural interests in Hong Kong as well as our history of 
friendship based on shared values. 1100 American companies are based in 
Hong Kong along with 50,000 American citizens. The United States also 
has a legal obligation under the 1990 Hong Kong-Policy Act to monitor 
the progress of democratization in Hong Kong, which we continue to 
discuss in our annual report to Congress.
    Question. What do the razor thin presidential victory of the 
Democratic Progressive Party (0.2 percent margin) and the increase in 
the DPP's share of the popular vote (up to 50 percent in 2004 from 39 
percent in 2000) mean for the forces of independence in Taiwan?
    Answer. The 2004 presidential election was a testament to Taiwan's 
vibrant democracy. More than eighty percent of eligible Taiwan voters 
turned out to participate in a free and fair selection of their next 
President after a vigorous campaign that highlighted a wide range of 
economic, political and social issues. Although the margin of victory 
was only one-fifth of one percent and the attempted assassination of 
President Chen and Vice President Lu marred the election campaign's 
final days, the people of Taiwan behaved well and with restraint.
    In 2000, President Chen said in his inaugural address that so long 
as the PRC does not intend to use force, he would not declare 
independence, not change the national title, not push the inclusion of 
``state to state'' relations in the constitution, not promote a 
referendum to change the status quo on independence or unification, or 
abolish the National Unification Council (the ``five no's.'') He 
repeated the ``five no's'' during the Presidential campaign. We 
appreciate and take very seriously President Chen's pledge and his 
subsequent reaffirmations of it. We do not interpret his victory as a 
strengthening of the ``forces of indenpendence'' in Taiwan.
    Question. How can the United States partner with Taiwan to advance 
democracy throughout the region?
    Answer. We applaud the success of democracy in Taiwan and the 
dedication of Taiwan's people to the rule of law. The United States 
strongly supports Taiwan's democracy and development of an open society 
under the rule of law. Taiwan is a success story for democracy in Asia 
and around the world. We feel strongly that others can benefit from 
knowing more about Taiwan's achievements. We will explore with our 
friends in Taiwan interested non-governmental organizations how they 
may be able to promote Taiwan's story to a global audience, and how we 
can help to make Taiwan's instructive example available to all 
countries that are attempting to institute democratic reforms and the 
rule of law.
    Question. What specific action has the State Department taken to 
safeguard Burmese Refugees and Burmese organizations in Thailand from 
Thaksin's crackdown on Burma's democratic opposition?
    Answer. The Bureau of Population, Refugees, and Migration funds 
UNHCR which provides protection to 140,000 Burmese refugees resident in 
nine camps in Thailand. UNHCR also issues protection letters to Burmese 
who are living outside the camps in Thailand who they find to be 
``persons of concern.''
    In fiscal year 2003, the United States provided over $5 million in 
humanitarian assistance to Burmese refugees in camps in Thailand and 
over $3 million for democracy promotion activities, many of which take 
place in Thailand. Some NGO groups have reported difficulties in 
operating along the border due to stricter Royal Thai Government 
policies; the RTG has responded positively when we have raised these 
issues.
    Question. Is Thailand deporting (either formally or informally) 
Burmese nationals to Burma at a rate of 10,000 per month, as reported 
by Human Rights Watch? What is the fate of these deported Burmese?
    Answer. We do not have figures for the total number of deportations 
of Burmese nationals by Thai immigration officials. Burmese nationals 
who are not registered residents of refugee camps are subject to 
deportation back to Burma, both formally or informally. Migrants who 
are informally deported are not returned directly to Burmese 
authorities; they are taken to the border and released. Many are able 
to evade Burmese authorities and re-enter Thailand. Those who are 
formally deported are directly handed over to Burmese authorities and, 
in some cases, may suffer reprisals. UNHCR works with Thai authorities 
to ensure that Burmese who have been designated as persons of concern 
are not formally deported back to Burma. We are looking into recent 
reports that Thai officials may have deported individuals that UNHCR 
has designated as persons of concern.
    Question. How do you assess the recent actions of the UNHCR in 
Burma--is UNHCR serving as a forceful champion for Burmese refugees?
    Answer. We believe UNHCR is fulfilling its mandate in protecting 
Burmese refugees. In February 2004, UNHCR entered into an agreement 
with the Government of Burma to begin initial efforts in the east of 
the country to create conditions that could eventually allow the 
voluntary return of 140,000 refugees from camps in neighboring 
Thailand. UNHCR has repeatedly stated that it will not take part in the 
repatriation of Burmese to Burma until three conditions are met: ``(1) 
a credible cease-fire agreement between the SPDC and the Karen National 
Union; (2) the development of an infrastructure in townships that far 
exceeds current conditions; and (3) an international protection 
presence set up to monitor continuously any repatriation and 
integration.'' UNHCR has underlined that the current situation is not 
conducive to refugee returns and that it currently seeks only to 
improve basic health, education, and community services.
    UNHCR's access to the eastern part of Burma can serve to increase 
transparency and offer the outside world a view into events in that 
region.
    Question. Why is the United States initiating refugee resettlement 
of Burmese refugees, absent a clear understanding with Thaksin's 
government on the treatment of Burmese in Thailand?
    Answer. Since 1990, the USG has been resettling Burmese refugees 
from Thailand. Initially, the United States and other resettlement 
countries, such as Canada, Australia, and others, offered refugee 
resettlement consideration primarily to Burmese students/dissidents who 
fled to Thailand following the violent suppression of pro-democracy 
forces in 1988. In addition, over the years the USG has processed other 
Burmese refugees identified by the United Nations High Commissioner for 
Refugees (UNHCR) office in Thailand as requiring protection provided by 
third-country resettlement.
    In February 2004, the USG began a resettlement initiative for 
certain UNHCR-recognized Burmese refugees living in urban areas. In 
2003, the Royal Thai Government (RTG) had indicated that it wanted all 
Burmese refugees to reside in the border camps. For security and 
protection reasons there are currently some 3,500 Burmese refugees 
living in urban areas within Thailand. UNHCR proposed to the RTG that 
these Burmese refugees be processed for resettlement in third-
countries. When the RTG agreed, UNHCR referred the first 1,400 to the 
United States for resettlement processing in February. The first of 
these refuges approved for United States resettlement arrived in the 
United States on May 26. UNHCR has indicated that it will refer some 
1,500 additional urban Burmese refugees to the United States later this 
summer. In addition, UNHCR has indicated that it plans to refer several 
hundred other urban Burmese refugees to other countries that have 
indicated an interest in participating in this resettlement initiative.
    Even though Thailand is not a signatory to the 1951 U.N. Convention 
on the Status of Refugees or its 1967 Protocol, for decades the RTG has 
provided temporary asylum to hundreds of thousands of Burmese, 
Indochinese, and asylum seekers from other countries.
    Regarding Burmese refugees in Thailand, in general, Thailand has 
been a generous host to Burmese asylum seekers. Thailand presently 
limits temporary asylum to those Burmese fleeing active fighting and we 
continue to urge the RTG to expand its definition, because of 
conditions in Burma, and grant temporary sanctuary to any Burmese 
genuinely seeking protection from persecution or other forms of serious 
harassment or discriminatory treatment. We also continue to encourage 
the RTG to accede to the Refugee Convention and its 1967 Protocol.
    Question. Does the relocation of these refugees help fulfill the 
objectives of the SPDC to permanently remove Burmese from the border 
areas?
    Answer. The United Nations High Commissioner for Refugees-led 
resettlement effort for the urban Burmese is for some 3,500 Burmese 
refugees who have been living in urban areas in Thailand for years. The 
1,400 individuals that the United States has processed to date 
primarily live in and around Bangkok with a few hundred of these 
refugee applicants residing in other urban areas in Thailand. These 
urban Burmese refugees are living entirely separate from the some 
142,000 Burmese refugees residing in camps on the Thai-Burma border.
    Question. How concerned are you with the reported backsliding of 
Thailand's democratic traditions--specifically, freedom of the press 
and human rights abuses?
    Answer. The Department's 2003 Thailand Country Report on Human 
Rights noted that the Thai constitution provides for freedom of speech 
and of the press, and the Thai Government generally respected these 
rights in practice; however incidents of harassment and intimidation of 
journalists continued to occur. Journalists generally were free to 
comment on governmental activities without fear of official reprisal, 
although there were attempts by the Thai Government to curb journalists 
or publications perceived to be critical of government officials or 
their families. In addition, the media practiced some self-censorship.
    The report also concluded that the Thai Government's human rights 
record worsened with regard to extra-judicial killings and arbitrary 
arrests. We continue to urge the Royal Thai Government frequently and 
at high levels to thoroughly and credibly investigate all killings from 
last year's anti-drug campaign and to bring to justice those 
responsible for wrongdoing.
    We are also following the Thai Government's investigation of the 
disappearance of noted Muslim human rights lawyer Somchai Ninphaijit in 
March 2004. Thai prosecutors have filed charges against several Thai 
police officials accused of participating in the disappearance, and a 
trial is underway.
    Question. What is the relationship between Thai King Bhumipol and 
Prime Minister Thaksin, and are there any indications that the King is 
concerned with Thaksin's potential business conflict of interests in 
Thai domestic and foreign policy?
    Answer. King Bhumipol, who has been on the throne since 1946, is 
the head of state and commands enormous popular respect and moral 
authority. Prime Minister Thaksin Shinawatra took office in February 
2001. As the head of government, the Prime Minister consults regularly 
with the King.
    We have no information on King Bhumipol's views on Prime Minister 
Thaksin's business interests.
    Question. What is the status of talks between Armenia and 
Azerbaijan over the Nagorno Karabakh conflict, and how does the passing 
of Azeri President Heydar Aliyev impact prospects for reconciliation?
    Answer. Heydar Aliyev was a singular figure in the South Caucasus 
and his death could not help but alter the tone course of negotiations. 
In fact, the late president's protracted decline in health became an 
obstacle to negotiations for much of 2003, for the simple reason that 
he was not physically well enough to be deeply engaged on the issue. 
However, President Ilham Aliyev has continued both his father's path 
towards the West and the negotiations between Armenia and Azerbaijan 
dedicated to solving the conflict over Nagorno-Karabakh. Both sides 
have agreed the dispute should be resolved peacefully. We are 
cautiously encouraged that the two sides may each be ready to resume a 
more regular series of discussions on the matter. In addition to direct 
negotiations between President Aliyev and President Kocharian, a 
recurring series of talks at the foreign minister level has been 
initiated to explore different settlement modalities.
    Question. Does current Azeri President Ilham Aliyev have the 
political weight and clout of his father to pursue negotiations over 
the N-K conflict?
    Answer. While it is true that the late President Heydar Aliyev had 
a unique stature in Azerbaijani politics and society, President Ilham 
Aliyev has shown himself willing and able to continue negotiations 
aimed at finding a peaceful settlement to the conflict over Nagorno-
Karabakh.
    Question. Given the strong Congressional interests of parity 
between Armenia and Azerbaijan, how do you explain the $6 million 
difference in FMF assistance to those countries?
    Answer. The matter of FMF allocation to Armenia and Azerbaijan is 
currently under review at the State Department. Armenia and Azerbaijan 
are each important partners of the United States. The Administration 
believes that building up Azerbaijan's maritime security capabilities 
is important in order to prevent the transit of destabilizing 
contraband or terrorists through the Caspian Sea zone. The 
Administration's increased FMF request for fiscal year 2005 is aimed, 
in large part, at countering that threat. FMF will also enhance 
Azerbaijan's capabilities to participate in international peacekeeping 
efforts. Azerbaijan currently has peacekeeping troops deployed to Iraq, 
Afghanistan and Kosovo.
    We hope to be able to enhance our security relationship with 
Armenia in order to do more in the peacekeeping area there. We 
frequently encourage the Armenian Government to permit closer military 
cooperation with the United States and to permit the United States to 
conduct an assessment of its armed forces. It will be difficult to 
usefully spend more FMF in Armenia until we do a more thorough 
assessment of Armenia's resources and needs to become more 
interoperable with United States and NATO forces.
    Question. How do you assess Armenia's partnership in the war 
against international terrorism? How does this compare to Azerbaijan's 
partnership?
    Answer. Armenia is a serious partner in the global war on 
terrorism. Armenian officials, including the President, regularly speak 
out condemning terrorism. Armenia has recently modernized its laws to 
specifically criminalize terrorism. Stronger counterterrorism financing 
laws are under consideration. Several domestic terror suspects were 
tried and convicted in 2003. Armenia is a party to 9 of the 12 
international conventions and protocols relating to terrorism.
    Azerbaijan is also a contributing partner in the global war on 
terror and has taken significant strides to strengthen its 
counterterrorism posture. Azerbaijan has joined all 12 international 
conventions and protocols relating to terrorism, including four for 
which Azerbaijan's accession was notified after the 2003 Patterns of 
Global Terrorism report went to press. Azerbaijan has recently 
accomplished important steps in combating terrorist finance, has 
rendered terrorism suspects to foreign governments for prosecution, and 
shown some success in disrupting terrorist networks seeking to transit 
Azerbaijani territory.
    We caution against attempting direct comparisons between any two 
countries' counter-terrorism efforts, as each faces different 
challenges in the war on terror and has different capabilities. We 
refer you to the State Department Report ``Patterns of Global 
Terrorism,'' which characterizes Armenia and Azerbaijan's cooperation 
in the global war on terrorism in more depth.
    Question. How best can the United States encourage Russia to ``stay 
the course'' in the advancement of democracy and press freedoms?
    Answer. A historic positive transformation has occurred in Russia 
during the twelve years since the collapse of the Soviet Union. In the 
1990s, Russians acquired basic freedoms, such as expression, religion 
and the ability to choose their leaders through elections. However, the 
pattern of official pressure on the independent broadcast media, 
irregularities in elections, and the arrest and detention of prominent 
individuals such as Mikhail Khodorkovskiy have raised questions about 
Russia's commitment to democracy and the rule of law.
    In January of this year, I addressed all of these issues directly 
with President Putin and in an article published in a leading Russian 
newspaper. I noted in my article that Russia's political system seems 
not to have found essential balance among the executive, legislative 
and judicial branches of government. I pointed out that key aspects of 
civil society, free media and political party development have not yet 
obtained an independent presence in Russia. While in Moscow, I also 
emphasized that the United States wants a robust partnership with 
Russia, but that without a basis of common principles, the United 
States-Russian relationship will fail to reach its potential.
    Through our continued engagement and our assistance programs, the 
United States has played a key role in supporting the development of a 
vibrant and diverse range of civil society organizations, independent 
media outlets and other institutions necessary for democratic values 
and institutions to flourish. Ambassador Vershbow and our embassy in 
Moscow actively advocate on behalf of improving respect for human 
rights, fundamental freedoms, and democratic institutions.
    In the current environment, which is less than supportive of these 
values and institutions, we must continue to engage on the policy front 
and provide assistance to those in Russia who are pushing harder than 
ever to advance democracy. Ultimately, it is up to the Russians to 
determine the kind of political system in which they live, but our 
support--moral and financial--makes a significant difference.
    Question. Is the fiscal year 2005 budget request of $79.5 million 
sufficient to support ongoing political and economic reforms in Russia?
    Answer. This request is adequate to support critical economic and 
political reforms. Given the large capital inflows from oil and gas 
revenues to Russia over the past several years, it is necessary to 
assess the relevance of our assistance and where it makes a strategic 
difference. Russia has the capacity to finance economic reforms if it 
has the political will to do so. We intend to reduce funding for 
economic programs next year with a goal of phasing-out economic 
assistance the following year, in 2006. We are concerned, however, that 
Russia's commitment to democracy and rule of law has come into 
question. We therefore plan to focus more of our funding on programs 
that support civil society, independent media, the rule of law and 
democratic practices.
    Question. Given an increasingly tense political environment, is 
democracy promotion in Russia best handled by the National Endowment 
for Democracy?
    Answer. We share your concern about the political environment in 
Russia and, particularly in this environment, consider it important to 
maintain a diversified approach to democracy promotion in Russia that 
includes a range of partners inside and outside of the country.
    NED's grant support to non-governmental organizations (NGOs) in 
Russia complements the extensive efforts of the U.S. Embassy and USAID 
to support a wide range of democracy assistance, including promoting 
open and competitive political processes, an independent media, human 
rights, tolerance and improved civic participation in local governance. 
These programs are carried out by such experienced United States 
implementers as Internews, IREX, NDI, IRI, ABA/CEELI and, increasingly, 
by Russian partners. The Embassy also provides direct grants for 
democracy-building initiatives directly through the Democracy 
Commission Small Grants program (topping out at $24,000, these are 
typically smaller than NED grants).
    The United States democracy assistance program for Russia is 
strengthened by the on-the-ground presence of the United States Mission 
and by coordination in Washington. We believe that the fact that the 
United States Mission to Russia is directly engaged in democracy 
assistance sends an important signal to activists as well as to the 
government. So far, USAID and the Embassy have encountered little 
explicit resistance from Russian or local federal authorities against 
these programs. Unless this situation becomes significantly more 
aggravated, it would be well worth continuing these programs as many of 
them provide key Russian democracy activists with the only source of 
domestic or international grant funding available to them at present.
    We highly value the contribution made by the National Endowment for 
Democracy (NED). Indeed, the Department of State has supplemented NED's 
core funding with FREEDOM Support Act (FSA) funds for Russia since 
fiscal year 2002. In fiscal year 2004, we will provide $2 million of 
FSA funds to NED for work in Russia.
    Question. Will the recent political changes in Georgia be taken 
into consideration for the purposes of additional assistance under the 
Millennium Challenge Account?
    Answer. We hope that the Millennium Challenge Corporation will take 
into account the changes emerging in Georgia after the Rose Revolution. 
President Saakashvili has made control of corruption a very high 
priority: his actions already back up his words. We would support an 
MCC decision to include Georgia in the eligible countries for fiscal 
year 2004 funding to underpin the new government's commitments. The 
decision, however, will be up to the Millennium Challenge Board.
    Question. What is your response to the recent decision of Serbian 
lawmakers to provide Slobodan Milosevic and other war crime indictees--
and their families--with financial support and other benefits?
    Answer. Our understanding is that the recent law codifies practices 
that had been in effect in Serbia and Montenegro as a matter of policy. 
These policies have included support for family members of Serbian 
defendants who are in the custody of the International Criminal 
Tribunal for the Former Yugoslavia (ICTY)--allowances for travel, 
telephone calls, the right to collect wages or pension payments due the 
indictee, and assistance with the defense expenses of some defendants. 
Croatia and Bosnia also make such assistance available to ICTY 
indictees, in order to induce them to surrender and submit to the 
Tribunal's jurisdiction.
    The new law, which has proved very controversial with the Serbian 
public, is currently under review by the Constitutional Court, and 
there are strong signals that some of the provisions will be 
overturned.
    In the past, assistance was available only for families of those 
defendants who had voluntarily surrendered to the Tribunal. It appears 
that the new legislation would make this assistance available to all 
defendants who are in The Hague. The Finance Minister, who is opposed 
to certain provisions in the law, is proposing restrictive regulations 
to implement the law.
    We cannot speculate as to what led the Serbian Parliament to pass 
this legislation. Rather than focusing on assistance that the Serbian 
Government might wish to extend to defendants who are already in ICTY 
custody, our primary concern is that fugitive ICTY indictees, including 
especially Ratko Mladic, are finally brought to justice before the 
Tribunal without further delay, a point that the U.S. Government 
continues to stress in all our meetings with Serbian officials.
    Question. ``What impact has the removal of HAMAS leader Yassin had 
on that terrorist organization, and on terrorism against Israel?''
    Answer. HAMAS is a designated terrorist organization. There is no 
question that the group continues to promote violence and instability 
in the Middle East, and its activities remain a major obstacle to the 
pursuit of Middle East peace. Following the death of Sheikh Yassin, 
HAMAS vowed revenge against Israel, as it did following the death of 
leader Abdel Aziz Rantissi on April 17. Since that time, HAMAS has 
continued its efforts to operationalize terrorist attacks inside Israel 
proper. Hamas recently claimed its first successful lethal rocket 
attack on 28 June, when a Qassam rocket launched from northern Gaza 
struck the Israeli town of Sderot, killing a 49 year-old man and a 3 
year-old child.

                              ISRAEL/EGYPT

    Question. Is the United States considering increased aid to the 
Palestinians for Gaza after an Israeli withdrawal?
    Answer. The United States has devoted significant development and 
humanitarian resources to the West Bank and Gaza, with nearly $75 
million in Economic Support Funds provided in fiscal year 2004 and 
another $75 million requested for fiscal year 2005. Total USAID 
assistance to the West Bank and Gaza since 1993 is over $1.3 billion. 
In addition, in 2004, we are providing $88 million to the U.N. Relief 
and Works Agency (UNRWA) general fund for its programs to assist 4.1 
million registered Palestinian refugees, 1.6 million of whom live in 
West Bank and Gaza. The United States remains the largest donor to 
UNRWA. Also, the United States contributed $20 million in February 2004 
from the President's Emergency Relief and Migration Assistance account 
to UNRWA's emergency appeal for refugees in West Bank and Gaza, and we 
are considering another contribution to the appeal.
    No decisions have been made about future levels of assistance. In 
the event of Israeli withdrawal, the United States will join with 
others in the international community to foster the development of 
democratic political institutions and new leadership committed to those 
institutions, the reconstruction of civic institutions, the growth of a 
free and prosperous economy, and the building of capable security 
institutions dedicated to maintaining law and order an dismantling 
terrorist organizations.
    Question. Will such increased aid (to Palestinians) be conditioned 
on Palestinian efforts to eliminate HAMAS and Islamic Jihad terrorism?
    Answer. This question has been sent to USAID for response.
    The committee notes that no response was received.
    Question. What conditionality has been placed on fiscal year 2003 
supplemental funding for Egypt ($300 million), and will similar 
conditions be placed on the fiscal year 2005 budge request for Egypt?
    Answer. We have placed the following conditions on the Government 
of Egypt for the disbursement of fiscal year 2003 Supplemental funding. 
These conditions were included in our April 2 Congressional 
Notification on this topic and were negotiated between our two 
governments in a cooperative manner. It is worth noting that the 
disbursement of the supplemental funds is still awaiting final 
signature on a joint MOU between our two governments.
    1. Implement a fully floating exchange rate supported by 
appropriate monetary policies:
  --Re-affirm the government's public commitment to allow banks and 
        foreign exchange bureaus that are in compliance with prudential 
        regulations to freely set exchange rates.
  --Commit to increase the efficiency of and reduce distortions in the 
        foreign exchange market under the floating exchange rate 
        regime.
    2. Improve the business climate and meet WTO obligations:
  --Maintain tariffs on apparel consistent with Egypt's WTO 
        obligations.
    3. Improve transparency and budget deficit:
  --Commit to publishing a budget.
  --Request and establish a timeline with the World Bank for a Public 
        Expenditures Review.
  --Agree to IMF public release of executive summary of the annual 
        Article IV Consultations report through the Public Information 
        Notice (PIN) of the IMF.
  --Agree to publish Reports on Standards and Codes by 12/31/04.
  --Commit to beginning public release of macroeconomic data, including 
        but not limited to quarterly GDP estimates (with six month lag) 
        and monthly industrial production indices.
    The fiscal year 2005 budget request includes an Economic Support 
Fund (ESF) request of $535 million. We are focusing our resources on 
the Middle East Partnership Initiative pillars of economic reform, 
education, civil society, and women and are determined that our 
assistance activities reach more Egyptians at the grassroots level.
    We have redesigned our cash transfer program, under which ESF 
disbursements are conditioned on economic reform, to focus on the 
financial sector, including bank privatization. In education, we are 
promoting the decentralization of Egypt's education system and 
integrating proven models of teacher training, local school management, 
and community and private sector support/involvement. Girls' education, 
particularly in rural areas, as well as English language training 
programs, will be a key focus of our activities. We are also planning 
to devote significant resources for democracy and governance programs 
that open the public space for debate, support civil society 
institutions, and promote the respect for rule of law.
    Question. How do you explain Egyptian President Hosni Mubarak's 
seeming reluctance to implement much needed political and economic 
reforms in Egypt?
    Answer. Reform has been a focal point in our bilateral relations 
with Egypt for several years. We have been cautiously encouraged by 
several steps the Government has taken including:
  --Floating the Egyptian pound,
  --Replacing WTO-inconsistent apparel tariffs,
  --Creating a National Council on Human Rights,
  --Repealing several military decrees,
  --Sponsoring a regional conference in Alexandria that issued a bold 
        declaration favoring reform, and
  --Public statements by Egyptian officials suggesting the possibility 
        of lifting the Emergency Law.
    In addition, President Mubarak has expressed his commitment to 
reform, highlighting the need to modernize, develop, and reform society 
in a 14 April speech to the Baker Institute for Public Policy in Texas.
    We remain concerned, however, over restrictions on basic political 
liberties and religious rights, treatment of prisoners including 
routine use of torture, and continued reliance upon the Emergency Law. 
The Emergency Law allows the state to arrest and detain suspects 
without trial for prolonged periods and refer civilians to military 
courts. We continue to stress the need for reform to our Egyptian 
counterparts and emphasize that true stability will only result from a 
free and open society where citizens' rights are respected.
    Question. Has the Egyptian Government actively undermined the 
President's Greater Middle East Partnership Initiative (GME), and what 
role did it have in, if any, in scuttling the Arab Summit in Tunisia 
last month?
    Answer. Like other countries in the region, Egypt has stressed that 
reform cannot be imposed from the outside, but must come from internal 
dialogue and debate--a principal we strongly support. Egypt has worked 
to this end, sponsoring a regional conference in Alexandria that issued 
a bold declaration favoring reform, and engaging in a national dialogue 
with some of the major opposition parties. The Egyptian Government 
acknowledges the need for reform in Egypt and the Middle East and has 
played an important and constructive role in ensuring that the Arab 
League takes up the issue of political and economic reform.
    When the Government of Tunisia cancelled the Arab Summit meeting on 
28 March, Cairo immediately offered to host the Summit if Tunisia was 
unwilling. From 8-10 May, Egypt hosted the Arab League foreign 
ministerial that agreed on a rescheduled date of 22-23 May for the 
Summit. Egypt has and continues to play a constructive role on Arab 
League issues.
    Question. Will the Administration be able to renegotiate foreign 
assistance agreements with Egypt to ensure that they do not have veto 
power over the use of taxpayer funds?
    Answer. The Government of Egypt (GOE) and the USG jointly agree 
every year on the use of aid dollars. Our assistance program is 
codified in our bilateral Treaty agreement with the GOE; something that 
we do not believe should be changed at this time. Such joint decision-
making has been the principle and practice of this assistance since the 
beginning of our program with Egypt more than twenty years ago. This 
program, rooted in the Camp David Accords, has achieved many benefits 
for the United States and Egypt and is one whose programs are 
continually evolving.
    Our most recent discussions with the GOE, held in November 2003 on 
the topic of a new Democracy and Governance assistance funding, were 
frank and are ongoing. In 1998, we negotiated funding changes to the 
assistance program. These discussions were always held in a productive 
atmosphere with GOE officials. If changes are to be made to the 
program, we are confident that we will have an engaged partner. 
However, a full renegotiation of the agreement would require changes to 
the Accords--a difficult and costly exercise to implement.
    The GOE does not hold a veto over U.S. Government assistance to 
Egypt. This is evidenced by the fact that we have just completed a 
review of the assistance program that intends to advance new program 
initiatives in the areas of economic reform, democracy and governance, 
health, education, and the environment, among other areas. Changes to 
the formulation of our assistance program for Egypt do not inhibit us 
from making these initiatives, and despite some GOE resistance to some 
of our proposals we have been and will continue to discuss these 
proposals in detail with the GOE.
     Question. Do you agree that the failure of the Egyptian Government 
to provide basic freedoms--including that of association--strengthens 
the ability of extremists to recruit from disaffected segments of 
society that have no role or voice in domestic politics?
    Answer. Islamic terrorist movements suppressed by the Egyptian 
Government in the 1980s and 1990's were not seeking an agenda of 
greater political inclusiveness. While the core of extremist movements 
consists of people who are committed to a radical ideology, disaffected 
segments of society are vulnerable to manipulation. The Egyptian 
Government has called for greater political and economic participation 
to counter extremists' influence, and the National Democratic Party has 
led a campaign to encourage youth to become involved in government. We 
are working with both the Government and NGOs to design programs to 
strengthen civil society and the rule of law in Egypt, a result of 
which may be greater public confidence in the political system, and 
accordingly, reduced appeal of extremist groups.
    Question. Are we making any progress at all with the Egyptians in 
reducing the unending vilification of America, Israel and Jews in their 
official and semi-official media?
    Answer. Since the onset of the second Intifada in September 2000, 
there has been an increase in anti-Semitic material published in the 
Egyptian media. We have raised regularly our concerns over anti-Semitic 
material in the official GOE media with Egyptian officials, and 
welcomed Presidential Adviser Osama Al-Baz's repudiation of anti-
Semitism as a vehicle for protesting policy differences with Israel. 
Our Ambassador in Egypt, David Welch, has taken an active role in 
protesting biased media coverage, calling on the press to present well-
researched and factually accurate arguments, not those perpetuating 
anti-Semitic slurs, rumors or unsubstantiated conspiracy theories.
     Question. How do you account for Qaddafi's recent willingness to 
cooperate with the West on a range of issues--including weapons of mass 
destruction?
    Answer. No one factor or any isolated event suffices to explain 
Libya's recent judgments. The record of negotiations reflects a new 
seriousness and intensity among Libyan negotiators following September 
11 and in the build-up to Operation Iraqi Freedom. The interdiction of 
the ship ``BBC China'' through President Bush's Proliferation Security 
Initiative may also have been a factor in Libya's decision. But the 
Libyan government has recognized the economic and security advantages 
of improving relations with the United States and others and had been 
edging slowly away from its destructive and futile past polices for 
some time.
    Question. What role did Qadhafi's son Saif Al-Islam have in 
shifting Libya's direction, and what role does he have in the future of 
Libya? What are his reform credentials?
    Answer. It's not clear how much of a role Saif Al-Islam plays in 
the direction of Libyan policy. Officially, Saif Al-Islam holds no 
position within the government. In practice, his familial association 
translates into some degree of influence. Saif Al-Islam heads the Human 
Rights Society of the Qadhafi International Foundation for Charity (The 
Qadhafi Foundation). In this capacity, Saif Al-Islam was involved in 
the discussions between the Foundation and the French victims' 
association that led to a compensation settlement with French parties 
in the UTA bombing. Saif Al-Islam facilitated the visits of several 
United States Congressmen to Tripoli earlier this year. He has not 
participated in the U.S./UK discussions on WMD with Libyan officials, 
nor our bilateral dialogue on political and economic relations.
    There is no established rule of succession in Libya. We cannot 
judge whether Saif Al-Islam has a future political role in Libya.
    Question. Will the United States provide assistance to Libya for 
the destruction of its chemical weapons stockpile?
    Answer. Libya has not made a direct request to the United States 
for assistance in the destruction of its CW stockpile, although at the 
March 23-26, 2004 meeting of the Executive Council to the Organization 
for the Prohibition of Chemical Weapons, the Libyan Representative 
stated that Libya hopes to receive technical and financial assistance 
from the international community. The United States Government has not 
ruled out such assistance. We are encouraging United States companies 
who have expressed an interest and have expertise in destruction of CW 
to initiate contact with the Libyan Government.
    Question. Does Libya provide an example of the value of sanctions 
in addressing a hardline regime?
    Answer. Economic sanctions against Libya--which included a U.N. 
sanctions regime, adopted by the Security Council, as well as sanctions 
imposed under U.S. laws--were sustained for a number of years. Over 
time, in addition to their economic impact, they contributed to 
creating a sense of international isolation for Libya. A desire to end 
that isolation and rejoin the world community was one element in 
bringing about the dramatic changes of policy that we have seen in 
Libya.
    Question. How much have events in Iraq precipitated change in Libya 
and throughout the region?
    Answer. There can be no doubt that United States resolve to see 
international law and more than a dozen U.N. Security Council 
resolutions upheld in Iraq have had a profound impact on the region, 
including on the dramatic decision by Libya's Moammar Qadhafi to give 
up his weapons of mass destruction.
    In Libya's case, other factors also played a role, including the 
sanctions regime, years of tough diplomacy, and United States and UK 
intelligence efforts to uncover the details of Libya's WMD efforts. It 
is also important to note that the courage and tenacity displayed by 
the families of the Pan Am 103 victims helped to persuade Libya to 
fulfill the requirements related to Pan Am 103, including transfer of 
the two suspects and renunciation of terrorism.
    Question. How alarmed should we be with Iran's construction and 
assembly of centrifuges used to enrich uranium at Isfahan, and at 
Iran's attempts to frustrate the work of the International Atomic 
Energy Agency?
    Answer. We are very concerned about Iran's nuclear program, 
including its construction and assembly of centrifuges for its uranium 
enrichment program, because we believe Iran's nuclear program is 
directed towards developing nuclear weapons. In his four reports on 
Iran over the past year, the IAEA Director General has documented 
eighteen years of clandestine nuclear activities, conducted in 
violation of its NPT safeguards obligations, including undeclared 
uranium enrichment and plutonium separation experiments, as well as 
experiments with such weapons-related materials as uranium metal and 
polonium-210. Dr. ElBaradei also documented Iran's efforts during that 
period of time to systematically and willfully hide its clandestine 
efforts from the world.
    Iran claims it needs to develop indigenous uranium enrichment 
capability for its nuclear power program. However, Iran already has a 
guaranteed external fuel supply for the one power reactor currently 
under construction at Bushehr. More importantly, Iran has no need for 
nuclear power to meet its indigenous power requirements. Indeed, Iran 
has some of the largest petroleum and gas reserves in the world. 
Moreover, Iran does not have sufficient known uranium reserves to 
support a civilian nuclear power program. It has more than enough 
uranium, however, for a nuclear weapons program. Iran's troubling, 
confirmed history of serious safeguards violations, and of long-term 
deception and denial regarding those efforts are clear indicators of an 
intent to develop a nuclear weapons capability under the cover of a 
peaceful nuclear energy program. We urge Iran to abandon its pursuit of 
sensitive nuclear fuel cycle capabilities and of nuclear weapons 
capabilities. We are undertaking intensive diplomatic efforts aimed at 
achieving those goals.
    Question. How close to completion is their [Iran's] enrichment 
facility?
    Answer. As a result of the intense international spotlight on, and 
rigorous IAEA investigation of, its nuclear activities, Iran has 
declared the existence of a number--but likely not all--of its 
facilities involved in its uranium conversion and enrichment programs. 
However, Iran's drive to develop the entire nuclear fuel cycle is 
complex and is not centered in a single facility. Furthermore, there 
are lingering suspicions Iran has not declared the full extent of its 
nuclear program. Iran has announced its intention to begin operations 
at its Esfahan uranium conversion facility. We believe testing this 
facility is not consistent with Iran's repeated pledges to suspend 
enrichment-related and reprocessing activities. The production of 
uranium compounds used to produce feedstock for enrichment would be an 
unacceptable step towards actual enriched uranium operations.
    Further along the fuel cycle, Iran has pledged to the IAEA to stop 
assembling centrifuges at the pilot fuel enrichment plant at Natanz, 
though construction of that facility and at the larger Fuel Enrichment 
Plant (which is being buried underground at the same site), appears to 
be proceeding rapidly. The IAEA continues to investigate the source of 
uranium contamination found on centrifuges at Natanz and elsewhere. The 
DG's February 2004 report to the IAEA Board revealed that Iran had not 
declared to the IAEA its possession of more advanced ``P-2'' gas 
centrifuge designs. The DG's February report also noted advances in 
Iran's capability to manufacture domestically a range of centrifuge 
components, including at a number of workshops controlled by the 
Iranian military, a troubling revelation. Until the IAEA concludes its 
investigation of Iran's centrifuge enrichment program, an investigation 
that we anticipate will need to continue for the foreseeable future, it 
is difficult to assess more precisely its current state of development.
    Iran has also experimented with laser enrichment techniques that 
have not been found to be commercially viable in other countries. A 
proliferator is not interested in making enrichment profitable; 
therefore, such techniques could be attractive for use in a covert 
weapons program. The IAEA's investigation of Iran's laser enrichment 
program is ongoing.
    In short, we do not know precisely how close Iran is to having an 
indigenous capability to enrich uranium, largely due to Iran's refusal 
to cooperate fully with the IAEA and because of lingering suspicions 
Iran has not declared the full extent of its nuclear program. However, 
we are working closely with other members of the IAEA Board of 
Governors to ensure that the IAEA and the IAEA's Board continue to 
exert the fullest possible pressure on Iran to cooperate fully.
    Question. The EU said it will not go forward with a new Trade and 
Cooperation Agreement with Iran until its nuclear program has been 
determined to be peaceful--how seriously does the EU take the threat of 
a nuclear-armed Iran?
    Answer. The EU shares our concerns about the threat of Iran 
acquiring nuclear weapons capability. The EU has consistently called on 
Iran to cooperate fully with the IAEA and comply fully with its 
nonproliferation obligations. EU member states serving on the IAEA 
Board of Governors have supported three resolutions adopted unanimously 
calling on Iran to cooperate with the IAEA and declare all its nuclear 
activities in order to allow the IAEA to verify whether Iran's nuclear 
program is exclusively peaceful in nature. But EU states have not 
supported reporting Iran's documented noncompliance with its NPT 
safeguards agreement to the U.N. Security Council.
    The Foreign Ministers of France, Germany and the U.K. (the EU-3) 
reached agreement with Iran during their October 21, 2003 visit to 
Tehran that Iran would suspend ``all enrichment-related and 
reprocessing activities as defined by the IAEA'' and would sign the 
Additional Protocol and commence ratification procedures. In exchange, 
the EU-3 agreed to take a number of future steps, including providing 
Iran easier access to technology. Iran signed the AP December 18, 2003, 
but has taken no significant steps toward ratification. Despite a 
follow-up agreement with the EU-3 on February 23 aimed at reaffirming 
its pledge, Iran has continued to flout its pledge to suspend 
enrichment-related and reprocessing activities, most recently 
announcing the imminent startup of its uranium conversion facility. The 
EU-3 continues to press Iran to meet its promises.
    We continue to work closely with the EU to reach our common goal of 
preventing Iran from acquiring a nuclear weapons capability.
    Question. What impact has the opening of Iraqi society--including 
greater freedom for women--had in Iran, and are there any indications 
that Iranian youth have increased calls for change?
    Answer. The status of Iranian women is complicated; they enjoy some 
freedoms--such as the right to vote and to run for public office--not 
permitted in neighboring states, and they are permitted to work and 
occupy many positions of responsibility in society, including in the 
President's cabinet. However, they are also subject to draconian edicts 
from Iran's theocracy that severely limit other freedoms.
    There has been no clear public reaction by younger Iranians to 
developments in Iraq. However, Iranian Kurds took to the streets in 
demonstrations following promulgation of the Transitional 
Administrative Law in Baghdad. Iranian Kurds seek greater freedom to 
use their language and express their cultural identity. They have 
observed developments in Iraq with great interest.
    With the support of the special Congressional approval provided in 
the 2004 Foreign Operations Bill, we maintain a very active public 
diplomacy program to expose Iran's behavior through public statements 
by USG officials, Radio Farda and VOA broadcasts, and the State Dept's 
Persian website. In addition, we are actively exploring opportunities 
to promote democracy activities within Iran, in accordance with fiscal 
year 2004 congressional authorization.
    We continue to support the Iranian people in their quest for 
freedom, democracy, and a more responsible, transparent, and 
accountable government that will take its rightful place as a respected 
member of the international community.
    Question. What has Iran's response been to the provision of U.S. 
humanitarian relief following last year's earthquake in Bam, Iran?
    Answer. This question has been sent to USAID for response.
    The committee notes that no response was received.
    Question. Has the administration made a determination on sanctions 
against Syria, as required by the Syrian Accountability Act (Public Law 
108-175)?
    Answer. The President of the United States signed the bipartisan 
SAA (the Act) on December 12, 2003. Our goal is to implement the Act to 
demonstrate United States resolve to address the Syrian government's 
support for terrorist groups, its continued military presence in 
Lebanon, its pursuit of weapons of mass destruction, and its actions to 
undermine United States and international efforts with respect to the 
stabilization and reconstruction of Iraq. We are still conferring 
within the State Department as well as with other agencies on the 
possibilities, as laid out in the Act, to best achieve that goal.
    Question. Has Syria made any progress in ceasing support for 
terrorist groups, developments of weapons of mass destruction, and 
facilitating terrorist activities in Iraq?
    Answer. Though Syrian officials have publicly condemned 
international terrorism and Damascus has cooperated with the United 
States and other foreign governments against al-Qaida, the Taliban, and 
other terrorist organizations and individuals, the Syrian Government 
continues to provide support and safe haven to many terrorist groups. 
HAMAS, Palestinian Islamic Jihad (PIJ), the Popular Front for the 
Liberation of Palestine (PFLP), and the PFLP--General Command (PFLP-GC) 
maintain a Syrian Government-sanctioned presence in Syria. Several of 
these groups claimed responsibility for anti-Israeli terrorist acts in 
2003. Hizballah continues to operate freely in Syrian-controlled areas 
of Lebanon and the Syrian Government has taken no steps to end Iranian 
re-supply of Hizballah in Lebanon using Syria as a trans-shipment 
point.
    Syria continues to develop its WMD capabilities. With one of the 
most advanced Arab-state chemical weapons capabilities, it is highly 
probable that Syria is also developing an offensive biological weapons 
capability. Syria maintains an inventory of Scud and SS-21 short-range 
ballistic missiles and devotes significant resources to its ballistic 
missile program; it is believed to have chemical warheads available for 
a portion of its Scud missile force. Syria has not volunteered to have 
its suspected weapons sites inspected by the international community. 
We remain concerned about Syria's nuclear research and development 
program and continue to watch for any signs of nuclear weapons 
activity. Syria has not yet signed the International Atomic Energy 
Agency's Additional Protocol.
    Since the end of major combat operations in Iraq, Syria has made 
some efforts to tighten its borders with Iraq to limit the movement of 
anti-Coalition foreign fighters into Iraq. Nevertheless, Syria remains 
a preferred transit point for foreign fighters entering Iraq. The 
existence of these smuggling networks reflects, at a minimum, some 
Syrian border guard complacency or complicity with foreign fighters 
despite government assurances of counterterrorism assistance in Iraq.
    Question. How many Syrian troops remain in Lebanon following its 
invasion in 1976, and does Syria's support for Hizballah continue to be 
robust?
    Answer. Approximately 15,000-20,000 Syrian troops remain in 
Lebanon. Syria also maintains a robust intelligence network within 
Lebanon. In addition, Syria maintains ties with Hizballah, including 
serving as a transshipment point for resupplying Hizballah in Lebanon.
    Question. How can Syria justify its continued occupation of Lebanon 
after the Israeli withdrawal in 2000?
    Answer. The Syrian and Lebanese Governments argue that Syria's 
continued military and security presence in Lebanon is at the request 
of the Lebanese government. However, the United States continues to 
insist that the Syrians withdraw from Lebanon consistent with the 
spirit of the 1989 Taif Accords, which call for the extension of 
Lebanese government control over the entire territory of Lebanon. The 
Lebanese Army should deploy throughout the country in conjunction with 
the negotiated withdrawal of Syrian military and intelligence 
personnel.
    Question. Do you support the Subcommittee including authority in 
the fiscal year 2005 bill to conduct democracy programs in Syria?
    Answer. We support the inclusion of any authorities and allocations 
that would allow us to work with civil society groups and conduct 
democracy programs in Syria.
    Question. To what extent is Syria aiding and abetting terrorism in 
Iraq?
    Answer. Syria's President Asad publicly indicated his willingness 
to take part in stabilization and rebuilding efforts in Iraq. However, 
Syria has taken no steps to transfer frozen Iraqi assets in Syrian 
banks to the Development Fund for Iraq as required pursuant to United 
Nations Security Council resolution 1483.
    Since the end of major combat operations in Iraq, Syria has made 
some efforts to tighten its borders with Iraq to limit the movement of 
anti-Coalition foreign fighters into Iraq. Nevertheless, Syria remains 
a preferred transit point for foreign fighters entering Iraq. The 
existence of these smuggling networks reflects, at a minimum, some 
Syrian border guard complacency or complicity with foreign fighters 
despite government assurances of counterterrorism assistance in Iraq.
    Question. The Administration has proposed increasing the personnel 
caps for Colombia from 400 U.S. civilian contractors and 400 U.S. 
military personnel to 600 and 800 respectively.
    Does the fiscal year 2005 budget request for Colombia include 
sufficient funding to expand the caps--particularly for civilian 
contractors?
    Answer. We have carefully reviewed the fiscal year 2004 
appropriations and the proposed fiscal year 2005 budget request and, as 
a general response, believe that both include sufficient funding to 
expand the personnel caps for U.S. military personnel and U.S. citizen 
civilian contractors in support of Plan Colombia.
    Enclosed for your information are detailed charts which show our 
intended increases, if the ceilings were raised, and how they will be 
funded. They also provide a breakdown of the numbers of contractors; 
the contractor's parent company; which agency employs the contractors 
and the services the contractor would provide.
    The Administration is seeking an increase in the caps for several 
reasons, as described in more detail by Assistant Secretary Paul V. 
Kelly in his letter of March 16. To review briefly, a cap increase is 
needed because some of the programs authorized by Congress are only now 
coming fully on line and there are also additional programs developed 
since the ceilings were established, such as the anti-kidnapping 
initiative and the Air Bridge Denial program. Most importantly, 
however, we believe that an increase in the military and civilian 
contractor support provided to the Government of Colombia during the 
next two years is essential to sustain the current progress being made 
by our programs in Colombia.
    While we are seeking an increase in the civilian cap of 200, it is 
estimated that the immediate need is for only an additional 93 
contractors.
    In addition, we would emphasize three important points:
  --No U.S. military personnel or U.S. citizen civilian contractors 
        would be assigned to Colombia in the absence of necessary 
        funding being available for that purpose.
  --The requested increase for civilian personnel ceilings does not 
        indicate that we intend to have 600 contractors in Colombia 
        full-time. In 2003, the number of U.S. citizen civilian 
        contractors varied from 246 to 400. During the period from 
        January 1, 2004 through April 8, 2004, the overall number of 
        U.S. citizen civilian contractors in support of Plan Colombia 
        was between 279 and 396. There are variations due to personnel 
        rotations and because individual programs and projects are 
        initiated, expanded or reduced, and completed.
  --An increase in the cap will help alleviate difficulties and 
        management inefficiencies that arise when several agencies are 
        trying to bring additional personnel into Colombia at the same 
        time and one group has to wait at the Miami airport until a 
        sufficient number of others have departed. In some cases, the 
        ceilings have constrained us from the full implementation of 
        already funded programs.

                         COLOMBIA CAP INCREASE

Total Additional U.S. Citizen Civilian Contractor Positions: 93
    Note: These charts illustrate expected increases by office or 
agency in U.S. citizen civilian contractors in support of Plan 
Colombia, contingent upon Congressional approval to increase the 
personnel ceiling. Actual dates will be dependent upon such approval, 
program developments and personnel availability.
Department of Justice (DOJ): Total Requested Increase--6
    DOJ is currently funding its present contractors and Coast Guard 
investigators through existing programs, but had reduced program 
implementation to meet the cap restrictions. If the increase is 
approved, DOJ plans to raise the number of contractors from six to 
twelve within one month, with presently available funds. These 
additional contractors are identified under in the chart below, but 
their actual presence in Colombia will be TDY on an as-needed basis.

      DOJ JUSTICE SECTOR REFORM PROGRAM (OPDAT, ICITAP, USMS) CHART
------------------------------------------------------------------------
                                                               Month 1
------------------------------------------------------------------------
UNYSIS:
    Programmer.............................................            1
    Prog Mgr...............................................            1
IBM:
    Programmer.............................................            1
    Prog Mgr...............................................            1
U.S. Coast Guard: Criminal Investigators...................            2
                                                            ------------
      Total................................................            6
------------------------------------------------------------------------

U.S. Agency for International Development (USAID): Total Requested 
        Increase: 12
    The increase of 12 contractors has already been included in USAID 
plans and budget projections, through available fiscal year 2003 and 
programmed fiscal year 2004 funding. Because of the contractor 
personnel ceilings, USAID has not been able to fully implement planned 
programs. The increase, if approved, should allow full implementation 
of all USAID programs. Four contractors would be assigned permanently 
to Colombia while eight would be short-term.

                               USAID CHART
------------------------------------------------------------------------
                                                     Month
                                     -----------------------------------
                                         1        2        3        4
------------------------------------------------------------------------
ARD/CAPP (Agri-business
 Development):
    Chief of Party..................        1        1        1        1
    Contracts/Grants................  .......        1        1        1
    Subject Area Expert.............  .......        1        1        1
Chemonics CAD (Alternative            .......        1        1        1
 Agricultural Development): Subject
 Area Expert........................
Chemonics (Commercial Forestry):      .......        1        1        1
 Subject Area Expert................
Trade and Investment: Economists....  .......        3        3        3
Program Design Team: Program          .......        4        4  .......
 Development Officers...............
                                     -----------------------------------
      Total.........................        1       12       12        8
------------------------------------------------------------------------

MILITARY GROUP (Milgroup): Total Requested Increase: 40
    The increase for DOD civilian contractors assigned to the Milgroup 
of the U.S. Embassy is to meet additional needs in the area of 
logistics, communications, intelligence aircrews, helicopter 
specialists, construction specialists, radar operators, and military 
operations specialists. The breakdown of increased contractors would be 
23 permanent and long-term additions and 17 recurring TDY personnel. 
Funding is expected from reprogrammed fiscal year 2004 funds and 
requested additional funding for fiscal year 2005. DOD will employ all 
companies listed. The chart below depicts four months of additional 
civilian contractors in the Milgroup. The number of permanent and long-
term TDY contractors in any given month will be 23 additional personnel 
(depicted in both sample months). In any given month there could be an 
additional seventeen short term TDY contractors (depicted in the 
alternate sample month). At any given time the maximum increase will be 
40 additional contractors, and the minimum increase will be 23 
additional contractors.

                             MILGROUP CHART
------------------------------------------------------------------------
                                                            Month
                                                   ---------------------
                                                        1          2
------------------------------------------------------------------------
Lockheed Martin (Parent Company):
    Property mgmt specialist......................          1          1
    Fuel mgr......................................          1          1
    Airlift coordinator...........................          1          1
    Supply specialist.............................          1          1
    Marine logistics specialist...................          1          1
MANTECH (Parent Company):
    Automation techs..............................          3          3
    Network techs.................................          3          3
Northrop Gruman (Parent Company for CSS aircraft):
    Pilots........................................          2          2
    Mechanics.....................................          2          2
    Tech operator crewmembers.....................          2          2
LSI/Dragoon Technologies (Parent Companies for
 MARS III aircraft):
    Pilots........................................          2          2
    Mechanics.....................................          2          2
    Tech operator crewmembers.....................          2          2
BDI/Ken Hornsby/Don Carlos (Parent Design
 Companies contracted by Corps of Engineers):
    Architects....................................          2  .........
    Electrician...................................          1  .........
ITT (Parent Company):
    Radar operators...............................          3  .........
    Radar mechanics...............................          2  .........
Lockheed Martin (Parent Company):
    Helo mechanics................................          3  .........
    Quality/product control specialists...........          2  .........
Booze Allen (Parent Company): Military operations           2  .........
 specialists......................................
Syntex (Parent Company): Comms specialists........          2  .........
                                                   ---------------------
      Total.......................................         40         23
------------------------------------------------------------------------

Narcotics Affairs Section (NAS): Total Requested over the Cap: 35
    Funding for all contractor positions under the Embassy NAS were 
included in the contract cost budget estimates for each program when 
developing annual budget submissions. For the DynCorp contract, funding 
for the increased positions has already been obligated into the 
contract. For the ARINC contract, funds will be added in July during 
the next contract extension and when fiscal year 2004 funds are 
available. Dyncorp positions are rotational, so although the overall 
numbers of required contractors will increase, not all will be in the 
country at the same time.

                                                    NAS CHART
----------------------------------------------------------------------------------------------------------------
                                                                                    Month
                                                           -----------------------------------------------------
                                                               1        2        3        4        5        6
----------------------------------------------------------------------------------------------------------------
DynCorp:
    Intel.................................................        2  .......  .......  .......  .......  .......
    Sec/Med...............................................        1  .......  .......  .......  .......  .......
    Safety................................................        2  .......  .......  .......  .......  .......
    Helo..................................................  .......        1        1  .......  .......        1
    GIS...................................................  .......        1  .......  .......  .......  .......
    QC Inspector..........................................  .......        1  .......  .......  .......  .......
    OV-10 Pilot...........................................  .......  .......        2  .......        2  .......
    Ops Coord.............................................  .......  .......        1  .......  .......  .......
    ISS Ops Co............................................  .......  .......        1  .......  .......  .......
    OV-10 Mech............................................  .......  .......  .......        1  .......  .......
    C-27 Mech.............................................  .......  .......  .......        1  .......  .......
    Metal Adv.............................................  .......  .......  .......        1  .......        2
    ALSE..................................................  .......  .......  .......  .......        2  .......
    ISS Sec...............................................  .......  .......  .......  .......        1  .......
    ISS Planner...........................................  .......  .......  .......  .......  .......        1
ARINC:
    ASM...................................................        2        1        1  .......  .......        2
    GSM...................................................        2  .......  .......  .......  .......  .......
    Maint.................................................  .......        1        1  .......  .......  .......
                                                           -----------------------------------------------------
      Total...............................................        9        5        7        3        5        6
----------------------------------------------------------------------------------------------------------------

    See position descriptions below:
DynCorp--Eradication, COLAR Aviation, ISS Contractor
            Security/Medical Coordinator (1)
    Position requires extensive security and medical experience as well 
as management experience in the field to complement the coordination 
duties. While we have been able to find some third-country nationals 
(TCN) who qualified for Search and Rescue (SAR)/Medical Technician 
roles, none have had management experience to qualify for coordinator.
            Intelligence/Mission Planners (2)
    Security clearance requirements preclude non-U.S. citizens from 
these positions. The positions coordinate intelligence information from 
various sources in Colombia and use the information to assist in 
mission planning.
            OV-10D Pilots (4)
    Through experience, the vast majority of pilots that can qualify in 
the immediate future for the OV-10 are U.S. citizens. We have been able 
to recruit only a very limited number of TCN and local national (LN) 
personnel because of the experience and skill levels required 
accomplish the mission.
            Rotary Wing Pilots (3)
    As with the OV-10D, for the immediate future, the required 
education and experience levels have historically lead to the vast 
majority of the pilots being U.S. citizens.
            Assistant GIS Coordinator (1)
    This position coordinates Geographic Information System data, which 
requires a security clearance, precluding TCN or LN candidates.
            OV-10D Mechanics (1)
    These mechanics are responsible for all maintenance of the OV-10 
aircraft in Colombia, which requires stringent training, experience, 
and licensing requirements. The aircraft are old and we have some 
difficulty finding personnel with direct experience on the aircraft. 
Few non-U.S. citizens possess the skills and experience that would 
allow the re-training, although we are training Colombian nationals.
            Lead C-27 Mechanic (1)
    This position is assigned to Bogota and coordinates all maintenance 
on the C-27 fleet in Colombia. The training, experience, and licensing 
requirements preclude a non-U.S. citizen from this position.
            Sheet Metal Technical Advisors (3)
    These positions require highly technical skills with a variety of 
specialized equipment. Our experience has shown that a sufficient pool 
of personnel with the skill levels required is not available to fill 
these positions with non-U.S. citizens.
            Safety Specialist (2)
    These positions are responsible for planning, training, and 
monitoring program safety programs, which requires an extensive amount 
of training and experience. Our experience is that the only personnel 
that have the required levels are ex-U.S. military personnel.
            Operations Coordinators (1)
    These individuals coordinate with various agencies and groups at 
Forward Operating Locations (FOLs) to plan and execute missions. 
Experience has shown that the management and experience necessary to 
accomplish this mission comes from a military background. Additionally, 
the vast majority of qualified candidates have been U.S. citizens. 
However, extensive recruiting has led to the hiring of some of the 
positions to be filled with local nationals.
            Aircrew Life Support Equipment (ALSE) Technician (2)
    This position maintains equipment such as vests, night vision 
goggles and other systems associated with aircrew flight operation. The 
position requires highly technical skills with a variety of specialized 
equipment. Our experience has shown that it is difficult to find the 
skill levels required to fill these positions with non-U.S. citizens. 
However, we have been able to recruit some local nationals with the 
appropriate training and experience to fill some of the positions.
            Quality Control Inspector (1)
    This position monitors maintenance carried out on the aircraft. 
Quality Control personnel generally begin as mechanics and through many 
years of experience and training, progress into the Quality Control 
specialty. This type of aviation program is still a relatively new 
endeavor in Colombia, and the experience levels of maintenance 
personnel are still growing. While there has been some success in 
elevating Colombian nationals to Quality Control positions, it is more 
usual that any given position would have to be filled with a U.S. 
citizen.
            ISS Operations Coordinator (1)
    This individual will coordinate with various agencies and groups at 
the Saravena FOL to plan and execute missions for the Infrastructure 
Security Program. Experience has shown that the management and 
experience necessary to accomplish this mission comes from a military 
background. Additionally, the vast majority of qualified candidates 
have been U.S. citizens.
            ISS Security/Medical Coordinator (1)
    Position requires extensive security and medical experience as well 
as management experience in the field to complement the coordination 
duties. While we have been able to find some third-country nationals 
(TCN) who qualified for Search and Rescue (SAR)/Medical Technician 
roles, none have had management experience to qualify for coordinator.
            ISS Tactical Mission Planner (1)
    This position will work in conjunction with the ISS Operations 
Coordinator to ensure that missions are planned with security and 
safety in mind and with clear objective. Experience has shown that the 
tactical, security, and safety requirements for the position limit the 
pool of non-U.S. citizens that can perform this job.
ARINC--Air Bridge Denial Contractor
            Air Safety Monitors (6)
    Air Safety Monitor (ASM) positions must be U.S. citizens. These are 
the individuals who fly in the aircraft or work at the FAC command 
center as the USG representative and require a U.S. security clearance. 
Once all seven aircraft are in service, there will be 11 ASMs. This is 
based on the current trends of flying one or two day-sorties and one 
night-sortie. If the operational tempo rises above that, we will have 
to increase the number to two ASM (14 total) per aircraft.
            Ground Safety Monitors (2)
    We have a requirement for one Ground Safety Monitor (GSM) and an 
operations officer. Starting July, due to the increased number of 
aircraft we will need two GSMs around the clock, which will require 
five persons in addition to the operations officer.
            U.S. Maintenance Personnel (2)
    We have only two maintenance personnel who are U.S. citizens. They 
are the only contract maintenance personnel that can fly the aircraft 
and have to be available 24 hours a day. We add one C-26 at the end of 
June, a Citation sometime August-September, another C-26 in September, 
and the last Citation sometime December. The number of U.S. citizen 
civilian contractors will increase to four as we get more aircraft.
    Question. To what extent was the Aristide Government involved in 
narcotics trafficking?
    Answer. The Department of Justice/DEA is conducting an 
investigation of drug trafficking in Haiti and all questions relating 
to criminal allegations against the Aristide Government should be 
directed to them.
    Question. Did Aristide personally profit from the drug trade, as 
alleged by a former Aristide confidant in a BBC news story?
    Answer. Any criminal allegations against former President Aristide 
are solely within the purview of the Department of Justice/DEA and 
questions should be directed to them.
    Question. Are any United States or Haitian investigations of former 
President Aristide ongoing that includes complicity in narcotics 
trafficking? Will Haitian authorities investigate the former President 
for any alleged drug trafficking activities?
    Answer. The Department of Justice/DEA is conducting an 
investigation of drug trafficking in Haiti. Questions relating to 
allegations against former President Aristide should be directed to 
them.
    Question. Did Aristide's efforts at placing his loyalists in key 
positions--and his curtailing of the ability of the police to 
function--facilitate the trafficking of narcotics into the region and 
the United States.?
    Answer. The placement of Aristide loyalists in key positions in the 
Haitian National Police--many of whom were unqualified--relegated U.S.-
trained officers to secondary positions and further undermined the 
effectiveness of an organization already weakened by a chronic lack of 
resources. As to whether or not the Aristide loyalists were themselves 
involved in drug trafficking, the question should be directed to the 
Department of Justice/DEA which is conducting an investigation into 
drug trafficking in Haiti. Certainly, there were no efforts to curb 
drug-related corruption nor prosecutions or convictions of government 
and HNP officials involved in drug trafficking during Aristide's tenure 
in office.
    Question. The March 2004 INCSR states: ``On October 5, 2003, a 
twin-engine Aztec aircraft landed near Cap-Haitien and offloaded 500 
kilograms of cocaine. The Secretary of Public Security refused to take 
action to apprehend three traffickers lodged at the Continental Hotel 
until DEA pressure forced their arrest. Witnesses have often observed 
light aircraft landing with drug cargoes on route 9 in Port-au-Prince. 
Typically, HNP officers will block traffic and help with off-loading 
and ground transport.''
    Were concerns with this incident ever brought to the direct 
attention of President Aristide? What actions if any, did he personally 
take to prevent drug trafficking activities within the HNP? To the best 
of your knowledge, was there ever a reorganization of the HNP by 
President Aristide to address corruption and/or drug trafficking within 
the HNP?
    Answer. The Embassy repeatedly expressed its concern about drug-
related corruption to President Aristide and other officials of his 
Administration. With the exception of the expulsion of Jacques Ketant 
and three other drug traffickers, President Aristide took no 
significant actions to prevent drug trafficking activities nor did he 
undertake a reorganization of the HNP to address corruption and/or drug 
trafficking within the HNP. On the contrary, the appointment of his 
loyalists to key leadership positions in the HNP exacerbated the 
problem of corruption and hindered the ability of the organization to 
effectively undertake counterdrug efforts.
    Question. What additional assistance requirements do you anticipate 
for Haiti, and how will these needs be addressed?
    Answer. We plan to provide additional assistance through USAID in 
the amount of $65.481 million ($4.0 million in Development Assistance 
and $61.481 million in Economic Support Funds). We will send a 
Congressional notification soon on the planned use of the additional 
funds.
    The additional ESF would provide immediate budget support to the 
interim Haitian government for operational expenses, emergency 
rehabilitation needs, and current debt service payments; protection for 
the interim president; funding to stand up and train an anti-corruption 
unit to effectively monitor all ministries of the Haitian government; 
technical assistance to the Finance Ministry to help with government 
revenue management; short-term and long-term technical assistance, 
equipment and training to strengthen the Haitian customs service and 
port operations; and other assistance to the Ministries of Justice, 
Agriculture, and Public Works. ESF will also support the repair of 
facilities and purchase electricity for vital government services and 
areas receiving less than two hours of electricity a day; support 
election planning and oversight; and training of judges and 
prosecutors.
    The additional Development Assistance (DA) funding will initiate 
short-term job creation programs to build infrastructure that will, in 
turn, spur growth. One immediate action will be to provide jobs and 
training to marginalized urban youth and former gang members to clean 
up the urban environment. Activities will also be developed to 
rehabilitate schools and improve basic infrastructure such as 
irrigation, canals, roads, bridges, and wells. Other short-term 
employment will be in critical areas of public services such as garbage 
collection, water and sanitation, and road repair.
    This $4.0 million of DA and $61.481 million of ESF is additional to 
(1) USAID's original programmed fiscal year 2004 level of $52.4 million 
and (2) the additional funds that had been previously notified to 
Congress, including $3.3 million in Child Survival and Health Funds, 
$3.5 million in Transition Initiatives funding, $3.5 million in 
Disaster Assistance, and $1.0 million ESF for civilian police 
development and election support.
    In addition to the originally programmed $24.7 million of Public 
Law 480 food assistance for fiscal year 2004, an additional $7.0 
million of food assistance will be used for humanitarian assistance.
    The total U.S. Government assistance package for Haiti for fiscal 
year 2004, including funding from all accounts, will be $160.0 million.
    Question. Given Romania's recent entry into NATO and support in 
Afghanistan and Iraq, what action is the Administration considering to 
strengthen United States-Romanian bilateral relations?
    Answer. Long at Europe's periphery, Romania now is at the heart of 
Europe's transition and America's policy goals in Eurasia. Bilateral 
relations are stronger than ever before. Our political dialogue is 
high-level and frequent; United States and Romanian soldiers are 
fighting side by side in Iraq and Afghanistan; we are working together 
to promote stability and security in the Caucasus and Black Sea; and 
Romania's accession to NATO and a rotating seat on the U.N. Security 
Council this year offer new avenues for expanded partnership. The 
United States must continue to place a high priority on building on our 
recent successes, and press Romania to move ahead in key areas of 
reform.
    Romania faces many challenges in the years ahead. Corruption is 
endemic, undercutting attempts to attract more foreign investment and 
pervading the daily lives of ordinary Romanians. The judicial system 
and public administration are in dire need of reform and reports of 
attacks on independent journalists have been on the rise. As Romania 
prepares for EU membership, planned for 2007, it will need to tackle 
these issues with increased vigor, and the United States. must stand 
ready to help in any way it can to support Romania's aspirations to 
fully integrate itself with the West. Greater attention to these areas 
is equally critical to the long-term strength of the United States-
Romanian partnership. One way we can contribute to meeting these goals 
is through the continued assistance provided to Romania through our 
Support for East European Democracy (SEED) program.
    United States assistance to Romania plays an important role in 
supporting market-based reforms, promoting participatory democracy, 
strengthening civil society, and relieving human suffering. It also 
helps Romania to strengthen its anti-corruption activities across all 
sectors. SEED assistance is helping to expand a market-based private 
sector and improve the quality of life for people in Romania. 
Strengthening the institutional capacity of the government and private 
sector is a priority, as is enhancing private sector competitiveness 
and improving the privatization process for state-owned assets. 
Promoting United States democratic governance objectives at the local 
level in the democratization and broader civil society spheres are 
accomplished through training and technical assistance.
    SEED funds also help to advance child welfare, health care, and 
social assistance reform, all areas where Romania still is seriously 
behind. Finally, the Bucharest-based Southeastern Europe Cooperative 
Initiative's (SECI) Anti-Crime Center, which coordinates regional 
criminal task forces working to counter human trafficking, smuggling, 
and the drug trade, also receives SEED funding. With financial and 
other support from the Romanian Government, the SECI Anti-Crime Center 
has achieved a number of successes in the fight against trans-border 
crime.
    Cooperation across such a wide range of issues has been crucial in 
building the strong partnership the United States shares with Romania 
today. We are confident that the relationships built over the years of 
providing such assistance have laid the groundwork for future 
cooperation based on common goals and values that will last long after 
Romania's graduation from U.S. assistance programs.
    Question. What activities are being considered to bolster reform 
efforts in Macedonia and Albania that are necessary for consideration 
of these countries' respective entry into NATO?
    Answer. The United States is committed to assisting the reform 
efforts of NATO's aspirant countries, and supports both Albania's and 
Macedonia's aspirations to join the Alliance.
    This latest round of enlargement is not NATO's last and the door to 
membership remains open. However, there is no timetable for the next 
round of enlargement.
    The Membership Action Plan (MAP) remains the road to NATO 
membership. Invitations will depend on the ability of each aspirant 
government to achieve the necessary political, economic, military, 
resource, and security reforms as described in their MAP Annual 
National Programs (ANPs). The Alliance will look at the progress that 
individual countries make on their ANPs when considering when to make 
future invitation decisions.
    The United States will continue to assist aspirant countries 
bilaterally as well as through NATO structures. Within the funds 
approved by Congress, the Administration will continue to pursue 
targeted programs, including Foreign Military Financing and 
International Military Education and Training programs to further 
military reforms and NATO compatibility, as well as Support for East 
European Democracy programs to advance political, economic, and civil 
society reforms to bring these countries closer to NATO membership. 
Regular bilateral political, economic, and defense discussions provide 
continuing guidance to the aspirants' efforts.
    The Adriatic Charter, which holds its second biannual Partnership 
Commission meeting in Skopje May 20, is another useful mechanism for 
promoting regional cooperation and concrete reforms by the aspirant 
countries that address common and specific ANP deficiencies.
    Question. What is the State Department doing to safeguard the lives 
and dignity of North Korean refugees in China and elsewhere?
    Answer. Since 1999, the State Department has funded a program that 
provides humanitarian assistance to vulnerable North Koreans in 
northeastern China. In Washington and through our Embassy and 
consulates in China we continue to press the PRC to live up to its 
obligation as a signatory to the 1967 Protocol Relating to the Status 
of Refugees and not deport any North Koreans back to the DPRK. We have 
also made numerous representations urging the PRC to allow the United 
Nations High Commissioner for Refugees access to North Koreans in China 
in order to assess their status.
    Question. Are reports that North Korea tests chemical weapons on 
political prisoners accurate?
    Answer. While we believe that North Korea possesses a chemical 
weapons program, we have no credible information to support claims from 
North Korean refugees that such weapons have been tested on prisoners.
    Question. How have China and Russia pressured the North Koreans to 
give up their weapons programs? Could both countries do more?
    Answer. We are working closely with China and Russia in the six 
party talks, which aim to give the DPRK the basis to make the strategic 
decision that giving up its nuclear weapons programs would be in its 
own best interests. From the first round of talks, in Beijing last 
August, China and Russia have joined the United States, the ROK and 
Japan to urge the DPRK to dismantle its nuclear weapons programs. The 
five parties share the common goal of a denuclearized Korean Peninsula. 
China has played an especially important role, helping to bring the 
DPRK to the table, to move the process forward. The five parties share 
the view that the dismantlement of North Korea's nuclear weapons 
program is a multilateral problem requiring a multilateral response, 
and both China and Russia have indicated they are prepared to actively 
participate in a settlement that would achieve that outcome.
    Question. Given North Korea's penchant for duplicity, how can the 
United States trust any future agreement with North Korea on weapons 
proliferation--or any other issue?
    Answer. The United States seeks the complete, verifiable, and 
irreversible dismantlement (CVID) of North Korea's nuclear program. In 
any agreement with North Korea, we would not rely on trust alone. 
Verification of CVID will be a critical component of any agreement, and 
would involve the United States, the International Atomic Energy Agency 
(IAEA), and other parties as appropriate. Throughout the 
denuclearization process, the onus will be on the DPRK to provide 
complete and accurate information about its activities, fully cooperate 
with all necessary measures to verify that information, and to 
dismantle its nuclear programs in a verifiable manner. We are confident 
that, through appropriate verification measures, we could assess DPRK 
cooperation and compliance. Furthermore, for the long term, we would 
insist on DPRK return to full compliance with the Nuclear 
Nonproliferation Treaty (NPT) and an appropriate IAEA Safeguards 
Agreement. In addition, as the President enunciated in his remarks at 
the National Defense University on February 11, 2004, ``nations that 
are serious about fighting proliferation will approve and implement the 
Additional Protocol.''
    Question. How involved is North Korea in the illicit narcotics 
trade, and what is the nature of its involvement?
    Answer. For decades North Koreans have been apprehended for 
trafficking in narcotics and engaging in other forms of criminal 
behavior, including passing counterfeit United States currency. 
Defectors and informants report that large-scale opium poppy 
cultivation and production of heroin and methamphetamine occurs in the 
DPRK. A defector identified as a former North Korean high-level 
government official testified in May 2003 before the United States 
Senate that poppy cultivation and heroin and methamphetamine production 
were conducted in North Korea by order of the regime. The government 
then engaged in drug trafficking to earn large sums of foreign currency 
unavailable to the regime through legal transactions. The testimony and 
other reports have not been conclusively verified by independent 
sources. Defector statements; however, are consistent over years, and 
occur in the context of regular narcotics seizures linked to North 
Korea.
    During 2003, there was one major heroin trafficking incident linked 
to North Korea. The ``Pong Su,'' a vessel owned by a North Korean 
enterprise, was seized by Australian Federal Police (AFP) and other 
Australian security forces in mid-April 2003 after apparently 
delivering 125 kilograms of heroin to criminals at an isolated beach 
near Lorne, Australia. Another incident with a connection to North 
Korea occurred in June in Pusan, South Korea, where customs authorities 
seized 50 kilograms of methamphetamine from a Chinese vessel that had 
stopped at the port of Najin, North Korea, before arriving in Pusan. 
The ``Pong Su'' seizure and numerous drug smuggling incidents linked to 
North Korea over the past several decades, reflect official involvement 
in the trafficking of illicit narcotics for profit, and make it highly 
likely, but not certain, that P'yongyang is trading narcotic drugs for 
profit as state policy.
    Japan is one of the largest markets for methamphetamine in Asia, 
with an estimated annual import of 10-20 metric tons. Traffickers from 
the DPRK have targeted the Japanese market in the past, and there have 
been regular, large seizures of DPRK methamphetamine in Japan since the 
mid-1990s. Although there were no seizures in Japan during 2003 that 
could be linked to the DPRK, Japanese authorities believe that roughly 
30 percent of methamphetamine seized in Japan is connected to the DPRK.
    There is no evidence that illicit drugs trafficked from the DPRK 
reach the United States, directly or indirectly.
    State trading of narcotics is a conspiracy between officials at the 
highest levels of the ruling party/government and their subordinates to 
cultivate, manufacture, and/or traffic narcotics with impunity through 
the use of, but not limited to, state-owned assets. Law enforcement 
cases over the years have not only clearly established that North 
Korean diplomats, military officers, and other party/government 
officials have been involved in the smuggling of narcotics, but also 
that state-owned assets, particularly ships, have been used to 
facilitate and support international drug trafficking ventures.
    The ``Pong Su'' narcotics seizure occurred within the context of a 
range of criminal activities perpetrated by North Korean officials. 
Those activities include the September 2002 admission by DPRK officials 
of involvement by state security in the kidnapping of a group of 
Japanese nationals held captive in North Korea for several decades. 
North Korean officials have been apprehended for drug trafficking and 
other offenses in countries around the world and have used diplomatic 
pouches to conceal transport of illicit narcotics. Numerous North 
Korean defectors have publicly stated that opium was grown in North 
Korea and refined into heroin, which then was trafficked under the 
direction of an office of the ruling Communist Party of North Korea. 
Information developed by law enforcement in Japan, on Taiwan, and 
elsewhere has repeatedly pointed to the involvement of DPRK officials 
and DPRK state-owned assets in narcotics trafficking. Specific examples 
of involvement of officials and state assets include calls at North 
Korean ports by traffickers' boats to pick up drugs, travel by 
traffickers to North Korea to discuss aspects of the trafficking 
operation, and suspected drug trafficking by North Korean patrol 
vessels, which were thought to engage only in espionage.
    DPRK-linked drug trafficking has evolved over the years from 
individual DPRK officials apprehended for trafficking in narcotics in 
the 1970s and 1980s to the apparent direct involvement of military 
officials and vessels providing drugs within North Korean territory to 
trafficking organizations for wider distribution in East Asia. The 
``Pong Su'' incident seemingly signals a further shift in North Korean 
involvement in drug trafficking. It is the first indication that North 
Korean enterprises and assets are actively transporting significant 
quantities of illicit narcotics to a designated destination outside the 
protection of DPRK territorial boundaries. Information has also been 
acquired indicating that North Koreans, employed by state-owned 
enterprises located in various Asian countries, have attempted to 
arrange large-scale drug transactions with undercover narcotics 
officers. Informants have also reported traveling to North Korea as 
guests of the government to meet with military officials to arrange 
drug deals. Although some of the information gathered is incomplete or 
unverified, the quantity of information and quality of many reports 
give credence to allegations of state sponsorship of drug production 
and trafficking that can not be ignored. It appears doubtful that large 
quantities of illicit narcotics could be produced in and/or trafficked 
through North Korea without high-level party and/or government 
involvement, if not state support.
    DPRK spokespersons deny any state involvement in criminality, 
ascribe that criminality to individuals, and threaten punishment under 
DPRK laws. However, year-after-year, incidents pointing towards 
increasingly large scale trafficking in narcotics, and other forms of 
criminality linked to the DPRK, accumulate.
    The cumulative impact of these incidents over years, in the context 
of other publicly acknowledged behavior by the North Korean such as the 
Japanese kidnappings mentioned above points to the likelihood, not the 
certainty, of state-directed trafficking by the leadership of North 
Korea. What we know about North Korean drug trafficking has come 
largely from investigation of trafficking operations like that of the 
``Pong Su'', which have gone wrong, and thus come to the attention of 
authorities. We know much less about the way North Korea is led and 
administered, thus the continuing uncertainty.
    There is also strong reason to believe that methamphetamine and 
heroin are manufactured in North Korea as a result of the same state 
directed conspiracy behind trafficking, but we lack reliable 
information on the scale of such manufacturing. The United States will 
continue to monitor closely developments in North Korea to test the 
validity of the judgment that drugs are probably being trafficked under 
the guidance of the state and to see if evidence emerges confirming 
manufacture of heroin and methamphetamine.
                                 ______
                                 
               Question Submitted by Senator Mike DeWine

    Question. Public reports suggest there are links between former 
senior Haitian officials in the Aristide government, and the deaths of 
and attacks on, a number of opposition members. There are also 
allegations that several of these individuals were involved with 
narcotics trafficking and corruption. Can you provide us with any 
documents that would substantiate these allegations?
    Answer. INL has no information regarding the opposition members. We 
can tell you that what information is available has been briefed to 
members of Congress.
    The Department of Justice/DEA is conducting an investigation of 
drug trafficking in Haiti and all questions relating to criminal 
allegations against the Aristide Government should be directed to them.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

    Question. Despite months of searching, we have found no weapons of 
mass destruction in Iraq and before the war there was no evidence that 
Iraq was responsible for 9/11 or that Saddam Hussein was involved with 
al Qaeda. Yet these were two key justifications for launching a 
preemptive war in Iraq.
    A recent Pew Research poll showed that the credibility and 
reputation of the United States have been badly damaged, especially in 
Muslim countries but also among our closest allies, as a result of the 
President's policy.
    How has this affected your ability to build support not only for 
our policy in Iraq, but also in Haiti and other parts of the world?
    Answer. Although weapons of mass destruction (WMD) have not yet 
been found in Iraq, the fact remains that Saddam Hussein had possessed 
and used such weapons in the past. He also made no secret of his 
intention to continue his efforts to acquire WMD. His capability to 
manufacture and distribute WMD was a real threat and his removal and 
capture, along with the disintegration of the Baathist party, has 
reduced that threat for Iraqis, the region and the world.
    Although our country's policies may be unpopular in certain 
regions, we continue to work to explain and to build support for our 
policies and actions, both through traditional diplomatic channels and 
through public diplomacy. We are actively engaged with governments and 
publics in all parts of the world, including the Muslim world, 
advocating our policies and informing others about our American society 
and values. Though this mission is challenging, as evidenced in recent 
polls, we will continue to be vigorously engaged. Opposition to our 
policies is a reality, and we cannot afford to answer our critics with 
silence.
    Question. As best I can tell, we are spending, at a minimum, $21 
million for private security contractors in Iraq to protect Ambassador 
Bremer and other CPA officials. USAID and other U.S. government 
agencies also have private security contractors, as do U.S. companies 
doing business there.
    Who is paying for these security personnel? The other day they got 
into the middle of a firefight with Iraqis and they even called in 
their own helicopter for air support. An article in today's Washington 
Post entitled ``Under Fire, Security Firms Form An Alliance,'' says, 
``The presence of so many armed security contractors in a hot conflict 
zone is unprecedented in U.S. history.'' It also describes how these 
individuals have gotten involved in combat without backup from the U.S. 
military.
    Answer. The armed civilian contract employees to whom you have 
referred in your question have worked under the authority of the 
Department of Defense or the Coalition Provisional Authority, and not 
under the authority of the Department of State. Questions concerning 
these contract employees, and the contracts under which they operate, 
should be referred to the Department of Defense.
    As to your specific reference to the protective detail assigned to 
Ambassador Paul Bremmer, these personnel have been contracted by the 
Coalition Provisional Authority and are supervised and directed by 
them. A similar contract detail is planned for Ambassador Negroponte, 
and will possibly use some or all of the contract employees currently 
assigned to Ambassador Bremmer. At the time of Ambassador Bremmer's 
departure, the supervision of that contract will be assumed by the 
Department of State. It is our understanding that the current cost of 
this detail is approximately $2.1 million per month.
    As to the personal protection of other representatives of the 
Coalition Provisional Authority, the Department of State has not been 
involved in this activity, and has no way of determining these costs.
    Question. Is the Administration moving to install Mr. Chalabi as 
the leader of Iraq after the June 30 deadline?
    Answer. U.N. Special Advisor Lakhdar Brahimi is leading the effort 
to forge a consensus among Iraqis on the formation of the Iraqi Interim 
Government (IIG), which will administer the country as it prepares for 
national elections no later than January 2004. The composition of the 
IIG will reflect the outcome of Brahimi's broad consultations, 
including with members of the Iraqi Governing Council and the Coalition 
Provisional Authority. The Administration fully supports Mr. Brahimi's 
efforts.
    Question. 85 percent of the troops are Americans. On the 
reconstruction side, no other nation comes close to us. The next 
biggest contributor is Great Britain, which has contributed a little 
more than $1 billion.
    Have you sought additional help from our allies, including our Arab 
allies, and what has been the result?
    Answer. In terms of military contributions, there are currently 34 
countries contributing approximately 24,500 troops. We are always 
seeking additional contributions. We recently approached about a dozen 
countries to request support for a dedicated force to provide security 
for U.N. operations in Iraq. Among these were one Arab, two Muslim and 
four South Asian countries.
    The response to our solicitation of financial assistance has been 
even more encouraging. At the Madrid Conference, 38 nations pledged 
over $13 billion, of which $1 billion was committed to 2004 spending at 
the February conference in Abu Dhabi. Japan has pledged $4.9 billion, 
Saudi Arabia pledged $1 billion as well: $500 million in grants and 
loans and an additional $500 million in export credits and guarantees, 
along with Denmark ($156 million) and Austria ($12 million). In 
addition to its monterary pledge of $5 million, Iran pledged $1.5 
billion in credit facilities, restoration of religious sites, tourism 
and pilgrimmage, technical and advisory services, trade, investment, 
market access, and humanitarian assistance.
    Kuwait has pledged $500 million, and the United Arab Emirates, 
Italy, Spain, and South Korea each pledged over $200 million. Arab and 
Muslim nations contributing other significant amounts include Qatar 
($100 million), Pakistan ($100 million), Turkey ($50 million), and Oman 
($3 million).
    Arab and Muslim countries that made in-kind pledges included 
Bahrain, Egypt, Jordan, and Tunisia, nearly all of which included 
offers for assistance in police training. Two other Muslim countries 
are among the coalition-supporting nations: Morocco and Uzbekistan.
    Question. What is the President, National Security Advisor, and OMB 
Director doing to defend the Administration's budget request for 
Foreign Operations?
    Answer. This winter, President Bush submitted a robust request of 
$21.3 billion for foreign operations. Since that time, President Bush 
and National Security Advisor Condolleeza Rice have forcefully 
advocated for the President's national security priorities as reflected 
in the Administration's fiscal year 2005 budget request.
    In early February 2005, OMB Director Joshua Bolten testified before 
both the Senate Budget Committee and House Budget Committee defending 
the President's fiscal year 2005 Budget. Since that time, 
representatives of the Administration have appeared before numerous 
committees to defend the President's request for foreign operations. 
They include Secretary Powell's appearances before the Senate Budget 
Committee, Senate Appropriations subcommittees on Foreign Operations 
and Commerce, Justice and State, Senate Foreign Relations Committee, 
House Appropriations subcommittees on Foreign Operations and Commerce, 
Justice and State, and the House International Relations Committee. 
Deputy Secretary of State Richard Armitage, U.S. Agency for 
International Development Administrator Andrew Natsios, and Global AIDS 
Coordinator Randall Tobias, among others, have all appeared before a 
number of congressional committees to defend the Administration's 
fiscal year 2005 budget request for foreign operations.

                        HUMANITARIAN ASSISTANCE

    Question. Mr. Secretary, in your written testimony you state ``the 
President's Budget Request reflects a continued commitment to 
humanitarian assistance.'' But when I look at the budget request I 
don't see this commitment. For example:
  --Child Survival and Health programs are cut by $100 million;
  --``Emergency'' Refugee Assistance is down by about $30 million;
  --``Regular'' Refugee Assistance is down by about $30 million;
  --The budget for Food Aid is flat lined; and
  --Funding for the Global Fund to Fight HIV/AIDS, TB, and Malaria is 
        cut by $350 million.
    I don't want to rehash all of the numbers, but last year's budget 
also proposed deep cuts to many of these same accounts. This 
subcommittee had to restore many of those funds. How do these cuts 
reflect a ``continued commitment'' towards humanitarian assistance?
    Answer. Even though we are on a war-time footing, foreign 
assistance is a higher priority than it has been in many years. This is 
most clearly evidenced by the President's additional funding requests 
for the Global HIV/AIDS Initiative (GHAI) and the Millennium Challenge 
Account (MCA). Overall funding for foreign assistance has increased 
greatly.
    While much of the recent foreign assistance funding increase is 
because of massive assistance efforts in Iraq and Afghanistan, the 
Administration is requesting a total of nearly $4 billion for the GHAI 
and the MCA in 2005. Some of the activities that have been funded under 
the traditional Child Survival and Health account will be covered under 
the GHAI and USAID is likely going to manage funding for ``threshold'' 
countries under the MCA. In regard to food aid, it is always difficult 
to predict emergency humanitarian needs, but the Public Law 480 account 
has the flexibility to shift some resources from the food for 
development programs to meet emergency relief requirements. And in the 
case of extreme need, there is the authority to draw on the Bill 
Emerson Humanitarian Trust, or even seek supplemental appropriations 
from the Congress.
    By no means is there a cut in foreign assistance.
    Question. Do you agree that our foreign aid agreements with Egypt 
should be renegotiated so the Egyptian Government no longer holds a 
veto over the use of U.S. aid dollars, and that more of our aid should 
be used to strengthen the role of civil society groups?
    Answer. The Government of Egypt (GOE) and the USG jointly agree 
every year on the use of aid dollars. Our assistance program is 
codified in our bilateral Treaty agreement with the GOE; something that 
we do not believe should be changed at this time. Such joint decision-
making has been the principle and practice of this assistance since the 
beginning of our program with Egypt more than twenty years ago. This 
program, rooted in the Camp David Accords, has achieved many benefits 
for the United States and Egypt and is one whose programs are 
continually evolving.
    Our most recent discussions with the GOE, held in November 2003 on 
the topic of a new Democracy and Governance assistance funding, were 
frank and are ongoing. In 1998, we negotiated funding changes to the 
program. At these discussions, we jointly agreed with both the GOE and 
the Government of Israel to reduce economic assistance funding levels. 
Such levels will take us from $535 million for fiscal year 2005 to $415 
million for fiscal year 2008. These discussions were held in a 
productive atmosphere with the GOE officials charged with renegotiating 
this significant package. If changes are to be made to the program, we 
are confident that we will have an engaged partner. However, a full 
renegotiation of the agreement would require changes to the Accords--a 
difficult and costly exercise to implement.
    The GOE does not hold a veto over U.S. Government assistance to 
Egypt. This is evidenced by the fact that we have just completed a 
review of the assistance program that intends to advance new program 
initiatives in the areas of economic reform, democracy and governance, 
health, education, and the environment, among other areas. Changes to 
the formulation of our assistance program for Egypt do not inhibit us 
from making these initiatives, and despite some GOE resistance to some 
of our proposals we have been and will continue to discuss these 
proposals in detail with the GOE.
    One specific area where we will advance changes is in the realm of 
democracy and governance. We agree with you that more of our aid 
dollars should be used to strengthen the role of civil society groups 
in this area. We believe that these groups are critical to ensuring 
that reform and development are achieved within Egypt, and are 
confident that the changes taking place in Egyptian society today will 
support such assistance.
    Question. What is the United States doing to make sure that Charles 
Taylor is transferred to the Special Court for Sierra Leone before the 
Court's mandate expires, possibly as early as mid-2005?
    Answer. We share the concern of Congress that Charles Taylor not 
escape justice simply by remaining a fugitive until the Special Court's 
mandate expires.
    We are in frequent contact with Nigeria on the issue of Charles 
Taylor. We have made clear to President Obasanjo and others that our 
mutual goal must be for Charles Taylor to be answerable to the charges 
and answerable to the Special Court for Sierra Leone. As part of his 
introductory calls and our ongoing efforts on this subject, recently 
confirmed Ambassador Campbell will raise the Taylor issue with 
President Olusegun Obasanjo and other senior leaders.
    We are looking at appropriate ways to ensure that Taylor will not 
escape justice because of the expiration of the Special Court's 
mandate.
    Charles Taylor and the people of Sierra Leone must know that Taylor 
will answer for his actions.
    Question. Bob Woodward, in his recent book ``Plan of Attack,'' 
writes that $700 million in funds appropriated for Afghanistan and the 
war on terrorism was diverted for use in preparing for the U.S. 
invasion of Iraq. This was apparently done without any knowledge of 
Congress. Were you aware of this?
    Answer. No. Questions about how DOD prioritized its funding prior 
to OIF should be directed to the Pentagon.
    Question. The Administration has rejected Richard Clarke's claim 
that the Bush Administration was not sufficiently focused on al Qaeda 
before 9/11. I don't want to get into that, but isn't a key issue 
whether launching a preemptive war against Iraq, which posed no 
imminent threat to the United States or to our allies and there was no 
evidence--none--that Saddam Hussein was involved with al Qaeda or 9/11, 
has made us safer from terrorists?
    Answer. Operation Iraqi Freedom has made the United States safer 
from terrorists by eliminating one of the principal state sponsors of 
terrorism, an enemy of the United States and our Middle East allies.
    The Iraqi regime posed a threat because it was the sworn enemy of 
the United States and those who supported our efforts to contain Iraq 
in accordance with the decisions of the United Nations Security 
Council. The Saddam Hussein regime was a threat because it had used 
chemical weapons against its neighbors, and its own people. It was a 
threat because it sought for years to acquire a broad variety of 
weapons of mass destruction in violation of international law, 
including seventeen U.N. Security Council resolutions and Iraq's own 
treaty commitments. It was a threat because it invaded its neighbor 
Kuwait, a longstanding friend and ally of the United States. It was a 
threat because it attacked Israel with scud missiles in 1991. It was a 
threat because it had connections to terrorist groups. And it was a 
threat because it provided safe haven for known terrorists. Iraq thus 
did pose a threat to the United States and its allies and interests. As 
we continue to prosecute the global war on terrorism, including in 
Iraq, we will continue to reduce the terrorist threat to our country 
and our citizens.
    The Iraqi regime had connections to terrorist organizations such as 
the Abu Nidal Organization and the Mujahedin-e-Khalq. Members of a 
terrorist network headed by a senior al Qaeda terrorist affiliate, Abu 
Musab Zarqawi, established a nascent presence in Iraq in mid-2002, 
probably with the knowledge of at least some Iraqi security officials. 
Zarqawi and his associates are still in Iraq, and it was Zarqawi who 
most recently claimed personally to have carried out the barbaric 
beheadings of United States and Coalition nationals. Zarqawi also 
oversaw the assassination of USAID officer Laurence Foley in Jordan in 
October 2002. Iraq provided material assistance to Palestinian 
terrorist groups, and paid $25,000 financial tributes to the families 
of Palestinian suicide bombers.
    It has never been the contention of this Administration that the 
terrorist attacks of September 11, 2001 were orchestrated jointly by 
Iraq and al Qaeda, as your question suggests.
    Question. Can you provide any evidence--evidence, not speculation--
that Americans are safer, either at home or when they travel abroad, 
because of the removal of Saddam Hussein, given the damage the war has 
done to our credibility and our reputation, and the anger it has caused 
throughout the Muslim world?
    Answer. We do not agree with your implication that the security of 
the United States has been damaged by Operation Iraqi Freedom. Quite 
the contrary, the President has demonstrated that he means what he says 
and that the United States will not stand idly by when the safety and 
security of the American people are in jeopardy.
    We also are confident that the United States and its citizens are 
safer at home and abroad because of the removal of a ruthless tyrant. 
Iraq was a longstanding state sponsor of terrorism. The Iraqi 
Intelligence Service itself targeted United States citizens, and it 
supported extremist and terrorist groups to further its agenda. Only 
the most well-known example was the attempt by Iraqi agents to 
assassinate former President George H.W. Bush on a trip to Kuwait. The 
Iraqi Intelligence Service reportedly instructed its agents that their 
main mission was to obtain information about United States and Israeli 
targets. Iraq for years was a safehaven, transit point, and operational 
base for groups and individuals who directed violence against the 
United States, Israel and our allies. Iraq provided safe haven and 
support for the Abu Nidal Organization, an extremely violent terrorist 
group that has become largely moribund in recent years. Among its 
earlier terrorist acts, the group machine-gunned scores of Christmas 
travelers in simultaneous and coordinated attacks at airports in Rome 
and Vienna in 1985. Five U.S. citizens were among those killed. With 
the fall of the Saddam Hussein regime, terrorist organizations have 
lost their state sponsor and haven. This undoubtedly has made America, 
and the rest of the world, safer.
    Iraq also supported the anti-Iranian Mujahedin-e-Khalq, the 
Palestine Liberation Front, and the Arab Liberation Front, all 
extremely violent terrorist groups. Moreover, Baghdad provided material 
assistance to other Palestinian terrorist groups in the forefront of 
the intifadah being waged against Israel. The Popular Front for the 
Liberation of Palestine-General Command, HAMAS, and the Palestine 
Islamic Jihad are only the three most important of the terrorist groups 
to which the Saddam Hussein regime extended outreach and support, 
although his support to those groups was less than that provided by 
Damascus and Tehran. As previously noted, Saddam Hussein paid the 
families of Palestinian suicide bombers large sums of money; these 
terrorists undertook attacks that have killed innocent American 
citizens in Israel. All of these groups have lost a principal state 
patron that provided them with a safe haven, financial support or an 
operational base to conduct terrorist acts against the United States 
and its allies. The removal of that regime, and the consequent blow to 
these terrorist groups formerly under Saddam's wing, unquestionably 
have made the United States and its citizens safer, both at home and 
abroad.
    Question. Our credibility as a nation has been badly damaged. In 
countries like Jordan, Pakistan and Morocco--allies of ours that 
receive hundreds of millions in U.S. aid, a majority of the people 
supports Osama bin Laden and believes our motives in Iraq are to 
control Middle East oil and dominate the world. This has given fodder 
to Muslim extremists who call for the annihilation of America. How has 
this made us safer?
    Answer. Any suggestion that the motives of the United States in 
Iraq are to control Middle East oil and dominate the world is belied by 
the fact that the United States now is in the process of handing over 
sovereignty over Iraq to the Interim Iraqi Government. The IIG will 
prepare the way for the election of the first truly democratic 
government in Iraqi's history. This is the best riposte to those in the 
region who might question our motives.
    Moreover, the President last year announced a ``forward strategy 
for freedom'' in the broader Middle East and North Africa. Operating 
principally through the U.S. Middle East Partnership Initiative, the 
President's vision recognizes that political, social and economic 
reforms are urgently needed in the region. It aims to encourage reform 
and democracy as alternatives to fanaticism, resentment, and terror. It 
is the lack of opportunity, the lack of firm democratic institutions, 
sensationalized media reporting, and a collective sense of 
powerlessness that drives young people to revere and support terrorists 
such as Usama bin Laden as an alternative to their present situation. 
The President is committed to working with our friends and allies, both 
within and outside of the region, to give these young people a 
reasonable basis for hope for a better life.
    Question. Democracy is on life support in Russian. Every day, 
President Putin acts more like the autocratic rulers of the past. Is 
this the beginning of a new cold war, as Senator McCain has warned? 
What does it mean for Russia's future?
    Back during the Clinton Administration, Senator McConnell and I 
were very critical of Russia's policies in Chechnya, where the Russian 
army was ruthlessly targeting civilians. During the past two years, the 
situation has not improved, but this Administration, especially since 
September 11, has been only mildly critical. Do you agree, as we told 
the Clinton Administration four years ago, that the Russians, as well 
as the Chechen rebels, have committed war crimes in Chechnya, and what 
are we doing to try to get them to stop?
    Answer. A historic positive transformation has occurred in Russia 
during the twelve years since the collapse of the Soviet Union. In the 
1990s, Russia made great strides in securing basic freedoms, such as 
expression, religion and the ability to choose its leaders through 
elections. However, the pattern of official pressure on the independent 
broadcast media, irregularities in elections, the arrest and detention 
of some prominent business executives, and other developments have 
raised questions about Russia's commitment to democracy and the rule of 
law. The international community, including the United States, can help 
Russia become a more open society through continued engagement and 
assistance, especially in the area of developing democratic 
institutions. Ultimately, however, it is up to the Russians to 
determine the kind of political system in which they live. While in 
Moscow in January, I emphasized that the United States wants a robust 
partnership with Russia, but that without a basis of common principles, 
the U.S.-Russian relationship will fail to reach its potential.
    Regarding Chechnya, we continue to be very concerned about credible 
reports containing allegations that Russian forces have committed 
atrocities, including extra-judicial killings, torture and rape. Such 
allegations raise fundamental questions of compliance with 
international humanitarian law. We are concerned as well by reports 
that allege Chechen forces have committed some similar abuses. The well 
documented and numerous human rights abuses committed by all parties to 
the conflict in Chechnya must be stopped. Russian authorities need to 
redouble efforts to control the behavior of government forces, both 
local and federal.
    In April, the United States voted in favor of the EU-sponsored 
resolution on Chechnya at the U.N. Commission on Human Rights that 
strongly condemned human rights violations in Chechnya. The 
resolution--which failed--urged the Russian government ``to take 
urgently all necessary measures to stop and prevent violations of human 
rights and international humanitarian law . . .'' The United States 
recognizes that Russia has a right to take appropriate measures to 
protect its citizens from terrorist attacks, but any military 
activities in Chechnya must be conducted within the framework of 
international humanitarian law. We condemn any and all abuses of human 
rights by all parties to the conflict. The settlement of the Chechen 
conflict must be a peaceful one, and we see free and fair elections of 
Kadyrov's successor as a possible first-step to defusing the violence 
in the region.
    Question. Just this week, the Global Fund to Fight AIDS, the World 
Health Organization, UNICEF, and the Clinton Foundation, announced that 
they are joining forces to provide generic AIDS drugs to poor countries 
at a fraction of the cost that U.S. drug companies charge.
    The United States, however, has so far refused to join them, which 
means we are paying 4-5 times the cost per person for AIDS drugs. Given 
that the lives of millions of people are at stake, what steps are being 
taken to resolve the Administration's differences with the WHO with 
respect to safety and efficacy standards for HIV combination therapies?
    Answer. Our policy for the procurement of antiretroviral treatments 
under the Emergency Plan is to provide drugs that are safe, effective, 
and of high quality at the lowest cost regardless of origin or who 
produces them to the extent permitted by law. This may include true 
generics, copies or brand name products. A true generic drug is one 
that has undergone review to ensure that it is comparable to an 
innovator drug in dosage form, strength, route of administration, 
quality, performance characteristics, and intended use. Drugs that have 
not gone through such a process are more accurately described as 
copies.
    On March 29-30, 2004, in Gaborone, Botswana, an international 
conference was held on fixed-dose combination (FDC) drug products. The 
conference included representatives of 23 governments, drug regulatory 
agencies, research-based and generic pharmaceutical industry, public 
health leaders, health care providers, advocacy groups (including 
persons living with HIV/AIDS), academia, and multilateral and non-
governmental organizations. We were very pleased with the broad 
international support and participation that the conference generated, 
including from the conference co-sponsors: the Joint United Nations 
Program on HIV/AIDS (UNAIDS), the World Health Organization (WHO), and 
the Southern African Development Community (SADC).
    The conference successfully completed a vital step forward in 
developing commonly agreed-upon scientific and technical international 
principles to evaluate the quality, safety, and efficacy of FDCs for 
use in treating HIV/AIDS, tuberculosis, and malaria. The conference 
sponsors, representatives, and experts agreed that the final principles 
are not intended to and should not impede access to safe, efficacious, 
and high quality FDCs by people living with HIV/AIDS. The principles 
are not intended to address specific quality issues, or to develop 
clinical, therapeutic, or regulatory guidelines. Rather the document 
will provide scientific and technical principles for considering, 
developing, and evaluating FDCs for use in treatment. It is anticipated 
that the principles will be of use to regulatory agencies around the 
world, as well as to pharmaceutical companies and other organizations 
involved in developing and evaluating FDCs. In this regard, the 
principles will aid us in determining the standards we will expect 
fixed-dose combination drugs to meet to qualify for our purchase and 
expedite the process by which we can purchase lower-cost, non-patented 
FDCs with confidence.
    We have the highest respect for the WHO and its prequalification 
pilot program. However, the WHO is not a regulatory authority. We must 
be assured that the drugs we provide meet acceptable safety and 
efficacy standards and are of high quality.
    Under the Emergency Plan, we intend to support programs that will 
have a sustainable positive impact on health. If the medications in 
question have not been adequately evaluated or have had problems with 
safety or cause resistance issues in the future, we will be 
appropriately held accountable. We will continue to work with WHO and 
the international community on this important area. The finalization 
and adoption of the principles document for FDCs will be a major step 
forward for all. The final statement of principles is expected to be 
released during the second quarter of 2004.
    Question. The Colombian Government is working on a law that would 
give concessions to members of paramilitary and rebel groups in return 
for giving up their arms. The first version of this law was widely 
criticized because it would have allowed drug traffickers and 
terrorists to avoid jail. A second version has been drafted, but it 
still leaves many questions unanswered. The State Department has said 
that it will not support any agreement that allows these people to 
avoid extradition to the United States. But there are many others who 
were responsible for horrific crimes, for whom there are not 
extradition warrants. Do you agree that while we want to support the 
demobilization of these armed groups, we should not support an approach 
that allows people who have committed gross violations of human rights 
to avoid the punishment they deserve?
    Answer. The United States has always supported the Government of 
Colombia's position that it would enter into a peace process with any 
of the illegal armed groups willing to first declare a ceasefire. A 
credible peace process can help end the violence in Colombia and 
achieve an enduring peace. To be credible, we believe that a peace 
process must include the rapid disarmament and demobilization of 
illegal armed groups, justice for victims, and legal accountability for 
the perpetrators of gross human rights violations and narcotics 
trafficking. We have insisted that in any process:
    (1) We will continue to seek extradition of any Colombians who have 
been indicted in the United States now and in the future;
    (2) Gross violators of human rights should be subject to judicial 
process for their crimes in Colombia;
    (3) There should be the rapid disarmament, demobilization and 
reintegration of former militants; and,
    (4) The Government of Colombia should control any zones in which 
members of illegal armed groups are concentrated for the purposes of 
demobilization and disarmament.

                         COLOMBIAN CONTRACTORS

    Question. I am very concerned about the use of American contractors 
in Colombia, where they are flying light weight aircraft in very 
dangerous circumstances. Pilots have written letters in protest for 
which they have been reprimanded. Planes have crashed, a shell company 
consisting of little more than a post office box has been set up to 
avoid legal liability and the families of the men who have been 
kidnapped or killed have not been able to get their questions answered.
    There was a series of articles last November in the Times Picayune, 
which I hope your staff has made available to you. There are serious 
problems with the way this program has been managed and I hope you will 
look into it. I would appreciate any information you can provide 
regarding steps taken to improve oversight of this program, and to 
ensure that there is appropriate accountability, both on the of the 
U.S. Government and civilian contractors, when negligence or misconduct 
occurs.
    Answer. The United States Government employs civilian contractors 
because of the flexibility in planning they allow and because the 
skills they provide are often not otherwise available to the 
government. They provide training, equipment, infrastructure 
development, and expertise to the Government of Colombia and Colombian 
civil society in a variety of areas. Both the Departments of State and 
Defense contract out work requiring the piloting of aircraft and are 
constantly evaluating operations to refine procedures and improve 
security for contract personnel in this area.
    With regard to contractors who work in the aerial eradication 
program, State has taken several measures to improve their safety and 
welfare. In response to increased hostile groundfire this past year, we 
successfully encouraged the Colombian National Police to add an 
additional helicopter to each squadron of aircraft that escorts and 
provides protection to spray missions. We also have coordinated with 
the Colombian Army to prioritize ground troop presence in areas slated 
for eradication where hostile fire is anticipated. Conducting spray 
operations is inherently dangerous work. All of the pilots in the spray 
program receive specialized training for the type of flying and local 
conditions that they will face. We also provide advanced survival 
training for our pilots in the case of a forced landing.
    Each spray mission is planned taking into account the need for 
maximum security, using all available intelligence. If a spray mission 
should face significant risk, it is either cancelled or conducted with 
stepped up coordination with Colombian security forces on the ground. 
Counter Drug Brigade and other Colombian army ground troops conduct 
interdiction operations in the vicinity of aerial eradication to 
provide increased support when required. Armed security escort 
helicopters and at least one search and rescue helicopter accompany 
every spray mission.
    The contractors presently held hostage by the Revolutionary Armed 
Forces of Colombia (FARC) and the subject of the Times-Picayune 
articles you mention, were employed by the Department of Defense, which 
can provide you additional information regarding those air operations.

            ISRAELI-PALESTINIAN CONFLICT/MIDDLE EAST REFORM

    Question. [Part I] In a recent press conference with Prime Minister 
Sharon, President Bush endorsed Mr. Sharon's position regarding the 
right of return of Palestinian refugees and Israeli settlements in the 
West Bank. Were you consulted on the specifics of the President's 
announcement prior to the press conference? This unilateral decision 
diverges in significant respects from the policy reiterated by past 
U.S. presidents. Do you support this decision? How is this decision 
consistent with U.N. Resolutions 242 and 238, which the United States 
is on record supporting? What impact do you expect this decision to 
have for U.S. relations with Muslims in Iraq and elsewhere in the 
Middle East?
    [Part II] The President recently announced his ``Greater Middle 
East initiative.'' So far, the reaction of several key Arab leaders has 
been one of skepticism, at best. What is the President's ``Greater 
Middle East initiative?'' Is it in the budget, or is it just another 
way of describing what we are doing already?
    [Part III] Are we going to stop giving hundreds of millions of 
dollars in aid and selling weapons to autocratic, corrupt governments 
in the Middle East that do not show any interest in becoming more 
democratic and that arrest people who speak in support of democracy? 
Doesn't this make a mockery of the President's message?
    Answer. [Part I] The President stated our views regarding certain 
realities that we believe will shape the outcome of negotiations on 
permanent status issues. The President also made clear that permanent 
status issues must be negotiated between the parties, and stated that 
we have no intention of prejudicing the outcome. It remains U.S. policy 
that issues of refugees and borders must be decided by mutual agreement 
and direct negotiation between the parties in accordance with U.N. 
Security Council resolutions 242 and 338 and the roadmap.
    [Part II] The Greater Middle East initiative is an effort to 
marshal the will and resources of the G-8 and the EU in support of 
indigenous efforts in the Middle East to bring about political, 
economic, and educational reform. Despite initial skepticism, many Arab 
leaders recognize the need to address reform issues and have welcomed 
our willingness to help. Both the political statement and the specific 
action plan to support reform that we and our G-8 partners will endorse 
at the Sea Island Summit remain under discussion. We understand that, 
once final decisions have been made on possible programmatic elements 
of this initiative, the White House will be consulting with OMB and 
Congress on resources.
    [Part III] Our military assistance to certain select countries in 
the Middle East is aimed at enhancing the ability of these governments 
to maintain regional stability and to assist us in the global war on 
terrorism. We also use this aid to enhance the professionalization of 
the officer corps and to strengthen the separation between civilian and 
military functions. At the same time, we are very sensitive to the need 
for greater political openness and economic modernization in a number 
of these countries; these concerns are the impetus for the Greater 
Middle East Initiative and our efforts to promote political, economic, 
and educational reform through programs such as those taking place 
under the auspices of the U.S. Middle East Partnership Initiative.
    Question. The situation in Haiti is obviously dire. The 
Administration says there is a new opportunity now that President 
Aristide is gone, although I gather the other Caribbean nations have so 
far refused to recognize the new government because of concerns about 
the way President Aristide left the country.
    Do you plan to submit a budget amendment or supplemental request 
for Haiti, or are you planning to just continue business as usual? I 
ask because your budget request for Haiti for fiscal year 2005 is $24 
million, down from $27 million in fiscal year 2004.
    Answer. At this point, there is no need for a supplemental request 
for Haiti.
    The fiscal year 2004 allocation for Haiti, including food aid, is 
approximately $55 million. In addition, we have provided more than $3 
million in emergency assistance for the immediate humanitarian needs of 
the Haitian people, and nearly $5 million to the Organization of 
American States (OAS) for its Special Mission for Strengthening 
Democracy in Haiti. The fiscal year 2005 budget request is $54 million.
    We already have identified an additional $40 million from existing 
funds for this year that we are reallocating to meet Haiti's short term 
needs. We are continuing to review other potential sources of funding 
for Haiti, and are working with the Haitian diaspora and international 
donor community to encourage their contributions and support.
    Question. In his November 6 speech to the National Endowment for 
Democracy, President Bush said that Syria has left its people a legacy 
of ``torture, oppression, misery, and ruin.'' The State Department's 
human rights reports say that torture is commonplace in Syria, and they 
describe the gruesome techniques used there, from electrical shocks to 
pulling out fingernails, to ``using a chair that bends backwards to 
asphyxiate the victim or fracture the victim's spine.''
    And yet, in October 2002, the Justice Department deported, or 
``rendered,'' a Syrian-born Canadian citizen, Maher Arar, who it 
suspected of links to terrorism, to the custody of the Syrian 
government. It did so on the basis of a promise by the Syrian 
dictatorship that Arar would not be tortured. As you know, Arar was 
ultimately released, and claims that he was in fact tortured.
    A. How can we trust mere assurances from governments like Syria or 
Egypt that they won't torture people we turn over to them, when we know 
they abuse prisoners routinely? Should we turn over people to the 
custody of governments that use torture?
    B. Doesn't this policy of turning over prisoners to repressive 
regimes undermine the President's message that America is going to 
stand up for human rights and democracy, especially in the Middle East?
    Answer. Mr. Maher Arar was detained in New York on September 26, 
2002 by United States immigration and law enforcement authorities after 
his name appeared on an immigration watch list. He was subsequently 
refused entry into the United States under Section 235C of the United 
States Immigration and Nationality Act based on information in the 
possession of United States law enforcement officials. United States 
immigration law gives the Attorney General the discretion to deport an 
alien to the country in which he was born. I refer you to the Canadian 
government and the United States Justice Department for the specifics 
of Mr. Arar's case.
    As a matter of principle, and in accordance with international law, 
the United States does not turn people over to governments that we know 
intend to abuse them. We strive to uphold international prohibitions 
against the use of torture and we regularly call on other governments 
to do the same.
    Question. Aren't we asking for trouble when we gloss over these 
facts and cozy up to a government that behaves this way?
    Answer. The fact is we need Pakistan's help on many matters of 
great importance to our national security. In the Global War on 
Terrorism, Pakistan has assisted the capture of more than 550 
terrorists, including many al-Qaeda. It has also recently undertaken 
operations against al-Qaeda and Taliban forces on the Pakistani side of 
the Afghan border. Such operations are continuing, and have helped 
disrupt efforts to attack our forces in Afghanistan. Pakistan's 
cooperation is also necessary for the success of our nonproliferation 
efforts. Information provided by the Government of Pakistan has been 
crucial to our ongoing efforts to put out of business the network 
established by Pakistani nuclear scientist A.Q. Khan.
    In the context of this important alliance, we engage Pakistan in 
frank discussions of all issues to seek solutions that serve our 
interests while preserving a critical relationship.
    Question. Over the past two years we gave Pakistan a total of $1.3 
billion. All that time we knew or had reason to suspect that Pakistan 
was selling nuclear weapons technology to our enemies. And, if we 
didn't suspect it--we should have. You are requesting another $700 
million for Pakistan in fiscal year 2005. What consequences has 
Pakistan suffered from selling nuclear weapons technology to Iraq and 
North Korea? What message does this send to other nations?
    Answer. As Under Secretary of State for Arms Control and 
International Security John Bolton testified on March 30, 2004 to the 
House International Relations Committee, we have no information that 
contradicts President Musharraf's assurances that the top levels of the 
government of Pakistan are not implicated in the activities of A.Q. 
Khan. Pakistan has taken concrete steps to eliminate this network and 
ensure that this kind of proliferation will never happen again. 
Pakistan continues to share with the U.S. Government information being 
developed through ongoing investigations. We are also continuing to 
work with Pakistan to bring its export controls in line with 
international standards.
    Question. For the past four years, I and other Members of Congress, 
and the State Department, have sought the assistance of the Lebanese 
and Syrian governments in a case involving the abduction of two 
American children by their Lebanese father. United States and Lebanese 
courts have awarded the mother, Elizabeth Murad, sole and permanent 
custody of the children. There is compelling evidence that the father 
and children are in Syria, yet despite appeals to President al-Asad, 
the Syrian government has done nothing. Your staff has been extremely 
helpful, but so far we've gotten nowhere. Syrian officials say they are 
attempting to solve this issue. What is your assessment of the Syrian 
Government's efforts? Will you discuss this personally with President 
al-Asad?
    Answer. We have been vigorously pursuing a resolution to the Murad 
child custody case for four years. During that time, we have raised the 
case with both the Lebanese and Syrian governments at every possible 
level, including with President Asad himself. While we appreciate the 
assurances of various Syrian government officials that they are working 
with us to find the Murad children and return them to their mother, we 
find it difficult to believe that neither the Syrian or Lebanese 
governments have been able to locate the father or the children. 
Clearly, both governments need to redouble their efforts to find Liz 
Henry Murad's children and return them to her as soon as possible.
    Question. In the State Department's ``Performance and 
Accountability Report to Congress,'' the Department concludes that it 
is ``on target'' or ``above target'' in meeting almost all of its goals 
with respect to sustainable development and environmental programs. 
Yet, while we can point to accomplishments here or there, if you look 
at the big picture, environmental degradation is getting steadily 
worse, not better. According to the State Department, these are good 
programs. But there is less than $300 million in this budget to protect 
the environment worldwide. In fact, we have consistently given you more 
than you've asked for, yet it is far less than many U.S. States spend. 
Shouldn't we be spending a lot more on these programs, which the State 
Department says are effective, to protect the environment?
    Answer. We appreciate your strong interest in international 
environmental initiatives. Under the new State/USAID Strategic Planning 
Framework, the United States identifies advancing sustainable 
development as one of four key strategic objectives. In reducing 
poverty throughout the developing world, sustainable development 
encompasses economic, social and environmental factors. Major 
initiatives to achieve this goal have been undertaken in sectors 
related to water, energy, forests, fish, climate, health, education, 
and science.
    We are also continuing to address environmental protection through 
substantial contributions to the Montreal Protocol Multilateral Fund 
and the Global Environment Facility. We are awaiting Senate action on a 
landmark agreement--the Stockholm Convention on Persistent Organic 
Pollutants--to phase out ozone depleting substances and we have taken 
significant measures to conserve depleted fish stocks and other ocean 
resources.
    Regarding funding for both social and environmental programs, in 
addition to the nearly $300 million in Department appropriations cited 
in the Report, the Department also administers foreign operation 
program resources totaling nearly $2 billion. These funds have enabled 
us to leverage needed additional resources from foreign governments, 
international organizations and the private sector to strengthen 
international cooperation and build public-private partnerships. The 
aforementioned $300 million funds key components of State operations as 
well as international organizations, including the Pan American Health 
Organization and the World Health Organization, to maintain their 
efficiency and financial viability.
    Question. On January 12, President Bush issued a proclamation, 
effective immediately, suspending entry into the United States of 
foreign officials who have been involved in corruption that has had 
serious adverse effects on the national interests of the United States. 
It also bars entry of their families. The Secretary of State is to 
identify persons covered by this proclamation, and to implement it. Are 
you doing that? Are you developing a list of persons who cannot enter 
the United States on account of this proclamation? For example, are 
former President Aleman of Nicaragua, or former President Portillo, 
both of whom stole millions, on your list? If not, shouldn't they be?
    Answer. The President gave me, as Secretary of State, 
responsibility for administering this 212(f) Presidential Proclamation 
on his behalf. I have approved procedures for implementation of the 
Proclamation and have delegated the decision-making to the Under 
Secretary for Political Affairs. Consistent with the procedures I 
approved, our overseas posts have been given comprehensive instructions 
relating to implementation of the Proclamation. The procedures involve 
initially identifying persons potentially subject to the Proclamation 
and watchlisting them. If the person actually applies for a visa or 
holds a visa that might be revoked, the facts are developed more fully 
to permit a decision by the Under Secretary whether the visa should be 
denied or revoked.
    The Department has not administered the Proclamation on the basis 
of a list. Names are entered in the visa lookout system by posts or the 
Department on a routine basis, and decisions subsequently are made on a 
case-by-case basis. In recent months, the Department has found a number 
of former officials subject to the Proclamation.
    The visa records of the Department, including the visa lookout 
system and records of decisions under the Proclamation, are deemed 
confidential pursuant to Section 222(f) of the Immigration and 
Nationality Act, and may be used for only the purposes specified in 
that section. Thus we are not generally disclosing the names of persons 
entered into the lookout system or specifically found subject to the 
Proclamation.
    Question. What specific steps is the Administration taking to 
ensure that U.S. aid is conditioned on the transparent management of 
oil and mining revenues in recipient countries?
    Answer. The Administration has made reducing corruption and 
enhancing transparency a top foreign policy priority because we believe 
they are central to supporting sustainable development, creating stable 
democracies, and advancing our national security interests. The 
Administration works to promote transparent management of all public 
sector resources, including those derived from oil and mining, even if 
a country does not receive U.S. assistance. We promote international 
efforts to raise transparency standards and improve public financial 
management wherever possible, including through international financial 
institutions (IFIs), through our own bilateral aid programs, in our 
policy dialogue with the U.N. system and in the Organization for 
Economic Cooperation and Development (OECD), and through a vitally 
important G-8 initiative that supports developing country efforts to 
raise transparency standards and reinforces these other efforts.
    Among our bilateral, regional and multilateral programs that 
promote transparency, good governance and anti-corruption are the 
Millennium Challenge Account and the African Growth and Opportunity 
Act. We also pursue these objectives actively in the Summit of the 
Americas, Asia Pacific Economic Cooperation, and the UNDP/OECD-led 
Middle East and North Africa good governance initiative. All of these 
programs emphasize transparency, accountability and good governance.
    The Millennium Challenge Account (MCA), funded initially at $1 
billion for fiscal year 2004, targets U.S. assistance at countries that 
govern justly, invest in their people, and encourage economic freedom. 
It recognizes that development must primarily come from within 
countries rather than from outside. The Millennium Challenge 
Corporation (MCC) uses independent indicators that address rule of law, 
control of corruption, and other governance criteria to select 
countries eligible for MCA assistance. Countries that fail to pass the 
corruption indicator, compiled by the World Bank Institute, are 
presumed not to qualify. Countries ultimately selected for MCA 
participation will enter into a compact with the MCC that requires 
effective, accountable, and transparent use of U.S. assistance.
    The African Growth and Opportunity Act (AGOA) provides significant 
benefits to countries selected for participation, including improved 
access to U.S. credit and technical expertise and liberal access to the 
U.S. market. As with the MCA, rule of law and efforts to combat 
corruption are among AGOA's eligibility criteria.
    The G-8 initiative on Fighting Corruption and Improving 
Transparency provides a particularly good avenue for G-8 governments to 
build partnerships with developing countries to increase transparency 
and thereby use public resources wisely. Efforts will focus on 
transparency in public budgets, including revenues and expenditures, 
government procurement, the letting of public concessions and the 
granting of licenses. Partner governments will conclude voluntary 
compacts with G-8 governments, specifying the concrete steps they will 
take to bring greater transparency and accountability to managing 
public resources. Special emphasis will be given to cooperating with 
countries rich in oil and mineral resources. For these countries the 
compacts will pay particular attention to transparency of revenue flows 
and payments in these sectors. For their part, G-8 countries will 
support partner countries by providing bilateral technical assistance 
and political support.
    At Sea Island, Nigeria, our fifth largest oil supplier, was one of 
four pilot countries to conclude such a compact, demonstrating its full 
ownership of an aggressive program of reform that will lead to greater 
transparency and accountability. The governments of Peru, Nicaragua, 
and Georgia concluded similar agreements with the G-8 governments at 
Sea Island. We hope that more countries will follow the leadership and 
commitment of the four pilots, and that they will provide models and a 
demonstration effect for countries that follow.
    Question. Are you confident that adequate procedures are in place 
to prevent the diversion or misuse of revenues from Iraqi oil 
production?
    Answer. United Nations Security Council resolution 1483 (2003) 
established that Iraq's oil export revenues would be deposited in a 
special fund, the Development Fund for Iraq (DFI.) Until the transfer 
of Sovereignty, the Coalition Provisional Authority in Iraq (CPA) had 
signature authority over DFI. An international body called the 
International Advisory and Monitoring Board (IAMB) was established to 
act as an external audit committee for the regular audits of the DFI. 
Under U.N. Security Counsel resolution 1546 (2004), which provided for 
United Nations recognition of the Iraqi Interim Government (IIG), full 
signature authority over the DFI transferred to the IIG. The resolution 
also continues the role of the IAMB to ensure that proper audits of the 
DFI continue to be carried out, which the USG fully supports. The CPA 
also reconstituted the Board of Supreme Audit and established 
Inspectors General for Iraqi ministries, which remain in operation 
under the interim government.
    Question. I am concerned about the way the Leahy human rights law 
conditioning U.S. assistance to units of foreign security forces (sic). 
I would appreciate your answers to the following questions:
    What instructions has the Department of State sent to embassies for 
establishing a database of alleged human rights violators?
    What instructions do embassies have in place to gather information 
on alleged violators and do their sources include non-governmental 
organizations?
    Are embassies vetting individuals and units before they receive 
security training and what criteria are they using to determine whether 
to provide training?
    What is the status of the Department of State database housed in 
the Bureau of Democracy, Human Rights and Labor? Does the database 
track information on alleged human rights violators, requests for 
training, and instances of denials of training?
    Answer. Department guidance to posts, issued most recently in 
February 2003, updated Leahy Amendment guidance and again instructed 
all posts to keep track of allegations of gross violations of human 
rights involving any unit of the security forces, regardless of whether 
that unit is currently receiving training or assistance or regardless 
of the passage of time.
    Posts have clearly been instructed that any time throughout the 
year that they become aware of any information regarding incidents 
which reasonably could be deemed to be credible information of a gross 
violation of human rights by any unit of the host nation's security 
forces receiving or proposed to receive FOAA-funded assistance or 
involved in DOD-funded training regardless of the passage of time, 
posts should so inform the Department by cable. Posts are instructed to 
report information regardless of the source, including, but not limited 
to reporting by State, DOD, DAOs/SAOs, NGOs, and the media. To the 
extent practicable, posts are asked to identify the unit that has 
allegedly committed the violation of human rights and include post's 
view as to whether the violation of human rights rises to the level of 
being a gross violation and whether it believes the information is 
credible.
    Both embassies and the Department are vetting units proposed for 
training and/or assistance before such training or assistance is 
received. The Department is cognizant of the Senate report accompanying 
the fiscal year 2002 FOAA, which stated that the term ``unit'' should 
be ``construed as the smallest operational group in the field that has 
been implicated in the reported violation.''
    The test database in the Bureau of Democracy, Human Rights and 
Labor (DRL) currently includes the names of approximately 100 
individuals and units about which we have serious human rights 
concerns. The names are drawn from post, NGO and media reports. Many 
are drawn from the 2002 and 2003 Country Reports on Human Rights 
Practices. Since the database was established for testing the Benetech 
Corporation's Martus software in the Department in 2003, DRL has been 
working with the Bureaus of Political-Military Affairs, Information 
Resource Management and Administration to develop and test a 
technology-based solution with security and encryption packages that 
could allow Martus to be available to most posts and Department 
officers. At this time, the test database does not track requests for 
training and instances of denials of training.
    Question. I am very concerned about the deepening crisis in Darfur 
in Western Sudan, a situation that both President Bush and U.N. 
Secretary General Kofi Annan have condemned and expressed alarm about. 
Today's Washington Post quotes the Secretary General saying there is a 
risk of ``genocide'' there and that U.N. troops may be needed.
    Would the Administration support a U.N. monitoring force?
    Would you support increasing the size and deploying part of the 
Civilian Protection and Monitoring Team, currently in Sudan, to the 
Darfur region to try to deter human rights violations?
    Has the Administration called upon the leadership of the African 
Union to declare Darfur an emergency, condemn the human rights abuses, 
and called on the Sudanese government to facilitate and support these 
desperately needed initiatives?
    Answer. The Administration supports a United Nations Peace Keeping 
Operation (UNPKO) in Sudan. We have been studying how a UNPKO might 
operate in Sudan. We expect that there will be a monitoring mission 
mandated under Chapter VI to help monitor the peace. We have been 
talking with our Troika partners (the U.K. and Norway) and the United 
Nations about a mission and look forward to receiving a report from the 
Secretary General. We would not expect a UNPKO to be created until 
after the signing of the comprehensive agreement which would include 
further details on monitoring and security arrangements, although we 
will continue planning for such a mission.
    We have agreed to support the Darfur Ceasefire Commission with 
logistical assets, and CPMT assets will be made available to the 
Commission in the short term to get things going. Due, however, to the 
complexities surrounding the situation in Darfur, we agreed with the 
African Union and the parties that it would be best to have an 
independent international monitoring team operating in Darfur. The 
ceasefire monitoring team will monitor the ceasefire within the 
provisions of the Ceasefire Agreement and when necessary investigate 
alleged violations of the Agreement.
    The African Union (AU) has taken a very active role in responding 
to the crisis in Darfur. In particular, with U.S. encouragement, the AU 
took the lead on establishing the Ceasefire Commission designed to 
plan, verify and ensure the implementation of the rules and provisions 
of the Darfur ceasefire accord signed on April 8 in N'djamena.
    Question. The Bush administration has recognized the role that 
family planning plays in reducing abortions. The President himself has 
said: ``one of the best ways to prevent abortion is by providing 
quality voluntary family planning services.'' Yet funding for U.S. 
family planning has declined since 1995 and remains below the 1995 
level. How do you reconcile the Administration's claim of support for 
family planning with these budget cuts?
    Please provide any information available to the Administration that 
the Mexico City Policy has reduced the number of abortions, either in a 
particular country, or worldwide.
    The State Department recently provided me with a list of activities 
deemed coercive which it says the Chinese Government must eliminate in 
the countries where UNFPA provides support, in order for UNFPA to 
receive U.S. funding. This, however, represents a misreading of U.S. 
law. The Kemp-Kasten amendment does not impose any requirements on 
China or any other government. Rather, it imposes restrictions on any 
(organization) or ``program'' that supports or participates in the 
management of coercive activities. Is it the Administration's position 
that no matter what form of assistance UNFPA provides in these Chinese 
countries, unless China eliminates these coercive activities UNFPA is 
ineligible to receive U.S. funding? In other words, if UNFPA were to 
only provide information (as opposed to any other form of assistance) 
to Chinese family planning workers about voluntary family planning 
services, it would still be ineligible to receive U.S. funding until 
China eliminates each of the activities deemed coercive?
    Answer. Funding for Family Planning.--President Bush has sustained 
funding for family planning assistance at levels between $425 and $446 
million per year, compared to $372-$385 million per year during the 
four years preceding the President's inauguration. The President is 
committed to maintaining these levels because he believes that one of 
the best ways to prevent abortion is by providing quality voluntary 
family planning services.
    Mexico City Policy.--President Bush restored the Mexico City Policy 
in 2001 to clearly separate U.S. Government support for family planning 
assistance from abortion-related activities. The President's directive 
of August 29, 2003 extended the Mexico City Policy to cover all 
Department of State funding to foreign non-governmental organizations 
for family planning assistance.
    There are many foreign NGOs through which USAID and the Department 
of State can provide family planning information and services to people 
in developing countries. The President determined that assistance for 
family planning will be provided only to those foreign NGO recipients 
and sub-recipients whose family planning programs are consistent with 
the values and principles the United States wants to promote as part of 
its foreign policy.
    Funding for UNFPA.--Per your request, the Department recently 
provided you a list for illustrative purposes of elements of a 
coercion-free environment with respect to family planning in China. 
While, as you correctly point out, the Kemp-Kasten Amendment does not 
impose any requirements on China or any other government, it has been 
the consistent policy of the Bush Administration to urge the Chinese 
government to remove coercive practices from its family planning 
programs.
    As you note, the Kemp-Kasten Amendment is relevant to all 
organizations or programs that receive U.S. funds under the Foreign 
Operations Appropriations Act. In light of Kemp-Kasten, and China's 
regime of severe penalties on women who have births outside those 
allowed under China's national and local birth planning laws, Secretary 
Powell determined on July 21, 2002, that China's coercive law and 
practices amounted to ``a program of coercive abortion,'' that UNFPA's 
funding in China amounted to ``support for or participation in the 
management of'' China's program, and that, therefore, it was not 
permissible to continue funding for UNFPA at that time. In notifying 
Congress of his decision, the Secretary pointed out, ``Regardless of 
the modest size of UNFPA's budget in China or any benefits its programs 
provide, UNFPA's support of, and involvement in, China's population-
planning activities allows the Chinese government to implement more 
effectively its program of coercive abortion.''
    The Department has been in consultations with China since 2002, but 
China has not eliminated its coercive practices. The Department has 
also discussed with UNFPA its Fifth Country Programme in China and has 
suggested various proposals that would permit the United States to fund 
UNFPA consistent with Kemp-Kasten. We continue to consult with the 
Chinese government and with UNFPA. The Department is currently 
reviewing the status of China's family planning program and UNFPA's 
funding in China with the view to determining whether funding for UNFPA 
is permissible in fiscal year 2004 in light of Kemp-Kasten.

                    MILLENNIUM CHALLENGE CORPORATION

    Question. As Chairman of the Board of the Millennium Challenge 
Corporation, how much of the $2.5 billion in the President's budget 
request for the Millennium Challenge Account (MCA) do you anticipate 
obligating in fiscal year 2005? Of the $1 billion Congress appropriated 
in fiscal year 2004, how much do you anticipate obligating this year?
    Answer. This question has been sent to MCC for response.
    The Committee notes that no response was received.
    Question. I also want to thank you for agreeing to provide $2.5 
million for programs to protect intellectual property rights overseas. 
This is an important, bipartisan initiative that is widely supported 
here in Congress. I am not going to micro-manage the process or favor 
one group over another for receiving this money--that is an issue for 
your Department to determine. However, I am wondering if you could get 
back to me, for the record, with more details on INL's plans for this 
$2.5 million.
    Answer. The State Department shares Congress's strong commitment to 
protecting the intellectual property of U.S. artists, inventors and 
industries from foreign counterfeiters and pirates. We view the State 
Department's role in this effort as crucial to our country's economic 
growth and to the well-being of our citizens.
    In response to the fiscal year 2004 budget report language 
regarding the allocation of $2.5 million in crime funds for anti-piracy 
programs, the State Department initiated a process to seek new training 
and technical assistance proposals from various United States 
government agencies and our overseas missions, with input from 
industry. We received over 90 proposals covering 46 countries, 
reflecting the growing demand for training and technical assistance 
from our foreign law enforcement partners.
    These are largely proposals for government-to-government training 
and technical assistance programs focused on building legal regimes and 
intellectual property law enforcement capacity. The proposals range 
from educating foreign judges and prosecutors on international IP 
standards, to hands-on border enforcement and forensics training for 
foreign customs officials.
    The State Department is now completing its review of these 
proposals and will soon begin consulting interested parties, including 
the Appropriations Committees, on its recommendations. Our goal is to 
begin obligating the funds for these programs during the summer of 
2004.
    Question. As you know, I have been urging the Administration to 
rejoin the International Coffee Organization (ICO). While the ICO will 
not solve the international coffee crisis, which has undermined U.S. 
assistance and counter-narcotics efforts around the world, it could be 
a useful instrument to help forge a multilateral consensus on how to 
address this crisis.
    What is the status of the U.S. membership in the ICO? And, where is 
the Administration in terms of formulating a comprehensive strategy to 
address the coffee crisis, as urged by the Congress in resolutions 
passed at the conclusion of the 106th Congress?
    Answer. While we all understand our membership in the ICO will not 
solve the coffee crisis, we view the ICO as a potentially important 
tool in bringing concerned parties together. We hope we will soon meet 
the conditions under which the United States might rejoin.
    A joint State-USTR delegation is attending meetings of the ICO in 
London May 14-21, where we anticipate the ICO will take positive steps 
to resolve our concerns on Resolution 407 and satisfactorily address 
legal and regulatory concerns before we can accede to the 2001 
International Coffee Agreement. We will also seek to address 
institutional issues such as a voting structure that currently favors 
the EU. After these meetings, Under Secretary of State Larson will meet 
for a second time with members of U.S. Industry regarding their 
programs. In anticipation of needing to meet an obligation for dues to 
the ICO, the State Department will continue to work closely with OMB 
and the appropriate congressional committees. We expect to be able to 
make a final decision on membership in the coming months, and before 
the next ICO meetings in September.
    Although coffee prices have seen a significant rebound in the last 
year, we have made our review of membership in the ICO the focal point 
of our activity related to the coffee crisis. However, we see the ICO 
primarily as a tool in implementing our broader efforts. Should we join 
the ICO, we will do so with a positive agenda to improve opportunities 
for producers and enhance the choices available to consumers. 
Recognizing that the coffee crisis has a variety of causes and 
differing effects, the Administration's programs are generally focused 
on the unique needs of individual countries or regions.
    USAID is providing resources and coordinating initiatives to 
address the worldwide humanitarian crisis caused by low coffee prices. 
Currently, USAID supports coffee activities in over 25 countries in 
Latin America, Africa, and Asia. These programs work to promote small- 
and medium-holder coffee systems compete in the international market. 
USAID is using a two-pronged approach. First, where potential exists 
for coffee farmers to effectively compete for premium prices in a 
differentiated market, USAID is working to improve local capacity to 
produce quality coffee that the market demands and to promote effective 
marketing thereby increasing the price farmers earn for their product. 
Second, USAID programs assist farmers that cannot compete within the 
coffee sector to diversify their activities and identify other sources 
of income.
    Question. Can you give me a status report on the implementation of 
FIA, especially with respect to the role of DRL in assigning officers 
to human rights positions?
    Answer. Starting with the Summer 2004 Foreign Service assignment 
cycle, which began in October 2003 and covers assignments for positions 
coming open between May and October 2004, DRL developed a list of 
priority positions on which it wanted to concentrate during this first 
stage of the development of this procedure. The list of priority 
positions to be filled during the Summer 2004 cycle was given to the 
regional bureaus concerned.
    DRL's Executive Office reviews all bidders on these positions and 
provides the Assistant Secretary with their names and pertinent 
information on their assignment history and experience. In addition DRL 
actively recruits and encourages eligible bidders who are well and 
favorably known to the bureau to bid on human rights reporting 
positions overseas, including senior positions. Using this information 
and other details available to DRL, the Assistant Secretary determines 
our preferred candidates. Those names are then given to the regional 
bureaus that bring the preferred candidates to panel for assignment. 
Thus far, no regional bureau has disagreed with a DRL recommendation. 
In any case, no assignment will be finalized without the approval of 
DRL's Executive Office. We anticipate expanding formal recommendations 
in the next cycle to include more senior positions that have 
responsibility for human rights.
    The excellent cooperation between DRL and the regional bureaus 
exhibited during the initial 2004 assignment cycle suggests that the 
objective of the legislation will be clearly and effectively met and 
the assignment of officers to human rights reporting positions in the 
manner envisioned by the FIA will become a routine aspect of the 
assignments process.
    Question. The situation in Indonesia continues to be very 
discouraging. Recently, the Indonesian Supreme Court cut by half the 
jail sentence of a Muslim cleric who had been convicted for his 
involvement in a Southeast Asian terrorist network linked to al Qaeda.
    In the province of Aceh there are reports of atrocities by the 
Indonesian military and police.
    It has been almost two years since the killings of two Americans 
and one Indonesian near the Freeport gold mine in Papua in August 2002, 
and we are still waiting for the results of the investigation.
    There does not seem to be any progress in bringing to justice those 
responsible for the killings and destruction in East Timor after the 
1999 referendum there.
    A. Indonesia is an important country and we have important 
interests in that part of the world. But President Megawati and the 
military hierarchy don't seem to be listening to us when it comes to 
human rights. Or am I missing something?
    Answer. As the world's most populous Muslim country, Indonesia 
takes on global significance. Indonesia is an example that Islam and 
democracy are compatible. Most political and economic trend lines for 
Indonesia are heading in a positive direction, even if they start from 
a low base. Indonesia is becoming ever more democratic--it will hold 
its first-ever direct presidential election this year.
    However, we remain concerned about Government's poor human rights 
record, particularly in Aceh where martial law is currently imposed. 
The need for accountability for human rights abuses committed by the 
Indonesian military and pro-Indonesia militias in East Timor in 1999 
cannot be ignored. We have repeatedly urged the Indonesian government 
to fulfill its commitment and pursue its internal investigation in a 
vigorous, expeditious and credible fashion. Together with the United 
Nations and concerned member states, the United States supports efforts 
such as those of the Serious Crimes Unit--a Timorese Prosecutor's 
office funded by U.N. peacekeeping contributions--to ensure justice for 
past human rights abuses in East Timor. We continue to consult with 
partners on options to ensure a credible level of justice for past 
human rights abuses in East Timor.
    Question. B. If the investigation produces enough evidence to bring 
charges against those responsible for this crime, will you insist that 
they be prosecuted and appropriately punished, not just let off with a 
slap on the wrist the way it always seems to happen in Indonesia?
    Answer. The United States has no higher priority in its dealings 
with the Government of Indonesia than seeking justice in the murder of 
American citizens in Papua. We have told the Government of Indonesia, 
at the highest levels, that we expect a full and impartial 
investigation, and that failure on this front would have negative 
consequences for our overall bilateral relationship. The Indonesian 
government, at the highest levels, has stated its commitment to a 
complete and transparent investigation into the killings. We expect the 
Indonesian Government to fulfill that commitment.
    Question. C. Please provide a detailed accounting of State 
Department counter-terrorism assistance--training, equipment, and any 
other assistance--provided to Indonesian security forces, including the 
police, during fiscal year 2002, fiscal year 2003, and the current 
fiscal year, as well as any such assistance proposed for fiscal year 
2005, and which entities within Indonesia will be the recipients for 
this assistance.
    Answer. The State Department provides capacity building assistance 
to the Indonesian National Police's (POLRI) counterterrorism unit--
``Special Detachment 88.'' Our counterterrorism (CT) assistance totaled 
$8 million in fiscal year 2002 and $4 million in fiscal year 2003. We 
have requested $4 million for fiscal year 2004 and $6.5 million for 
fiscal year 2005. This funding will support training of three 
Counterterrorism Investigation (INV) teams (90 officers total) by ATA/
FBI. As part of this training, we supply certain investigative 
equipment to the teams. The first team of CT investigators (30) 
graduated July 18, 2003, and the graduates were immediately assigned to 
investigate the Parliament bombing and the August 5, 2003, Marriott 
Hotel Bombing.
    We will train three Explosives Incidents Countermeasures (EIC) 
teams (45 officers total). The first EIC team (15 officers) began 
training 25 August 2003. As part of this training, we supply the teams 
with certain tactical equipment. We will also train six Crisis Response 
(CRT) Teams (144 officers total). The first CRT team (24 officers) 
began training September 1, 2003. We provide certain tactical (SWAT) 
equipment and vehicles. Our assistance will support two CRT Train-the-
Trainer (CRT-TTT) classes (24-36 officers) in fiscal year 2004-2005 to 
develop trainers to sustain and expand the CT Task Force.
    In addition to counterterrorism assistance, we provide anti-
terrorism assistance (``regular'' ATA). In fiscal year 2001, we 
provided $1,260,779 for courses in Hostage Negotiation Management, 
Vital Installation Security, Explosive Incident Countermeasures, Post 
Blast Investigation, and Terrorist Crime Scene Investigation. In fiscal 
year 2002, we provided $865,955 for courses in Critical Incident 
Management, Hostage Negotiation Management, and Mail Security. We 
provided $778,712 in 2003 for courses in Senior Crisis Management, WMD 
Awareness Seminar, and Explosive Incident Countermeasures.
    The State Department, in conjunction with the Department of 
Justice, is assembling a package of equipment and training to the 
Attorney General's new CT and Transnational Crime Task Force to handle 
all terror trials. This assistance package will be approximately 
$750,000 and is anticipated to begin in Spring, 2004.
    Question. What specific procedures will be taken to ensure that 
this assistance will not be used in a manner that violates human 
rights?
    Answer. Training for the Indonesian military is restricted to non-
lethal programs, and covers topics designed to promote the 
establishment of a more professional military, such as national 
security decision-making, defense restructuring, civil-military 
relations, military justice, and peacekeeping operations, not to 
mention English language training. Training for the police is either 
specifically focused on appropriate use of force, human rights and 
democratic policing (ICITAP), or in the case of anti-terrorism 
assistance (ATA), includes a specific module on human rights.
    All refresher and advanced training provided by ATA also includes 
specific modules to ensure that graduates remain cognizant of their 
human rights responsibilities.
    Question. Please describe in detail the process by which the 
Administration ensures that members of the Indonesian military and 
police slated to receive U.S. training or other assistance have not 
previously engaged in human rights abuses.
    Answer. The Embassy section or agencies that proposes a candidate 
for training requests biographic information from the candidate. The 
nominating section vets the candidate and/or unit, drawing from its 
files. If the candidate passes the initial screening, the candidate's 
name is submitted to other Embassy sections and agencies for screening.
    If at any point in the process, any doubt or hint of past human 
rights violations arise, the Embassy rejects the candidate. In a few 
cases, the Embassy may recommend that a further investigation is 
needed. If so, a more thorough screening continues and the Embassy 
forwards the case to Washington for decision.
    Question. How are proposed participants vetted? Who conducts the 
vetting? What data banks and other sources of information are used for 
vetting?
    Answer. The Embassy Defense Attache's Office, Office of Defense 
Cooperation, Regional Security Office, Consular Section, Political 
Section, and other agencies all vet proposed candidates. They draw on 
their agencies' national-level databases and records, as well as files 
held at post. Questionable candidates are referred to the Defense 
Intelligence Agency for a more thorough search of the National 
Intelligence Database.
    Question. Does the vetting process include review of information 
available to United States and Indonesian human rights organizations?
    Answer. Yes, when those files are available on line or when the 
Embassy Political Section has reason to believe that derogatory 
information exists about a specific individual. Again, in cases where 
credible derogatory information exists the Embassy rejects the proposed 
candidate. If any questions arise in the case of police candidates, the 
name is submitted for assessment to Indonesian Police Watch, an NGO 
that monitors Indonesian police activities.
    Question. Does the vetting include review of relevant records 
available to other governments with which the U.S. Government has a 
close working relationship (e.g., the Jakarta Embassies of Australia, 
the United Kingdom, Canada)?
    Answer. Yes, certain U.S. Government databases have links to the 
records maintained by key allies. In some cases, Embassy officers 
consult allied embassies with regard to the background and reputation 
of candidates.
    Question. Will the Administration insist on transparent and 
credible prosecutions of those responsible for the killing and wounding 
of United States and Indonesian civilians in Timika, August 31, 2002, 
prior to the provision of IMET assistance to the Indonesian military? 
If Indonesia fails to bring the killers to justice, what steps is the 
Administration prepared to take?
    Answer. We have repeatedly made clear to senior Indonesian 
Government officials, in meetings both in Indonesia and Washington, 
that we expect a full and impartial investigation of this crime, and 
that failure to conduct such an investigation would have a negative 
impact on bilateral relations. Our assistance to the Indonesian 
military is currently limited to E-IMET, and future provision of IMET 
would take into account the results of the investigation of the Papua 
murders. We will reexamine all aspects of our bilateral relationship 
should there be no credible investigation and appropriate follow 
through on the results of the investigation.
    Question. Has Indonesia signed an Article 98 Agreement? If not, has 
Indonesia been the recipient of a presidential waiver on national 
security grounds?
    Answer. Indonesia has not signed an Article 98 agreement to date. 
Indonesia does not require a waiver under the American Servicemembers 
Protection Act (ASPA) as it is not a party to the Rome Statute of the 
International Criminal Court.
    Question. Recent media reports on the use of funds from the U.N.-
Iraq Oil for Food Agreement to procure support from prominent world 
political leaders included the names of senior Indonesian government 
figures, including President Megawati and DPR (House of 
Representatives) Speaker Amien Rais. What, if anything, has the 
Administration done to investigate these charges? What would be the 
consequences for U.S. policy should the substance of these media 
reports be validated?
    Answer. The Indonesian press has reported the claims of various 
international media outlets that President Megawati Soekarnoputri and 
People's Consultative Assembly Chairman Amien Rais received valuable 
oil contracts from the former Saddam Hussein regime. In response, 
several political figures close to Megawati and Amien issued strong 
public denials that the two figures received benefits from the Iraqi 
Government. Embassy Jakarta reports that other Indonesian sources have 
privately confirmed these public denials.
    President Megawati's opposition to the war in Iraq was consistent 
with domestic political pressures she faced and established trends in 
Indonesian diplomacy.
    The United States strongly supports the U.N.'s independent Volcker 
commission charged with investigating allegations of corruption under 
the Oil for Food (OFF) program, including allegations that many 
prominent international figures took bribes. In addition, the Iraqis 
have insisted upon their own investigation.
    CPA Administrator Bremer has directed the Iraqi Board of Supreme 
Audit, which functions much like our General Accounting Office, to 
undertake the investigation. It is working cooperatively with the 
Volcker commission to investigate OFF abuses and bring the facts to 
light. CPA is cooperating closely with both of these efforts.
    Question. What has the Administration done in the past six months 
to bring an end to the bloodshed in Aceh and to restore the December 
2002 cease fire that the United States played a critical role in 
arranging?
    Answer. U.S. officials continue to press Indonesian authorities to 
seek a negotiated settlement to the conflict in Aceh. The Ambassador 
and other U.S. officials have done so privately at the highest levels 
of the Indonesian Government, and the Embassy did so publicly, 
including through issuance of a statement criticizing the decision to 
extend martial law in November 2003. Through our USAID mission in 
Indonesia, we support NGOs working on human rights in Aceh, along with 
a newsletter and website that report on events in Aceh, critical 
elements given the limited press access to the province.
    Embassy officials have visited Aceh on numerous occasions to meet 
with civilian and military officials as well as civil society figures. 
Embassy officials monitored legislative elections in the province, 
helping to ensure a fair vote. In meetings with Indonesian officials in 
Aceh and Jakarta, Embassy officers have stressed our belief that the 
conflict is not amenable to a military solution, and our belief that 
special autonomy represents the best chance for a long-term solution. 
We have also reiterated our willingness to provide economic assistance 
for reconstruction in Aceh should another cease fire take place, as 
well as our willingness to facilitate such a cease fire, if requested. 
The United States continues to coordinate its actions closely with 
Japan, the EU, and the World Bank.
    Question. In a recent edition of The Wall Street Journal there was 
a mention that the Administration is going to pledge $400 million to 
Cyprus, if a peace agreement between the Greek and Turkish Cypriots is 
reached. Where is this money going to come from, existing funds, a 
budget amendment, or supplemental request?
    Answer. The pledge will not go forward in view of the April 24 
rejection of the unification plan by Greek Cypriot voters.
    Question. I can think of a number of countries, who are not going 
to become members of the European Union, where $400 million is 
desperately needed--including several in Latin America, Africa, and 
Asia. How is this amount of funding for Cyprus justified in light of 
pressing needs in a number of places that are desperately poor and have 
closer ties with the United States, such as Haiti, The Philippines, and 
Liberia?
    Answer. The European Union has decided to make available 259 
million Euros to northern Cyprus, for the purpose of ending the 
isolation of the Turkish Cypriots. In light of the efforts of the 
European Union, we are reviewing our policy towards the Turkish 
Cypriots. Our efforts in Cyprus aim to resolve a long-standing obstacle 
to peace and stability at the intersection of two regions critical to 
U.S. national interests and security. Proposals to fund support for 
Cyprus reunification come at a time of significant increases in the 
fiscal year 2004 budget and fiscal year 2005 request for such 
undertakings as the Millennium Challenge Corporation and the 
President's Emergency Plan for AIDS Relief.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

    Question. The United States took great pains to ensure appropriate 
ethnic and geographical representation in Iraq's interim decision-
making bodies. Why was the same attention not given to gender 
representation, even when women compose a majority of the population?
    Answer. We recognize that the women of Iraq have a critical role to 
play in the revival of their country and we strongly support their 
efforts. Women play a key role both at the national and provincial 
level--in the Iraqi Governing Council (IGC) and the governorate and 
local councils. The IGC has 25 members, including three women. We are 
making every effort to ensure women are represented at every level of 
government and, that they continue to be a central part of the Iraqi 
Interim Government that will take over after the June 30 transition to 
sovereignty. The State Department is currently focusing programs on 
preparing women for future leadership roles within the IGC. For 
example, USAID has focused on women's equality and empowerment through 
assistance to local government . . . USAID-funded conferences and 
trainings have helped Iraqi women learn about democracy, legal rights 
and women's civil society organizations that enable women to advocate 
for their own rights.
    Question. What is being done now, and what more could be done, to 
ensure the full participation of women in the political process after 
the hand over of power on June 30?
    Answer. President Bush has repeatedly stated that supporting and 
promoting respect for women's rights is a U.S. foreign policy 
imperative. The CPA and U.S. Government are working closely with the 
Iraqi Governing Council (IGC) to ensure that women will be well 
represented in the Iraqi Interim Government. The Law of Administration 
for the State of Iraq for the Transitional Period, also known as the 
Transitional Administrative Law (TAL) makes clear that ``the electoral 
law shall aim to achieve the goal of having women constitute no less 
than one-quarter of the members of the National Assembly . . .'' The 
United States is committed to doing all it can to ensure the full and 
fair representation of women and all Iraqis, in the administration of 
Iraq now and in the future.
    Question. What is the State Department doing to help Iraqi women 
overcome these hurdles? For example, do programs to support the 
development of political parties advocate and foster the integration of 
women in political party structures and decision-making? Are there 
programs to train Iraqi women to effectively compete in the electoral 
process?
    Answer. The United States has sponsored, and will continue to 
sponsor, a wide range of initiatives to reach out to Iraqi women, from 
homemakers to professionals and politicians, to ensure their rights and 
opportunities to fully participate in Iraqi civil society.
  --Earlier this year, Under Secretary Dobriansky hosted a roundtable 
        with Iraqi women to elicit their ideas for ensuring the full 
        integration of women in the reconstruction process. As a result 
        of these discussions, the Office of International Women's 
        Issues provided a list of qualified women inside and outside 
        Iraq who are available to work with the Coalition Provisional 
        Authority on reconstruction issues.
  --The State Department helped send a delegation of Iraqi women to the 
        June 2003 Global Summit of Women (GSW) conference in Morocco. 
        Forty women ministers and over 700 delegates from approximately 
        80 countries met to discuss women's economic development and 
        business. It was the first GSW meeting held in the Arab world, 
        and provided Iraqi women with the opportunity to network with 
        their counterparts in the region.
  --The Department of State's Educational and Cultural Affairs Bureau 
        is organizing a series of International Visitor (IV) Programs 
        on business opportunities for professional Iraqi women. It is 
        also organizing interactive Digitized Video Conference programs 
        between members of Iraqi women's NGOs and their counterparts in 
        the United States.
    Since April 1, 2003, USAID has focused on women's equality and 
empowerment in Iraq, through assistance to local government and civil 
society organizations, directly and immediately touching the lives of 
Iraqi women. USAID-funded conferences and training have helped Iraqi 
women learn about democracy, human rights, women's legal rights, and 
women's civil society organizations that enable women to advocate for 
their needs at both the local and national government levels. The CPA 
and USAID, for example, are working with local women's groups to 
establish nine centers for women in Baghdad and five in Southern Iraq 
to provide educational programs, job skills training, rights awareness 
seminars, and mentoring programs. Additionally, in early 2003, the 
United States committed approximately $2.5 billion in humanitarian and 
reconstruction aid to Iraq. In November 2003, Congress approved 
President Bush's request for an additional $18.7 billion over the 
coming 18 months. Some of these funds will be used to restore Iraq's 
infrastructure, while other portions are allotted to democracy 
building, economic development, employment, medical, and educational 
needs, with full attention to the equal participation of women.
    The leadership experiences gained through involvement in these 
various activities, including in-country councils, conferences, 
external visits, and inter-organizational collaboration are helping 
prepare Iraqi women for professional and political careers. By 
supporting these types of initiatives the United States is working to 
expand the pool of trained Iraqi women, a vital task given the 
centrality of Iraqi women to the future prosperity and stability of 
Iraq.
    Question. The Iraqi Governing Council passed Resolution 137 in a 
closed session in December 2003. The resolution sought to impose 
sharia--Islamic law--in the new Iraq. Imposing sharia would have 
severely rolled back rights that women have enjoyed in Iraq since the 
end of the Ottoman Empire. Iraqi women took to the streets protesting 
the measure and succeeded in having it revoked. The Transitional 
Administrative Law has a bill of rights for all citizens and says that 
sharia is one of many sources of law.
    How confident are you that the rights of women will be preserved in 
Iraq after the transfer of sovereignty?
    What is being done now to lay the groundwork for preserving the 
rights of women in Iraq?
    Answer. The Transitional Administrative Law (TAL) guarantees the 
basic rights of all Iraqis, men and women, including freedoms of 
worship, expression, and association. The TAL also protects union and 
political parties and outlaws discrimination based on gender, class, 
and religion. Looking ahead beyond the June 30 transfer of sovereignty, 
this Law provides that the electoral system should aim to achieve the 
goal of having women constitute not less than 25 percent of the 
Transitional National Assembly. In addition, seven women were recently 
appointed as Deputy Ministers in the current Iraqi administration.
    As for other groundwork, U.S. policy is to ensure that Iraqi women 
are fully involved as planners, implementers, and beneficiaries in the 
reconstruction of their country. The Administration has worked closely 
with Congress to establish programs dedicated to promote equal rights 
and economic opportunities for Iraqi women.
    On March 8, I announced two more initiatives: First, a $10 million 
Iraqi Women's Democracy Initiative to promote women's political 
participation. A comprehensive and open RFP for this initiative has 
been posted, with proposals due by June 1. We expect to select the 
winning entries and inaugurate actual projects on the ground shortly 
thereafter. The second initiative is a United States-Iraq Women's 
Network. This is a public-private partnership between Americans and 
Iraqis to mobilize expertise and resources for Iraqi women. At the same 
time, USAID is implementing civic, economic, and political training 
programs for Iraqi women totaling $17 million.
    There is also significant international support for women's 
initiatives in Iraq. The British government, through DFID, supports 
women's programs. The recent Iraq Reconstruction Conference in Europe 
devoted a special panel to the subject of women. Finally, the 
international NGO community is actively engaged in supporting Iraqi 
women's programs as well.
    Question. What can we count on you to do to ensure that our 
assistance funds support the hard work of indigenous Afghan women's 
NGOs and help build Afghanistan's civil society?
    Answer. In fiscal year 2004, $60 million was specifically earmarked 
by Congress to support women and girls in Afghanistan, and we have 
exceeded that requirement. USG programs that benefit women are a mix of 
components within existing programs ($65,469,000) and new programs 
($15,000,000) that focuses on advancing the participation and voice of 
Afghan women in local governance, and their access to services. The 
U.S. Agency for International Development, Department of State, and 
many other government and non-government entities are engaged in 
funding and implementing projects.

    AFGHANISTAN--RELEASE OF 2004 SUPPLEMENTAL FUNDS FOR AFGHAN WOMEN

    Question. Congress provided substantial fiscal year 2004 
supplemental appropriations for aid to Afghanistan. $60 million was 
directed to programs to aid Afghan women. How will the $60 million be 
allocated, and when will it be released?
    Answer. In fiscal year 2004, while Congress earmarked $60 million 
for Afghan women and their development, the United States Agency for 
International Development (USAID) has been spending $71.8 million on 
advancing the status of women in Afghanistan. These funds include the 
continuation of projects including education ($29 million), healthcare 
($10.3 million), private-sector integration ($1.5 million), political 
development by supporting the Bonn Process ($15 million) and government 
support to the Afghanistan Ministry of Women's Affairs ($1 million). 
Through these initiatives, USAID is working to ensure that women are 
active participants in the private and public sectors of Afghan life. 
The supplemental funds also went to the Women's Empowerment Program 
($15 million), which helps women participate in community activities 
and local governance. This program includes the Women's Private Sector 
Initiative, which strives to provide women with enterprise-skills 
training and other tools to strengthen the environment for women's 
involvement in the private sector.
    The Empowerment Program also includes the Women's Teacher Training 
Institute and Afghan Literacy Initiative, which target young girls who 
do not have formal access to school with literacy-development programs.
    Question. Outwardly, there has been progress on women's rights in 
Afghanistan, with a women's bill of rights and a set-aside for 25 
percent of the lower house of the legislature for women. However, there 
has been little improvement in the lives of most Afghans--men, women, 
and children--especially those in rural areas.
    What is the strategy to reach women and other vulnerable Afghans in 
rural areas?
    Answer. Much of the $60 million specifically earmarked by Congress 
to support women and girls in Afghanistan has gone to those living in 
rural areas.
    In education, the Afghan Primary Education Program (APEP) has set 
aside $20 million of a total $95 million in fiscal year 2004 to provide 
accelerated learning for girls, train female teachers, provide 
textbooks for girls in both the formal and informal school systems, and 
provide vocational training for women. In addition, we are contracting 
the reconstruction of a women's dormitory ($8 million) that will house 
1,000 women from rural areas and allow them to reside in safe 
surroundings while they attend University of Kabul and/or the Education 
University.
    In healthcare, the Rural Expansion of Afghanistan's Community-based 
Healthcare (REACH) program is significantly lowering maternal and child 
mortality and morbidity in Afghanistan. Of the $52 million total 
funding for REACH in fiscal year 2004, over $10 million is being given 
in grants for the delivery of health services by local women-focused 
NGOs and to vocational training for women as community healthcare 
workers and midwives. The first class of 25 rural-based midwives 
graduated from an 18-month long training in April 2004, and by summer 
150 trained midwives will be attending to Afghan women and children.
    In the private sector, we are providing $3.5 million for private 
sector development for women and to secure women's property rights by 
helping to educate women about their property rights in Islam and 
assisting women in accessing sensitively delivered legal assistance to 
use new, more transparent administrative and judicial processes.
    To support democracy, civil society, and the elections, $25,000,000 
of a total $139,900,000 in fiscal year 2004 funding is being used to 
support women's participation in the democratic process. A portion of 
these funds was used to provide technical assistance to the 
Constitutional Commission and the Constitutional Loya Jirga, including 
support for public education campaigns and consultations focused 
specifically on ensuring that women's views were incorporated in the 
constitutional process. Women participated in all phases of the 
drafting process, made up 20 percent of the Loya Jirga Delegates, and 
succeeded in passing a new constitution enshrining equal rights for 
women. These funds are also being used to ensure the registration and 
participation of women in upcoming national elections. We have set 
aside $10 million to develop a community empowerment initiative that 
ensures women's participation in local governance, builds capacity of 
women's community development councils, oversees women's block grants 
issued by the Ministry of Rural Rehabilitation and Development, and 
supports the coordination of multiple activities and services for women 
at the community level. The program will also provide small grants to 
the councils to develop community-owned centers that provide a venue 
for women to participate in governance issues; that provide them with 
services such as literacy training, health education, early childhood 
development assistance, vocational training and micro credit, and where 
they can develop cooperative enterprises. We are also providing $1 
million to help fund the Ministry of Women's Affairs and $2.5 million 
to fund the new Office of Women's Internal Affairs and Human Rights in 
the Afghan Ministry of Foreign Affairs. The United States-Afghan 
Women's Council and State Department have fostered women's 
participation in the political, social, and economic sectors through 
exchanges, mentoring, and specific projects totaling nearly $1 million 
for programs in rural-based women's centers, including adult literacy 
and vocational training.
    Finally, our PRTs are supporting women and girls, with $469,000 
spent to renovate women's dormitories at Kandahar University and Kunduz 
Teacher's Institute and for the rehabilitation of a women's sponsored 
silkworm production factory in Mazar-i-Sharif. We expect other PRT 
projects supporting women to be nominated for funding in the future.
    Question. What is being done to improve security so aid efforts can 
reach more of the population of Afghanistan?
    Answer. The presence of Provincial Reconstruction Teams (PRTs) 
throughout Afghanistan is intended to provide a secure environment for 
NGOs to safely carry out activities. PRTs are a multinational effort. 
In addition to the ten United States-led PRTs, the UK, New Zealand, and 
Germany (under NATO) are also leading PRTs around the country, and 
several other nations have indicated a willingness to lead their own. 
PRTs will form the basis for an expanded NATO/ISAF presence in 
Afghanistan, particularly critical in the run-up to September 2004 
elections.
    Question. On March 8, 2004--International Women's Day--President 
Hamid Karzai was quoted as saying, ``Please, my dear brothers, let your 
wives and sisters go to the voter registration process. Later, you can 
control who she votes for, but please, let her go.''
    What is your strategy to really empower women and have them 
participate in society as equal citizens under the law?
    Answer. First, we want to get women registered to vote and into 
voting booths. Second, we are funding programs to development of civil 
society, particularly human rights for women. Here are some details.
    The Constitutional Loya Jirga approved a new Constitution in 
January 2004. Women were fully engaged in the constitutional process. 
Two of the nine members of the Constitutional Drafting Committee, and 
seven of the 35 members of the Constitutional Review Commission were 
women. Women held almost 20 percent of the 502 seats, or 105 places, in 
the Constitutional Loya Jirga.
    Women achieved a significant gain with the Constitution's specific 
mention of women as citizens, and its provision to set aside 25 percent 
of its seats in the lower house and 17 percent in the upper house of 
Parliament for women. Afghan women will have the right to vote and run 
for office in the elections, which are scheduled to take place in 
September 2004.
    As of May 20, 2.56 million eligible voters have been registered to 
vote. Overall, 807,000 or 31.5 percent of registered voters are female, 
with a 45 percent level in the Central Highlands. Separate secure 
spaces have been created for women at polling stations and at voting 
facilities.
    Special efforts are being made to educate using focus group 
discussion, community interaction and NGO meetings designed to 
encourage village leaders, men and women on the importance of women 
voting. Special emphasis has been given to increasing information 
targeted at women. Over 3,000 civic education classes have been held 
for a total of 70,500. Of that group, approximately 25,000 have been 
women. Two Asia Foundation partners are conducting civic education 
seminars related to the elections. Through a local Afghan NGO called 
Awaz, 200,000 cassette tapes will be distributed in the south, 
southeast and east, specifically targeting messages for women, 
encouraging them to participate in the process and vote. Approximately 
400 traveling theater productions carry similar messages to the 
provinces. Many of these performances will feature the role of women in 
the elections.
    Media use is critically important. Through a Kabul-based media 
center, the United States has also funded video documentaries and made-
for-TV features on women in elections, women in politics, and three 
``All Women's Radio Stations'' that host political programs to 
encourage women to register to vote. The percentage of women 
registering to vote in cities such as Mazar-e-Sharif and Herat where 
these shows are aired are double the national average. The United 
States supports content for Radio and Television Afghanistan (a 
national agency) on elections, and specifically provided content to the 
Internews/Tanin network on its recent weekly program on Women and 
Islam.
    In fiscal year 2004, $60 million was specifically earmarked by 
Congress to support women and girls in Afghanistan, and we have 
exceeded that requirement. U.S. programs that benefit women are a mix 
of components within existing programs ($65,469,000) and new programs 
($15,000,000) that advance the participation and voice of Afghan women 
in governance, and their access to services. We have many projects in 
place to ensure the protection and promotion of women's rights. The 
United States addressed the needs of women in many of its 
reconstruction programs and implemented more than 175 projects to 
increase women's political participation, role in civil society, 
economic opportunities and education. The United States has allocated 
$2.5 million for the construction of Women's Resource Centers in 14 
provinces throughout Afghanistan. In Kabul and nearby towns, the United 
States supports the establishment of an additional 10 neighborhood-
based Women's Centers. All these Centers will provide educational and 
health programs, job skills training and political participation 
training to women. Through the United States-Afghan Women's Council, 
the United States is providing $1 million for educational training at 
the Centers.
    In sum, our strategy for Afghanistan includes supporting and 
encouraging Afghanistan to evolve into a nation that respects human 
rights, possesses strong democratic institutions and an independent 
judiciary, and conducts free and fair elections. We encourage full 
implementation of the Constitution and establishment of programs that 
promote economic and political empowerment.
    Question. How are we ensuring that women will be involved fully in 
electoral and political processes?
    Answer. The United States is providing $15 million to assist in 
voter registration, and another $8.86 million to support the electoral 
process in Afghanistan through programs that include civic and voter 
education, focus group research, training for political parties and 
civic activists. Extensive voter education will be required to inform 
the population about both the importance of the elections and the 
procedures for participating in the elections, which are scheduled for 
September 2004. Special programs have targeted women, educating them on 
the importance of voting and political participation. Voter 
registration is underway, and as of May 20, 2.56 million eligible 
voters have been registered to vote. Overall, 807,000 or 31.5 percent 
are female, with a 45 percent level in the Central Highlands. Special 
efforts are being made to encourage women to register, approaching 
village leaders and the men and women themselves through focus group 
discussions, community interaction and NGO meetings. The rural nature 
and security concerns make registration difficult, so the United States 
is funding a program of mobile vans to go directly to voters in their 
villages. In Mazar-e-Sharif and Herat, where women have their own radio 
programs, women are registering at twice the national average.
    To support democracy, civil society, and the elections, $25 million 
of a total $139.9 million in fiscal year 2004 funding is being used to 
support women's participation in the democratic process. A portion of 
these funds were used to provide technical assistance to the 
Constitutional Commission and the Constitutional Loya Jirga, including 
support for public education campaigns and consultations focused 
specifically on ensuring that women's views were incorporated in the 
constitutional process. These funds are also being used to ensure the 
registration and participation of women in the national elections, 
which are scheduled for September 2004. The United States funded a $1.2 
million program in political party development and domestic election 
monitoring and also funded a countrywide program on civic education, 
particularly for women, to promote their acceptance of and familiarity 
with democratic norms and civic responsibility in Afghanistan.
    The United States also funded a project to promote women's 
participation in the political process in central Afghanistan, offering 
workshops and discussion groups to rural women and support to potential 
female Constitutional Loya Jirga and parliamentary candidates. We have 
set aside $10 million to develop a community empowerment initiative 
that ensures women's participation in local governance, builds capacity 
of women's community development councils, oversees women's block 
grants issued by the Ministry of Rural Rehabilitation and Development, 
and supports the coordination of multiple activities and services for 
women at the community level. The program will also provide small 
grants to the councils to develop community-owned centers that provide 
a venue for women to participate in governance issues, have access to 
services such as literacy, health education, early childhood 
development, vocational training and micro credit, and where they can 
develop cooperative enterprises. We are also providing $1 million to 
help fund the Ministry of Women's Affairs and $2.5 million to fund 
proposals form the new Office of Women's Internal Affairs and Human 
Rights in the Afghan Ministry of Foreign Affairs.

       MILLENNIUM CHALLENGE ACCOUNT AND CORE DEVELOPMENT ACCOUNTS

    Question. Funding for the MCA in fiscal year 2004 was far below the 
level needed to meet the President's commitment, and the fiscal year 
2005 budget request includes only $2.5 billion for the MCA. Moreover, 
core development accounts are being depleted. This year's request is 
$56 million below last year's enacted levels.
  --How do you justify the reductions in the core development accounts?
  --Do you expect to meet the President's commitment of $5 billion in 
        new funds for the Millennium Challenge Account without further 
        reductions on other development assistance?
    Answer. These questions have been sent to MCC for response.
    The Committee notes that no response was received.
    Question. Over the past decade, 370 women have been brutally 
murdered in a string of unresolved murders in the cities of Juarez and 
Chihuahua, Mexico. Over 450 women have been abducted--of those, 30 are 
Americans--and over 100 have shown signs of sexual assault, rape, 
beating, torture and mutilation. Media reports have tied the killings 
to drug running and have implicated state and local police. Mexico's 
President, Vicente Fox, has been slow to act on this issue. Recently, 
bending to international pressure, he has appointed a federal 
commission to prevent and punish violence against women in Ciudad 
Juarez and a special prosecutor to coordinate federal and state efforts 
to punish assailants, but both efforts lack funding and teeth.
    What are you doing to raise the profile of these murders and get 
the Mexican Government to take effective action?
    Answer. The murders of women in Ciudad Juarez are a matter of great 
concern to the Department of State. The Department of State, with the 
assistance of the U.S. Embassy in Mexico City and the U.S. Consulate 
General in Ciudad Juarez, has closely followed the situation and the 
inconclusive efforts of Chihuahua state law enforcement authorities to 
resolve these murders. Department of State officials have met with 
Mexican human rights organizations to discuss the latter's view that 
these cases have been mismanaged by Mexican state and local law 
enforcement. Department of State officials have also discussed the 
matter with officials of the Mexican Government. I raised the issue 
with my Mexican counterpart during the November 12, 2003, United 
States-Mexico Binational Commission meeting, reiterating our concern 
over this tragic situation.
    As you know, President Fox has ordered the Federal Attorney 
General's Office (PGR) to assist local authorities in bringing to 
justice those responsible for these crimes. In June of last year, units 
of the Federal Preventive Police were sent to Ciudad Juarez to 
reinforce the local authorities. In August, a joint task force was 
created between the PGR and the State Attorney General's office. In 
October President Fox appointed a commissioner to coordinate the 
Mexican Federal Government's participation in the case, and in January 
of this year the PGR named a special prosecutor on the matter.
    While we cannot independently verify the figures, we note the 
Mexican Government claims that the recent appointments and coordination 
efforts appear to have reduced the incidence of murders of women in the 
city. The Mexican Government has also advised that, while overall the 
investigations are still not advancing as fast as they wish, of 328 
cases involving murders of women, 103 convictions have been obtained, 
and arrest warrants have been issued in another 27 cases.
    We note that Mexico has been open to outside expert evaluation of 
the problem and has invited numerous entities, including the United 
Nations Office on Drugs and Crime and the Inter-American Commission on 
Human Rights Rapporteur on the Rights of Women, to visit Ciudad Juarez 
to examine the situation.
    Offers of technical assistance and training have been made to 
Mexican law enforcement authorities by U.S. law enforcement authorities 
and a working group has been formed with the Mexicans to facilitate the 
provision of assistance. The U.S. Government funds and coordinates a 
broad range of training programs as well as material and technical 
assistance to Mexican federal law enforcement agencies to increase 
their crime-fighting capacities, including their ability to render 
assistance to Mexican state and local law enforcement. We have offered 
to tailor technical or other assistance to the PGR or to state and 
local police, if desired by the appropriate Mexican authorities, to 
help them address the crimes in the Ciudad Juarez area.
    Question. What revenues are being generated by Iraqi oil 
production? How are these funds being accounted for? What percentage of 
Iraq's reconstruction is being paid for from Iraqi oil revenues?
    Answer. Iraq's 2004 first quarter oil revenues just surpassed the 
$4 billion mark. Since the liberation of Iraq, over $9 billion has been 
generated. The current budget projects 2004 revenues of $14.175 
billion, but some current projections estimate that it will rise to at 
least $14.5 billion.
    The Iraqi Oil Ministry accounts for oil revenues with assistance 
from the Coalition Provisional Authority in Baghdad. Oil export 
revenues, in accordance with United Nations Security Council Resolution 
1483, are deposited directly in the Development Fund for Iraq. This 
fund, as well as the export oil sales themselves, are subject to 
external audit by an independent public accountant that reports both to 
CPA and to the International Advisory and Monitoring Board (IAMB) 
endorsed by the resolution. The IAMB includes representatives from the 
International Monetary Fund, the World Bank, the Arab Fund for Social 
and Economic Development and the United Nations.
    The United Nations and World Bank needs assessment for Iraq's 
reconstruction from 2004 to 2007 totaled $56 billion. CPA currently 
projects that oil revenues from 2004 to 2007 will finance $12.1 billion 
of capital projects, or just under 22 percent of the total estimated 
reconstruction cost of $56 billion.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin

    Question. Would you support and work for a modification of the 
MCC's eligibility criteria to provide a greater focus on women and to 
include these additional indicators in the criteria in order to endure 
that this half of the world's population is not left to suffer 
discrimination and disparate treatment even as their countries move 
toward greater development?
    Answer. I strongly believe that the participation of women is vital 
to the success of a country's long-term development strategy. The MCC 
criteria already support this proposition. In the selection of eligible 
countries, the Board is required by the legislation establishing the 
MCC to, where appropriate, take into account and assess the treatment 
of women and girls. Eligibility criteria already require ``political 
pluralism, equality and rule of law,'' ``respect for human and civil 
rights,'' and ``investments in the people of the country, particularly 
women and children.'' The indicators used this past year reflect this 
emphasis. Countries that did not provide suffrage or civil rights for 
women were unlikely to score well on the indicators regarding political 
rights, civil liberties, or voice and vote. Countries that did not 
provide adequate education or health care for women did not score well 
on indicators of primary education and inoculation rates. To provide a 
check on these indicators, the Board was able to consider information 
from the State Department Human Rights Report regarding the treatment 
of women and girls and to consider both the level and trend of girl's 
enrollment rates in primary school.
    The eligibility criteria in the MCC's legislation already place a 
clear and rightful emphasis on the role of women. No additional 
legislative language is needed. I believe the MCC should evaluate its 
methodology and indicators each year to make sure it is meeting the 
criteria and be open to including new indicators that provide a better 
measure of whether a country has, as the statute states, demonstrated a 
commitment to ``just and democratic governance, economic freedom, and 
investments in the peoples of such country, particularly women and 
children.''

               BASIC EDUCATION FUNDING AND THE G-8 SUMMIT

    Question. Mr. Secretary, you and I agree that basic education is 
important to our strategic and developmental interests around the 
world. You have spoken eloquently on the subject many times, and our 
National Security Strategy recognizes the link between poor education 
and reduced security. Unfortunately, the Administration's budget 
request would cut basic education support by $23 million under 
Development Assistance.
    Last December, 18 Senators and 63 Members of the House wrote to the 
President urging him to use the G-8 Summit this June as a venue to 
launch a significant U.S. Initiative on basic education and galvanize 
the world community to achieve the goal of education for all by 2015.
    Reports suggest the Administration is proposing that the Middle 
East be a principal focus of this year's G-8 Summit. I understand that 
priority. I do not think it is incompatible with a major initiative to 
promote basic education.
  --Please explain the proposed funding cut for basic education in the 
        Development Assistance account in light of our strategic 
        objectives.
  --Please comment on the possibility that the Administration might 
        make this year's G-8 Summit the ``Basic Education Summit''.
    Answer. Education is a priority issue for this Administration. It 
is an important long-term investment in sustaining democracies, 
improving health, increasing per capita income and conserving the 
environment. Economic growth in developing countries requires creating 
a skilled workforce. President Bush has helped to give education a 
strong profile in the G-8 in recent years, and work is being carried 
forward actively both multilaterally and bilaterally. We are working 
internationally to support countries' efforts to improve the education 
and to get measurable results on enrollment and educational 
achievement.
    Since the submission of the USAID fiscal year 2005 Congressional 
Budget Justification, projections on basic education levels have 
changed somewhat for both fiscal year 2004 and fiscal year 2005. While 
there is a $22 million reduction in Basic Education funded by 
Development Assistance (DA) from fiscal year 2004 to fiscal year 2005 
(from $234 million to $212 million), the currently projected total for 
basic education from all accounts for both fiscal year 2004 and fiscal 
year 2005 is $334 million. The Administration intends to continue to 
maintain its strong interests in this area. In fact, the United States 
support for basic education from all accounts has more than doubled 
from fiscal year 2001 to fiscal year 2004, in recognition of its 
importance to giving people the tools to take part in free and 
prosperous societies.

                         FEMALE GENITAL CUTTING

    Question. It is my understanding that USAID is developing a 
strategy for eliminating female genital cutting around the world. I 
would like to call to your attention the work of the group Tostan in 
Senegal, which has impressed observers by inspiring the mass 
abandonment of female genital cutting in more than 1,200 villages since 
1997. This kind of extraordinary progress should be encouraged.
    Please provide me with (a) a timetable for the timely completion of 
USAID's strategy, (b) an indication of the likely role of multi-
dimensional programs such as Tostan in that strategy, and (c) your 
sense of whether it might be possible to begin supporting effective 
programs such as Tostan even before the strategy is completed.
    Answer. (a) USAID will complete its Female Genital Cutting (FGC) 
Abandonment Strategy and implementation plan by early summer.
    (b) Multi-dimensional programs such as Tostan currently are 
integral to USAID's work. Accordingly, USAID incorporated eradication 
of FGC into its development agenda and adopted a policy on FGC in 
September 2000. To integrated this policy into programs and strategies, 
USAID:
  --Supports efforts by indigenous NGOs, women's groups, community 
        leaders, and faith-based groups to develop eradication 
        activities that are culturally appropriate and that reach men 
        and boys as well as women and girls.
  --Works in partnership with indigenous groups at the community level, 
        as well as with global and national policymakers, to reduce 
        demand by promoting broader education and disseminating 
        information on the harmful effects of FGC.
  --Collaborates with other donors and activists to develop a framework 
        for research and advocacy and to coordinate efforts, share 
        lessons learned, and increase public understanding of FGC as a 
        health-damaging practice and a violation of human rights.
    (c) USAID currently funds Tostan projects in Senegal, Guinea, 
Burkina Faso, and Mali.
    In addition to our work with Tostan, USAID is involved with other, 
comparable organizations. For example, in Nigeria, USAID's local 
partners include the Women's Lawyers Association and Women's 
Journalists Association. These groups work with us in programs 
involving community media and traditional media advocacy to change 
social norms regarding FGC.
    We have conducted an evaluation for Tostan approach. Recently, we 
supported the dissemination of the findings and results at a symposium 
in Dakar, Senegal attended by national and international 
nongovernmental organizations as well as government ministries.
    In Mali, we worked with an important women's Islamic group which 
reversed a previous stance when they affirmed that female circumcision 
is optional and that the practice is not mandatory under Islam.
    Question. I would like to have clarification on the 
Administration's position on contributions to the Global Fund for 
fiscal year 2005. The President's budget provides on $200 million for 
the Global Fund in fiscal year 2005. This is less than half of the $547 
million Congress provided in 2004 and far less than the $1.2 billion 
needed from the United States if we are to meet one-third of the Fund's 
projected need for 2005. The Global Fund is a critical partner in the 
14 countries that are part of PEPFAR (President's Emergency Plan for 
AIDS Relief) and is needed, perhaps even more acutely, in all the other 
countries that PEPFAR won't reach. (The Global Fund currently provides 
grants in 122 countries.) The Global Fund is also currently the most 
important new source of funding to fight TB and malaria globally.
  --Why has the Administration proposed such severe cuts to the Global 
        Fund?
  --How will the Global Fund be able to renew existing grant awards 
        from Rounds 1-3, fund Round 4, and award grants in Rounds 5 and 
        6 to the many countries that are equally needy yet left out of 
        the 14 country initiative, if the United States commitment to 
        the Global Fund is cut by more than half?
  --How can we provide leadership to the Fund while providing only $200 
        million, which is only six percent of its budget and less than 
        one-third of what is needed to keep existing programs running?
  --Will you support funding the Global Fund at a level of $1.2 billion 
        to meet its 2005 need?
    Answer. The President's Emergency Plan for AIDS Relief made a $200 
million per year commitment of pledges for the five-year period of 
2004-2008. Our fiscal year 2005 request therefore remains the same as 
our request in fiscal year 2004. We were the first donor to make such a 
long-term pledge of support to the Global Fund, which together with our 
previous donations to the Fund still represents nearly 40 percent of 
all pledges and contributions through 2008.
    The American people can be extremely proud of our record of support 
for the Global Fund. Our support for the Global Fund is an integral 
part of the President's Emergency Plan. As you note, we cannot make 
every country a focus country, and there are other nations equally 
needy. When the United States contributes to a project of the Global 
Fund, it means that our dollars are leveraged in these grants by a 
factor of two, since the United States thus far has provided one-third 
of all Fund monies. So it is in our interests, as well as the interest 
of all people struggling against HIV/AIDS, malaria and tuberculosis, to 
see to it that the Global Fund is an effective partner in the fight 
against these diseases.
    The Fund nevertheless is a relatively new organization, 
particularly in comparison to the 20 years of bilateral HIV/AIDS 
programs carried out by the United States and other bilateral donors. 
Like all new organizations, it is quite understandably undergoing some 
growing pains. As of April 1, 2004, the Global Fund had disbursed 
approximately $280 million since the Global Fund's Board approved its 
first round of funding in January 2002. This compares to the first $350 
million under the President's Emergency Plan sent to our focus 
countries only three weeks after the program first received its 
funding.
    This is not to criticize the Global Fund for being slow--indeed, 
the United States is one of the donors that has been urging the Global 
Fund to move carefully to ensure accountability and avoid waste. It 
does highlight, however, the potential effectiveness of bilateral 
assistance where donors already have an in-country presence.
    We need both multilateral and bilateral avenues of assistance; 
neither the Global Fund nor bilateral donors can do it all. Other 
bilateral donors also need to step up with greater technical assistance 
to Global Fund projects, without which those projects will founder.
    In addition, the United States believes that in order for funds to 
be effectively and efficiently disbursed, Country Coordinating 
Mechanisms (CCMs) and Local Fund Agents (LFAs) must be actively engaged 
in overseeing the implementation of grant activities. The United States 
would like to see in particular, a stronger representation of the 
private sector, NGOs and people living with the diseases on CCMs, which 
are largely chaired by government ministries. Engaging a broader 
representation of various stakeholders will help reduce potential acts 
of corruption and will allow for a wider distribution of funds so that 
more individuals in need can be served.
    The Global Fund has already announced, in advance of the June Board 
meeting, that technically approved Round Four proposals will not exceed 
the cash already on-hand; so that at least through this Round, no 
funding gap exists. And we along with other donors believe that as a 
new organization, it may be best for the Global Fund not to press its 
current capacity too far, with Round Five not occurring until 2005 and 
Round Six in the following year. Its first projects will not come up 
for review and possible renewal until August 2004, and we will have a 
better sense at that time of its performance record and future needs.

                         TUBERCULOSIS TREATMENT

    Question. Will you push to expand overall U.S. funding to fight 
tuberculos to our fair share of the global effort--about $350 million--
including our fair share to the Global Fund? (The United States is 
currently investing about $175 million in tuberculosis from all sources 
including our contribution to the Global Fund.)
    Answer. The fight against tuberculosis (TB) is a very high priority 
for the United States Agency for International Development (USAID) and 
the United States is the largest bilateral donor for international TB. 
Over the last several years, our funding commitment to international TB 
programs has increased dramatically--from $10 million in fiscal year 
1998 to about $84 million in fiscal year 2004. TB is a key area in our 
programs to address infectious diseases. We focus on strengthening TB 
control at the country level by supporting programs to expand and 
strengthen the World Health Organization recommended ``Directly 
Observed Treatment Short Course (DOTS)'' strategy in 34 countries, 
including activities in 16 of the 22 high-burden TB countries. We also 
support research related to new and improved treatment regimens, new 
diagnostics and approaches to improve the delivery of TB treatment to 
patients co-infected with TB and HIV/AIDS. In the near future, we will 
expand our research activities by initiating a new partnership with the 
Global Alliance for TB Drug Development. We work in close partnership 
with the National Institutes of Health (NIH) in the area of research, 
and with the Centers for Disease Control and Prevention (CDC) in 
supporting DOTS programs throughout the developing world.
    The U.S. Government also is the largest bilateral donor to the 
Global Fund; it has made almost one-third of the contributions (almost 
$1 billion) and more than one-third (almost $2 billion) of the pledges 
to date. At its eighth board meeting in June in Geneva, the Global Fund 
approved a fourth round of grants. The four rounds of grants will 
provide more than $3 billion over two years and more than $8 billion 
over five years to almost 130 countries. The two-year funding for the 
four rounds includes 13 percent (almost $400 million) for TB grants, 3 
percent (almost $100 million) for HIV/TB grants, and 1 percent (more 
than $20 million) for integrated (HIV, TB, and malaria) grants.
    The resources required to fight TB are considerable. While we have 
to continue with our investments, we need to balance increased funding 
to TB with other extremely important programs, such as malaria and 
child and maternal health. USAID and the Centers for Disease Control 
and Prevention (CDC) are working actively with the Stop TB Partnership 
and other donors to help meet those needs and to identify new resources 
to support TB control worldwide.
    Question. Will you ensure that the President's AIDS Initiative 
makes it a priority to expand access to TB treatment for all HIV 
patients with TB and links TB programs to voluntary counseling and 
testing for HIV?
    Answer. The Office of the U.S. Global AIDS Coordinator is committed 
to the appropriate coordination and integration of tuberculosis and 
HIV/AIDS services and programs. As you are aware, opportunistic 
infections, such as TB and malaria, play a fundamental role in the 
overall health of HIV infected individuals. TB is frequently the first 
manifestation of HIV/AIDS disease and the reason many people first 
present themselves for medical care.
    Since both tuberculosis treatment and HIV/AIDS treatment require 
longitudinal care and follow-up, successful TB programs may provide 
excellent platforms upon which to build capacity for HIV/AIDS 
treatment. The Emergency Plan for AIDS Relief will support TB treatment 
for those who are HIV-infected and develop HIV treatment capacity in TB 
programs. In addition, interventions that increase the number of 
persons diagnosed and treated for HIV/AIDS will increase the need for 
TB treatment and care services. Therefore, action is required to build 
or maintain necessary tuberculosis treatment capacity. For example, 
laboratories, clinical staff, community networks, and management 
structures used for TB control can be upgraded to accommodate HIV/AIDS 
treatment. Finally, because the prevalence of HIV infection is high 
among persons with tuberculosis, TB programs will be important sites 
for HIV testing in the focus countries as well as ensuring that TB 
testing is available in HIV testing, treatment and care sites.
    Question. Mr. Secretary, in September 2002, the National 
Intelligence Council released a report that identified India, China, 
Nigeria, Ethiopia and Russia, countries with large populations and of 
strategic interest to the United States, as the ``next wave'' where HIV 
is spreading rapidly. (India already carries one-third of the global TB 
burden, and because AIDS fuels TB, TB rates will also skyrocket as AIDS 
spreads.)
  --Congress mandated a 15th country be included as a part of the 
        President's AIDS Initiative. The PEPFAR strategy report stated 
        that this 15th country will be named shortly. Do you know that 
        country this will be? If so, can you name the country?
  --If not, what consideration is being given to include India as the 
        15th country, given the large number of HIV cases already 
        present, the growing HIV problem that is likely to become a 
        more generalized epidemic and India's strategic importance?
  --India has a remarkable TB program that has expanded over 40 fold in 
        the last 5 years, treated 3 million patients, and trained 
        300,000 health workers. I would suggest that India's TB program 
        has important lessons for the scale-up of AIDS treatment 
        programs in India and globally and we should support it and use 
        it as a model in fighting HIV/AIDS. Will you support such an 
        effort?
    Answer. Consultations regarding the selection of a 15th country 
have been underway. As a first step, Ambassador Randall L. Tobias, the 
U.S. Global AIDS Coordinator, has consulted with senior officials 
within the Administration, including at the U.S. Agency for 
International Development (USAID), the U.S. Department of Health and 
Human Services (HHS), and the U.S. Department of State, about possible 
candidate countries for the 15th focus country. From this consultative 
process, the following list of 39 countries were identified by one or 
more of the agencies named above as a potential candidate for the 15th 
focus country.

                     EMERGENCY PLAN FOR AIDS RELIEF

            15th focus country--initial candidate countries
    Albania, Armenia, Azerbaijan, Bangladesh, Belarus, Bolivia, Brazil, 
Burma, Cambodia, China, Croatia, Egypt, El Salvador, Estonia, Georgia, 
Guatemala, Honduras, India, Indonesia, Jordan, Kazakhstan, Kyrgystan, 
Latvia, Lithuania, Macedonia, Mexico, Moldova, Nepal, Nicaragua, Peru, 
Philippines, Romania, Russia, Tajikistan, Thailand, Turkmenistan, 
Ukraine, Uzbekistan, and Vietnam.
    Currently, these countries are being considered in the context of 
the ten standards listed below. These considerations provide a basis 
for comparative analysis and discussion regarding the potential 
candidates. It is important to note that these do not represent 
weighted criteria against which countries will be quantitatively 
evaluated. We do not expect that any one country will excel in all 
areas; instead, each country is being evaluated for its collective 
strengths and weaknesses.
  --Severity and Magnitude of the Epidemic.--The prevalence rate, the 
        rate of increase in HIV infection, and the total number of 
        people living with HIV/AIDS.
  --Commitment of Host-Country Government.--The basis of leadership's 
        willingness to address HIV/AIDS and stigma and its desire to 
        partner in an amplified response.
  --Host-Country commitment of resource potential.--The degree to which 
        the host government has the capacity and the determination to 
        make trade-offs among national priorities and resources in 
        order to combat HIV/AIDS.
  --Enabling Environment.--The level of corruption, stigma, free press, 
        state of government bureaucracies and the strength of bilateral 
        partnerships, all of which support effective use of Emergency 
        Plan resources.
  --U.S. Government In-country Presence.--Whether the country has a 
        strong U.S. Government bilateral in-country presence by USAID 
        and/or HHS.
  --Applicability of Emergency Plan Approaches.--Whether modes of 
        transmission of HIV/AIDS in the host country are receptive to 
        Emergency Plan interventions.
  --Potential Impact of Emergency Plan Interventions.--How many people 
        can be reached and the effect of intervention on the trajectory 
        of disease.
  --Gaps in Response.--Whether the U.S. Government's technical 
        expertise, training, development and strengthening of health 
        care systems and infrastructure would fill gaps in the current 
        response.
  --Existence of Other Partners.--Whether non-governmental 
        organizations and other partners have a substantial in-country 
        presence and can facilitate rapid expansion of services and 
        efficient use of funds.
  --U.S. Strategic Interests.--The Emergency Plan is ultimately a 
        humanitarian endeavor. At the same time, applicability of U.S. 
        strategic interests may further the sustainability of 
        programming, engender new sources of support, and offer 
        increased opportunities for partnerships.
    With regard to India, it is among the potential candidates for the 
15th focus country. As you know, India has the second largest 
population of HIV-infected persons in the world, second only to South 
Africa. Regardless of its selection as a 15th focus country, an 
amplified response is necessary to stem the potential for a generalized 
epidemic that would greatly increase India's HIV/AIDS burden. India has 
a well-developed national strategic plan to address HIV/AIDS and a 
comparatively large pool of health professionals to assist in its 
implementation.
    In addition, the President's Emergency Plan for AIDS Relief 
includes nearly $5 billion to support on-going bilateral HIV/AIDS 
programs in approximately 100 countries worldwide, including in India. 
The U.S. Agency for International Development (USAID) and the U.S. 
Department of Health and Human Services (HHS) are highly engaged and 
active in the HIV/AIDS response in India. India is a participating 
country in HHS' Global AIDS Program through which HHS allocated $2.3 
million for HIV/AIDS programs in India in fiscal year 2002, and $3.6 
million in fiscal year 2003. USAID allocated $12.2 million to HIV/AIDS 
prevention and care activities in India in fiscal year 2002, and $13.5 
million in fiscal year 2003. Additionally, both the U.S. Departments of 
Defense and Labor have HIV/AIDS programs underway in India. Numerous 
other donors, including governments, the private sector, multilateral 
organizations, and foundations, also fund HIV/AIDS programs in India.
    With regard to using India's tuberculosis program as a model for 
HIV/AIDS treatment, the President's Emergency Plan for AIDS Relief is 
focused on identifying and promoting evidence-based best practices in 
combating HIV/AIDS. The Directly Observed Therapy-Short Course (DOTS) 
treatment that has been so effective in India has served as a model for 
HIV/AIDS treatment programs in Haiti and elsewhere. It is important to 
note that unlike TB, HIV therapy is life-long and therefore DOTS will 
likely require modification to be utilized on a large scale. One of the 
most important lessons drawn from the DOTS program is its use of 
community health workers to expand access to treatment. The network 
model of treatment and care promoted by the President's Emergency Plan 
implements this lesson by using community health workers to expand 
access to HIV/AIDS treatment in rural areas where consistent access to 
medical health professionals is limited.
    The President's Emergency Plan for AIDS Relief also recognizes the 
importance of local context in implementing effective HIV/AIDS 
treatment programs. India's human resource capacity is significantly 
greater than that of many focus countries of the President's Emergency 
Plan, as is the reach of its health care infrastructure. These 
advantages play a significant role in India's tuberculosis treatment 
success, but represent limiting factors in access to treatment in the 
focus countries. Thus, the Emergency Plan, while actively implementing 
best practices identified from the success of DOTS therapy, focuses 
significant resources in building human capacity and strengthening 
health infrastructure in the focus countries to support expanded 
treatment programs.
    Question. The Administration has raised safety concerns about 
generic drugs manufactured overseas. In some cases, these concerns are 
legitimate and we would all agree on the importance of safety and 
quality. For this reason the WHO carefully evaluates the safety and 
effectiveness of drugs, whether manufactured overseas or in the United 
States. Yet, you have questioned the WHO approval process because it is 
not a regulatory body that requires clinical trials.
    In the last week, the Global Fund, the World Bank, UNICEF, and the 
Clinton Foundation negotiated an agreement that will significantly 
expand the use of fixed dose combination drugs made in India and South 
Africa. This will dramatically increase the number of AIDS patients 
being treated.
  --Given the urgent need of millions of AIDS victims, will you consent 
        to allowing the purchase and use of drugs prequalified by WHO 
        while you develop standards and a process to determine whether 
        WHO meets the bar?
  --What is the timeline the Administration will use to put in place 
        and judge whether the generic drugs manufactured overseas are 
        safe and efficacious for purchase with bilateral dollars? How 
        are you going to deal with the variations in the procurement of 
        drugs? Will there be an collaboration with the coalition?
    Answer. Our policy for the procurement of antiretroviral treatments 
under the Emergency Plan is to provide drugs that are safe, effective, 
and of high quality at the lowest cost regardless of origin or who 
produces them to the extent permitted by law. This may include true 
generics, copies or brand name products. A true generic drug is one 
that has undergone review to ensure that it is comparable to an 
innovator drug in dosage form, strength, route of administration, 
quality, performance characteristics, and intended use. Drugs that have 
not gone through such a process are more accurately described as 
copies.
    On March 29-30, 2004, in Gaborone, Botswana, an international 
conference was held on fixed-dose combination (FDC) drug products. The 
conference included representatives of 23 governments, drug regulatory 
agencies, research-based and generic pharmaceutical industry, public 
health leaders, health care providers, advocacy groups (including 
persons living with HIV/AIDS), academia, and multilateral and non-
governmental organizations. We were very pleased with the broad 
international support and participation that the conference generated, 
including from the conference co-sponsors: the Joint United Nations 
Program on HIV/AIDS (UNAIDS), the World Health Organization (WHO), and 
the Southern African Development Community (SADC).
    The conference successfully completed a vital step forward in 
developing commonly agreed-upon scientific and technical international 
principles to evaluate the quality, safety, and efficacy of FDCs for 
use in treating HIV/AIDS, tuberculosis, and malaria. The conference 
sponsors, representatives, and experts agreed that the final principles 
are not intended to and should not impede access to safe, efficacious, 
and high quality FDCs by people living with HIV/AIDS. The principles 
are not intended to address specific quality issues, or to develop 
clinical, therapeutic, or regulatory guidelines. Rather the document 
will provide scientific and technical principles for considering, 
developing, and evaluating FDCs for use in treatment. It is anticipated 
that the principles will be of use to regulatory agencies around the 
world, as well as to pharmaceutical companies and other organizations 
involved in developing and evaluating FDCs. In this regard, the 
principles will aid us in determining the standards we will expect 
fixed-dose combination drugs to meet to qualify for our purchase and 
expedite the process by which we can purchase lower-cost, non-patented 
FDCs with confidence.
    We have the highest respect for the WHO and its prequalification 
pilot program. However, the WHO is not a regulatory authority. We must 
be assured that the drugs we provide meet acceptable safety and 
efficacy standards and are of high quality.
    Under the Emergency Plan, we intend to support programs that will 
have a sustainable positive impact on health. If the medications in 
question have not been adequately evaluated or have had problems with 
safety or cause resistance issues in the future, we will be 
appropriately held accountable. We will continue to work with WHO and 
the international community on this important area. The finalization 
and adoption of the principles document for FDCs will be a major step 
forward for all. The final statement of principles is expected to be 
released during the second quarter of 2004.

                            MICROENTERPRISE

    Question. USAID has been a global leader in the area of 
microenterprise, but we need to coordinate our efforts with other major 
players--particularly the World Bank and the United Nations Development 
Programme (UNDP). The Microenterprise for Self-Reliance Act of 2000 
states that the Administrator of USAID and the Secretary of State 
should ``seek to support and strengthen the effectiveness of 
microfinance activities in the United Nations agencies, such as the 
UNDP, which have provided key leadership in developing the 
microenterprise sector.''
    What steps have you taken to strengthen the effectiveness of 
microfinance activities in the UNDP?
    Answer. The United Nations Development Program (UNDP) and USAID are 
both active members of the Consultative Group to Assist the Poor 
(CGAP), the 28-donor coordinating body for microfinance. USAID played a 
leading role in founding CGAP and the agency's financial and technical 
support has strengthened donors, including UNDP, in a number of ways. 
Over the past 18 months, for example, CGAP has coordinated a ``peer 
review'' process to increase aid effectiveness in microfinance. 
Seventeen donors, including USAID and UNDP, have been assessed through 
this process. In each case, the peer review team has identified very 
specific areas for improvement and has proposed steps to strengthen the 
strategic clarity, staffing, instruments, knowledge management, and 
accountability of the microfinance activities of the agency being 
reviewed. The findings have been shared with other donors. UNDP has 
taken a number of concrete steps to respond to the findings, and the 
Administrator of the UNDP provides leadership to the microfinance peer 
review initiative.
    USAID has also worked with other CGAP members to develop stronger 
donor practices, including the recent drafting of core principles for 
microfinance that is in the process of being endorsed by all CGAP 
members. At the last annual meeting, the CGAP member donors also 
endorsed new requirements for membership, including comprehensive 
reporting of microfinance activities and results. USAID has also used 
CGAP to collaborate on developing new tools for microfinance donors, 
such as common performance measures. USAID, UNDP and CGAP took the lead 
in developing specialized microfinance training for donor staff, and 
many staff from UNDP and other donors have benefited from the week-long 
course.
    USAID also takes responsibility for developing knowledge and ``how-
to'' materials in specific areas, such as post-conflict microfinance 
and rural and agricultural finance. USAID invites participation from 
other donors in this work. Last month, for example, we convened a donor 
forum on recent innovations in rural finance and their implications for 
the donor community. Finally, in the field, USAID is often involved 
with UNDP in in-country donor coordination efforts in the microfinance 
arena.
    Question. I am concerned that the UNDP has not joined USAID's 
efforts (which are required by Public Law 108-31) to develop cost-
effective poverty-assessment tools to identify the very poor and ensure 
they receive microenterprise loans.
    Will you work with Congress to ensure that UNDP expands its 
microfinance efforts for the very poor and uses the poverty measurement 
methods that USAID is developing so that we can be sure that these 
funds are reaching the people who need them the most?
    Answer. USAID has invited CGAP's technical and financial 
collaboration in developing the poverty assessment tools, as a means to 
ensure that the broader donor community is aware of and involved in 
this important work. An ambitious work plan is underway to have the 
tools designed, field-tested and ready for implementation by USAID in 
October 2005. Over the coming year, USAID will be testing preliminary 
tools in the field with diverse partners. This should begin to provide 
evidence of the value and practicality of the USAID tools for other 
donors, including UNDP. We hope that the tools will prove sufficiently 
valuable and cost-effective to suggest ways for donors and 
practitioners to better serve very poor clients.
    Question. Last year, the Appropriations Committee included language 
in the report that accompanied the Foreign Operations bill (S. Rept. 
108-106) indicating that ``The majority of microenterprise development 
resources should be used to support the direct provision of services to 
poor microentrepreneurs through these networks. Funding for 
administrative, procurement, research and other support activities not 
directly related to the delivery and management of services should be 
kept to a minimum.'' I am concerned to learn that by USAID's own 
reporting, only 45 percent of microenterprise funding in 2002--the most 
recent year for which detailed data are available--went to Private 
Voluntary Organizations, NGOs, credit unions and cooperatives (the 
groups that should be receiving the bulk of the monies) while the 
balance went to consulting firms, other for-profit organizations, 
business associations, research entities, and government agencies.
    What are you doing, or what can you do, to ensure that a majority 
of these funds will, in fact, reach the extremely poor women Congress 
intended for them to reach?
    Answer. USAID's microenterprise development support continues to 
benefit the very poor in a variety of ways. Using the measures 
established by the U.S. Congress, the portion of USAID's fiscal year 
2002 microenterprise development funding that benefited the very poor 
was 50 percent. The services provided to poor and very poor 
entrepreneurs included ``poverty loans,'' other financial services such 
as safe savings accounts, and other support including business 
development services. The Microenterprise for Self-Reliance Act of 2000 
defined poverty loan limits, by region, for purposes of assessing the 
extent of service to very poor clients. Poverty loans comprised a 
majority (63 percent) of all loans held by microfinance institutions 
reporting data in 2002.
    Just as women are disproportionately represented among the very 
poor, so too are they disproportionately represented among clients of 
USAID-supported microfinance institutions. Women clients constituted 
more than two-thirds of the total clients of all microfinance 
institutions in fiscal year 2002,\1\ and the trend is upward. The Near 
East has seen the most dramatic change: the percentage of women clients 
of USAID-supported microfinance institutions in the region has more 
than doubled since 2000, rising from 27 percent to 55 percent.
---------------------------------------------------------------------------
    \1\ Excluding Bank Rakyat Indonesia (BRI). BRI's numbers are 
typically excluded from analyses of USAID microenterprise development 
funding because the Bank's client base is so large it would skew the 
findings for the rest of the institutions that receive USAID support.
---------------------------------------------------------------------------
    USAID achieves these results in part through collaboration with 
private voluntary organization (PVO) networks, which are the backbone 
of U.S. assistance to the microenterprise development field. USAID has 
long supported the development of PVO networks (including cooperative 
development organizations). The share of USAID funding received 
directly by U.S. PVOs, NGOs, cooperatives and credit unions for 
services to poor entrepreneurs averaged around 46 percent in the 1997-
2003 period.
    USAID works with other direct service providers as well, to ensure 
that ever more poor clients receive microenterprise support from USAID-
assisted awardees. Banks, non-bank financial institutions, and business 
associations complement the agency's traditional partners and provide 
diverse financial and business services to poor microentrepreneurs. In 
fiscal year 2003, direct service providers received an estimated 58 
percent of total USAID microenterprise funding directly through grants, 
cooperative agreements, and contracts. This figure understates the 
extent of support to direct service providers. Of the funds awarded to 
consulting firms, a significant portion (often more than 50 percent of 
the contracted amount) is typically designated for direct service 
providers, including PVOs, NGOs, cooperatives and credit unions. Thus 
the actual share of USAID funding awarded to direct service providers 
is consistently over two-thirds of the total.
    USAID is a global leader in supporting innovations that benefit 
very poor women entrepreneurs. The following examples from India 
illustrate creative approaches to overcoming gender and socioeconomic 
disadvantages:
  --In India, the rural dairy initiative seeks to help 4,000 micro-
        scale dairying households in the Himalayan state of Uttaranchal 
        move from subsistence to commercial production. With $750,000 
        from USAID, AT India (a local non-governmental organization) is 
        facilitating delivery of business development services and 
        credit, helping very poor women in remote areas integrate into 
        the economy and find profitable markets for their dairy 
        products. Financial services are delivered through small 
        producer networks called mutually aided cooperative societies; 
        microcredit allows easy access to services as producers move 
        from subsistence level to commercial scale of operations and 
        enter into competition with government-sponsored dairies. 
        Business services are supplied through private-sector providers 
        and include milk and milk products collection, distribution and 
        marketing businesses, as well as a range of veterinary, 
        nutritional and other livestock services.
  --Also in India, SEWA (Self-Employed Women's Association) Bank has 
        used the tools USAID developed under the AIMS (Assessing Impact 
        of Microenterprise Services) project to develop a number of new 
        products and services for its clients. The SEWA Bank recently 
        introduced a one-day loan to meet the credit needs of vegetable 
        vendors. In addition, it now offers a special savings account 
        designed to pay for marriage expenses, and has started a 
        financial literacy program to help its members improve their 
        personal financial management. SEWA is also reviewing the 
        appropriateness of its products for each of the major 
        subsectors in which its members work. Future plans may include 
        a loan product to finance girls' education.
    Question. I am concerned about signals that the State Department is 
backing off of its commitment to microenterprise. First, 
microenterprise is no longer mentioned in USAID's Congressional Budget 
Justification (CBJ). The ``Pillars and Programs of Special Interest'' 
tables in the fiscal year 2002, fiscal year 2003, and fiscal year 2004 
CBJs all include a separate line for microenterprise under the 
``Economic Growth, Agriculture, and Trade'' category. In the fiscal 
year 2005 CBJ, there is no reference to microenterprise in this table. 
Second, microenterprise is not mentioned at any point in the USAID 
Strategic Plan for 2004-2009. Finally, you made no mention of 
microenterprise in your prepared testimony.
    Are the State Department and USAID backing off their commitment to 
microenterprise? Given that there is no specific reference to 
microenterprise in this year's USAID CBJ, what level of microenterprise 
funding do you believe is appropriate?
    Answer. The State Department and USAID remain firmly committed to 
support for microenterprise development and recognize its important 
contribution to economic growth and poverty reduction. In fact, I wrote 
in the February 2004 issue of the State Department publication Economic 
Perspectives, ``I am proud of America's key role in promoting 
microenterprise. U.S. objectives are threefold: to improve access to 
financial services for the world's poor; to support access to business 
services that specifically address constraints felt by poorer 
entrepreneurs; and to improve the business climate through regulatory, 
legal and policy reforms. Our efforts are global, from Mali in Africa 
and Jordan in the Near East to Azerbaijan in Europe and Peru in Latin 
America. Our successes will be universal, with the concerted efforts of 
the international community.''
    In fiscal year 2003, USAID substantially exceeded the $175 million 
funding target set by Congress. In fiscal year 2004, the agency will 
once again surpass the agreed upon target of $180 million. Despite the 
very tight budget in fiscal year 2005, USAID considers a 
microenterprise funding target of $180 million to be appropriate for 
that year as well.
    Question. In the May edition of Vanity Fair (page 230), there is an 
article entitle ``The Path to War'' which states that one week prior to 
your speech at the U.N. Security Council in New York on February 5, the 
White House provided you with a lengthy document intended to serve as 
the basis of your UNSC speech that ``was a laundry list of intelligence 
gathered by the government about Iraq's weapons programs.'' According 
to the article, this dossier was ``cobbled together in Vice President 
Richard Cheney's office by a team led by Cheney's chief of staff, I. 
Lewis ``Scooter'' Libby, and John Hannah, the Vice President's deputy 
assistant for national security affairs.'' The article reports that you 
and your State Department staff rejected the White House dossier--which 
ultimately grew to over 90 pages--and started from scratch by drafting 
a new speech based on CIA analysis at CIA Headquarters.
  --Is this account accurate? If so:
    --Why did you and your State Department staff reject the White 
            House-provided information as the basis for your Security 
            Council speech? What specifically did you find 
            objectionable in this material?
    --Why did you rely on the CIA--rather than your own intelligence 
            analysts at the State Department's INR bureau--to draft 
            this speech? Do you find INR's analysis on Iraq matter in 
            any way deficient? Please elaborate. Why didn't you rely on 
            intelligence analysis provided by DOD to make your Security 
            Council speech.
    --How skeptical were you prior to the recent Iraq war regarding the 
            quality of intelligence reporting provided by sources from 
            the Iraqi National Congress?
  --If the account is not accurate, which parts are not accurate and 
        what are the facts?
    Answer. Shortly after the President gave the State of Union speech 
in January 2003, a small interagency team under State Department 
leadership was sent to the CIA to work with Intelligence Community (IC) 
analysts to prepare my presentation to the U.N. Security Council. 
Working directly with DCI Tenet, the Deputy DCI, John McLaughlin, and 
key CIA, DIA, NSA, and other analysts, the team carefully reviewed, 
vetted and assessed a large volume of material from a variety of 
sources. I urged the IC to conduct a careful sourcing review of all of 
the intelligence information in my presentation. As a result, on a 
number of occasions during the preparation process, we decided to omit 
information from my presentation. It would not be appropriate for me to 
comment further on intelligence matters and this deliberative process. 
But I will say that I gave a draft of my proposed presentation to 
Assistant Secretary for INR, Carl Ford, and he in turn provided me his 
comments. Let me say also that INR's overall assessment of Iraq's BW 
and CW programs paralleled the Intelligence Community's assessment of 
those programs. Where the INR assessment of Iraq's WMD programs 
differed from the IC was in the status of Iraq's nuclear program. I 
reviewed that difference of views and decided to go with the view of 
the majority of the IC.
    The briefing I presented to the United Nations Security Council on 
February 5, 2003, was based on the best intelligence information that 
was available to us, available to the United Nations over a period of 
years, and available to the foreign intelligence services whom we 
worked with closely and for whose efforts we had great respect. We all 
believed that Saddam Hussein had the capabilities and the intent to 
produce WMD. We still believe that. At the time of my briefing, we also 
believed that stockpiles of prohibited weapons were in Iraq, including 
WMD. We were right about missiles and other conventional ordnance. But 
we haven't found stockpiles of chemical or biological weapons, nor have 
we found an active nuclear program.
    Question. The May edition of Vanity Fair contains an article 
entitled, ``The Path to War,'' and cites Sir Christopher Meyer, the 
British Ambassador to the United States, as stating that President Bush 
made clear in a White House meeting on September 20, 2001, with you, 
Dr. Rice, Prime Minister Blair and Ambassador Meyer, that he was 
determined to topple Saddam Hussein from power. According to the 
article, Amb. Mayer stated that ``[r]umors were already flying that 
Bush would use 9/11 as a pretext to attack Iraq . . . On the one hand, 
Blair came with a very strong message--don't get distracted; the 
priorities were al-Qaeda, Afghanistan, the Taliban. Bush said, ``I 
agree with you, Tony. We must deal with this first. But when we have 
dealt with Afghanistan, we must come back to Iraq.''
  --Do you recall this conversation? Is this an accurate 
        characterization of that meeting? Please elaborate.
  --Other former Bush Administration officials--Richard Clarke, former 
        Secretary O'Neill--have suggested that going to war with Saddam 
        was a high Administration priority immediately after Sept. 11, 
        or sooner. What is your recollection of specifically when the 
        Administration made invading Iraq a high priority? What 
        specific event or piece of intelligence was the catalyst for 
        the decision to go to war against Iraq?
    Answer. After September 11, I spoke on numerous occasions with 
Principals, the President, and other foreign leaders and officials, to 
include PM Blair and Ambassador Meyer, regarding our response to the 
September 11 attack. These and other conversations were part of a 
process of careful and deliberate considerations that the President 
undertook as he considered how to respond to the September 11 attacks. 
It would not be appropriate for me to discuss specific, privileged, 
pre-decisional conversations with the President. As we know, in 
September 2001, the President directed the U.S. Government to respond 
against those who perpetrated or facilitated the 9/11 attack--Al-Qaeda 
and the Taliban regime in Afghanistan that provided al-Qaeda safehaven.
    The United States' decision, more than a year later, to undertake 
military operations against Iraq was based on Saddam Hussein's refusal 
to comply with U.N. Security Council resolutions and his defiance of 
the international community, his capabilities and intent to possess CW, 
BW, and nuclear weapons--in the past he had used CW against the 
Iranians and against his own people--and, as we believed then, his 
possession of stockpiles of CW and BW weapons as well as an active 
nuclear weapon development program. The Iraqi regime's failure to 
comply with the U.N. resolutions and to continue to defy the 
international community was made clear in the months after the Security 
Council unanimously passed resolution 1441 and after U.N.-mandated 
inspections resulted in reports to the Council that Iraq was not 
providing the immediate, unconditional and active cooperation that had 
been demanded by the Council.
    Question. You were recently quoted in the press (e.g., in the April 
3, 2004 editions of the Washington Post and The New York Times) as 
stating that your characterization of mobile biological laboratories in 
your presentation to the United Nations last year appears to have been 
based on faulty intelligence sources. In your 2003 Security Council 
speech, you cited information regarding mobile biowarfare labs, citing 
eyewitness accounts and saying, ``[w]e have firsthand descriptions of 
biological weapons factories on wheels and rails.''
  --Please elaborate on the nature and extent of your concern with the 
        intelligence reporting on this issue--which at the time you 
        indicated was based on multiple sources. What have you since 
        found out about these apparently faulty intelligence sources, 
        and where within the Intelligence Community do you believe that 
        responsibility lies for not adequately vetting these sources?
  --Do you believe the U.S. Intelligence Community should initiate a 
        reassessment of its vetting procedures for human source 
        reporting?
  --Do you consider Intelligence Community reporting related to Iraq 
        any more reliable now than it was before the recent war with 
        Iraq?
    Answer. My presentation at the U.N. Security Council on February 5, 
2003 reflected the best and most rigorous intelligence, based on the 
information at hand at the time. In the preparation for that 
presentation at the United Nations, I had insisted on multiple sources 
for all intelligence. For example, there were four separate sources for 
the information I presented on the mobile biological labs. Recently, 
the Director for Central Intelligence (DCI) acknowledged that the 
Intelligence Community had previously had access to information that 
called into question the credibility of one of the sources on these 
labs. I understand that, because of this lapse, the DCI has publicly 
stated the Intelligence Community's review process will be scrutinized 
carefully and, where needed, adjusted. As for the other three sources, 
I also understand that their previously solid credentials are now also 
in question--but to go into this any further would cause my answer to 
be classified, so I will stop here. At the end of the day, the 
President, the Vice President, the other cabinet officers and I 
continue to have confidence that the Intelligence Community presents us 
and other senior U.S. officials with timely and credible information 
and its best analysis, based on what is known at any given time.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

    Question. How was the Administration so wildly off the mark on the 
costs, difficulties and duration of our involvement in Iraq?
    Answer. Many agencies worked to provide the best possible estimates 
of the resources that would be required to free Iraq from the 
repressive regime of Saddam Hussein and to ensure that Iraqis were able 
to form an independent, united, prosperous and peaceful Iraq after the 
conflict. The innumerable variables in making such calculations made 
this very difficult.
    I would refer you to my interagency colleagues for comment on their 
remarks.
    Question. Why were those working on post-war plans dismissed by 
DOD/the Administration? Why weren't the State Department and the Army 
War College listened to? Why hasn't CPA put to use the best practices 
espoused by numerous government agencies, especially since CPA is 
operating in fits and starts and cannot obligate the $18 billion in its 
hands?
    Answer. Our focus now is on supporting the reconstruction and 
political transformation of Iraq and preparing for a transition on June 
30 to Iraqi self-rule, the dissolution of CPA, and the establishment of 
an American embassy, not on revisiting previous differences of opinion.
    Our policy in Iraq has always been a fully cooperative, interagency 
effort, directed by the President. Given the magnitude of the 
undertaking, it should not be surprising that there were interagency 
disagreements at times over personnel and planning. State did its best 
to contribute constructively to the planning effort, and I am proud of 
our contributions.
    On your questions regarding CPA contracting policies, I would refer 
you to my CPA and DOD colleagues.
    Question. What happens to CPA Funds when CPA Disbands on June 30, 
2004? Mr. Secretary, Congress appropriated $18.4 billion for Iraqi 
reconstruction and humanitarian aid last October to the Coalition 
Provisional Authority. In November, the Coalition Provisional Authority 
established it would cease operations on June 30, 2004 and hand-over 
the governance of Iraq to an interim government. A recent CPA Inspector 
General Report states that the CPA has only obligated $900 million of 
the $18.4 billion for reconstruction, or 5 percent. That fact, in and 
of itself, is inconceivable, but I want to ask these questions.
    What happens to the remaining $17+ billion of taxpayer money 
allocated to the CPA when the CPA shuts its doors on June 30? Will it 
transfer to State? DOD? Will Congress have to reallocate these funds? 
What is State doing to fill the void left by CPA?
    Answer. After June 30, the Secretary of State will have 
responsibility for the continuous supervision and general direction of 
all U.S. assistance for Iraq, including the $18.4 billion Iraq Relief 
and Reconstruction Fund (IRRF). Each implementing agency (State, 
Defense, USAID, HHS, and Treasury) will execute assistance programs 
according to its own regulations under the overall guidance of U.S. 
Mission in Baghdad. The Coalition Provisional Authority expects to have 
obligated $5 billion of the $18.4 billion to programs in Iraq by June 
30. OMB has thus far allocated about $11 billion to appropriate 
implementing agencies, and not a single allocation to CPA or its 
successor. In addition, $2.5 billion of 2003 Iraq reconstruction 
assistance continues to fund thousands of projects as money is 
obligated and disbursed to those projects. Funds are allocated 
according to the spending plan described in the quarterly 2207 report 
to Congress. The State Department is working to ensure a smooth 
transition from CPA authorities to the U.S. Mission Baghdad. Program 
Management Office (PMO) policy oversight and general oversight 
functions will transfer to the Mission, while many of its projects, 
particularly in the construction sector will continue to be supervised 
by a temporary organization called the Project and Contracting Office.
    Question. Mr. Secretary, on March 31, you pledged an additional $1 
billion in U.S. funding to the reconstruction of Afghanistan. President 
Karzai says Afghanistan requires at least $27 billion in foreign aid 
over the next five years. The donor conference garnered a total of $4 
billion for this year. I applaud the donors and the Administration's 
pledge, but I have several questions.
    When does the State Department anticipate sending the request for 
an additional $1 billion to Congress: Fiscal year 2005? Fiscal year 
2006? As a supplemental? How will the money be used? Is the State 
Department committed to allocating at least 10 percent of this pledge 
toward the plight of Afghan women? For how many years will the United 
States continue to provide economic assistance to Afghanistan? How much 
funding will be allocated during that time-frame?
    Answer. In fiscal year 2004, the United States is providing $2.2 
billion for Afghanistan's reconstruction, which includes the $1 billion 
pledge announced in Berlin. In fiscal year 2005, we have requested an 
additional $1.2 billion for Afghanistan. This money will be used for a 
wide variety of programs and purposes, including security assistance 
(building the Afghan National Army, training national police, counter-
narcotics, rule of law, etc.), reconstruction and development projects 
(road construction, health clinics, education, power generation, etc.) 
humanitarian relief (shelter construction, etc.), and economic growth 
initiatives (capacity-building, domestic revenue generation, etc.). 
Though no decisions have yet been made regarding the precise allocation 
of future year funds, support for women and girls in Afghanistan 
remains a high priority, and we will continue to allocate funds for 
these initiatives.
    Since fiscal year 2001, the United States has provided over $4 
billion total for Afghan reconstruction, and as Secretary Powell has 
stated on numerous occasions, we are committed to Afghanistan for the 
long haul. We must ensure that Afghanistan never again reverts to a 
sanctuary for terrorism, a challenge that will require significant 
resources over a prolonged period of time. However, the progress made 
to date has been substantial, and we are confident that with continued, 
steady support, Afghanistan will ultimately re-join the community of 
nations as a stable, democratic, and self-reliant partner.
    Question. The Antiterrorism Assistance program (ATA) has been a 
valuable tool to train international security forces and police forces 
in antiterrorism methodologies and tactics. I am proud Louisiana has 
played such an active role in ATA. I understand the State Department is 
committed to providing such training overseas for programs in 
Afghanistan and Iraq and for the establishment of regional training 
centers closer to the home nations of the participants in ATA. It 
certainly makes sense to conduct training in Afghanistan and Iraq, but 
the other overseas training is certainly a deviation from the 
commitments the State Department made to the State of Louisiana. At the 
behest of the State Department, the State of Louisiana committed 
resources to expand its training infrastructure to accommodate 
increased training. If the State Department continues to move ATA funds 
overseas, programs in Louisiana will be threatened.
    Is the State Department committed to upholding the pledges it made 
to Louisiana and other states to conduct ATA within the United States? 
Will State continue to fund ATA within the United States at fiscal year 
2002 levels?
    Answer. We share your view that the Antiterrorism Assistance 
program has been an extremely valuable tool in the United States 
Government's effort to fight the war on terrorism. Many allied nations 
have the will to combat terrorism, but ATA helps them develop and 
maintain the skill they need in a variety of disciplines.
    Louisiana State University and the Louisiana State Police Academy 
have been valuable partners in antiterrorism training over the years, 
as has New Mexico Tech in Socorro, NM, the Nonproliferation and 
National Security Institute in Albuquerque, NM, the Federal Law 
Enforcement Training Center in Brunswick Georgia, the Pacific Northwest 
National Laboratory in Hanford, Washington, the ATF K-9 Training Center 
in Front Royal, VA, the FBI Academy in Quantico, VA, Fort A.P. Hill in 
Bowling Green, VA, the ATF laboratory in Beltsville, MD, the Armed 
Forces Institute of Pathology in Rockville, MD, and a number of other 
U.S. facilities and institutions.
    Since September 11, 2001, ATA has also provided intensive in-
country training programs in key countries such as Pakistan, Indonesia, 
Afghanistan, Colombia, and Iraq. The Department of State does not plan 
to discontinue U.S.-based training in favor of overseas training. 
Rather, the Coordinator for Counterterrorism, with my concurrence, has 
tasked ATA with broadening its menu of training options to include in-
country programs, fly-away courses, emergency antiterrorism assistance 
training teams, and customized consultations as well as standard 
training at U.S. facilities.
    We believe ATA has responded well to the demand for flexibility in 
responding to shifting terrorist threats. The ATA budget for training 
has increased in recent years, and the Louisiana institutions continue 
to meet training requirements effectively. However, there is no way the 
Department can guarantee specific levels, types and locations of 
training into the future, as those decisions will depend upon as yet 
undetermined requirements and funding levels. Please be assured that 
the Department will continue to utilize all platforms that prove 
effective in improving the counterterrorism capabilities of our partner 
nations.

                     SHORTFALL OF ARABIC LINGUISTS

    Question. Secretary Powell, I fully support your efforts to recruit 
the next generation of diplomats through the DRI. Not only is 
recruiting vital to our armed forces but it is also imperative for 
State to recruit Foreign Service employees. Foreign language training 
is critical to the success of our members of the Foreign Service. More 
importantly these men and women must speak the right languages.
    What efforts are being taken to ensure the State Department has 
sufficient numbers of speakers of languages such as Arabic, Farsi, and 
Pashtun?
    Answer. The Department of State has developed and started to 
implement a coherent, integrated strategic plan for meeting its 
language proficiency goals. This plan involves close collaboration 
among the Bureau of Human Resources, the Foreign Service Institute, and 
the functional and regional bureaus and posts with foreign language 
requirements. Our approach involves targeted recruitment, credit in the 
hiring process for language proficiency, and incentives to acquire, 
maintain, improve language skills to highly advanced levels, and to re-
use over a career the critical and difficult languages that are in high 
demand as we build the language cadres needed. This strategic plan is 
reinforced by the high priority value that the Department's corporate 
culture places on language proficiency among our officer corps.

                           CRITICAL LANGUAGES

    New Policy on Hiring Preference.--To boost our language capability, 
in December 2003 the State Department instituted special preference for 
hiring into the Foreign Service, applicable to both generalists and 
specialists. This preference is given to candidates who speak languages 
for which our current needs are critical. These languages include 
Arabic, Chinese (Cantonese or Standard/Mandarin), Indic languages (e.g. 
Urdu, Hindi, Nepali, Bengali, Punjabi), Iranian languages (e.g. Farsi/
Persian, Dari, Tajiki, Pashto), Japanese, Korean, Russian, and Turkic 
languages (e.g. Azerbaijani, Kazakh, Kyrgyz, Turkish, Turkmen, Uzbek). 
This list is a reflection of foreign policy objectives, language-
teaching considerations, and supply of speakers among current 
employees, so it is subject to revision as needs evolve.
    Specifically, candidates with a speaking score of 2 or higher on a 
1 to 5 scale in a critical needs language get a 0.4 point increase on 
the hiring registers, while 0.17 remains the increase for other 
languages. Candidates who benefit from the new policy have already 
passed the relevant Foreign Service entrance exams. As a result of this 
policy, generalist candidates who have their scores adjusted upward are 
moved up on the list of eligible hires, thereby increasing the chances 
that they would be offered an appointment into the Foreign Service.
    Language skills factor prominently in the assignments process, 
affecting job opportunities for the Foreign Service, and the promotion 
process. In addition, Language Incentive Pay provides financial 
incentives for the acquisition, improvement and repeated use of 
languages. This emphasis on languages throughout a career is balanced 
and appropriate.
    A priority has been to develop and expand our Arabic language 
programs to support efforts in Iraq, Afghanistan, Libya, and elsewhere 
in the Middle East. Arabic language training has more than doubled 
between fiscal year 1999 and fiscal year 2003.
    FSI has recently published a ``Language Continuum'' that is 
parallel to FSI's other career and training-related continua. A 
collaborative effort with the personnel system and the operational 
bureaus, this Continuum outlines for the Department and its employees a 
way to meld the principles of strategic workforce planning and the 
``Open Assignments'' system, by serving as a roadmap to weave language 
proficiency development and use into a successful career progression. 
The Language Continuum is designed to help Foreign Service personnel 
plan a long-term integrated approach to language learning and use, 
leading the motivated and talented more often to attain the advanced 
language skills needed. In partnership with regional bureaus, posts, 
and the Bureau of Human Resources, ``beyond S-3/R-3'' training 
opportunities may be arranged at select educational institutions 
overseas, at a FSI field school or at FSI/Washington. (``S-3/R-3'' 
represents a speaking/reading General Professional Proficiency.) This 
targets the need to continuously build and expand the cadre of 
sophisticated users of critical languages, who can better understand 
the positions and assumptions of others and communicate our own 
perspectives more cogently and persuasively in order to effectively 
defend and advance the interests of the United States.
    The Language Continuum provides a ``roadmap'' to systematically 
guide employees at different stages in their careers through the 
multiple training opportunities; outlines a strategic plan for 
achieving the language competency needed for tenuring and for promotion 
to the senior level; describes available resources beyond course 
offerings, including such resources as home stays, guided self-study 
and language learner counseling; addresses the language-training needs 
of eligible family members; and provides learning tips to foster more 
effective language proficiency, and use and improvement to advanced 
levels.

                            GIRLS' EDUCATION

Background
    Question. There are about 70 million girls not attending school in 
the developing world. They make up three-fifths of the 115 million 
children out of school. The 2003/04 EFA Global Monitoring Report found 
that 70 countries are currently at risk of not achieving the Millennium 
Development goal of gender parity (an equal number of girls and boys in 
school) by 2005.
    Research shows that improving girls' education is one of the most 
effective development investments countries can make. Providing 
education for girls:
  --Boosts economic productivity
  --Lowers maternal and infant mortality rates
  --Reduces fertility rates
  /--Increases life expectancy
  --Protects against HIV/AIDS
  --Improves educational prospects for the next generation
  --Promotes better management of environmental resources
    Encouraging girls' enrollment in school is a focus of basic 
education funding. The Administration's request for basic education 
under DA in fiscal year 2005 is $212 million, representing a $23 
million cut from the fiscal year 2004 appropriation under DA.
    Mr. Secretary, the effectiveness of educating girls is very well 
documented.
    Educating girls:
  --Boosts economic productivity
  --Lowers maternal and infant mortality rates
  --Reduces life expectancy
  --Protects against HIV/AIDS
  --Improves educational prospects for the next generation
    Getting more of the 70 million girls who are currently out of 
school into classrooms is one of the primary goals of the basic 
education program.
    Given these benefits, I am very concerned by the Administration's 
request for a $23 million reduction in basic education support under 
Development Assistance.
    Could you please comment on the rationale behind this?
    Answer. I couldn't agree with you more on the value of girls' 
education. Education can lead to improved lives and livelihoods not 
only for girls but ultimately impacts entire families and communities. 
In addition to the points you have made, I would add, that in these 
troubled times around the world, literacy and learning are the 
necessary foundation for both democracy and development. That is why 
education is a strong priority for this Administration.
    While there is a small decrease in the fiscal year 2005 Development 
Assistance account for basic education, funding from all USAID-managed 
accounts is currently projected to be the equivalent of fiscal year 
2004, $334 million, which excludes funding from recent supplementals. I 
would also like to note that total funding for basic education programs 
has more than doubled since 2001.

              COORDINATED EDUCATION AND HIV/AIDS STRATEGY

    Question. There is strong evidence that keeping children in 
school--especially girls who are much more susceptible to the HIV/AIDS 
virus--reduces the chance that they will become infected.
    In Swaziland, UNAIDS found that 70 percent of high school age 
adolescents attending school are not sexually active, while 70 percent 
of out-of-school adolescents are sexually active.
    A World Bank study called A Window of Hope reports that in 
Zimbabwe, girls who received primary and some secondary education had 
lower HIV infection rates--a trend that extended into early adulthood.
    Despite this, the focus has been on using schools as a venue for 
teaching about AIDS, rather than recognizing the protective nature of 
education--that simply being educated helps protect people from 
infection.
    Given the value of education as the most effective vaccine against 
AIDS that we currently have:
    Doesn't basic education--and not just AIDS education--have to be 
central to AIDS prevention activities?
    Answer. Basic education is the foundation for success in the 
majority of the Agency's development activities, including agriculture, 
private sector development, and health. To be successful in the fight 
against HIV/AIDS, it is essential that USAID continue working around 
the world to promote completion of basic education for all and 
integrate AIDS prevention messages into all of the other sectors, 
including education.

              COORDINATED EDUCATION AND HIV/AIDS STRATEGY

    Question. Should the United States have a coordinated strategy on 
basic education and HIV/AIDS prevention?
    Answer. The U.S. Agency for International Development has both 
prevention and mitigation strategies that link basic education to 
lessening the impacts of HIV/AIDS. At the primary level, USAID has 
model curricula to raise learner awareness of the disease and self-
protection and parallel curricula for teacher training--increased 
awareness and basic learning skills combined do contribute over time to 
lowered rates of infection. USAID is also supporting a technical 
position at UNESCO to advance basic education and HIV/AIDS strategies 
at a global level, and through UNESCO, as a member of UNAIDS, with in-
country strategies.
    At the mitigation level, USAID developed a model to project the 
work force impacts of the disease. This model guides how the education 
sector needs to respond to assure continued human resources necessary 
for countries and sectors to avoid system and economic collapse, e.g., 
teachers and managers necessary to meet education sector demands. To 
offset education work force losses in countries worldwide, a multi-
lingual Internet education portal has been built to train teachers and 
provide resources they need.
    Question. ``The worldwide advancement of women's issues is not only 
keeping with the deeply held values of the American people; it is 
strongly in our national interest. Women's issues affect not only 
women; they have profound implications for all humankind. We, as a 
world community cannot even begin to tackle the array of problems and 
challenges confronting us without the full and equal participation in 
all aspects of life.''----Sec. Powell, March 7, 2002

    Mr. Secretary, your words before the United Nations in March 2002 
imply that you and your administration understand the important role 
advancing the rights of women has in the reconstruction of a nation, 
particularly a nation where women's rights have been violently 
oppressed for decades.
    Yet, since that time, for whatever reason your administration has 
seemingly chosen not to pursue an aggressive, long-term agenda directly 
aimed at protecting and improving the lives of women in Afghanistan and 
Iraq. Instead, we have employed a ``rising tide lifts all boats'' 
strategy based on a misperception that overall aid given by the United 
States will inevitably benefit all members of the Afghan and Iraqi 
population. In fact, in your 2003 report on the status of women and 
children you state:

    ``Overall U.S. humanitarian and reconstruction assistance [in 
Afghanistan] will be over $1 billion in fiscal year 2002 and 2003 
combined. Most of these funds are intended to benefit the country and 
Afghan families as a whole--men, women and children alike. Some aid is 
targeted specifically toward Afghan women, children and refugees. This 
combination means that it remains impossible to define a distinct 
dollar amount devoted just to the three population groups feature in 
this report.''

    Making matters worse, while the entire report is about current 
systemic barriers to reconstruction such as security, economic 
development, health care, and education, there is almost no mention of 
the unique barriers to women in these areas.
    Mr. Secretary, in the words of Martin Luther King ``Peace is not 
just the absence of conflict, it is the presence of justice.'' 
Particularly justice for those for whom justice has been denied. In 
other words, the advancement of civil rights requires aggressive action 
and targeted programs aimed at eliminating discrimination and promoting 
equality. I know that you know this to be true. Why, then, do your 
recent policies in this area continually fail to acknowledge this 
reality?
    Answer. The United States works proactively with women's issues in 
Afghanistan and Iraq, and has done so from the inception of both 
programs. A list of activities addressing women in Afghanistan and Iraq 
is attached.
    In Afghanistan, the United States Agency for International 
Development (USAID) assists Afghan women through directed grants to 
non-governmental organizations and integration into broad programs. We 
are now combining all of our smaller women's activities into multi-year 
programs. Early in its Afghanistan program, USAID used small grants to 
help establish the Ministry of Women's Affairs, support women's NGOs, 
and provide women with job opportunities. USAID has also ensured 
support for women into humanitarian programs, such as food aid. The 
current program intends to establish and fund seventeen women's 
centers.
    In Iraq, USAID bases its reconstruction programs on the belief that 
women's consent and active participation matters in politics, economic 
opportunity, and social settings. Since April 1, 2003, USAID has 
focused on women's equality and empowerment through local government 
and civil society organizations--two avenues that allowed the most 
immediate and direct impact on their lives. USAID helped build the 
social structures needed to support Iraq's women with increased school 
enrollment for girls and health programs aimed at mothers.
    Reaction to explicit changes in women's roles typically occurs 
about a year after programs begin. This implies that civil society 
organizations and female leaders will be challenged in 2004 even as 
they move beyond their initial footholds. To support women in the 
second year of reconstruction, USAID programs allow for a sustained 
approach to women's equality. In governance, legal changes will include 
codifying women's rights, solidifying the role of women in government, 
and supporting women's civil society organizations. Economic programs 
which target women and give them new opportunities are also being 
developed.
    Question. Mr. Secretary, as you know, the U.S. sponsored resolution 
calls on nations to eliminate laws and regulations that discriminate 
against women and prevent them from participating in society and the 
political process. I understand that you and your administration have 
been working with leaders in both Iraq and Afghanistan to ensure that 
their constitutions recognize and protect the rights of women. 
According to recent reports, your administration remains confident that 
the Afghan and Iraqi Constitutions ``will make acceptable provisions on 
the issue of women's rights.''
    It is my understanding that both constitutions contain a provision 
that states that when there is a conflict between the constitution and 
the law of Islam, the law of Islam is supreme. While other Islamic 
nations have established systems that recognize the sanctity of 
religion and the importance of human rights, what assurances to you 
have that religion will not be used as a means of discrimination 
against women?
    Answer. None of the world's major religions, including Islam, 
discriminate against women. It is traditional practices and 
interpretations of religious teachings that result in discrimination. 
Governments that permit women to be made subservient to men can be 
expected also to make men subservient to men, and are antithetical to 
democracy. There are numerous instances, not only in Islamic countries, 
where conservative elements in strongly patriarchal societies attempt 
to limit a recent extension of civic and economic rights to women. 
Afghanistan's constitution states that ``no law can be contrary to 
sacred religion of Islam and the values of this constitution,'' which 
includes guarantees for the rights of women. A reliance on Islamic 
jurisprudence applies only to laws or provisions not covered by the 
constitution. The United States, as an external influence in Iraq and 
Afghanistan, can help blunt reactionary efforts against recent gains by 
women through explicit inclusion of females in governance, economic and 
social programs.
    Question. Last Wednesday, at a donors' conference in Berlin, 
President Karzai said his country would need $28 billion over the next 
seven years to fully recover from decades of war. Experts say that 
without this funding, most of which will have to come from 
international donors, the reconstruction efforts will likely fail. 
Correct me if I am wrong, but it is my understanding that our total 
contribution to non-military reconstruction efforts in Afghanistan 
since 2002 has been a little over $2 billion. At the same time, in one 
year alone, the United States has allocated $18.4 billion for similar 
reconstruction in Iraq.
    Mr. Secretary, no one on this committee would suggest that 
reconstruction in either of these two countries is any more or less 
important than the other but in terms of strategic planning and long 
term goals, these disparate allocations don't make sense.
    First, if one looks at the indicators of need for non-military 
reconstruction it is clear that there is a greater need for efforts in 
Afghanistan than our budget reflects.

------------------------------------------------------------------------
                                                    Iraq     Afghanistan
------------------------------------------------------------------------
Literacy Rate (percent).......................           40           36
Women (perecent)..............................           29           21
Infant Mortality Rate.........................     55/1,000    143/1,000
GDP (dollars in billions).....................          $58          $19
------------------------------------------------------------------------

    Second, according to a recent IG report, of the $18.4 billion we 
allocated, only $900 is under contract. In other words, we are not 
spending 95 percent of the money we have allocated for reconstruction 
in Iraq.
    These disparities may lead some to suspect that there are ulterior 
motive at hand here. Can you address this criticism?
    Answer. USAID programmed approximately $1 billion in fiscal years 
2002 and 2003 combined and an additional $1 billion in fiscal year 
2004. The Administration's ``Accelerating Success'' initiative was 
intended to significantly increase both the amount and the impact of 
assistance. While this is a sizeable amount, and we thank Congress for 
its generosity, the needs in Afghanistan will require a sustained 
commitment for the next several years.

                          SUBCOMMITTEE RECESS

    Senator McConnell. Thank you all very much. The 
subcommittee will stand in recess to reconvene at 2:30 p.m. on 
Wednesday, April 21, in room SD-124. At that time we will hear 
testimony from the Honorable J. Cofer Black, Coordinator, 
Office of the Coordinator for Counterterrorism and the 
Honorable Andrew Natsios, Administrator, United States Agency 
for International Development.
    [Whereupon, at 4:30 p.m., Thursday, April 8, the 
subcommittee was recessed, to reconvene at 2:30 p.m. Wednesday, 
April 21.]


      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                       WEDNESDAY, APRIL 21, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:35 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Shelby, DeWine, Leahy, and 
Durbin.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF ANDREW S. NATSIOS, ADMINISTRATOR

                          DEPARTMENT OF STATE

STATEMENT OF AMBASSADOR COFER BLACK, COORDINATOR FOR 
            COUNTERTERRORISM

             OPENING STATEMENT OF SENATOR MITCH MC CONNELL

    Senator McConnell. The hearing will come to order. I want 
to welcome Mr. Natsios and Ambassador Black. Thank you for 
being here today. Our hearing is on foreign assistance and 
international terrorism, a topic of keen interest, not only to 
our subcommittee but to all the people in the world who are 
free and would like to remain so. Senator Leahy, I believe, is 
on his way. We will both make some opening remarks and then be 
followed by the two of you, first Mr. Natsios and then you, 
Ambassador Black. In the interest of time I'm going to ask our 
witnesses to summarize their remarks and then we will proceed 
to 5-minute rounds of questions and responses.
    A final piece of housekeeping. Due to last minute travel 
requirements, HIV/AIDS Coordinator Tobias will be unable to 
participate in the April 28 hearing on the fiscal year 2005 
HIV/AIDS budget request. Staff will be working with the State 
Department to reschedule the hearing for some time next month 
and we will make an announcement once that date has been 
reached.
    I want to make a few brief historical reflections. 
Understanding the looming threat of the axis powers to America, 
President Roosevelt said in his Arsenal of Democracy speech in 
December 1940, that ``no man can tame a tiger into a kitten by 
stroking it. There can be no reasoning with an incendiary bomb. 
We know now that a nation can have peace with the Nazis only at 
the price of total surrender.'' So it is with the ongoing war 
on terrorism. Our current-day enemies are as ruthless as the 
Nazis and as devious as the kamikaze pilots who struck without 
warning, originally at Pearl Harbor and later when then crashed 
into our ships. From trains in Spain to nightclubs in Bali and 
Tel Aviv the terrorist hydra indiscriminately targets innocent 
men, women, and children in misguided jihad that pits 
fanaticism against freedom. To be sure there can be no 
armistice or peace treaty with terrorists. With the continued 
participation of other world democracies this scourge must be 
managed and controlled like the disease that it is. Our modern 
day arsenal of democracy is vast and potent. From precision-
guided munitions to basic education programs in the Muslim 
world, America has at hand the tools and the capacity to 
militarily confront terrorism on foreign shores while 
simultaneously undermining social and economic conditions that 
offer terrorists safe haven and breeding grounds. And under 
President Bush we have tested and solid leadership. The weapons 
under this subcommittee's jurisdiction are numerous and include 
the obvious, the State Department's Anti-Terrorism Assistance 
Program and Terrorist Interdiction Program and the more subtle 
USAID's child survival and basic education programs. Although 
many advocate additional resources for foreign assistance 
programs it is clear this administration understands the 
importance of U.S. foreign aid in the war against terrorism.

                           PREPARED STATEMENT

    Testifying on the fiscal year 2005 budget request before 
this subcommittee earlier this month, Secretary Powell 
indicated as follows: ``to eradicate terrorism the United 
States must help create stable governments in nations that once 
supported terrorism, go after terrorist support mechanisms as 
well as the terrorists themselves, and help alleviate 
conditions in the world that enable terrorists to bring in new 
recruits.'' When it comes to the budget request, there may be a 
difference of dollars but not direction. We all know now that 
repression in Cairo and Riyadh translates into terrorism in New 
York, Virginia, and Pennsylvania.
    Let me just close with an observation on Southeast Asia. 
With a highly combustible mix of corrupt and undemocratic 
governments and regional terrorist groups with linkage to Al 
Qaeda, that region may very well become our next front in the 
war on terrorism. The hydra has already appeared in the 
Philippines, Indonesia, Thailand, Malaysia, Singapore, and 
Cambodia. It is imperative that we provide sufficient resources 
to foreign assistance programs in that region--whether basic 
education in Jakarta or democracy promotion in Phnom Penh--to 
deny footholds for Islamic extremism. Should we fail to do so 
the results will be catastrophic for the region and for the 
world. Regional terrorists are undoubtedly aware of the massive 
flow of trade and oil through the Strait of Malacca.
    [The statement follows:]

             Prepared Statement of Senator Mitch McConnell

    I want to begin my remarks with a brief historical reflection.
    Understanding the looming threat of the Axis powers to America, 
President Franklin Roosevelt said in his ``Arsenal of Democracy'' 
speech in December 1940 that ``no man can tame a tiger into a kitten by 
stroking it. There can be no reasoning with an incendiary bomb. We know 
now that a nation can have peace with the Nazis only at the price of 
total surrender.''
    So it is in the ongoing war against terrorism.
    Our current day enemies are as ruthless as the Nazis and as devious 
as the kamikaze pilots who struck without warning at Pearl Harbor. From 
trains in Spain to nightclubs in Bali and Tel Aviv, the terrorist Hydra 
indiscriminately targets innocent men, women and children in misguided 
jihad that pits fanaticism against freedom.
    To be sure, there can be no armistice or peace treaty with 
terrorists. With the continued participation of other world 
democracies, this scourge must be managed and controlled like the 
disease that it is.
    Our modern day arsenal of democracy' is vast and potent. From 
precision guided munitions to basic education programs in the Muslim 
world, America has at hand the tools and capacity to militarily 
confront terrorism on foreign shores while simultaneously undermining 
social, political and economic conditions that offer terrorists safe 
haven and breeding grounds. And under President Bush, we have tested 
and solid leadership.
    The weapons' under this Subcommittee's jurisdiction are numerous 
and include the obvious--State's Antiterrorism Assistance Program and 
Terrorist Interdiction Program--and the more subtle--USAID's child 
survival and basic education programs. Although many advocate 
additional resources for foreign assistance programs, it is clear this 
Administration understands the importance of U.S. foreign aid in the 
war against terrorism.
    Testifying on the fiscal year 2005 budget request before this 
Subcommittee earlier this month, Secretary Powell stated: ``[t]o 
eradicate terrorism, the United States must help create stable 
governments in nations that once supported terrorism, go after 
terrorist support mechanisms as well as the terrorists themselves, and 
help alleviate conditions in the world that enable terrorists to bring 
in new recruits.''
    When it comes to the budget request, there may be a difference of 
dollars--but not of direction. We all know now that repression in Cairo 
and Riyadh translates into terrorism in New York, Virginia and 
Pennsylvania.
    Let me close with an observation on Southeast Asia. With a highly 
combustible mix of corrupt and undemocratic governments and regional 
terrorist groups with linkages to al-Qaeda, that region may very well 
become our next front in the war on terrorism. The Hydra has already 
appeared in the Philippines, Indonesia, Thailand, Malaysia, Singapore 
and Cambodia. It is imperative that we provide sufficient resources to 
foreign assistance programs in the region--whether basic education in 
Jakarta or democracy promotion in Phnom Penh--to deny footholds for 
Islamic extremism.
    Should we fail to do so, the results will be catastrophic for the 
region and the world. Regional terrorists are undoubtedly aware of the 
massive flow of trade and oil through the Strait of Malacca.

    Senator McConnell. With that, let me call on my friend and 
colleague, Senator Leahy, for his opening observations.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you very much, Mr. Chairman. I'm 
pleased you're holding this hearing. Ambassador Black and Mr. 
Natsios, I appreciate both of you being here. You both have 
long and distinguished records in your fields and have been 
helpful to our committee.
    I think a key question for us today is one that was posed 
by a top official of the Bush administration. He said: ``Are we 
capturing, killing, or deterring more terrorists every day than 
the madrassas and the radical clerics are recruiting, training, 
and deploying against us?'' I think it is a key question. That 
was Secretary Rumsfeld's question on October 16. It's a lot 
different than the everything is roses rhetoric than we've 
heard from many in the administration. I commend Secretary 
Rumsfeld for the statement. It was blunt, unpolished, and it 
was right on target. I think that question, particularly the 
issue of deterrence, should be at the heart of our 
counterterrorism strategy.
    As you both know, fighting terrorism involves a lot more 
than just force and interdiction. If that's all it took, with 
the most powerful military on earth, we would have already won. 
But I think that many of the administration's foreign policies 
are taking us in the wrong direction, and let me give you some 
examples of where I believe we're losing ground. The conflict 
between Israelis and Palestinians has enormous impact on how 
the United States is perceived in the Muslim world but I don't 
believe the President has invested, really, any political 
capital in solving the conflict. The road map is dead, the 
violence continues unabated and it's fueled the propaganda 
machines of Islamic extremists.
    Iraq, after squandering the goodwill afforded us around the 
world after the September 11 attacks, we are floundering. The 
failure to find weapons of mass destruction has damaged our 
credibility. The commander of U.S. ground forces in Iraq, 
General Sanchez, has said Iraq is becoming a magnet for foreign 
terrorists. Other reports indicate that terrorist organizations 
around the world are using Iraq as a rallying cry for gaining 
new recruits. And while the President has talked about 
democracy and human rights, he speaks about changing the world, 
we are giving billions of dollars in aid to corrupt, autocratic 
regimes that are the antithesis of democracy and American 
values. Yet, we spend a pittance of what is needed to counter 
the powerful forces of Islamic extremism in key countries like 
Indonesia, the Philippines, and Malaysia, just to give some 
examples.
    Ambassador Black and Mr. Natsios, a recent Pew Research 
Poll showed that the credibility and reputation of the United 
States has been badly damaged, especially in Muslim countries, 
as a result of our own policies. Now, your testimony, which I 
have read, I know you're just going to summarize it but it 
describes what you're doing to strengthen government 
institutions and win the battle for hearts and minds in 
countries that are vulnerable to terrorist networks. We want to 
help. But I'm telling you that while I'm sure there have been 
successes, and there have been, if you look at the big picture 
some of the President's policies are working against you and I 
don't think you're devoting enough resources to do the job. And 
I say this as one who has strongly supported efforts of this 
administration, as I have of past administrations, to get 
resources to areas where foreign aid can do some good.
    Thank you. Thank you, Mr. Chairman.
    [The statement follows:]

             Prepared Statement of Senator Patrick J. Leahy

    Thank you Mr. Chairman for holding this hearing. Ambassador Black 
and Mr. Natsios, I appreciate you being here. I know you both have long 
and distinguished records in your fields.
    I think a key question for us today is one that was posed by 
another top official of this Administration. He said, quote: ``Are we 
capturing, killing or deterring more terrorists every day than the 
madrassas and the radical clerics are recruiting, training and 
deploying against us?'' That was Secretary Rumsfeld's question on 
October 16, and it was notably different from much of the rhetoric we 
have come to expect from this Administration. It was blunt. It was 
unpolished. And it was right on target.
    This question, and particularly the issue of deterrence, should be 
at the heart of our counter-terrorism strategy. As you both know, 
fighting terrorism involves more than force and interdiction. 
Unfortunately, I believe that many of this Administration's foreign 
policies are taking us in the wrong direction. Let me give you some 
examples of how I believe we are losing ground:
  --The conflict between Israelis and Palestinians has an enormous 
        impact on how the United States is perceived in the Muslim 
        world. Yet, despite its importance, President Bush has invested 
        almost no political capital in solving the conflict, the road 
        map is dead, and the violence continues unabated--fueling the 
        propaganda machines of Islamic extremists.
  --In Iraq, after squandering the good will afforded us after the 
        September 11 attacks, we are floundering. The failure to find 
        weapons of mass destruction has damaged our credibility. The 
        Commander of U.S. ground forces in Iraq, General Sanchez, has 
        said the country is becoming a magnet for foreign terrorists, 
        while other reports indicate that terrorist organizations are 
        using Iraq as a rallying cry for gaining new recruits.
  --At the same time the President talks about democracy and human 
        rights--``changing the world'' is how he put it--we are giving 
        billions of dollars in aid to corrupt, autocratic regimes that 
        are the antithesis of democracy and American values. And yet we 
        spend a pittance of what is needed to counter the powerful 
        forces of Islamic extremism in key countries like Indonesia, 
        the Philippines, and Malaysia.
    Ambassador Black, Mr. Natsios, a recent Pew Research poll showed 
that the credibility and reputation of the United States have been 
badly damaged, especially in Muslim countries, as a result of our own 
policies.
    Your prepared testimony describes what you are doing to strengthen 
government institutions and win the battle for hearts and minds in 
countries that are vulnerable to terrorist networks. We want to help. 
But what I am telling you is that, while I am sure there have been 
successes, if you look at the big picture, some of the President's 
policies are working against you, and you are not devoting enough 
resources to do the job.

    Senator McConnell. Mr. Natsios, why don't you go ahead and 
we'll put your full statement in the record. If it's too 
lengthy, I would ask you to summarize.
    Mr. Natsios. Thank you. Does this go on automatically?
    Senator Leahy. You can press the button right in front of 
you. The light will go on if it's on.

              SUMMARY STATEMENT OF HON. ANDREW S. NATSIOS

    Mr. Natsios. I do have a longer statement for the record, 
Mr. Chairman, which I would like put in the record, and I will 
read a summarized version.
    It is a privilege for us to be here today to discuss the 
efforts of both the State Department and USAID to combat 
terrorism. President Bush said defeating terrorism is our 
nation's primary and immediate priority; in a word it is this 
generation's calling. The war on terrorism has led to a 
broadening of USAID's mandate and has thrust the Agency into 
situations that go beyond its traditional role of humanitarian 
aid and development assistance.
    In both Iraq and Afghanistan, USAID has stood in the 
frontlines of important battles in the new war. The USAID's 
initiatives are helping the people of Iraq and Afghanistan 
reclaim their societies and together we're laying the 
groundwork for their rebirth. Through the end of the cold war 
and the challenges that now face USAID have prompted the most 
thoroughgoing reassessment of the country's development mission 
since the end of World War II, when the reconstruction of 
Europe began. We are responding with a new understanding of the 
multiple goals of foreign assistance, specifically we now have 
reformulated what we do into five distinct, broad challenges.

                    BROAD CHALLENGES OF FOREIGN AID

    First is supporting transformational development. Second is 
strengthening fragile states and reconstructing failed states. 
Third is supporting U.S. geo-strategic interests. Fourth is 
addressing transnational problems and fifth is providing 
humanitarian relief in crisis countries. Let me go through each 
of these to describe how that relates to the goal of combating 
terrorism.
    First, supporting of transformational development. It is 
the mission of USAID to shore up the democratic forces in a 
society and to help bring economic reforms that have the most 
effective antidote to terrorist threats. The President's 
Millennium Challenge account, in fact, fits very much into this 
category, and we're working with a number of countries that are 
threshold countries. They will probably not make MCC status, 
according to the indicators, but they are on the edge of making 
it and we want to help them get through the 16 indicators so 
they do qualify. And that's a category of countries that are 
about to take off in terms of development. They're pretty 
functional countries but they're very poor, and they need help 
to take off at high rates of economic growth.
    The second is strengthening failed and fragile states. The 
President's national security strategy underscores the changed 
dynamics of the post-cold war world. Today, weak states, it 
says, pose a greater danger to our national interests than 
strong states do. We are dealing with this consequence today. 
There is perhaps no more urgent matter facing AID's portfolio 
than fragile states, and no set of problems more difficult and 
intractable. I might add that the bulk of the states we deal 
with are either failed or fragile states now, the 80 countries 
in which we have USAID missions. It is no accident that the 
three countries which hosted headquarters Al Qaeda were failed 
states; first Somalia, then Sudan and then Afghanistan. That is 
not an accident.
    The third category is supporting U.S. geo-strategic 
interests. Aid is a potential leveraging instrument that can 
keep countries allied with U.S. policy. It also helps them in 
their own battles against terrorism. For example, while it is 
vital that we keep a nuclear-armed Pakistan from failing and 
allied with us in the war on terrorism, we must also help 
Pakistanis move towards a more stable, prosperous, and 
democratic society.
    The fourth category is addressing transnational problems, 
such as HIV/AIDS, infectious disease, international trade 
agreements and various efforts to combat criminal activities to 
support terrorism.
    The final category is a historic one for USAID and the U.S. 
Government, and that is humanitarian aid and disaster relief. 
There is a moral imperative, and that has not changed, to 
provide assistance to people's basic needs. We must, however, 
do a better job of combining this assistance with longer-term 
development goals.
    I want to be clear in my remarks today. I do not believe 
terrorism is simply caused by poverty. The clear analysis shows 
that there is no necessary relationship. There are very poor 
countries that have no terrorism, there are middle income 
countries that do. I do believe, however, that there are 
certain conditions that encourage terrorist networks and spread 
their influence. Among these are geographic isolation of 
people; a lack of economic opportunity and large levels of high 
unemployment; weak institutions and governance; a lack of 
financial transparency in their private banking sectors and 
poor educational systems. Many of these issues are related and 
overlapping, but I'd like to discuss each of them briefly to 
show how they relate to our ability to make contributions in 
the war against terrorism.

                          GEOGRAPHIC ISOLATION

    First is geographic isolation. I would commend a book 
written by my friend, Ahmed Rashidi, a journalist for the Far 
Eastern Economic Review; he's a Pakistani scholar and 
journalist. He wrote a book called ``The Taliban,'' which is 
the best book on the Taliban. It was written before 9/11. And 
what he describes is fascinating, because the connection 
between the terrorist threat, the isolation in the most remote 
areas of Pakistan and Afghanistan, to the Al Qaeda networks and 
the relationship between the madrassas along the border between 
the countries is directly related to the rise of Taliban and Al 
Qaeda in Afghanistan.
    Building roads has been an extremely effective means of 
combating the effects of geographic isolation. We signaled this 
last year when we completed a 379 kilometer highway that 
connects Kabul to Kandahar; we're now building the rest of it 
with the Saudis and the Japanese, between Kandahar and Herat. 
We did this in 13 months. Having run the Big Dig in Boston, I 
can tell you this is almost unimaginable what we built, a 379 
kilometer highway through the middle of this heartland of Al 
Qaeda and Taliban, in the middle of a war and got it done in 13 
months. The restoration of the road was one of President 
Karzai's overriding priorities. Everybody, including school 
children, know about the road. When I was down cutting the 
ribbon with Hamid Karzai, I went down to Kandahar, I asked 6-
year-old kids: ``Do you know about this highway?'' They said: 
``Everybody knows about the highway.'' I said: ``Who built the 
highway? They said: ``The Americans built the highway.'' So 
it's very well known that it exists. It is a symbol of what can 
happen when there is development going on in a society.
    We're also sponsoring very innovative radio programming to 
restore communications infrastructure, private sector radio 
stations, in Afghanistan. In a similar vein, USAID has funded a 
so-called Last Mile Initiative, which will bring rural and 
isolated populations around the world into the information age 
via connection to the Internet.

                    ECONOMIC GROWTH AND JOB CREATION

    Third is the lack of economic growth and job creation. We 
have learned that countries become vulnerable and subject to 
terrorist subversion when there are high rates of unemployment, 
particularly among young men between the ages of 15 and 35. You 
can look at actually a demographic analysis of societies. If 70 
percent of the population is over 25 and there are low rates of 
unemployment, the incidence of terrorist groups and the 
incidence of militias, which are outside the control of the 
central government, tend to diminish dramatically. And if you 
have the inverse statistic you have a serious problem. It is 
the case that militias are recruited from the ranks of restive 
and unemployed youth who are easily seduced into criminal 
activity. Our interventions in post-conflict countries have 
focused on various quick impact projects that generate 
employment as they help rebuild communities. We are using a 
variety of programs that address the economic isolation that is 
imposed on them by law and custom, by tenuous rights to 
property, multiple impediments to the creation of productive 
enterprise and disenfranchisement. One of the most important 
aspects of our strategy to address the lack of economic 
opportunity has been trade capacity building, because trade 
equals jobs equals lower unemployment rates.

                           GOVERNANCE ISSUES

    Weak institutions and poor governance. The terrorist threat 
also correlates closely with governance issues. Our development 
programs are firmly committed to building networks of schools 
and health clinics and seeing that they are competently 
staffed. In Afghanistan, Iraq, and elsewhere we are installing 
management systems and teaching skills that will modernize key 
government ministries. For example, in Afghanistan right now, 
1,000 people are on the staffs of the central ministries that 
are paid for by USAID. Eight hundred and seventy of them are 
Afghans with college degrees who have worked with international 
institutions, or NGOs, before their entrance, and we hired them 
jointly, very carefully--120 of them are expatriates. They are 
in the ministries; these are not people working for USAID and 
the Mission. We pay their salaries; they are the force to stand 
up competent ministries to develop public services. So the 
government is competent in administering services. Other 
programs, as in Cambodia, seek to foster competent political 
parties, political institutions at the national and local 
level, judicial reform and the protection of human rights.
    Terrorism also breeds in places where the government is 
present but is gripped by corruption. We're beginning to mount 
a more worldwide assault on endemic, parasitic corruption of 
elites which, among other things, short circuits effective 
development and deepens the resentments that terrorists so 
effectively mine. Weak financial systems also contribute to the 
problem of terrorism by allowing the movement of money between 
institutions and groups without any oversight.
    There is also a problem of choking off criminal activities 
like opium and poppy production. Much of the revenue in 
Afghanistan that fueled Al Qaeda and Taliban was provided by 
the heroin trade; 70 percent of the production of heroin in the 
last 10 years has been from Afghanistan. Our experience in 
fighting cocoa production in Peru, Bolivia, and Colombia has 
shown us that the only effective strategy to literally clear 
the ground for licit and legal crops that will feed the nation 
is aggressive eradication on one side and then alternative 
development programs on the other that provide a means for 
family incomes.

                         EDUCATION AND TRAINING

    The lack of education and training. We believe that in the 
longer term education is one of the most potent weapons against 
terrorism. To that end we have designed programs specifically 
for the Muslim world that respond to the challenges posed by 
the madrassas that preach radical forms of Islam. One approach 
focuses on improving the performance of secular education 
systems. We share the view with more enlightened Muslims that 
see the participation of women as a key to modernization, and 
our education programs are designed to emphasize this 
objective.
    Finally, we would like to emphasize that the presence of 
our missions and embassies in a host country can be a powerful 
educational force as well as a potent counterweight to the 
presence of terrorism and anti-Americanism. I'd like to cite 
that of the 8,000 people who work for USAID--we have 2,000 
direct hires, but 8,000 employees total--4,000 are former 
foreign service nationals. They are not Americans. They are 
Brazilians, they are Peruvians, they are Ugandans, they are 
Jordanians, and they work as a cadre of development experts, 
many of them have PhDs or law degrees or they're experts in 
their disciplines in their countries. Many of them have worked 
for USAID for a couple of decades. They are our links into the 
community at the grassroots level but they also have used USAID 
as a way of learning American values and American systems, and 
I am proud that legions of these graduates, from our FSN 
workforce, have now gone on to ministerial posts. I would add 
that the new vice president of El Salvador, just elected 2 
weeks ago, is a former FSN with USAID in El Salvador. The 
minister of agriculture in Guatemala stopped me 2 years ago at 
a conference and thanked me because for 10 years he was an FSN 
with our agriculture program in Guatemala. He was the minister 
of agriculture, I don't know if he still is. But we find this 
all over the world, that people who used to work for USAID now 
are in ministries as ministers, as prime ministers, as heads of 
NGOs and universities.

                           PREPARED STATEMENT

    I want to close with one point. We at USAID are the chief 
instrument of what some people call the Nation's soft power. 
I'm not fond of the phrase because it unintentionally implies 
weakness, and it is the opposite of that. In any case, the 
President signaled the importance of what we do when he called 
development a critical part of the triad of foreign policy 
instruments. Last week he reminded us that the war on terrorism 
is imminently winnable but it will be long and tough. He has 
also referred to it as an unconventional war that will require 
a large measure of old fashioned resolve and fortitude as well 
as new thinking. He has charged my Agency with new challenges 
and unprecedented responsibilities. I consider it our most 
important calling. Foreign assistance is one of our nation's 
best offenses against terrorism and instability now and in the 
long term.
    Thank you very much.
    [The statement follows:]

              Prepared Statement of Hon. Andrew S. Natsios

    Chairman McConnell, members of the subcommittee: It is a privilege 
to be here today to discuss the efforts of the U.S. Agency for 
International Development to combat terrorism.
    September 11 and the war on terrorism have brought the most 
fundamental changes to this country's security strategy since the 
beginning of the Cold War. This was the theme that Secretary of State 
Colin Powell brought to Congress in multiple testimonies this month and 
last. Recent events in Madrid--as in Indonesia, Morocco, the 
Philippines, Turkey, Uzbekistan, and Pakistan, among other places--
underscore the urgency of his remarks and the global nature of this 
challenge. As President Bush said: ``Defeating terrorism is our 
nation's primary and immediate priority.'' In a word, it is this 
generation's ``calling.''
    This country is no longer tasked with managing a global political 
chessboard with two blocs of opposing armies and alliances. We face a 
challenge that is much more complex.
    In September 2002, President Bush unveiled his National Security 
Strategy to address the unprecedented challenges that are facing the 
nation. It outlined the new direction in foreign policy that was 
required to respond effectively to what occurred the previous 
September. Among the tools that would be engaged in the new war was 
``development.'' Indeed, it was elevated as a ``third pillar'' of our 
foreign policy, along with defense and diplomacy. The global war on 
terror is the arena in which foreign aid must operate. This requires 
USAID to acknowledge its mission is broader than the traditional 
humanitarian and development response. We are challenged increasingly 
to deal effectively with failed states, transnational problems, and 
geostrategic issues.
    In February of last year, the Administration issued the National 
Strategy on Combating Terrorism, which laid out a ``4D strategy'' in 
the War on Terror: (1) defeat the terrorists, (2) deny them resources 
and state sponsorship, (3) diminish the underlying conditions that 
terrorists seek to exploit, and (4) defend U.S. citizens and interests 
at home and abroad. USAID's programs aim directly at both denying 
terrorists resources and diminishing the underlying conditions that 
terrorists exploit.
    In both Iraq and Afghanistan, USAID has stood in the front lines of 
the most important battles in the new war. The outside world has little 
understanding of the devastation--physical and psychological--that 
these societies had suffered from decades of predatory and tyrannical 
governments and political fanaticism. USAID initiatives are helping the 
people of Iraq and Afghanistan reclaim their societies and together we 
are laying the groundwork for their rebirth.
    Our country's post-war reconstruction efforts in Iraq are critical 
to the broader war on terror and remain a central priority of the 
Agency. Our achievements are significant, especially in light of the 
security situation and the desperate and on-going efforts of some to 
disrupt our progress.
    To check the forces of terror and bring peace and stability to this 
dangerous region of the world, USAID is committed to the President's 
goal of seeing democratic governments come to Afghanistan and Iraq. It 
is a historic commitment that is rivaled only by the Marshall Plan, to 
which my Agency traces its origins.
    The new challenges have prompted some of the more important 
internal reforms I have brought to USAID. A bureau of the Agency 
formerly focused on humanitarian crisis has been redesigned to deal 
with the vulnerability of contemporary societies to conflict and 
breakdown as well as the shoring up of democratic governance around the 
world. The Office of Conflict Management and Mitigation has been 
created to provide analytical and operational tools in order to sharpen 
our responses to crises by better understanding the motivations, means, 
and opportunities for violent conflict to thrive.
    Terrorists frequently thrive within an atmosphere of chaos. 
Conflict and state failure serve the purposes of terrorists by 
providing them with an opportunistic environment in which to operate. 
Regimes that are closed--politically and economically--foment a sense 
of hopelessness and multiply the number of aggrieved, who become easy 
recruits to the terrorist cause. It is the mission of my Agency to 
shore up the democratic forces of society and to help bring the 
economic reforms that are the most effective antidote to the terrorist 
threat and its appeal. We understand that this is not going to happen 
overnight and that our contributions are necessary but not sufficient 
alone: a fact clearly pointed out in the President's National Strategy 
for Combating Terrorism. The war on terror will be a long one, as the 
President reminds us, and it will take both resolve and long-term 
commitment.
    USAID's higher profile in our foreign policy initiatives since the 
war on terror began can be measured in budgetary terms. The commitment 
to the Agency has been substantial and growing as we administer funds 
from a number of Foreign Affairs accounts. In fiscal year 2003, for 
example, we administered a nearly $14.2 billion portfolio, including 
supplemental funds for Iraq, which is up from $7.8 billion in fiscal 
year 2001. We are proud of this vote of confidence and anxious to make 
good on our daunting responsibilities.
    The end of the cold war and the challenges that now face USAID have 
prompted the most thoroughgoing reassessment of the country's 
development mission since the end of the Second World War. We are 
responding with a new understanding of the multiple goals of foreign 
assistance. Specifically, USAID now faces five distinct challenges:
  --Supporting transformational development
  --Strengthening fragile states and reconstructing failed states
  --Supporting U.S. geo-strategic interests
  --Addressing transnational problems
  --Providing humanitarian relief in crisis countries
    You may notice that ``conducting the war on terror'' is not one of 
the Agency's core goals. Each of these goals, however, is vitally 
relevant to what the President has called this nation's ``primary and 
immediate priority.'' Let me take a moment to outline these challenges.
    Supporting transformational development.--In the developing world, 
USAID supports far-reaching, fundamental changes in institutions of 
governance, human services such as health and education, and economic 
growth. Through this assistance, capacity is built for a country to 
sustain its own progress. While these efforts have long been justified 
in terms of U.S. generosity, they must now be understood as investments 
in a stable, secure, and interdependent world.
    Strengthening failed and fragile states.--The President's National 
Security Strategy wisely recognizes the growing global risks of failing 
states when it said: ``The events of September 11, 2001 taught us that 
weak states . . . can pose as great a danger to our national interests 
as strong states . . . poverty, weak institutions and corruption can 
make weak states vulnerable to terrorist networks and drug cartels 
within their borders.'' The failure of states such as Zaire, 
Afghanistan, Lebanon, Bosnia, Somalia, Liberia had repercussions far 
beyond their own regions. We are dealing with the consequences today.
    There is perhaps no more urgent matter facing USAID's portfolio 
than fragile states and no set of problems that are more difficult and 
intractable. USAID has extensive experience in conflict and post-
conflict situations, which uniquely equip us to play a constructive 
role in achieving stability, reform, and recovery in fragile states. I 
offer our experience in the Sudan as illustrative.
    USAID boasts unparalleled expertise in Sudanese affairs. Our staff 
has spearheaded strategic interventions that have brought pockets of 
peace and intervals of tranquility which have allowed our humanitarian 
missions to move forward and peace to gain traction. They have helped 
coordinate policies with other nations that have brought this country 
to the doorstep of peace after more than a generation of civil war. Our 
goal is to bolster the peace, provide humanitarian relief, and spur 
recovery in order to maximize incentives for further development and 
now it is up to the Sudanese government and warring parties to pursue 
this path of opportunity that the U.S. government and other donors have 
helped to open.
    Supporting U.S. geo-strategic interests.--Aid is a potent 
leveraging instrument that can keep countries allied with U.S. policy. 
It also helps them in their own battles against terrorism. Our tasks 
today however, are broader and more demanding than just winning the 
allegiance of key leaders around the world. For example, while it is 
vital that we help keep a nuclear armed Pakistan from failing and 
allied with us in the war on terrorism, we must also help Pakistanis 
move toward a more stable, prosperous, and democratic society. Our 
support for reform of Pakistan's educational system and its political 
institutions is critical in this regard.
    Addressing transnational problems.--Global and transnational issues 
are those where progress depends on collective effort and cooperation 
among countries. Examples include HIV/AIDS and other infectious 
diseases, international trade agreements, and certain criminal 
activities such as trafficking in persons and the narcotics trade. 
USAID will continue to play a leading role on these issues, working 
with countries to help them address these problems so that they do not 
slip into instability and failure.
    Providing humanitarian relief.--The United States has always been a 
leader in humanitarian aid and disaster relief. We are the largest 
contributors of food aid that have fed the hungry and combated famine 
around the world. This is a moral imperative that has not changed. We 
must, however, do a better job of combining such assistance with longer 
term development goals. And we must make sure that the recipients are 
aware of help and U.S. generosity. This is particularly important in 
areas of the world subjected to anti-Americanism and terrorist 
propaganda.
    I want to be clear. I in no way believe that terrorism is simply 
caused by poverty. Osama Bin Laden was by no means from a deprived 
background, nor were the perpetrators of 9/11. I do believe that there 
are certain conditions that are propitious to terrorists and their 
cause. Among these are: isolation, a lack of economic opportunity, weak 
institutions and governance, a lack of financial transparency and poor 
educational systems. Many of these issues are related and overlapping, 
but I'd like to discuss them each briefly, and outline some of our 
endeavors in these areas and the critical contributions they make to 
waging an effective war on terrorism.
    (1) Isolation.--As the experience in Afghanistan indicates, remote 
and isolated areas of poorer countries are the most fertile grounds of 
terrorist fanaticism. These continue to be the strongholds of the 
Taliban.
    Building roads has been an extremely effective means of combating 
the effects of isolation. USAID's signal achievement last year was the 
rehabilitation of 389 kilometers of road that connects Kabul with 
Kandahar, an unprecedented engineering feat given the constricted time 
frame and insurgency threats. Approximately 35 percent of Afghanistan's 
population lives within 50 km of the highway, much of this agrarian and 
rural. Plans are being implemented to extend it to the city of Herat, 
were it will then arc back and reconnect with Kabul in one complete 
circuit.
    Restoration of the road has been one of President Karzai's 
overriding priorities. It is crucial to extending the influence of the 
new government, now endowed with democratic legitimacy and bent on a 
new start for the country. When complete, it will help end the 
isolation that has sheltered the Taliban and fed terrorist insurgency. 
It will stimulate development and reconnect the country to a larger 
network of regional trade.
    I am convinced that development has generally gotten off track in 
abandoning its commitment to road building, particularly in rural 
areas. Short term, it generates employment; long term, it serves 
development. In connecting more remote regions to the capital cities, 
it also spreads the modernizing forces of urban life to the 
hinterlands. And in places like Afghanistan or Pakistan, this can make 
a significant contribution to the war on terror. In other places like 
Nepal where we built roads decades ago, recent evaluations have shown 
that they have had an enormous impact in opening access to remote areas 
and countering the impact of insurgent groups.
    Radios are another example of how we combat isolation. Afghanistan 
has a radio culture. USAID has restored radio transmission towers. It 
has also funded innovative programming and provided the capital to 
build private radio stations. For example, Radio Kabul has broken new 
ground with a program that appeals to the music tastes and concerns of 
the young, featuring a mix of female and male disk jockeys that are 
representative of the diverse ethnic groups in Afghan society. Such 
things were unimaginable under the Taliban and the programming 
popularity is testament to the country's new ethos.
    In a similar vein, USAID is funding the so-called ``Last Mile'' 
initiative, which will bring rural and isolated populations into the 
information age via connection to the internet. Increased development 
and trade opportunities for such areas can also be pursued through such 
linkages to the outside world.
    (2) Lack of economic growth and job creation.--We have learned that 
countries become vulnerable and subject to terrorist subversion when 
there are high rates of unemployment, particularly among males aged 15-
35. This has been confirmed time and again by our experiences with 
fragile and failing states. Militias recruit from the ranks of restive 
and unemployed youths who are easily seduced into the criminal 
activities that support terrorism.
    Our interventions in such countries have focused on various quick 
impact projects that generate employment as they help rebuild 
communities. In channeling the productive energies of such peoples, 
these programs also provide visible signs of hope that can counter the 
call of those who base their appeals on a sense of hopelessness. 
Indeed, programs such as ``food for work'' may be the only means of 
survival for backward or war-devastated communities. As we found out in 
Afghanistan, this is what stood between desperation and reliance on 
Taliban ``charity.''
    The most potent weapon against terrorism, however, will come not 
from external aid but from the internal development of such societies. 
USAID is using a wide variety of programs that address the economic 
isolation that is imposed on them by law and custom, tenuous rights to 
property, multiple impediments to productive enterprise, and 
disenfranchisement. We take inspiration from the work of Hernando De 
Soto who seeks to integrate the untapped talents and tremendous 
energies of the marginalized by bringing them into the mainstream of 
their nation's economy. And we apply the lessons from the work of 
Michael Porter who seeks to unlock the potential latent in national 
economies by creating local conditions that foster business and job 
creation.
    One of the most important aspects of our strategy to address the 
lack of economic opportunity has been trade capacity building 
activities. This includes supporting trade negotiations and helping 
counties take advantage of the opportunities for trade. Complementing 
our efforts in the World Trade Organization and in support of the 
Africa Growth and Opportunity Act, our trade capacity building programs 
help integrate countries into the world trading system. Our programs 
which support our trade negotiations from Central America to Southern 
Africa and beyond will help countries: a) implement the free trade 
agreements, furthering the rule of law and improving transparency, and 
b) benefit from the opportunities offered by those agreements.
    In order for trade agreements to translate into investment 
opportunities, developing countries must have a sound business climate. 
In much of the developing world, however, it remains difficult to start 
and run a business. We are addressing some of the key issues related to 
property rights, contract enforcement, and rule of law--that are part 
of the enabling environment that allows businesspeople, investors, and 
farmers to build private enterprises and create wealth.
    Another example is a report from Mindanao in the Philippines, where 
USAID has been working to provide economic opportunities and permanent 
private sector jobs for members of an insurgent group. Unsolicited, 
this prompted another armed group to offer to turn in their guns for a 
jobs program like the USAID program in a neighboring village. This is 
the kind of demand these programs can generate.
    There is also the problem of choking off criminal activities like 
opium and poppy production that provides the livelihood for many people 
in different regions. Our experience in fighting cocoa production in 
Peru, Bolivia, and Colombia has shown us that the only effective 
strategy is to literally clear the ground for the licit crops that will 
feed the nation while aggressively pursuing eradication of the others.
    In eradicating poppy, we eradicate what is a major source of 
funding for terrorists. We are also addressing what has turned into a 
plague for the region. While poppy was cultivated for export to the 
West as a weapon to undermine the fabric of society there, it has 
caused a raging addiction problem in Pakistan, Afghanistan, and Iraq.
    (3) Weak Institutions and Poor Governance.--The terrorist threat 
also correlates closely with governance issues. This has a geographic 
dimension, when, typically, institutions of government and the services 
they provide have only the most tenuous presence in areas outside the 
capital. Where food is scarce and health service is minimal, the 
religious schools called madrassas will fill the void. USAID has made 
fortifying agriculture and reviving rural economies a priority. Our 
development programs are firmly committed to building networks of 
schools and health clinics and seeing that they are a competently 
staffed. In Afghanistan, Iraq and elsewhere, we are installing 
management systems and teaching the skills that will modernize key 
government ministries. Other programs seek to foster competent 
political parties, parliaments, local government and judicial systems 
which ensure the rule of law.
    Building and strengthening institutions has been at the center of 
our efforts in Afghanistan. We are supporting the electoral process, 
providing assistance for voter registration, political party 
development, and civic education. We are also expanding our rule of law 
program so that a new Constitution can be enforced and are heavily 
involved in supporting educational institutions at different levels and 
through a broad range of activities. In almost every country where 
USAID works, building up institutional capacity--whether it's 
supporting the Bank of Indonesia or the Indonesian Attorney General's 
office ability to combat money laundering or strengthening rule of law 
in Columbia--is central to our approach.
    Terrorism also breeds in places where the government is present but 
is gripped by corruption. USAID considers the issue of corruption as 
central to our development mission. I have commissioned an agency-wide 
anti-corruption strategy which will move USAID's commitment to fighting 
corruption into all appropriate facets of agency operations. We have 
supported Transparency International almost from its inception and we 
work with a host of related NGO's in the field. We are developing 
innovative strategies in Washington and the field to counter the petty 
corruption that demoralizes the citizenry and encumbers their 
activities. The economic drag from such practices is literally 
incalculable.
    We are also beginning to mount a more serious assault on the 
endemic, parasitic corruption of elites which, among other things, 
short-circuits effective development and deepens the resentments that 
terrorists so effectively mine. In making democratic change central to 
our foreign policy initiatives, we are not merely advancing a core 
value of our society but the most effective instrument of social 
regeneration in closed and corrupt regimes.
    (4) Weak Financial Systems.--Related to weak governance is the 
problem of weak financial institutions and lack of financial 
transparency. Of particular significance to the war on terrorism are 
our efforts to reform banking and financial systems and install proper 
auditing practices that will track the monies that serve criminal 
activities and feed terrorist networks. Assistance efforts have helped 
pass legislation, set up financial crimes investigative groups, and 
trained bank examiners to identify and report suspicious transactions.
    (5) Lack of Education and Training.--We believe that in the long-
term, education is one of our most potent weapons against terrorism. To 
that end, we have designed programs specifically for the Muslim world 
that respond to the challenge posed by radical Islamism. One approach 
focuses on improving the performance of the secular educational system, 
to help it compete more effectively with radical schools. Radical 
schools have been particularly successful in countries where the public 
school system has deteriorated, leaving an educational vacuum. This has 
been dramatically illustrated in Afghanistan and Pakistan. We share the 
view of more enlightened Muslims that see the participation of women as 
key to modernization. And our educational programs are designed with 
due emphasis to this goal.
    Finally, I would like to emphasize that the very presence of our 
Embassies and Missions in a host country can be a powerful educational 
force as well as a potent counterweight to the presence of terrorism 
and anti-Americanism. Secretary Powell last year paid tribute to our 
missions as among the best exemplars of American values and among the 
nation's most effective ``ambassadors.''
    I would also like to cite the over 4,000 Foreign Service Nationals 
that work for USAID. I have been thanked by them on numerous occasions 
in my travels and they frequently express their gratitude for the 
``educational experience'' that USAID afforded them. In addition, I 
believe that the impact of our training programs has been enormous. I 
am proud that among the legions of ``graduates,'' both of our 
educational programs and of our foreign service national workforce 
(FSN), many have gone on to ministerial posts and other positions of 
influence in their countries. We welcome the vice-president of El 
Salvador as one, a former USAID FSN installed in office several weeks 
ago in what, from a United States point of view, was a most promising 
election for the people of her country and inter-American relations.
    I want to close with the following point. We at USAID are the chief 
instrument of what some call the nation's ``soft power.'' I am not very 
fond of the phrase because it unintentionally implies weakness. In any 
case, the President signaled the importance of what we do when he 
called ``development'' a critical part of a triad of foreign policy 
instruments. Last week, he reminded us that the war on terrorism is 
eminently winnable, but that it will be long and tough. He has also 
referred to it as an ``unconventional'' war, one that will require a 
large measure of old fashioned resolve and fortitude as well as new 
thinking. He has charged my Agency with new challenges and 
unprecedented responsibilities. I consider it my most important task to 
respond to this ``calling.'' U.S. Foreign Assistance is our nation's 
best offense against terrorism and instability now and in the long 
term.
    This concludes my testimony, Mr. Chairman. I will be happy to 
answer any of your or the Committee's questions.

    Senator McConnell. Thank you, Mr. Natsios. Ambassador 
Black.

                 SUMMARY STATEMENT OF HON. COFER BLACK

    Ambassador Black. Thank you very much, Chairman McConnell, 
Senator Leahy, and distinguished members of the subcommittee. 
Thank you very much for this opportunity to testify today at 
your hearing on foreign assistance and international terrorism.
    This hearing is appropriate and timely in addressing the 
State Department's specific counterterrorism programs and USAID 
development programs in the context of the U.S. Government's 
overall strategy to assist other countries. It is essential to 
consider these efforts together rather than narrowly viewing 
individual programs that respond to various regional or global 
threats. Today's hearing should reinforce the fact that 
international programs fundamentally contribute to our goals of 
diminishing the underlying conditions that spawn terrorism 
while thwarting and capturing terrorists before they can strike 
us and our allies overseas.
    Resources are lifeblood as we prosecute the global war on 
terrorism. Many countries function as our allies in this effort 
but a number of these prospective partners are faced with 
relatively weak institutions and capabilities. Before I 
describe the variety of State Department programs, and I'll try 
to be short, to improve the capabilities and institutions of 
our international partners, I first want to thank you and your 
colleagues for your subcommittee's support for these programs. 
We greatly appreciate your subcommittee's support for the 
administration's full fiscal year 2004 appropriations request 
for anti-terrorism programs funded through the 
Nonproliferation, Anti-Terrorism, De-mining and Related 
Programs account. I sincerely hope that your mark-up of the 
fiscal year 2005 request will be equally supportive and that 
your colleagues in the House will follow this example.
    Administrator Natsios has described the scope of USAID 
programs briefly. To strengthen the institutions in our partner 
countries these efforts are a complimentary backdrop to the 
programs we pursue at State. In many of the countries where we 
work the overall institutions of government and society are not 
sufficiently robust for the task of aggressive counterterrorism 
programs. We cannot expect countries to be effective in 
deterring, detecting, and capturing terrorists if their 
security guards and policemen are barely literate and poorly 
paid and susceptible to bribes, their investigators, 
prosecutors and the judges are poorly trained and their basic 
communications infrastructure is weak or virtually nonexistent. 
In order to develop these institutional capabilities fully, 
countries need a functioning educational system to develop 
qualified personnel. Institution building requires laws to 
provide the necessary legal framework for investigating, 
pursuing, apprehending and prosecuting terrorists. Countries 
even need radios, computers and other communications equipment 
that will allow foreign counterterrorism officials to exchange 
information real-time.
    When we strengthen the institutions of our partners we move 
less-developed countries closer toward their full potential in 
combating terrorism. At the same time we must encourage our 
international partners to provide resources and expertise in 
support of this goal.
    Mr. Chairman, let me turn briefly now to some of our 
specific counterterrorism programs. The administration is 
requesting $128 million in the NADR account to meet the Anti-
Terrorism Training Assistance Program's growing requirements. 
My office provides policy, guidance and funding to the 
Department of State's Bureau of Diplomatic Security Office of 
Anti-Terrorism Assistance, ATA. The highest priority for 
assistance remains in the southern crescent countries, which 
extend from East Asia through Central and South Asia to the 
Middle East and to particularly vulnerable East African 
counties. In this request, $25 million is specifically intended 
for programs in Indonesia, Afghanistan, Pakistan, Kenya, and 
Colombia.
    The ATA program provides a wide range of courses to 
strengthen the counterterrorism capacities of recipient 
countries. The Department works closely with U.S. embassy 
officers, especially regional security officers, to develop a 
tailored training package to meet each recipient country's 
needs. The training includes courses on hostage negotiation, 
bomb detection, and airport security, all of which are 
currently relevant to the threats and events we've witnessed in 
the past year.
    The administration is also requesting $5 million for the 
Terrorist Interdiction Program, or TIP. TIP is designed to 
enhance border security of countries confronted with a high 
risk of terrorist transit. Through this program priority 
countries receive a sophisticated database system and training 
support to identify and track suspected terrorists as they 
enter and exit at ports of entry. TIP is currently operational 
in 18 countries. The requested funds will be used for TIP 
installations in up to six new countries and continued work and 
maintenance on existing installations. The administration is 
requesting $500,000 to strengthen international cooperation and 
to advance United States and international goals and to 
stimulate the analytical and problem solving skills of senior 
officials in countries that currently confront the terrorist 
threat.
    We're also requesting $7.5 million to support programs that 
combat terrorist financing. Understanding----
    Senator McConnell. Excuse me, Ambassador Black.
    Ambassador Black. Yes sir?
    Senator McConnell. Are you near the end of your opening 
statement?
    Ambassador Black. Yes sir, I am.
    Senator McConnell. Okay, great.
    Ambassador Black. I can stop right away if you like, sir.
    Senator McConnell. I want to assure you, if it's any help, 
that I've read your statement.
    Ambassador Black. Okay
    Senator McConnell. I appreciate having it read to me again 
but I can read.

                           PREPARED STATEMENT

    Ambassador Black. Okay. I certainly did not mean to suggest 
that, sir. Anyway, we have a spectrum of programs that we think 
are crucial in the global war on terrorism. They provide an 
underlayment in terms of the anti-terrorism assistance program 
to the interdiction program to our diplomatic initiatives with 
other countries so that we can build the capacity and the will 
to fight terrorism.
    If that's all right with you, Mr. Chairman, I think it's 
probably best I stop right there.
    [The statement follows:]

                 Prepared Statement of Hon. Cofer Black

    Chairman McConnell, distinguished Members of the Subcommittee, 
thank you for the opportunity to testify today at your hearing on 
``Foreign Assistance and International Terrorism.''
    This hearing is appropriate and timely in addressing the State 
Department's specific counterterrorism programs in the context of the 
U.S. Government's overall efforts to assist other countries, rather 
than programs that respond to various regional or global threats. 
Today's hearing should reinforce the fact that international programs 
fundamentally contribute to our goals of diminishing the underlying 
conditions that spawn terrorism and trying to capture and thwart 
terrorists before they can strike us and our allies overseas.
    Resources are lifeblood as we prosecute the Global War on 
Terrorism. Many countries are willing to cooperate in the Global War on 
Terrorism, but many of these prospective partners are faced with 
relatively weak institutions and capabilities. Before I describe the 
variety of these programs to improve the capabilities and institutions 
of our international partners, I first want to thank you and your 
colleagues for your Subcommittee's budgetary support for the programs. 
We greatly appreciate your Subcommittee's support for the 
Administration's full fiscal year 2004 appropriations request for Anti-
Terrorism programs funded through the Nonproliferation, Anti-Terrorism, 
Demining and Related Programs (NADR) account and we applaud your 
efforts to restore at least some of the cuts made by the House last 
year. Your action recognizes and underscores the essential role of 
international programs in the ongoing effort to combat terrorism. I 
sincerely hope your markup of the fiscal year 2005 budget request will 
also be equally supportive and that your colleagues in the House will 
follow this example.
    My colleague, USAID Administrator Natsios, has described the broad 
Agency for International Development programs to strengthen the 
institutions in our partner countries. These programs are a 
complementary backdrop to the programs we pursue at State.
    Institution Building for CT Programs.--While the State Department's 
counterterrorism programs focus on developing specific skills, we 
recognize that in many of the countries where we work, the overall 
institutions of the government and society are not sufficiently robust 
for the task of aggressive counterterrorism programs. For this reason, 
institution building is not an abstract or academic concept. 
Institution building begins with having laws in place to provide the 
necessary legal framework for investigating, pursuing, apprehending, 
and prosecuting terrorists. It requires capable and motivated law 
enforcement personnel, investigators and prosecutors and judges. 
Therefore, aside from the many other benefits that may accrue from our 
foreign assistance programs, the U.S. Government must consider the 
status of a country's social institutions and our role in enhancing 
those capabilities to support the Global War on Terrorism.
    Foreign Assistance Programs Support CT Programs.--We cannot expect 
countries to be effective in deterring, detecting and capturing 
terrorists if their security guards and policemen are barely literate, 
poorly paid and susceptible to bribes, if the investigators, 
prosecutors and judges are poorly trained, and if the basic 
communications infrastructure is weak or virtually non-existent. In 
order to develop these institutional capabilities fully, countries need 
a good educational system to develop qualified personnel and even 
radios, computers, and other communications equipment that will allow 
foreign counterterrorism officials to exchange information in real 
time. We must do what we can to strengthen the institutions of our 
partners and thereby move less developed countries closer toward their 
full potential in combating terrorism. At the same time, we must also 
encourage our international partners to provide resources and expertise 
in support of this goal.
    Mr. Chairman, let me turn now to some of our specific 
counterterrorism programs.

               STATE DEPARTMENT COUNTERTERRORISM PROGRAMS

    Antiterrorism Training Assistance (ATA).--For fiscal year 2005, the 
Administration is requesting $128 million in the NADR account to meet 
the ATA program's growing requirements. Of this amount, $25 million is 
specifically requested for programs in Indonesia, Afghanistan, 
Pakistan, Kenya, and Colombia. The ATA program was among the first 
specific counterterrorism programs funded at State, initially 
authorized in late 1983. It continues to serve as the primary provider 
of U.S. Government antiterrorism training and equipment to the law 
enforcement agencies of friendly countries needing assistance in the 
Global War on Terrorism. My office, the Office of the Coordinator for 
Counterterrorism (S/CT), provides policy guidance and funding to the 
Department of State's Bureau of Diplomatic Security Office of 
Antiterrorism Assistance (DS/ATA), which implements the program. My 
office determines the relative priority for select countries to receive 
a given type of training. If a country must be assigned a higher 
priority because of specific problems, we will do so. It is important 
to keep in mind that we receive far more requests for ATA training than 
we can accommodate in a year, and there are always countries waiting 
for the benefits of this program. Once the prioritization process is 
completed, our colleagues in DS/ATA then work out the details of the 
training schedules and make the arrangements.
    The ATA program provides a wide range of courses to strengthen the 
counterterrorism capacities of recipient countries. The Department 
works closely with the U.S. Embassy officers, especially the Regional 
Security Officers, to develop a tailored training package to meet each 
recipient country's needs. The training includes traditional courses, 
such as hostage negotiations, bomb detection, and airport security. In 
recent years, ATA has developed new courses for investigating terrorist 
organizations and defeating cyber-terrorism. The program has also 
provided a series of seven seminars to help other countries strengthen 
their counterterrorism legislation.
    In fiscal year 2005, we plan to continue a robust schedule of 
training and assistance with our partner nations to further enhance 
their capacity to counter terrorism. The highest priority for 
assistance remains the ``southern crescent'' countries, which extend 
from East Asia through Central and South Asia to the Middle East and 
into particularly vulnerable East African countries and even beyond to 
the western hemisphere. We will continue to support specialized 
programs conducted in-country in Indonesia, Afghanistan, Pakistan, 
Kenya, and Colombia. We will support the Counterterrorism Center in 
Kuala Lumpur, established by the Government of Malaysia to address 
pressing regional counterterrorism issues. We will aid the Government 
of the Philippines in the establishment of a new law enforcement 
counterterrorism unit. We also expect to develop new courses and 
programs to meet the evolving terrorist threat.
    Terrorist Interdiction Program (TIP).--The Administration's fiscal 
year 2005 budget request includes $5 million for TIP. TIP is designed 
to bolster the border security of countries confronted with a high risk 
of terrorist transit. Through this program, priority countries receive 
a sophisticated database system and training support to identify and 
track suspected terrorists as they enter and exit at-risk countries. 
TIP is currently operational in 18 countries, and is scheduled for 
deployment in five more countries this calendar year. The requested 
funds will be used for TIP installations in up to 6 new countries and 
continued work and maintenance on existing installations.
    CT Engagement.--The Administration is requesting $0.5 million in 
fiscal year 2005 to strengthen international cooperation and working 
relationships for counterterrorism. In pursuit of this goal, S/CT 
coordinates and participates in a variety of bilateral meetings and 
conferences with our allies. These meetings and conferences not only 
advance U.S. and international goals; they also stimulate the 
analytical and problem-solving skills of senior officials in the 
countries that currently confront the terrorist threat.
    Terrorist Finance Programs.--The Administration's budget request 
for fiscal year 2005 is $7.5 million for the NADR account to support 
counter/anti-terrorist finance programs. Understanding and interdicting 
the financial transactions that sustain terrorist activity is a core 
function of the State Department's efforts to combat international 
terrorism. We seek to stem the flow of funds to terrorist groups and to 
strengthen the capability of our partners to detect, disrupt and deter 
terrorist financing networks around the world.
    The groundwork for our counterterrorism finance offensive was 
actually laid many years before 9/11, through provisions that the State 
Department proposed and the Congress enacted in the Antiterrorism and 
Effective Death Penalty Act of 1996. The Act authorizes the Secretary 
of State, in consultation with the Attorney General and the Secretary 
of Treasury, to designate Foreign Terrorist Organizations (FTOs). Among 
other provisions, the Act prohibits U.S. persons and persons subject to 
the jurisdiction of the United States from knowingly providing material 
support or resources to an FTO, or attempting or conspiring to do so. 
Among the consequences of a designation, any financial institution that 
becomes aware that it has possession of funds of a designated FTO must 
retain control over the funds and report the funds to the Treasury 
Department's Office of the Foreign Assets Control (OFAC). Currently 37 
groups are designated as FTOs.
    Following the terrorist attacks of September 11, 2001, the 
President signed Executive Order 13224, which requires U.S. persons to 
freeze the assets of individuals and entities designated under this 
E.O. for their support of terrorism. There are currently over 250 
individuals and entities designated under E.O. 13224. The White House 
has established an interagency mechanism to coordinate the USG policy 
on counterterrorism training and technical assistance, including 
terrorist financing.
    We are not alone in our efforts to combat terrorist financing. The 
U.N. Security Council has also significantly enhanced efforts to combat 
terrorist financing after the September 11 attacks, calling on member 
countries to criminalize terrorist financing and to freeze the assets 
of terrorists and terrorist organizations. The U.N. Security Council 
created the 1267 al-Qa'ida/Taliban Sanctions Committee to maintain a 
list of individuals and entities associated with al-Qa'ida, the 
Taliban, or Usama bin Laden. All U.N. Member States are obligated to 
implement asset freezes, arms embargoes, and travel bans against those 
on the list. This list continues to expand as other countries join the 
United States in submitting new names to the committee. So far, the 
international community has frozen over $130 million in assets of 
persons or entities with ties to terrorist networks, and in many cases 
to al-Qa'ida. The U.N. Security Council's role in fighting terrorist 
financing through its resolutions on asset freezing and other 
sanctions, and especially its listing of al-Qa'ida-related names, has 
been crucial to our efforts in this area.
    We are working closely with the Financial Action Task Force (FATF), 
a 31-member international organization that sets standards to combat 
money laundering and more recently to combat terrorist financing. The 
FATF elaborated on two of its earlier recommendations to make the use 
of cross-border wire transfers and alternative remittance systems (such 
as hawalas) more transparent, and less subject to exploitation by 
terrorist groups. On the bilateral front, interagency teams led by the 
State Department are traveling to states critical to our 
counterterrorism efforts to evaluate their financial systems, identify 
vulnerabilities, and develop and implement comprehensive 
counterterrorism financing training and technical assistance programs.
    To help other countries combat terrorism financing, we have 
developed CT Finance Capacity Building programs that are jointly 
coordinated by S/CT and administered through the Department of State's 
Bureau for International Narcotics and Law Enforcement Affairs (INL). 
We coordinate these capacity-developing programs with counterpart 
entities at the Departments of Justice, Treasury, and Homeland 
Security, USAID, and the independent financial regulatory agencies. 
These programs provide front-line states with technical assistance in 
drafting anti-terrorist financing legislation, and training for bank 
regulators, investigators, and prosecutors to identify and combat 
financial crimes that support terrorism.
    The INL Bureau also runs a number of other programs that strengthen 
the fundamental law enforcement framework needed to fight a number of 
problems: terrorism, conventional criminals, and narcotics, including 
narcotics trafficking linked to the financial support of terrorism. 
Examples include the International Law Enforcement Academies in 
Budapest, Hungary; Bangkok, Thailand; Gaborone, Botswana; and Roswell, 
New Mexico. Bilateral training also is provided for a variety of 
courses on such topics as alien smuggling, border security and cyber 
crime, and some of this training has counterterrorism aspects.
    In addition to the counterterrorism programs mentioned above, the 
State Department also has a number of regional and country-specific 
assistance efforts, focusing heavily on countries where there are major 
terrorism threats.
    South East Asia.--The Bureau for East Asia and the Pacific (EAP) 
has put together a $70 million request in fiscal year 2005 using 
Economic Support Funds (ESF) program to continue to help Indonesia in a 
number of areas, including education, economic growth and 
implementation and enforcement of financial crimes and antiterrorism 
laws and policies. The education program initiative would be designed 
to improve the quality of secular and technical education and to 
moderate extremism in madrassas. In the Philippines, $35 million is 
requested in ESF for EAP and USAID to continue to help the government 
and the Autonomous Region of Muslim Mindanao to implement their peace 
agreement. This is accomplished by funding sorely-needed health, 
education, and small infrastructure improvements and the transition of 
Muslim separatist fighters to peaceful and profitable livelihood 
pursuits, such as corn, sorghum and seaweed farming.
    South Asia.--S/CT and ATA have several programs designed to allow 
countries in the region to defend themselves from terrorist groups. The 
ATA program has over the past year trained an indigenous presidential 
protective unit for the Afghan government. It has also recently 
completed the training of a dedicated civilian investigative unit in 
Pakistan that will significantly increase that county's capacity to 
investigate terrorist groups and their activities. Other ATA training 
conducted throughout the region is reinforcing the strong partnership 
between the United States and both Pakistan and India, as well as other 
South Asian governments cooperating in the Global War on Terrorism.
    In addition to the $6 million we are seeking for ATA programs in 
Pakistan to train counterterrorism specialists, International Narcotics 
Control and Law Enforcement (INCLE) funds are being requested to 
improve the effectiveness of that country's law enforcement efforts in 
border security, law enforcement coordination and development, and 
counternarcotics. The Administration has requested $40 million for 
fiscal year 2005 to help secure the western border of Pakistan from 
terrorists, criminals and narcotics traffickers.
    Africa.--The President's East Africa Counterterrorism Initiative 
(EACTI) announced in June of 2003 is designed to strengthen the 
capabilities of regional governments to combat terrorism and to foster 
cooperation among these governments. It includes military training for 
border and coastal security, a variety of programs to strengthen 
control of the movement of people and goods across borders, aviation 
security capacity-building, assistance for regional efforts against 
terrorist financing, and police training. EACTI also includes an 
education program to counter extremist influence and a robust outreach 
program. In addition to EACTI, we are using NADR funds, Economic 
Support Funds, and other diplomatic and developmental tools to help 
strengthen democratic institutions and support effective governance. 
Amounts devoted to these efforts are relatively small, but in Africa, a 
little goes a long way.
    General Law Enforcement Training.--As part of a broader 
institutional building effort, INL is funding a police development 
program begun in 2002 for national police in Tanzania, Uganda, and 
Ethiopia. While not specifically CT focused, the program is introducing 
essential skills-based learning and problem solving techniques to build 
the capacity of these East African police forces to detect and 
investigate all manner of crime, including terrorist incidents. INL is 
also funding forensic laboratory development programs in Tanzania and 
Uganda, designed to build the capacity of these governments to analyze 
evidence collected at crime scenes. In Kenya, INL is funding technical 
assistance and training for the Anti-narcotics Unit of the Kenyan 
national police and the anti-smuggling unit that works out of the Port 
of Mombassa. These units jointly search containers entering the port to 
interdict drugs and other contraband that may be brought into Kenya 
otherwise undetected.
    Last year we held a major counterterrorism conference for 13 
nations in southern Africa. The sessions, held in the International Law 
Enforcement Academy in Botswana, included crisis management workshops 
and discussions of ways to strengthen counterterrorism laws. In 2002, 
six African countries from various parts of the continent took part in 
a week-long CT legislation seminar in Washington that State co-
sponsored with the Justice Department.
    Latin America.--Colombia remains a major trouble spot in the 
western hemisphere because of the unholy alliance between narcotics 
traffickers and FARC and other terrorist groups. The variety of 
assistance programs include the Andean Counterdrug initiative, and 
anti-kidnapping initiative and the ATA program. The Colombia programs 
can be and have been the subject of separate hearings. I mention them 
because they are also part of the overall program to counter terrorism 
even though the elements are different than the more widely-publicized 
threat from al-Qa'ida and related groups.
    Mr. Chairman, this concludes my overview of our foreign assistance 
programs that help support the GWOT. We had a productive meeting with 
your staff earlier this year to discuss my office's specific programs. 
If you or your staff want additional details, we would be glad to 
provide them. At this point, I'd be happy to take any questions.

    Senator McConnell. Great. Thank you, Mr. Ambassador.
    Let's just go right to some of the questions that have been 
prominent in the news lately. To what extent do you believe the 
liberation of Iraq has served to draw international terrorists 
to that country?
    Ambassador Black. Are you asking me, sir?
    Senator McConnell. Yes.
    Ambassador Black. I think, first of all, we need to 
appreciate this is a global war on terrorism. The strategy is a 
global one. I think it's important to recognize that we put our 
resources where the terrorists are. We also need to cover those 
areas where either there is a limited terrorist presence or 
areas where they could in surge to. Look at this globally. As 
an example, there are areas such as the tri-border area in 
South America where there is not an established presence now; 
the terrorists who were there to a large extent have left but 
we position ourselves to identify and be able to counter any 
terrorists that flee to this area. I think it is important to 
appreciate that the current violence and anti-terrorism 
activity in Iraq is founded upon several key pillars. One is 
the members of the regime that have nothing, that have lost 
everything and have nothing to gain are operating against us. 
There are also those from established groups that are rallying 
to what they believe to be a cause to operate against coalition 
forces, as well as an element of those that have been incited, 
essentially, by play in the media.
    Senator McConnell. To the extent that terrorists have gone 
to Iraq, that's a pretty good place to fight them, is it not?
    Ambassador Black. It is, indeed. You know, I do recall, 
Senator, at the height of the war in Afghanistan, where the 
commanding general there was being asked about his ability to 
prosecute the war against Al Qaeda. And if I may quote him, and 
I just forget his name, I just thought of this off the top of 
my head, his answer was essentially, you know, the Al Qaeda 
terrorists that present an immediate threat to the United 
States, we'll kill them here. And if they go somewhere else, 
we'll kill them there. So I think there is an element of that, 
Mr. Chairman, where there is a universe of these people that 
are determined to do us harm and this engagement is one that is 
global and right now we are paying particular attention, as are 
they, to the battlefield in Iraq.
    Senator McConnell. There are some that have suggested that 
by going on offense and taking the fight to the terrorists 
we're creating more terrorists. I'm curious as to your reaction 
to that line of argument.
    Ambassador Black. I am profoundly against that argument. 
There is no opportunity to negotiate. One cannot appease. There 
are a number of these people that are very set in their ways, 
that are absolutely determined to do us harm, to kill as many 
people as they possibly could, and our determination to engage 
these people and our will to continue, I think is vitally 
important.
    Senator McConnell. To what extent is the well-publicized 
decision by Spain and Honduras to withdraw their troops from 
Iraq going to embolden terrorists or in general create a 
problem for us?
    Ambassador Black. It's hard to estimate exactly how a 
terrorist will think in such a situation. I think the reality 
which they will have to confront, as these countries have been 
and continue to be good allies, the Spanish in particular have 
made significant contributions on the battlefield, is a 
democracy, their forces do respond to the actions of their 
government. I think that the loss has some significance. We 
want to have as many with us as we can. However, practically 
speaking, I think the position of the Spanish government is 
very clear. They know that they're playing a key role in the 
global war on terrorism. They've redeployed their forces to 
another area and I think the terrorists will fully appreciate 
that these losses are tactical and can be made up by reshifting 
of coalition forces, and that's what U.S. commanders have 
stated.
    Senator McConnell. Some in this country have argued, and 
you certainly have heard the argument, that the effort in Iraq 
is somehow detracting from the war on terrorism, as if they 
were two entirely separate issues. To what extent is the war in 
Iraq detracting from, or irrelevant to, as the critics have 
said, the war on terror? Or is it part of this larger effort? 
As you suggested earlier, we are confronting these people in a 
place where we're in a pretty good position to deal with them.
    Ambassador Black. Again Senator, this is a global war. 
There is currently a finite set of these terrorist enemies we 
need to engage and we have done this in Afghanistan; we are 
doing it in Iraq. And the United States with her allies are 
operating globally, around the world, and I think it's 
important to appreciate that these forces are being used 
productively against a terrorist set, that if we weren't 
engaged with them there then we would be operating against them 
in other places and in other contexts.
    Senator McConnell. One final question on this round. To 
what extent does sticking to the June 30 transfer date and 
handing over at least the political authority in Iraq to an 
Iraqi entity undermine terrorists' arguments in Iraq, or 
elsewhere for that matter?
    Ambassador Black. I believe there is a determination to 
conduct this action. I think that terrorists fear the emergence 
of a society where there's equitable representation. They fear 
what a democracy or a like or affiliated kind of a government 
does to their cause and they are intensifying their operational 
activity to do as much as they can to derail it.
    Senator McConnell. So it's reasonable to assume it could 
well get a good deal worse before June 30 than it has been?
    Ambassador Black. Well, it's hard to predict. I think there 
are significant actions underway now on the battlefield in Iraq 
but our enemies clearly do appreciate that the clock is 
ticking, that the new Iraq is one in which there is to be 
equitable representation, in contrast to all of their recent 
history. This is a bright future and they want to stop it for 
their own advantages so they're likely to do everything they 
can do derail it in the short-term.
    Senator McConnell. Well, the BBC/ABC poll taken of Iraqi 
citizens back in February, which got remarkably little coverage 
in this country, was a clear indication that the Iraqi people 
feel that they're a lot better off than they were a year ago. 
And there was a stunning level of optimism about how they would 
be a year from now. The kind of numbers that people in my line 
of work would love to see in this country.
    Ambassador Black. Absolutely, sir. And the folks that come 
back from Afghanistan and talk, you and I perhaps watch the 
news and TV and we see isolated incidents of, you know, 
violence and conflict. To a large extent it's looking at 
history, real time, through a straw. The vast majority of 
Iraqis want the kind of future that we're helping them to get. 
It's important that we do this and I think it is clear, at 
least in my view, history will say that Iraq is far better off 
as a result of these actions.
    Senator McConnell. Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.
    Tell me, Ambassador Black, there was a horrible car bombing 
in Iraq, a number of children--I think it was in the last few 
hours--children killed. And horrible bombings in Saudi Arabia. 
The press, at least initially, reported that the Saudis had 
heard there might be six of these bombs; they were able to find 
and diffuse five. Now, in Saudi Arabia, is there any indication 
that Al Qaeda was involved?
    Ambassador Black. The most recent reporting that I have 
received, Senator, is that there is no definitive proof yet 
that it was Al Qaeda. But the actions underway, as you know, in 
Saudi Arabia, the government of Saudi Arabia is fully engaged 
countering these individuals, and there's a tremendous amount 
of operational activity that's underway.
    Senator Leahy. What about in Iraq? Do we have--what is the 
indication of who was responsible?
    Ambassador Black. Again, I would have to check. I think the 
forensics are underway. It almost always takes some time to 
actually prove this out, to find out exactly which particular 
group is involved.
    Senator Leahy. Did that appear to be internal, though, at 
least from initial reports?
    Ambassador Black. They always say, when you come down to 
speak before you, one should not speculate.
    Senator Leahy. I accept that. Well, let me ask you a 
question that maybe you could answer. This is Foreign Policy 
Magazine, the most recent copy, and it has articles about Al 
Qaeda, and on the cover it says, leadership is in disarray, the 
training camps are in ruins, so why is Al Qaeda's ideology 
spreading faster every day? Gentlemen?
    Ambassador Black. I think it's important, again, to 
emphasize what we know. What we know is, as the President has 
stated, more than two-thirds of the Al Qaeda leadership of the 
period of 9/11 is captured, detained, or killed.
    Senator Leahy. Accepting that, why is their ideology 
spreading faster every day?
    Ambassador Black. It is the convergence of communications, 
TV, the Internet and the like, incitement, where----
    Senator Leahy. Let's take it step by step. The TV and the 
Internet and all was there before, before we broke up the 
leadership. So we have to assume there's something more.
    Ambassador Black. Well, I think that there is a lot to see 
with greater regularity.
    Senator Leahy. Such as?
    Ambassador Black. Well, such as your 9/11, to start with. 
The images of that were transmitted around the world in such a 
way that----
    Senator Leahy. But subsequent to that we went to 
Afghanistan, we knocked out a lot of the Al Qaeda leadership.
    Ambassador Black. Yes, Senator, but also it goes the other 
way too, such as the bombings in Madrid, the bombings in 
Indonesia. And acts in one place of the world are transmitted 
around the other. The vast majority of these terrorists that 
formerly were very isolated have obtained comfort, if you will, 
in their objectives by seeing actions around the world.
    Senator Leahy. So these actions are why their ideology is 
spreading so fast?
    Ambassador Black. No, it's not why, it's an incitement or 
an encouragement of, you know, radicalized views which have 
not, in our view, been sufficiently countered by the programs 
such as being conducted by USAID, which essentially encourage 
appreciation of, you know, moderation as opposed to radicalism.

                        COST OF REBUILDING IRAQ

    Senator Leahy. You mention AID and Mr. Natsios has said, 
appropriately, that USAID is being increasingly called up to 
deal effectively with failed states, transnational problems, 
geo-strategic issues, and part of our responsibility is making 
sure we know how much it's going to cost. I remember last 
April, a year ago, you stated with some confidence, on 
``Nightline,'' the American contribution to rebuild Iraq would 
be no more than $1.7 billion. So far we're more than 1,000 
percent higher than that. You were about $18 billion short. Are 
your estimates getting more accurate?
    Mr. Natsios. The estimate was not $1.7 billion. That was 
the amount of money that OMB told me they were going to give 
us, the U.S. Government, to reconstruct Iraq.
    Senator Leahy. Is that what you told OMB that you needed?
    Mr. Natsios. We weren't asked what we needed. We were told. 
We were not doing all the work, we were doing some of the work. 
Some of it was being done by State Department, some by some 
other Federal agencies, some by the Defense Department. There 
was an overall figure, I believe the figure was $2.7 billion; 
the amount of money that we were given of that $2.7 billion was 
$1.7 billion. I never said on ``Nightline'' that that was the 
amount that we estimated--because we did not know how much it 
would cost since we weren't in the country yet.
    Senator Leahy. Well, let me ask you this. We've 
appropriated $18 billion and we're told we had to do it 
immediately, needed it yesterday. I remember in the committee's 
conference, the White House said, we've got to have this money, 
we've got to have it right now. And that was 6 months ago and 
less than one-ninth of the money has been obligated. I expect 
far less than that has been expended. What happened between 
we've got to have it immediately and the fact we're not using 
it?
    Mr. Natsios. Well, I can only tell you what was given to 
us. We've been given $3.8 billion between the first and second 
supplemental. We've obligated $3.3 billion as of last week.
    Senator Leahy. How much have you expended?
    Mr. Natsios. That obligation means that there are signed 
contracts but the contracts are 1 year to 2 years long so some 
of them are being expended more rapidly because they're shorter 
contracts, some of them longer. But our expenditure rates are 
pretty good, I don't know the exact figure now.
    [The information follows:]

                        Expenditure Rates--Iraq

    As of April 2004, USAID has been apportioned a total of 
$4,338,263,000 from the Fiscal Year 2003 Iraq Relief and Reconstruction 
Fund and the Fiscal Year 2004 Iraq Relief and Reconstruction Fund. Of 
this amount, $3,328,194,000 has been obligated and $1,247,797,000 has 
been expended.

    Mr. Natsios. But obligation is a written contract with 
people on the ground spending money.
    Senator Leahy. If the people on the ground can get there. 
Under the circumstances there now, a lot of them are leaving 
because of the danger.
    Let me just read what you did say on ``Nightline.'' Koppel 
says, all right, this is the first, when you talk about $1.7 
you're not suggesting the rebuilding of Iraq is going to be 
done for $1.7 billion. Your answer was, well in terms of the 
American taxpayers' contribution, I do. This is it for the 
United States. They're going to get $20 billion a year in oil 
revenues but the American part of this will be $1.7 billion; we 
have no plans for any further funding for this.
    Mr. Natsios. Right.
    Senator Leahy. That's from the transcript. A little bit 
different than your answer today, Mr. Natsios.
    Mr. Natsios. Senator, if I could----
    Senator Leahy. I have supported USAID as much as any Member 
of this Senate and I just, you know----
    Mr. Natsios. My answer, a minute ago, just to be very clear 
sir, was that at the time that was put forward, that is what we 
were told the U.S. contribution was going to be. That is what 
we proposed in the first supplemental. What I just said was I 
never suggested on that program or elsewhere how much it would 
cost to reconstruct Iraq because we were not in the country 
yet. And until you're in a country and you do assessments, 
which the World Bank has done with UNDP and the U.S. 
Government, we did not know how much it would cost. We do know 
now how much it would cost, there's been a pledging session, I 
believe the amount pledged from all donors and international 
institutions is about $34 billion. So a substantial amount has 
been pledged, not just by the United States but by donor 
governments around the world, including the Bank and the United 
Nations.
    Senator McConnell. Okay, thank you, Senator Leahy. Senator 
DeWine.

                          AGRICULTURE PROGRAMS

    Senator DeWine. Thank you, Mr. Chairman. Mr. Natsios, you 
and I have discussed in the past the importance of agriculture 
development programs, and you're a big advocate for that, I'm a 
big advocate. Yet we keep seeing the requests from the 
administration going down. I was glad to see, when you all 
first took office, the program went up. We saw a high point, I 
think, of about $480 million in 2003, but your request for 2005 
I think is $419 million. That disappoints me and I just, you 
know, it seems to me that, you know, I just don't know why 
we're cutting the very initiatives that will reduce our need 
for emergency food assistance in the future. And if we're going 
to deal with the long-term problems, if we're going to shape 
the future in these developing countries, I don't know any 
other way of doing it than to put some investment and some 
money into agriculture. You want to talk a couple minutes--I've 
got another question--but do you want to talk a little bit 
about that?
    Mr. Natsios. I would like to, Senator, because I fully 
agree with you. I have been disappointed as well. We did have 2 
good years where we increased the resources. I am disappointed 
by the amount in the budget, but that's the reality. The 
reality is that agriculture is not very visible. You and I 
support it and I know members of this committee have supported 
it but----
    Senator DeWine. Well, let's get it done.
    Mr. Natsios. Let me tell you, though, what the consequences 
of our not funding this program. What happens when there's a 
huge gap in between rural areas in terms of lifestyle and 
public services and people's family income in urban areas, as 
people migrate from the rural areas to the cities. And they do 
not end up in middle-class neighborhoods.
    Senator DeWine. No.
    Mr. Natsios. They end up on the streets and in shanty 
towns. The most destabilizing thing in developing countries, 
particularly with large Muslim populations that are prone, 
potentially, to radicalization through these radical Islamic 
networks, is large scale migration to the cities without jobs 
in those cities. And so our strategy is, to the extent that we 
have the money to spend it, is to spend the money in the rural 
areas to rectify the inequality between the rural areas and the 
urban areas so they don't go to the cities. Because when they 
leave the rural areas, the natural constraining factors of the 
traditional mullahs, their family, their extended family, local 
institutions, local governance, which constrain and socialize 
young men's behavior as they're growing up, goes on everywhere 
in the world, not just in the southern countries. It's rich 
countries too, where that's the case. Those systems collapse 
when families move to urban areas. There are no substituting 
factors that constrain and socialize young men's behavior at 
that age. And so we don't want them to move to the cities. We 
want them to stay in the rural areas and improve life for them. 
However, it has not been a particularly popular thing, in the 
United States, to vote for this stuff because it's not as 
visible, and it's more remote and other things like health, 
which are very important, education, very important, other 
things, but in my view this is one of the critical and most 
important things that we can do.
    Senator DeWine. Well, I appreciate, you've articulated it 
very well. I just, you know, would hope that working with the 
administration we can do better in this area. I mean, there's 
many, many conflicting, you know, many drains on the budget, 
many demands on the budget but it seems to me this was a great 
investment. You've articulated it very well.

                                 HAITI

    Let me turn, if I could, to Haiti. Earlier this month, a 
couple of weeks ago, Secretary Powell testified in front of 
this community, and I asked him about how much money we're 
going to be able to set aside for Haiti this year. And I 
suggested to him that the $55 million that is budgeted is just 
not going to be enough. And he wholeheartedly agreed. In fact, 
let me quote what he said. ``The need is much, much greater, 
Senator. One hundred and fifty million dollars a year''--which 
is the figure I had just thrown out to him--he said, ``$150 
million a year would almost be a modest sum, frankly. This is a 
country that's been, once again, run into the ground that needs 
everything.'' Last month I asked Mr. Noriega, Mr. Franco 
similar questions. I asked about were such programs as 
agricultural development, rebuilding basic infrastructure would 
fit in in our future assistance strategy. Let me just tell you, 
Mr. Administrator, I want to be candid. While everyone says we 
have this great need in Haiti, everybody from the Secretary of 
State all the way down, I'm still waiting for a plan. I'm still 
waiting to see where the administration is going. Now, I 
understand that the USAID has come up with a draft emergency 
response plan. Is that correct and is that something you could 
share with us today?
    Mr. Natsios. We have not only a draft emergency plan but a 
draft transition plan.
    Senator DeWine. Can you give us any insight into that?
    Mr. Natsios. Yes. Just in terms of the funding, we are now 
reviewing our existing budgets because, of course, we're in the 
middle of the fiscal year, and we have spent much of our 
budget. So, that's a problem in terms of where we get the money 
from. And so we are reviewing the areas that we have discretion 
in. As you know, we cannot take money from the Eastern European 
accounts because legally you can't transfer money from those 
accounts; we can't take money from the Andean Initiative 
because it's for the Andean countries, which is the largest 
component of our aid program in Latin America. So there are 
restrictions in terms of our ability to transfer from other 
accounts into Haiti. Is it enough money? No. Secretary Powell 
was correct, I fully agree with him. We will obviously spend 
whatever money in fiscal 2005 that you give us, Senator. It is 
a serious problem, and if we don't deal with it we're just 
going to have a repetition of this again in another 5 or 10 
years.
    In terms of what's in the emergency plan, the first phase 
of it is to stabilize the existing situation, which is going on 
now. In the transition plan that we've done, we want to do 
three things we did not do 10 years ago when we went through 
this. One, we did not engage the Haitian-American diaspora, 
many of who are professional people and entrepreneurs. They 
have skills and values from American society that could be very 
useful in reconstructing Haiti. And they can transfer those 
values much more easily than we can. And so we're going to have 
three conferences with CIDA, the Canadian aid agency, and 
USAID, for the Haitian-American community to tell us how they 
think they could help us do this reconstruction in a way that 
would engage the large Haitian-American diaspora in the United 
States.
    The second is, we did not have a government to work with 
before. The new government, we're very, very pleased with. They 
are technocrats, they're honest people, they appear to be 
competent technically, and so we are going to coordinate with 
them. Because if you don't get the engagement of an indigenous 
government, it really reduces the effectiveness of your 
program. So we do have one good thing working in our favor.
    Economic growth is a critical part of this. If there aren't 
jobs, it's going to further destabilize the situation. So we've 
got to work on the issues around transformation of the economy. 
They were transforming in the early 1990s and the great sadness 
of what happened in the 1990s was all that industrial 
manufacturing that had created about 500,000 jobs, has all 
moved to Central America. And that's not going to come back 
easily. Some of it stayed, but much of it has left.
    So those are the three components right now.
    Senator DeWine. My time is up but I just want to say, that 
that's why I was so happy in the last hearing to hear Secretary 
Powell say that, you know, he supports our trade bill. And, you 
know, we've got to get that passed.
    So, thank you very much. Thank you, Mr. Chairman.
    Senator McConnell. Okay, thank you, Senator DeWine. Senator 
Durbin, to be followed by Senator Shelby.
    Senator Durbin. Ambassador Black, I really didn't come to 
this meeting prepared to ask you any questions. But I do have 
to ask one now, based on what you've said in your testimony. I 
believe you responded to the Chairman by suggesting that we 
don't have an accurate view of what is happening in Iraq. You 
gave an example of the television coverage and you said that we 
are, like, looking at the situation through a straw--your 
words--and focusing on: ``isolated instances of violence and 
conflict.'' Those were your words. I've heard Secretary 
Rumsfeld describe what has happened over the last 2 or 3 weeks 
as a flare up. I can't believe those words are being used in 
reference to what we've been through in the last several weeks. 
The death toll now of Americans is over 700 in Iraq, over 3,000 
injured seriously. More lives have been lost in the first 2 
weeks of April in Iraq than in any month since we invaded that 
country. The Iraqi police and army, that we trained, were 
totally ineffective when this offensive started. Ambassador 
Bremer announced this week not to expect them to take any 
responsibility on June 30 for the security of their country. 
Foreign armies have not come to our rescue; sadly, they are 
leaving, causing a greater burden for the American troops which 
remain. There have been orders for 20,000 additional American 
soldiers to be sent to this theatre. And I can tell you that 
any Senator at this table will tell you when they go home on 
the weekend the phone calls they will receive from the families 
of Guard and Reserve. Isolated instances of violence and 
conflict are how you described it. Last week, Secretary 
Rumsfeld, after some extensive questioning, finally conceded 
that the situation in Iraq is worse today than he thought it 
would be. Are you prepared to make that same concession?
    Ambassador Black. I think it's very important, Senator, for 
me to emphasize the response was to a specific question. The 
question was the viewpoint from the terrorists, in terms of 
incitement and terrorism. What I was trying to convey was that 
the terrorists are influenced by new forms of communication, 
television, the Internet and the like. And what I was trying to 
convey was that terrorists around the world can see acts of 
violence and it is covered pretty well, and this is an 
incitement to terrorists in areas other than on the 
battlefield, that there's a significance that we are 
heartbroken at the loss of life is all true and all of us as 
Americans view these developments very seriously. But what I 
was trying to answer was from the standpoint of the terrorists, 
and this is the end I know better, was, you know, what is the 
commonality terrorists in other areas of the world, what does 
this mean to them? And the commonality is they have instant 
communications, they can watch TV and these incidents are 
portrayed on a full TV screen and it has significant impact for 
terrorists. It is inciteful and it gives them comfort and 
continues to fuel their radical beliefs that are not to our 
advantage.
    Senator Durbin. I don't argue with that conclusion.
    Ambassador Black. Sir, that's what I was trying to say.
    Senator Durbin. But to suggest that the television 
reporting of what has happened in Iraq somehow distorts by 
focusing on isolated instances of violence and conflict is to 
ignore the reality of the danger of this situation.
    I'd like to ask you this question, because it's come up in 
many contexts. You're a 28-year veteran of the Central 
Intelligence Agency. When did you reach the conclusion, after 
9/11/2001, that the key to fighting terrorism in the world was 
the invasion of Iraq?
    Ambassador Black. As an intelligence officer I would not be 
involved in those decisions and gratefully I wouldn't have to 
make them. We provide--intelligence services provide analysis; 
my end was to provide analysis to facilitate that process, as 
well as to collect information for the decision makers and they 
would use that in factoring in what they decided to do.
    Senator Durbin. So you won't answer the question?
    Ambassador Black. I wasn't in a position to do it, sir. I 
was in the collection operational end. I wasn't in the decision 
making end of this. And frankly, my involvement with Iraq was 
very limited. I look at terrorism as a global issue and others 
specifically looked at Iraq. I did not, Senator.
    Senator Durbin. That is hard to believe. Ambassador, State 
Department Coordinator for Counterterrorism with the rank of 
Ambassador-at-Large, and you never had an opinion as to whether 
the invasion of Iraq----
    Ambassador Black. No sir. Senator, you asked me, if I 
understood you correctly, you were asking about my time in the 
Central Intelligence Agency, and I was speaking from that 
context.
    Senator Durbin. Well, can you speak to the context of your 
service to our Government? At what point did you reach the 
conclusion that the key to counterterrorism, after 9/11/2001, 
was the invasion of Iraq?
    Ambassador Black. I believe that there is an association 
among terrorist groups. I think the Secretary of State made the 
case in front of the United Nations. I think our, you know, our 
policy makers viewed this issue and took action that's in the 
interest of the United States. Tactically looking at 
terrorists, there have been association, terrorists have moved 
across Iraq and this is a whole separate story. But that was 
considered friendly territory; in fact, many of the Al Qaeda 
that had to flee out of Afghanistan transited numerous 
countries in the area. So looking at it from a terrorist 
organizational standpoint there was an association.
    Senator Durbin. Is my time up?
    Senator McConnell. Yes.
    Senator Durbin. I'll wait for another round.
    Senator McConnell. Thank you, Senator Durbin. Senator 
Shelby.
    Senator Shelby. Mr. Chairman, I was not here earlier. We 
had a banking committee hearing. I'd like that my opening 
statement be made part of the record in its entirety.
    Senator McConnell. It will be.
    [The statement follows:]

              Prepared Statement of Senator Richard Shelby

    Mr. Chairman, thank you for holding this very important hearing and 
for the opportunity to address the subcommittee and the witnesses on 
the need to ensure adequate resources and attention remain focused on 
the vitally important role of foreign assistance in waging a long-term 
struggle against terrorism.
    Foreign aid programs, we all know, have long been very unpopular 
among the American public, which views the one-percent of the federal 
budget that goes towards aid programs as an unwarranted drain on higher 
priority domestic programs. Mr. Chairman, nothing could be further from 
the truth, and I commend you for the role you have played over the 
years in leading the effort to ensure that U.S. interests abroad 
receive the attention and resources they need. Since the devastating 
attacks of September 11, 2001, the importance of these programs has 
only grown, and you can be assured of my support in the months ahead as 
the budget process advances.
    Terrorist organizations like al Qaeda, Jemaah Islamiya, Palestinian 
Islamic Jihad, Hamas, and others prey on the destitute and the 
desperate in their efforts at replacing existing governments with 
fundamentalist regimes that eschew democracy and freedom and that 
advance their cause through the use of indiscriminate violence. The 
scale of the problem, I think it is safe to say, exceeds anything any 
of us anticipated even as the threat of terrorism emerged during the 
1990s as one of our most pressing national security challenges. 
Successes against al Qaeda in Afghanistan--and they have been 
considerable--have perversely resulted in a diffusion of the problem as 
less-centrally coordinated cells replace the hierarchy that once 
characterized the birth child of Osama bin Laden. The threat of 
terrorism today is enormous, and has already had a very fundamental 
transformational effect on the way we live our lives in history's 
strongest and most prosperous country.
    I am a supporter of the President's Millennium Challenge Account. 
Foreign aid programs should take into account recipient countries' 
commitment to the ideals of democracy and free enterprise. The war on 
terrorism, sadly, does not allow for as broad an application of that 
principle as many of us would like. Economic and security assistance to 
countries that share our interest in fighting terrorism but that do not 
represent our ideal recipient must remain a central tenet of U.S. 
foreign policy for the foreseeable future. We simply cannot afford to 
discount the role countries like Pakistan, Uzbekistan, Nepal, Egypt and 
others play in the struggle against terrorism. They need our 
assistance, and they should receive it. At the same time, we should not 
give out blank checks. Security assistance in particular must come with 
strings attached that ensure it is not abused for the purpose of 
repressing legitimate democratic aspirations. Economic assistance, 
similarly, must be oriented toward transition to free market systems 
where the rule of law and transparency are integral parts of those 
transitions.
    Mr. Chairman, I thank you again for the opportunity to address the 
hearing today, and look forward to the testimony of the witnesses.

    Senator Shelby. Ambassador Black, it's good to see you 
again. You have had a distinguished career at Central 
Intelligence Agency and I'd like to focus some of my remarks on 
terrorist financing. And I don't know what you can tell us here 
today. And the Banking Committee, as you probably know, is 
engaging in a comprehensive review of our government's ability 
to identify and track the financing of terrorists in their 
operations.
    I think it's a given in a lot of quarters that the terror 
finance issue is viewed as much diplomatic as it is enforcement 
at times. One example, there are material differences in many 
countries' view of the phrase, support for terrorism, as it 
relates to the sanctions program. As you look around the world, 
Ambassador Black, can we convince our allies that the 
President's standard is appropriate? And if so, how have we 
been able to do this? Have we hurt our long-term efforts for a 
short-term benefit, and what are our biggest challenges here, 
success in this area? Because I think it's important to get to 
the financing.

                          TERRORISM FINANCING

    Ambassador Black. I think absolutely, as I believe you will 
recall, the greatest progress and greatest growth in the field 
of counterterrorism has been in the financial area. It's been 
only in the last few years that this has been addressed 
aggressively and comprehensively. The experts that look at this 
first have to identify where we need to encourage the will of 
countries to look at their system in a critical way.
    Senator Shelby. That's hard sometimes.
    Ambassador Black. That's very hard to do. And then to take 
corrective action that may impact in other areas besides 
terrorism and that may not be necessarily instinctively 
appealing to some segments of a society in a particular foreign 
country. We look to encourage them to change their rules, the 
banking regulations, essentially to improve their will and 
capacity but to create a commonality of financial, legal rules 
and to make sure that there is a way to enforce the regulations 
in an international way. We do this by working not only 
bilaterally with countries but also through the United Nations, 
working with our partners in the G-8, work with other 
countries. So there has been growth, there has been progress, 
and it is tricky, Senator, because when you figure out a way to 
close off one avenue of fundings or one ploy from a terrorist 
group invariably they will seek to do something else. So we 
have broadened into such things as----
    Senator Shelby. Unconventional financing.
    Ambassador Black. Unconventional financing. And it's 
basically an offense and defense type thing; as we get a leg up 
in one area they shift to something else so we have to keep at 
it.
    Senator Shelby. But essential to our fight on terrorism, is 
it not?
    Ambassador Black. Yes, it is, absolutely. If armies move on 
supplies then the terrorists need access to funding, is the 
most important thing. And unfortunately for us, usually they 
don't need much. But we can severely threaten and curtail so 
that they cannot conduct training as they have in the past and 
do the big things. The small things are harder to catch but the 
big things we have some optimism what we can interdict on.
    Senator Shelby. Ambassador Black, while the focus of a lot 
of discussion is on the Middle East for various reasons, the 
scourge of terrorism and the harboring of terrorists has become 
a global phenomenon. From the tri-border area that we're both 
familiar with in South America to the continued consolidation 
of its position in Lebanon by Iranian- and Syrian-supported 
Hezbollah, to Uzbekistan currently experiencing either a 
resurgent Islamic Movement of Uzbekistan or whatever Al Qaeda 
offshoot is replacing it, to the jungles of Indonesia, the 
challenge that's facing us has grown beyond anything some of us 
imagined, you know. Maybe not you, you know, I mean, your 
special position a few years ago. In addition, I want to ask 
you, in addition to the countries and regions I've listed, 
where do you see the next challenges? And where in the context 
of harboring terrorist funds or using money for terrorist 
support are the real trouble spots?

                            GLOBAL CHALLENGE

    Ambassador Black. I think it's a commonality. Again, I 
think you've hit it exactly right, Senator, it's global. As you 
make progress in one particular geographical area or in one 
sector, invariably it will shift to the other side of the world 
then another sector. Essentially I'd look at it in two ways. 
One, we have to work exceptionally well with our partners at 
the financial centers, London, Hong Kong and the like, so that 
we can begin to inhibit the movement of funds of terrorist 
groups or those associated with terrorists as well as identify 
the main individuals and funding mechanisms by which the 
operators get their funding.

                  USAID PROGRAMS AND COUNTERTERRORISM

    Senator Shelby. How will assistance programs, USAID, 
address some of these programs?
    Mr. Natsios. Senator, there are a dozen countries now where 
USAID has programs on counterterrorism financing through the 
Central Bank. For example, in Central Asia, all of Central 
Asian Republics. Now employees in many of their commercial 
banks and their Central banks are being trained in money 
laundering and how to prevent it, how to notice whether or not 
transactions look out of the ordinary. We are running anti-
money laundering programs. It's not just in the terrorist 
areas, I might add, it's also in narcotics trading, it's in 
human trafficking. The globalization of the world economy has a 
bright side to it--more jobs, more wealth, less poverty. It has 
a darker side to it too, which is all the criminal elements who 
are now using globalization for their own darker purposes. 
We're doing a financial crimes training program for the 
judicial system in a number of countries, including South 
Africa. And there's a unit within West Bank Gaza that USAID 
runs that deals with this bank supervision system to stop the 
flow.
    Senator Shelby. Working?
    Mr. Natsios. It is working, yes, to the extent that it's 
going through the formal system. You know Al Qaeda knows what 
we're doing now.
    Senator Shelby. Yes.
    Mr. Natsios. And they're moving money, some of their money, 
as I understand it, my friend Cofer Black tells me, I see him 
every morning at the morning staff meeting with the Secretary, 
that some of the money, I think you said at one point, was 
moved into gold bouillon. And you can't track that through a 
bank account. I signed with the finance minister of the 
Philippines, when President Arroyo visited last year, an anti-
money laundering effort in the Philippines that the government 
asked for there, and we're helping work with them on new 
regulations to control it. So we're doing that in a number of 
countries as part of our worldwide corruption campaign.
    Senator Shelby. Mr. Chairman, thank you for your 
indulgence.
    Senator McConnell. Thank you, Senator Shelby.
    Let me shift to an area of the world where there appears 
not, at the moment, to be a difference between Senator Kerry 
and the President. On ``Meet the Press'' Sunday, when asked 
whether he supported the President's stance on Israel, Senator 
Kerry said yes, completely. On the same Sunday talk show, 
Senator Kerry also expressed support for the right of Israel to 
defend itself against Hamas terrorists. So it appears at least 
in this area there may not be a partisan debate during the 
election year and I think that's a good thing.
    Ambassador Black, has the killing of Hamas leaders, 
including terrorist Yassin and al-Rantisi disrupted that 
organization?
    Ambassador Black. I believe that it has disrupted it. The 
leadership being challenged like that certainly has a ripple 
effect on that society. You know, Israel has a right to defend 
itself; we've required them to be prudent and circumspect in 
what the objective is and the objective is peace. And currently 
there is a lot of violence with Hamas. Hamas will have 
difficulty replacing leadership individuals such as Rantisi.
    Senator McConnell. Do you see any difference in United 
States efforts to hunt down Osama bin Laden and Israel's 
targeting of Hamas terrorists?
    Ambassador Black. Well, I think that I can speak from, you 
know, Al Qaeda, we've lost 3,000 people. We have to take 
actions to defend ourselves against an imminent threat. Israel 
has a right to defend itself, it has lost people. We, in the 
case of Israel and Hamas, it is important, the objective is 
peace, the objective is an improvement in the quality of life. 
And we encourage both sides to reach that goal and Hamas and 
terrorists should stop violence and to allow some positive 
developments to take place.
    Senator McConnell. What impact, if any, has resulted from 
the elimination of these Hamas leaders, in terms of terrorist 
attacks against Israel?
    Ambassador Black. We would have to see and we'd need more 
time to see what effect that has had on their operational 
capability. I think all of us need to look at this and see what 
the developments are.
    Senator McConnell. Mr. Natsios, how have USAID-funded 
programs in the West Bank and Gaza countered--if they have--the 
efforts of Hamas to win the hearts and minds of the Palestinian 
people?
    Mr. Natsios. We have a number of programs, Senator, in West 
Bank and Gaza in a number of areas. First is in the area of 
civic education through the news media, and they are designed 
for young people, very young and teenage level people, that 
violence is not the solution. There are some things that we can 
measure precisely but the effect on people's behavior, while we 
know it takes place, you cannot quantify it as carefully as you 
can, let's say, child mortality rates or increases in income 
from micro enterprise, that sort of thing. We also are 
sponsoring----
    Senator McConnell. Have you all ever done any surveys, or 
are you familiar with any surveys of people in Gaza, for 
example, in terms of how widely a group like Hamas is 
supported?
    Mr. Natsios. I think some surveys have been done; I am not 
familiar enough with them from memory to give you the data. But 
we certainly would be willing to look and provide to you. I've 
seen some of them a year ago.
    Senator McConnell. Do you remember whether more people were 
favorable or unfavorable toward activities of Hamas?
    Mr. Natsios. I don't recall, Senator.
    Senator McConnell. Okay, go ahead.
    Mr. Natsios. We are running a series of town hall meetings, 
panel discussions and young leader training programs at the 
community level, where areas that we might think would be 
primary breeding grounds for suicide bombers, to at least get 
these issues out on the table and have discussions that there 
are alternatives to violence. We're also running a series of 
community service programs that will bring conflict resolution 
skills. We're doing this in a number of countries. In fact, we 
set up a new office in USAID called Conflict Mitigation and 
Management because it's very clear that there are some things 
you can do at community programming levels that can affect 
people's propensity to get drawn into these violent militias or 
these suicide bombing groups.
    Senator McConnell. I hate to interrupt you but I want to 
ask if you are confident that none of our U.S. tax dollars end 
up in pockets of Hamas.
    Mr. Natsios. We have an extensive program in the office we 
have set up in West Bank Gaza to monitor this; we have a system 
of certifications that we do where----
    Senator McConnell. Is the answer to my question yes, you're 
confident that U.S. tax dollars----
    Mr. Natsios. I am confident, yes.
    Senator McConnell. Let me shift to Syria for a minute with 
you, Mr. Ambassador. Have you noticed any change in Syria's 
support for terrorism since the fall of Saddam Hussein?
    Ambassador Black. There has been selective improvement in 
certain areas, certainly in the border area we see some 
positive signs there. We believe because of their strategic 
position in the region and their comprehensive support for 
established terrorist groups in Syria there's an awful lot more 
that they can do.
    Senator McConnell. Then they still are a haven to some 
extent for terrorists?
    Ambassador Black. Yes, they are.
    Senator McConnell. So there's been some improvement but not 
nearly enough? Would that be a way to describe it?
    Ambassador Black. Not anywhere near enough.
    Senator McConnell. To what extent is Iran supporting or 
directing Shiite cleric al Sadr?
    Ambassador Black. There are contacts between Iranian 
officials and members of that community. We are concerned about 
the involvement and the projection of Revolutionary Guard 
personnel and the like into that community with contacts but I 
have to leave the rest of that to the intelligence community. 
We're concerned there are contacts, yes.
    Senator McConnell. Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman. A couple of points 
I didn't mention, where Ted Koppel is speaking to Mr. Natsios, 
he said: ``I understand but as far as reconstruction goes, the 
American taxpayer will not be hit for more than $1.7 billion, 
no matter how long the process takes.'' Natsios answered: 
``That is our plan, that's our intention.'' And these figures, 
outlandish figures I see, and I have to say there's a little 
bit of hoopla involved in this. And then later on when asked 
the question again, Natsios said: ``that's correct, $1.7 
billion is the limit on reconstruction for Iraq. It's a large 
amount of money compared to other emergencies around the world 
but in terms of the amount of money needed to reconstruct the 
country it's a relatively small amount.''
    Mr. Black, one of the things that the United States is 
admired most for is our values. As I travel around the world I 
speak of our basic values as a country, democracy, human 
rights, our respect for the rule of law. And I think the more 
we can point to that the easier it makes our diplomacy; I think 
it helps our intelligence gathering, it certainly helps us 
counter the message of extremists. Would you agree with that?
    Ambassador Black. I would, yes sir.
    Senator Leahy. And the world looks to us for leadership and 
I think back to some of the things we've done, we closed our 
eyes at times during the cold war, sometimes we would support 
dictators because they said they were anti-communist. And then 
sometimes we turned a blind eye to activities of some countries 
because they said that they'd help us combat drugs. And now if 
they will fight terrorism we close our eyes, whether they're 
repressing minorities or whatever. We still see a number of 
very autocratic regimes since September 11, including some we 
give large amounts of aid to, engage in repression under the 
rubric of fighting terrorism. How do you go to some of these 
autocratic countries, asking for their help in fighting 
terrorism, without giving them an excuse to violate the rights 
of their own people, to crack down on legitimate voices of 
opposition? For example, legitimate voices of dissent. I'm not 
talking about people trying to blow up their government or ours 
but people who protest peacefully. How do you do that balancing 
act?
    Ambassador Black. I think it is a challenge. I would 
underscore that in all of my experience it has been very clear 
in all the dealings that we've had in countries that the way 
you generically described them is that we're in the business of 
countering terrorism, countering terrorists, which means 
identify the terrorists and counter them. We're not in the 
business of countering anybody else. We are proponents and 
advocates for the principles of democracy, free speech and the 
like. I always make it very clear, and we're always mindful, 
and sort of, you know, ruthlessly mindful and focused to any 
country that is cooperating with us, if they show any sign, and 
we check these things out, of using religious expression or 
political expression as an example that these are actually 
terrorists or they should be countered or someone should engage 
them, this is relentlessly looked at. We are in the business, 
we as Americans, in the counterterrorism field, of countering 
the terrorists, which means terrorists are specific individuals 
who represent, in our case certainly, an imminent threat to the 
United States. We encourage freedom of speech, religious 
expression and the like. So it is difficult. It requires 
constant education and we, as Americans, regardless of what 
element or what agency we are with, attempt, to the best of our 
ability to underscore that principle. And they are, of course, 
as I'm sure you would advocate, they are related. You really 
can't do one without the other.

                              USAID BUDGET

    Senator Leahy. I agree, but I could name a lot of countries 
where we give aid that are autocratic and we seem to be 
increasing our aid.
    Mr. Natsios has quoted the President's national security 
strategy, which says that: ``Poverty, weak institutions and 
corruption can make weak states vulnerable to terrorists 
networks.'' I certainly agree with the President on that, and 
with Mr. Natsios. Mr. Natsios testified that failed states, 
including Zaire, Lebanon, Somalia and Liberia had repercussions 
far beyond their own regions, and we're dealing with the 
consequences today. But the amount of aid we provide is not 
significantly more than the past, with one exception, Liberia, 
and there I had to offer an amendment over the administration's 
objections to provide emergency funding for Liberia because the 
administration had not done so. And we know what Senator DeWine 
has said about Haiti. I agree with all the rhetoric, I worry 
the reality of money is not there.
    Mr. Natsios. Senator, if I could, I want to first thank the 
committee for their help and leadership on the budgets, since 
I've been administrator. We really do appreciate the money 
you've given us. But just to give you a sense of the importance 
of AID, when I started in office the total amount of money AID 
spent, from all spigots, was $7.9 billion. That was in fiscal 
year 2001, the last year of the last administration. Last year 
we spent $14.2 billion. Our budget has basically doubled in 2 
years. That is not all Iraq. It's Afghanistan and we have 
increased the budget for Africa for the first time in 20 years, 
by a substantial amount, it's a 35 percent increase in the 
Africa Bureau budget. And it's been stable for 20 years, since 
the early 1980s.
    Senator Leahy. Some of that money came from the Congress 
over the objection of the administration.
    Mr. Natsios. Well actually, no, this is the money we asked 
for. You did give us more money for HIV/AIDS. I didn't include 
the 2004 budget.
    Senator Leahy. And Afghanistan, 1 year there was zero in 
there for Afghanistan.
    Mr. Natsios. I understand that. I understand that but the 
budget cycle in the case of Afghanistan started before 9/11 
took place, so. But if you look at all of our accounts, they've 
gone up. The President is putting a huge increase in foreign 
aid. Now I might add, ODA, which is Official Development 
Assistance, that's the standard used worldwide for donor 
governments. The donor-from all agencies, not just the U.S. 
Government, I mean, not USAID alone, was $10 billion in fiscal 
year 2001. We estimate ODA this year will be up 150 percent to 
$26 billion, and that is not primarily Iraq. In all these 
accounts, because of the Millennium Challenge account, because 
of HIV/AIDS, because of the President's 18 initiatives and 
foreign assistance, because of the increase in the Africa 
Bureau budget, because of the increase in famine assistance, 
there's a whole set of initiatives the President's made. So 
this is the largest increase in foreign aid since the Truman 
administration; we went back to our records.
    Senator Leahy. Including the $146 million cut in 
international health programs and developmental assistance?
    Mr. Natsios. Well, the priority of the Congress and the 
administration was in HIV/AIDS, and we put the money into those 
accounts.
    Senator McConnell. We need to move along here. We've got 
about 15 minutes left and Senators are still here. Senator 
DeWine.
    Senator DeWine. Thank you, Mr. Chairman.

                                 SUDAN

    Mr. Natsios, let me move to Sudan. When Secretary Powell 
testified before this subcommittee, I brought up the issue of 
Sudan. As the former special humanitarian coordinator for 
Sudan, maybe you can continue the dialogue I started with him. 
He testified that we're this close in regard to a peace 
agreement. But this week the Sudanese government requested the 
U.N. emergency relief coordinator to postpone his visit. The 
coordinator and the humanitarian agencies really need access to 
the affected region in order to help the people suffering 
there. Given the current crisis and the lack of access, as far 
as the U.N. Mission and the humanitarian organizations that 
they're facing, what are your thoughts about how the United 
States can play a constructive role now in ending this conflict 
and suffering?
    Mr. Natsios. I think there are two separate conflicts here. 
One is between the North and the South.
    Senator DeWine. Right.
    Mr. Natsios. That's been going on since 1982. And Secretary 
Powell was correct that there are about two remaining issues, 
one around power sharing, the other about the application of 
law in Khartoum for Southerners. Those issues are still 
outstanding. They are being dealt with but we're not at a 
resolution of those issues. There is a relative cease-fire in 
the South, and that's been holding with a couple of egregious 
examples, but for the most part it's been holding. The biggest 
tragedy in the world right now is in Darfur.
    Senator DeWine. That's correct.
    Mr. Natsios. You're specifically referring to.
    Senator DeWine. Right.
    Mr. Natsios. That is the worst disaster in the world. We 
are very concerned about it. President Bush has spoken to 
President Bashir about it; I've spoken to the foreign minister 
about it; Secretary Powell has spoken to Vice President Taha 
about it at length. We have gone to the Security Council for a 
review of what is happening. We have gone to the U.N. 
Commissioner on Human Rights for review of this. I've tried to 
get staff in; we do not have visas yet, in fact, the State 
Department is meeting for the second time with the Sudanese 
Charge here to get permission to get our DART teams, Disaster 
Assistance Response Teams, into the country.
    Senator DeWine. Do you have your staff in?
    Mr. Natsios. We have a small staff in Khartoum, but we need 
far more people to respond. We have negotiated with the 
European Union and the United Nations in agreement between the 
rebels and the government for access into Darfur. The problem 
is unless we have monitors in there we'll have no way of 
knowing whether the agreement is being enforced, Senator. So I 
just want to thank you for bringing this issue up; it is a 
great tragedy, that we're about to end one conflict, and we're 
starting a new one. The atrocities committed in Darfur are 
among the worst I have ever seen; 800,000 people displaced; 400 
villages have been burned to the ground; irrigation systems 
have been blown up. We are extremely disturbed by what has 
happened. I'm spending a very large amount of time on this; I 
talked with Jan Eglund, who is the U.N. Undersecretary General 
for Emergency Operations yesterday and we are trying to assist 
his office in getting his people in. The head of the World Food 
Program, who I spoke with yesterday, Jim Morris, is being sent 
in as the leader of that delegation next week but we have to 
get him a visa to get in, and there are problems with that. So, 
it is a serious problem, we're spending a lot of time on it at 
very high levels.
    Senator DeWine. Good. Well, I'm glad it's at a high level, 
and I, you know, I know that the President has spoken about it. 
We appreciate that, I commented on that before but, you know, I 
appreciate your focus on it very much.
    Let me ask another unrelated question. There's been a 
considerable amount of press and attention given to USAID's 
malaria control policies and programs. ``New York Times 
Magazine'' wrote a significant piece about DDT and USAID policy 
just last week. I wonder if you wish to comment or clarify 
USAID's position in regard to malaria and the use of DDT.

                            MALARIA PROGRAMS

    Mr. Natsios. There are two ways to control malaria at the 
household level in countries that are prone to it. One is 
through insecticide-treated bed nets, which is the policy we 
have been pursuing. We have empirical evidence from the field 
and tests that this dramatically reduces malaria because most 
people who get bitten, particularly children, get bitten at 
night. And if they do not have the bed nets they get bitten and 
many of the kids die if they are malnourished. That is the 
policy we have been pursuing. There are people who argue we 
should be spraying with DDT. Some Africans are saying to me, 
wait a second, you want us now to allow you to spray in our 
villages something that is illegal in the United States? Please 
explain that to me. So it's interesting to have it debated this 
way in the newspapers in the United States, but the fact is we 
haven't made it legal to use DDT in the United States. Are 
there arguments for it? Yes, there are. It can be used with a 
relatively minimal level of risk if it's used properly at the 
household level. However, we have a strategy, it has been 
working, and the question is, do we want to divert the money we 
are spending now in the insecticide-treated bed nets into DDT? 
We are reviewing this now, and this is not just my decision to 
make. If we shift strategies it needs to be discussed in 
Washington widely because it will be controversial.
    Senator DeWine. More to come. Thank you. Thank you, Mr. 
Chairman.
    Senator McConnell. Okay, we're going to do two more rounds 
and that will be it for the hearing. Senator Durbin, followed 
by Senator Shelby.

                              MICRO CREDIT

    Senator Durbin. Thank you very much, Mr. Chairman.
    Mr. Natsios, 30 years ago an economics professor in Asia 
set out to prove a point that he believed, that if you loaned 
small amounts of money to very poor people amazing things would 
happen. Thirty years later that concept of micro credit 
Mohammed Unis initiated in Bangladesh now reaches some 70 
million people across the face of the earth. It's an incredible 
testament to this man's wisdom and tenacity and the fact that 
he had an open franchise; anyone can try it. And fortunately 
the United States has supported micro credit expansion in the 
name of economic development, certainly the liberation of 
women, the enrichment of families and increasing opportunities 
for education. We've had a pretty strong record in support of 
micro credit as a nation until this year. And I'm concerned 
about decisions made in your agency about micro credit. The 
President included no reference to micro enterprise in his 
budget; USAID did not include it in its Congressional 
presentation, either in the House or the Senate, either of your 
testimony; you've reduced the administrative status of the 
Office of Micro credit and cut its funding by as much as 50 
percent, and your 5-year strategic plan makes no mention of it. 
Why is USAID backing off of its commitment to micro finance?
    Mr. Natsios. Well Senator, I don't know where that 
information comes from. It is not accurate. We have made no 
cuts in micro finance.
    Senator Durbin. I can tell you exactly where the cuts were 
made.
    Mr. Natsios. Well Senator, if I could just finish.
    Senator Durbin. Sure.
    Mr. Natsios. First, there have been no cuts made in micro 
finance in this budget or next year's budget. The funding level 
remains at $150 million. Second, the status of the office has 
been the same since the Clinton administration. We reorganized, 
and we created a new Bureau on Economic Growth, Agriculture and 
Trade instead of in the Global Bureau. But the status of the 
office has not changed at all in 3 years.
    Senator Durbin. Well, what used to be the Office of Micro 
credit has been downgraded to the Micro credit Development Team 
within the Office of Poverty Reduction, accompanied by a cut in 
administrative funding by about 50 percent.
    Mr. Natsios. Well, that's because we're sending the 
programs to the field to be run.
    Senator Durbin. Well, let's talk about where they're going 
in the field, and that concerns me as well, because I think 
this tells a story. Listen. In 2002, less than half, 45 percent 
of your funding went to groups directly responsible for 
delivering micro enterprise funds. The majority of the funding 
went to organizations that were involved in consulting, other 
for-profit organizations, business associations, research and 
government agencies. Less money is going for micro enterprise 
and more money is going for bureaucracy and consulting.
    Mr. Natsios. Well, some of the NGOs that are providing that 
information, I think are misleading the Congress. I have to say 
I'm disturbed by it because it's not accurate, sir. We are 
attempting to convert many of Mohammed Unis's great ideas and 
by the way, we were the first to fund Mohammed Unis and his 
biggest funder and have been for 30 years. A review was just 
done of the USAID Micro enterprise Program. We were ranked, of 
17 bilateral and multilateral institutions, as having the best 
micro finance programs in the world. We are the model now for 
all development agencies and remain that. What we are doing now 
is converting and some of the NGOs are working in this. I could 
tell you a couple of NGOs that are doing this. NGO funding, by 
the way, has not been cut. They're still getting about 48 
percent. What we're doing with the rest of the money is some of 
it to create a savings and loans association in cooperative 
banks to convert what our informal networks into community-
based banking. It is consumer-owned.
    Senator Durbin. Well let me just say, I have been, before 
your administration, I have been to South Africa and asked 
USAID, show me your micro enterprise. They took me to Soweto 
Township and showed me where they were loaning $10,000 a week 
to a gasoline station, owned by Blacks, which was quite an 
achievement in Soweto Township.
    Mr. Natsios. Sure.
    Senator Durbin. But that was their idea of micro credit and 
micro enterprise, $10,000 a week. What I have seen in micro 
credit and micro enterprise, and you have seen, I am sure, is 
that much, much, much smaller amounts of money have dramatic 
impacts on the lives of poor people and their families around 
the world. And my fear is that we're starting to look at this 
as a Junior Chamber of Commerce instead of what it was 
originally destined to be, and that is a way of liberating some 
of the poorest people in the world from their plight and 
helping them send their kids to school. Is this a change in 
philosophy?
    Mr. Natsios. No, actually those programs were run in the 
1990s that you mentioned and they remain programs. We don't 
support just $50 loans. We support loans that will produce more 
employment for poor people. Let's say a woman starts a micro 
enterprise program making dresses, let's say, for a $100 loan. 
Some people are more entrepreneurial than others, no matter how 
much training you give, some people have that instinct in some 
societies--if she's successful, what we then do is, we say, can 
we give you $500? Can you employ 10 women doing this in your 
business? And if she says she can then we give her larger 
loans. So there is an effort to take the more successful micro 
financed projects and scale them up so they employ more people. 
And I can show you examples all over the world where scaling 
up, in fact, is creating huge increases.
    Senator McConnell. We need to wrap up, Mr. Natsios, and 
give Senator Shelby a shot here.
    Mr. Natsios. Okay.
    Senator Durbin. Thank you, Mr. Chairman. I'd like to submit 
the remainder of my questions in writing.
    Senator McConnell. Yes, that will be true of everyone. I 
know that Senator Leahy has questions to submit for the record 
and we'll do that for everyone. Senator Shelby.
    Senator Shelby. I just have an observation, on picking up 
on what Senator Durbin was saying and some of what the 
Ambassador was saying. I have seen a lot of micro credit work 
in Africa, in Central Asia, myself, small loans, and they do 
grow. And I do believe that those are good programs, as you do, 
and I hope we will continue to expand them in the world because 
they give opportunities at $100 or $50 that they never dreamed 
they would have.
    Having said that, I want to get into a couple of more 
questions with you, Mr. Black.
    Mr. Natsios. If I could just say, Senator, I fully agree 
with you and that is what we are doing.
    Senator Shelby. Thank you. Thank you.

                             IRANIAN TERROR

    Iran has long been categorized by the U.S. Government as 
the world's leading state-sponsor of terrorism. Just a few 
weeks ago the Iranian convened what they call a terrorist 
summit. Attending were representatives of Hamas, Islamic Jihad, 
Hezbollah, allies of Al Qaeda, such as Ansar al-Islam, along 
with 30 other groups, all designated by the United States as 
terrorist groups. Furthermore, Iran reportedly used Syrian 
planes that were flown to Iran for humanitarian purposes 
following their recent earthquake to supply arms back to 
Hezbollah in Lebanon on their return flights.
    Mr. Black, how and to what extent has Iran continued and 
expanded its material support for the Palestinian terror groups 
such as Hamas and Islamic Jihad in the two years since Israel 
intercepted the ship transporting arms in January of 2002?
    Ambassador Black. Iranian intelligence hasn't stopped one 
iota.
    Senator Shelby. Not a bit?
    Ambassador Black. Not a bit. You and I have talked about 
this----
    Senator Shelby. Yes sir.
    Ambassador Black [continuing]. Over many years, Senator.
    Senator Shelby. Yes sir.
    Ambassador Black. And they continue to be as formidable as 
they were in those days. A lot of effort goes into trying to 
keep up with what they're doing, to counter them, but their 
associations with many terrorist groups are long-standing and 
very deep. The most well-known of these, of course, is 
Hezbollah, where they provide a significant portion of their 
funding. Their operatives of the Iranian Revolutionary Guards 
are accomplished and active in various areas of the world. They 
represent a formidable threat in the field of terrorism.
    Senator Shelby. Sure. What can you tell us here about the 
coordination with Ambassador Bremer and the CPA regarding 
Iranian involvement in Iraq, particularly with Ayatollah 
Sustani?
    Ambassador Black. I would have to take that for the record. 
There are others that would know much more about this than I, 
Senator.
    Senator Shelby. Would you furnish that to us?
    Ambassador Black. Yes sir, I'll get back to you, sir.
    [The information follows:]

    We coordinate very closely with Ambassador Bremer and the CPA 
regarding all indications of foreign influences in Iraq.
    CPA and Iraqi officials share our concerns about the role Iran is 
playing in Iraq. We are particularly concerned about border security, 
and the potential inflow of foreign terrorists and weapons to Iraq.
    There are also concerns that the Iranians may have contacts with 
insurgent elements in Iraq, and are seeking to ensure their capability 
to influence events in Iraq.
    The CPA is working closely with Iraqi officials to address these 
issues related to Iraq's stability and security.
    Iran, like other countries, should abide by U.N. Security Council 
Resolution 1373 to deny safe haven to those who plan, support, or 
commit terrorist acts and to affirmatively take steps to prevent the 
commission of terrorist acts by providing early warning to other states 
by exchange of information.
    Iran should also abide by U.N. Security Council Resolution 1511 
which calls upon all Member States to ``prevent the transit of 
terrorists to Iraq, arms for terrorists, and financing that would 
support terrorists.''

    Senator Shelby. Is Iran using Hezbollah to funnel money to 
terrorists in the West Bank in Gaza?
    Ambassador Black. The amount of funds that goes to 
Hezbollah is substantial and to my personal knowledge and 
experience it's primarily used within Hezbollah itself but I 
would have to take that for the record.
    [The information follows:]

    Hizballah continues to be closely allied with and, at times, 
directed by Iran. The group continues to receive financial, training, 
material, political, diplomatic and organizational aid from Iran. We 
see clear evidence that Hizballah is actively undermining prospects for 
Middle East peace by taking an active role in supporting Palestinian 
terrorist groups. This assistance has come in various forms, to include 
guidance and encouragement, funding, training and other forms of 
material support.
    We will continue to apply pressure on all states and entities who 
use terrorism to threaten the prospects for a just and lasting Middle 
East peace. This includes working closely with our allies to put 
pressure on state sponsors Iran and Syria, seek support for U.S. 
terrorism designations (including U.S. Executive Order 12947--
Prohibiting Transactions with Terrorists Who Threaten to Disrupt the 
Middle East Peace Process), and exposing the activities of these 
entities in our publications and public statements.

    Senator Shelby. Does that include bank transfers and other 
means, other unconventional means or some of both?
    Ambassador Black. It's through a variety of means; money in 
suitcases and, you know, wire transfers and the whole spectrum.
    Senator Shelby. Are we doing everything we can to try to 
stop that, as far as you know?
    Ambassador Black. Yes, we are, but there's always more we 
can do. This is a serious business and you know, we can always 
say there's a lot more that we can do and we are trying, 
Senator.
    Senator Shelby. The possibility of linking assistance to 
cooperation in combating terrorist financing--this has been 
brought up before. In testimony earlier this year, former 
Deputy National Security Advisor for Combating Terrorism, 
Richard Clarke, testified, suggested one approach to improving 
the level of cooperation among countries of interest would be 
the establishment of a certification process linking U.S. 
assistance to individual countries' records at cooperation in 
the war on terrorism including terrorist financing, very 
similar to the old process of certifying countries' cooperation 
in the war on drugs that we're familiar with. Is this a 
reasonable approach, to link this, or is it worth looking at? 
Mr. Ambassador, you want to?
    Mr. Natsios. Eighty-five percent of our funding does not go 
through governments. It goes through trade associations, it 
goes through NGOs, it goes through universities, it goes 
through private businesses in competitive contracts. And so, we 
don't go--there are only about four or five countries left in 
the world where we actually give large amounts of money to the 
governments. So what I don't want to do is have a sort of----
    Senator Shelby. And those countries are Israel and who 
else?
    Mr. Natsios. Egypt, Pakistan, and Jordan. There are a 
couple of, I mean, Bolivia, we're doing a little bit now but 
those are the big ones, that's where the 15 percent goes.
    Senator Shelby. Along this same line, it's interesting to 
note that of the seven countries listed by the Financial Action 
Task Force as non-cooperative in the effort to stem the flow of 
funds that support terrorist activities, one, the Philippines, 
has been a major recipient of counterterrorism assistance and 
another, Indonesia, presents us with one of our most serious 
long-term counterterrorism challenges in the entire world. 
Don't we need some kind of criteria? Or how do we do it? I know 
they need help, I know the Philippines definitely need help.
    Mr. Natsios. Right.
    Senator Shelby. Indonesia is a heck of a challenge.
    Mr. Natsios. In both countries, though, none of our money 
goes through the governments.
    Senator Shelby. Okay.
    Mr. Natsios. It goes through these other means, and that's 
why we do it through other means so we can control the money.
    Senator Shelby. Control the money.
    Mr. Natsios. Yep.
    Senator Shelby. Okay.
    Mr. Natsios. But we'll certainly look at it, Senator. It's 
a legitimate point.
    Senator Shelby. Well, it's not original with me, it's just 
something--we just want to make sure the programs were working.
    Mr. Natsios. Absolutely.
    Senator Shelby. Mr. Chairman, thank you for your 
indulgence.
    Senator McConnell. Thank you, Senator Shelby and Senator 
DeWine for staying to the end. And we thank you both for your 
service to our country and we'll look forward to getting the 
answers to the questions that are submitted in writing.
    Ambassador Black. Thank you Senator, for having this 
hearing.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator McConnell. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

         Questions Submitted to Administrator Andrew S. Natsios

             Questions Submitted by Senator Mitch McConnell

                                  IRAQ

    Question. Following the June 30 transition in Iraq, will USAID be 
the implementing agency for humanitarian, health, education and 
democracy and governance programs in Iraq?
    Answer. To date, USAID has been successfully implementing a large-
scale development program in Iraq in the areas of humanitarian 
assistance, economic growth, health, education, democracy and 
governance, and infrastructure. We are currently building upon and 
expanding our interventions in each of these sectors with funding 
provided under the second supplemental. The allocations to date are 
articulated in the April 5, 2004, section 2207 report. USAID is 
prepared to increase its portfolio, consistent with its areas of 
expertise, at the request of the Secretary of State.
    Question. What impact can regional democracy activists--such as 
Egypt's Said Ibrahim--have in furthering political reforms in Iraq?
    Answer. While it is important for democracy activists in the region 
to continue their efforts and raise their voices in support of 
democratic systems of government in Iraq and throughout the Middle 
East, it is more important that Iraqis are in a position to advocate 
for democratic reforms in their own country. In order for democracy to 
take root culturally, below the level of institutional structures, 
there must be a genuine Iraqi demand for the reforms. USAID's 
assistance program facilitates this transformation by working directly 
with Iraqis to secure an environment that protects the rights of 
minorities and other marginalized populations, promotes a broad-based 
understanding of democratic rights and responsibilities, 
professionalizes the civil service, fosters freedom of expression, and 
establishes an independent and responsible media. These efforts, 
however, could be enhanced by political activists such as Said Ibrahim 
and other scholarly interpretations by Arab religious, academic, and 
opinion leaders regarding the consistency between Koranic teachings and 
democratic principles and institutions.
    Question. Has the liberation of Iraq already had an impact on 
freedom in the region--such as increased calls for reform in Syria or 
Libya's recent opening to the West?
    Answer. The liberation of Iraq has sent a strong message regarding 
the intention of the United States to oppose dictatorial regimes which 
terrorize their own people and offer haven to terrorist groups. Given 
the timing of the war and the calls for reform in Syria and Libya, a 
case could be made for there being a connection. Whatever the 
motivation for these new openings, the critical factor is to provide 
the support and encouragement necessary to turn the promise they hold 
out into reality. Activities to develop more democratic policies and 
mechanisms and a more open market economy should be undertaken to help 
facilitate transparency and equity in these countries' dealings with 
their own citizens and the rest of the world.

                              AFGHANISTAN

    Question. What programs are being funded by the United States to 
provide alternatives to Afghan poppy farmers?
    Answer. It is generally agreed that a successful counter-narcotics 
effort is predicated on a three-legged approach (interdiction, 
eradication and alternative livelihoods). USAID operates under the 
alternative livelihood heading. Few crops can compete with poppy. 
However, USAID is implementing some programs which help farmers with 
alternative sources of income through production of high value crops, 
such as grapes, apricots, almonds, pomegranates, pistachios, walnuts, 
cherries, melons and peaches, in addition to food processing, as an 
alternative to poppy.
    USAID's agriculture program--Rebuilding Agricultural Markets 
Program (RAMP)--is working in several key areas of Afghanistan which 
are growing poppies--most notably Helmand, Nangarhar and Kandahar. 
Specifically, of the 32 projects which had been funded under RAMP by 
mid-April, five were exclusively directed at these provinces, with a 
total value of $7,610,291. These figures exclude projects which will 
impact these provinces but which have a regional or nationwide scope. 
USAID advisors have actually gone into villages where poppy is grown, 
and had discussions with the village headmen to ask them to sign 
affidavits attesting that they will disavow poppy cultivation in 
exchange for USAID assistance. Anecdotally, this has been a successful 
approach.
    In addition, USAID is rehabilitating farm-to-market roads and 
providing market and storage facilities to ensure that perishable 
produce can make it to the markets and facilitate their sale, once 
there. Under RAMP, improving market linkages and the ``value chain'' 
from field to market to processing to final sale is a key strategy to 
improving farmer's incomes. By focusing this strategy on both 
traditional and innovative, high value crops, the relative 
attractiveness of poppy cultivation is greatly reduced. These market 
and storage facilities are being constructed in eight provinces, 
including Nangarhar, Helmand, and Kandahar. To date, three are 
completed, another 65 are under construction, and 100 will be completed 
by June 30, 2004. By late Summer, 141 market and storage facilities 
will be completed.
    Question. What importance do the British (who are in charge of 
counternarcotics operations in Afghanistan) place on alternative crops 
or employment opportunities?
    Answer. The United Kingdom has adopted a plan to support the Afghan 
National Drug Control Strategy. The Research in Alternative Livelihoods 
Fund (RALF) is a component of the UK's development assistance program 
to Afghanistan which is administered by the Department for 
International Development.
    RALF is a $5.4 million effort over three years, whose overall scope 
is applied research and the promotion of natural resource-based 
livelihoods specifically directed to rural areas currently affected by 
poppy production.
    We are working closely with the British to ensure that our programs 
are coordinated.
    Question. Are these [counternarcotics] activities sufficiently 
funded?
    Answer. The key to successful counternarcotics activity is a fully 
integrated and well-implemented program involving interdiction, 
eradication and alternative livelihoods. While additional funds are 
welcomed, emphasis must be placed on a well-coordinated strategy.
    Question. Are education programs in Afghanistan having an impact in 
mitigating radical Islam among the nation's youth?
    Answer. USAID's education program in Afghanistan is primarily 
geared at primary education, for grades one through six, though we have 
been providing textbooks through grade 12. With that said, there is an 
enormous cohort of youth who did not attend school under the Taliban 
and so need extra help in order to reach a grade appropriate for their 
age. Our accelerated learning is directed at these students. The 
program is expanding rapidly, with now 137,000 students enrolled in 17 
provinces. This program has also trained 4,800 teachers, specifically 
trained in methodologies for these students.
    We are also working to improve the quality of education in the 
regular curriculum. In the 2002 and 2003 school years we provided a 
total of 25 million textbooks, this year we will provide over 16 
million more. We are also implementing a radio-based teacher training 
program to improve the quality of teaching. The program is now 
broadcast in six provinces through local broadcasters and nationwide 
through a national broadcaster. Twenty-six of these programs have been 
broadcast to date and initial results from monitoring of the pilot 
programs found that approximately 80 percent of Afghan teachers in the 
listening areas listened to these programs.
    Lastly, data show that Afghan children and youth are increasingly 
returning to school. In 2001, under the Taliban, approximately 1 
million Afghan children went to school, in 2002, the first year we 
provided textbooks, UNICEF measured that 3 million children were in 
school. Data collection was poor in 2003, but education experts working 
in Afghanistan estimated that the total was approximately 4 million 
children in school. Finally, the latest data for 2004 show that 4.5 
million children are in school. Such significant percentage gains year 
over year in school enrollment indicate a vote of confidence in a 
peaceful, productive future among Afghan children, youth, and their 
parents.
    Question. What threat does Afghani Islamic fundamentalism pose to 
reconstruction efforts in Afghanistan?
    Answer. It is important to draw a distinction between Islamic 
fundamentalism and terrorist activities. Extremist political groups who 
sponsor terrorist activities continue to pose a threat to 
reconstruction in Afghanistan. Fundamentalism itself is not the 
problem.

                             SOUTHEAST ASIA

    Question. How can the United States and international donors hold 
governments in the region more accountable for their actions--for 
example, in Cambodia where despite significant foreign aid, the country 
remains a corrupt narco-state that is a known haven to regional triads 
and terrorists?
    Answer. USAID does not engage directly with the Cambodian 
Government, except in the areas of HIV/AIDS treatment and prevention, 
programs to prevent trafficking in persons, and basic education. Many 
USAID-supported activities are funded specifically to encourage 
government transparency and accountability: legal clinics that 
challenge some of the most egregious situations; democracy projects 
that promote alternative political approaches; anti-trafficking 
programs that highlight some of the worst cases of abuse; and labor 
union programs that promote the free exercise of union rights.
    More broadly, USAID programs are not structured to ``reward'' the 
government. Rather, the aim is to improve Cambodia's human rights 
performance, introduce new ideas about good governance and address some 
of the most challenging social issues facing the country. With regard 
to terrorism specifically, it should be noted that since September 11, 
the Cambodian Government has been an active and cooperative participant 
in the fight against terrorism. Specific actions include sharing 
information, closing possible ``cells,'' and shutting down extremist 
sites and potential staging grounds for terrorist acts.
    During initial operations against the Taliban and al-Qaeda in 
Afghanistan, Cambodia quickly offered basing and over-flight rights for 
U.S. military aircraft (this offer still stands). It also arrested four 
people in May 2003 with alleged ties to a terrorist organization and 
closed two Islamic fundamentalist schools where these individuals were 
employed. In addition, Cambodia destroyed its entire stock of hand-held 
surface-to-air missiles. It also introduced an automated system to keep 
better track of people entering and leaving the country.
    Question. What programs are currently funded by USAID that 
encourage and foster regional cooperation among Southeast Asia 
reformers?
    Answer. USAID is funding four programs that are fostering regional 
cooperation efforts to address transnational issues and opportunities, 
promoting public-private partnerships, and facilitating the exchange of 
information and ideas among reformers in Southeast Asia. The Southeast 
Asia competitiveness initiative focuses on improving competitiveness of 
the Asian economy by building economic clusters in Vietnam, Thailand 
and Cambodia that work towards growth and help government and the 
private sector design and implement national competitiveness 
strategies. The Accelerated Economic Recovery in Asia program supports 
legal, judicial and economic reform in Thailand, Vietnam, Cambodia as 
well as Indonesia and the Philippines. The ASEAN program supports 
projects in three areas: bolstering the administrative and project 
implementation capacity of the ASEAN Secretariat; building regional 
cooperation on transnational challenges, including terrorism, human 
trafficking and narcotics, and HIV/AIDS and other infectious diseases; 
and fostering economic integration and development between the ten 
Southeast Asian member countries. The trafficking in persons program 
operates in Thailand, Laos and Vietnam, and focuses on prevention, 
protection and prosecution to combat trafficking.
    Question. What programs are currently funded by USAID to counter 
the efforts of madrassas to recruit the region's disaffected Muslim 
youth?
    Answer. In Indonesia, the new basic education program will also 
include assistance provided for school-to-work transition, especially 
to out-of-school youth. Over time, this will increase the prospects for 
employment among young job-seekers. Improved prospects for meaningful 
employment, and the better future that it can bring, should lessen 
frustration and alienation among those young people who could, 
otherwise, be willing recruits for leaders who advocate extreme 
solutions to social and economic problems. These efforts in the 
education sector will be complemented by the new emphasis on job 
creation in the new USAID economic governance and growth programs.
    In October 2003 President Bush announced in the Philippines that 
USAID would make available up to $33 million in fiscal year 2004-2008 
for education assistance in conflict affected areas of the 
Philippines--specifically in the Autonomous Region of Muslim Mindanao 
(ARMM). To counter the efforts of madrassas to recruit disaffected 
Muslim youth, the program's goal is to improve the quality of education 
in ARMM region schools where public schools are grossly under-funded 
and madrassas may be the only school within walking distance.
    The Improved Access to Quality Education in Poor, Conflict-
Affective Communities program is designed to address the political, 
economic and social marginalization of Muslim and other impoverished, 
conflict-affected communities in Mindanao with a goal to building peace 
and economic security.
    Program focus areas are:
  --Increasing community-based learning opportunities--especially in 
        school-less, conflict-affected areas;
  --Promoting reintegration of out-of-school youth into the peaceful, 
        productive economy;
  --Improving teaching capacity in math, science, and English in both 
        public and madrassa schools and providing opportunities for 
        madrassa schools to adopt secular curriculum;
  --Reforming education policy.
    Key achievements to date:
  --A Congressional internship program for young Muslim leaders 
        provided the first group of ten college graduates and graduate 
        students with an understanding of the dynamics of the 
        legislative branch.
  --Peace Corps volunteers in collaboration with the USAID education 
        program are providing math, science, and English training for 
        teachers from Muslim areas of Mindanao.
  --Public elementary and high schools in the ARMM have received up to 
        five computers each, as well as software, printers, network and 
        internet connection.
  --USAID is distributing books donated by U.S. publishers to schools 
        and libraries in conflict-affected areas of Mindanao where 
        reference and books materials are in critically short supply.
    In two other countries, Pakistan and Bangladesh, USAID is 
responding to vulnerable and at-risk Muslim youth. The emphasis of 
USAID's program in such countries is to develop a more credible public 
education system so families can select this option as a viable option 
over the madrassa system.
    To this end, USAID is working along several tracks. One approach 
being explored is the introduction of innovative approaches for early 
childhood learning. Some of these involve engaging parents, some of 
them semi-literate or even illiterate, to be proactive in the education 
of their children, having mothers take a greater interest in school 
operations and engaging unemployed or under-employed youths in the 
community with some level of education to act as tutors for children 
having difficulty in schools.
    Another element of USAID's support for early childhood development 
is through a mass media approach to improving literacy, numeracy and 
critical thinking skills in the next generation. In Bangladesh, a 
USAID-supported Bangladeshi-produced Sesame Street program will include 
messages of tolerance and non-violent conflict resolution, reaching out 
to a broad audience in Bangladesh in addition to preschoolers.
    Third, USAID is seeking a better understanding of the madrassa 
education system and its relationship with the mainstream public (and 
private) education systems. The objective is to identify incentives and 
resources to improve educational content at madrassas and to determine 
if there are appropriate entry points for U.S. assistance for those 
madrassas that are registered with the host government and subscribe to 
a government-approved curriculum.
    Finally, USAID is supporting innovative public-private partnerships 
to increase job skills of older students and better prepare those 
leaving schools for future employment.

                                 ISRAEL

    Question. How have USAID-funded programs in the West Bank and Gaza 
countered the efforts of Hamas to win the hearts and minds of the 
Palestinian people?
    Answer. USAID funds a broad range of activities in the West Bank 
and Gaza that engage the youth population, and are aimed at dissuading 
Palestinian youth from aspiring to be terrorists. For example:
  --Our democracy and governance projects teach the skills of 
        democratic, civil, non-violent mobilization and advocacy. They 
        reach out to school children and university students, providing 
        mentoring, counseling, and structure, and at the same time 
        imparting skills, knowledge, and appreciation for non-violent 
        conflict resolution techniques.
  --USAID-supported civic education media programs are widely 
        disseminated and designed to deliver and reinforce the message 
        that there are problems, but that violence is not a solution.
  --Town hall meetings, panel discussions, and young leader training 
        programs reach out into the heart of the communities that have 
        been identified as prime breeding ground of suicide bombers, 
        providing avenues of communication that are effective and 
        healthy alternatives to violence.
  --Through our various community service programs, we are trying to 
        inculcate skills and positive experiences that will support 
        non-violent conflict resolution behaviors. For Palestinian 
        teens and young adults, we support programs that ``get them off 
        the street'' into positive, healthy, mentored situations where 
        they are engaged in activities conducive to adopting non-
        violent approaches to resolving the national conflict.
    Additionally, Palestinians put a very high priority on education 
for children. While USAID/West Bank and Gaza does not work specifically 
on curriculum development or textbooks, we do fund significant training 
programs for teachers and students, which help students deal in 
alternative ways with trauma and anger. For example:
  --Our ``psycho-social'' training project has reached over 32,000 
        students between the ages of 6 and 18 and their teachers. 
        Activities under this project include play and art activities 
        for children, geared towards helping them deal with the tension 
        of the situation on the ground, and group discussions with 
        parents and teachers.
  --Our People to People program works with Palestinian Ministry of 
        Education and Israeli public school teachers on developing a 
        curriculum that recognizes the views, values, narrative, and 
        humanity of each side in the conflict.
  --We also improve the learning environment by building and repairing 
        classrooms, libraries, and labs. The 800 classrooms that USAID 
        has remodeled and rebuilt provide improved learning 
        environments for children. Among other things, these new 
        classrooms provide the opportunity for girls to go to school in 
        areas that they previously were unable to because of space 
        limitations.
  --USAID funds have also provided summer camp experiences for more 
        than 8,500 girls and boys. Basic themes of these in-school and 
        summer camp activities include moderation, reconciliation, and 
        overcoming conflict through peaceful means.
  --Under our Tamkeen project one NGO in Gaza supports university 
        students' work on issues of democratic practice, including peer 
        mediation and conflict resolution.
  --Another NGO has provided extremely high quality civic education to 
        thousands of people (mostly high school students) throughout 
        the West Bank and Gaza.
  --Under our Moderate Voices program NGOs work with teachers, Ministry 
        of Education, and school administrators on a peace curriculum 
        integrated with the regular school curriculum. It has also 
        supported an initiative with high school students promoting 
        democratic dialogue, attitudes, and skills, and an ongoing 
        project in the Gaza Strip to enrich and emphasize democratic 
        and human rights oriented values in the standard curriculum.
  --Also in Gaza, a peer mediation and conflict resolution program 
        conducted in UNWRA schools disseminates desired values and 
        identifies and training peer leaders to act as mediators in 
        conflict situations.
    Finally, a significant portion of our overall programming is geared 
to meeting emergency health and humanitarian needs, creating jobs, 
providing educational opportunities, and supporting economic 
development. In this way, USAID programs give Palestinian youth hope 
for a better life and future.
    This fiscal year we plan to use available funds to design and 
implement additional targeted activities, within the parameters of 
current U.S. law.
    Question. What plans does USAID have for its programs in Gaza--
particularly those relating to water--should Israeli withdrawal become 
a reality?
    Answer. The primary issue that determines USAID Gaza water programs 
is the security situation and the cooperation of the Palestinian 
Authority in the investigation into the killing of three American 
Security Guards that occurred on October 15, 2003. On 4/28/04, the 
Department of State determined that the situation had not improved 
sufficiently for the major infrastructure projects--the Gaza Regional 
Water Carrier Project and the Gaza Desalination Plant Project--to 
continue. However, rather than terminate the project, the U.S. 
Government is simply continuing to suspend activity, and retain the 
funds allocated in the hopes that these important projects can be 
brought on line rapidly should the situation change. If the security 
risk level is considered acceptable and there is agreement that the PA 
has cooperated in the investigation, we will want minimal time to begin 
implementation of the Gaza Regional Water Carrier and perhaps six 
months to bid and award the Gaza Desalination Plant Project.
    Directly related to the Israeli withdrawal may be the need to 
replace water supplies now being provided by Israel's Mekorot Water 
Company, primarily (but not exclusively) to Gaza's southern 
settlements. Once the settlements are withdrawn it is conceivable that 
Israel will no longer pump water into Gaza. Piped connections may have 
to be modified so that Gaza communities will be able to benefit from 
the Mekorot lines. USAID/WBG will investigate the engineering 
implications of this issue over the coming weeks.
    In addition, we believe that several of the Israeli settlements in 
Gaza are now getting their potable water from local groundwater 
reserves. Where this is happening, it may be necessary to provide piped 
connections from the wells to the closest adjacent Palestinian water 
network. Whether and to what extent this may be required must also be 
investigated in the coming weeks.
    Question. How does USAID ensure that no U.S. taxpayer funds for the 
West Bank and Gaza end up in the hands of terrorists?
    Answer. The Mission is well aware of the dangers associated with 
providing assistance to terrorist organizations or those who are 
affiliated with such organizations. Country Team vetting and close 
oversight help the Mission ensure that funds do not fall into the hands 
of terrorists. Consequently, beginning in November 2001, the Mission 
implemented a program whereby Palestinian grantees and contractors must 
be vetted by the Country Team at the Embassy in Tel Aviv. This applies 
to all contracts in excess of $100,000 and to all grants regardless of 
dollar value. In each case, the organization and its key personnel are 
reviewed to determine whether they are engaged in terrorist activity. 
Also, individuals applying for scholarships or to participate in USAID 
funded training programs are similarly vetted. To date, the Mission has 
vetted more than 1,000 Palestinian organizations and individuals.
    Finally, the Mission, with congressional encouragement, has 
developed a robust risk assessment strategy. All Mission institutional 
contracts and grants--approximately 100--are audited on an annual basis 
by local accounting firms under the guidance and direction of USAID's 
Inspector General. Preliminary findings on the first 10 auditable units 
appear to indicate that except for some questioned costs, general 
compliance and internal controls appear to be adequate.

                               INDONESIA

    Question. Will increased assistance for education and health 
programs help counterbalance the ability of JI and other extremist 
groups to recruit in Indonesia?
    Answer. The increased assistance from USAID for education and 
health programs should help to counterbalance the appeal of extremist 
groups and messages in Indonesia. The new basic education program will 
support our efforts to counter extremism through its focus on critical 
thinking, improved teaching methodologies, democracy, pluralism and 
tolerance. The focus on improving the quality of public school 
education, through improvements in school governance and teacher 
training, will allow schools that follow the government-mandated 
curriculum to offer a more attractive alternative to parents and 
students who are currently turning to private and religiously-based 
schools for basic education.
    The assistance provided on school-to-work transition and the 
special assistance to out-of-school youth should, over time, increase 
the prospects for employment among young job-seekers. Improved 
prospects for meaningful employment, and the better future that it can 
bring, should lessen frustration and alienation among those young 
people who could, otherwise, be willing recruits for leaders who 
advocate extreme solutions to social and economic problems. These 
efforts in the education sector will be complemented by the new 
emphasis on job creation in the new USAID economic governance and 
growth programs.
    Similarly, although perhaps over a longer time frame, increased 
assistance to health and other basic human services can lessen the 
appeal of extremists. The provision of better quality health, water and 
nutritional services to people and communities should improve their 
quality of life, particularly among poor Indonesians, and help address 
the feelings of abandonment that can fuel the anti-government and anti-
societal appeal of extremists. More broadly, the delivery of improved 
services by local governments, through management systems that 
encourage community participation, ownership and control, offers 
citizens a real voice in their governance and, by extension, a more 
substantive role in the development of effective dispute resolution 
mechanisms at the local level.
    Question. How does USAID maximize information technology in its 
programs in a geographically challenging place such as Indonesia?
    Answer. The decision to make Indonesia one of three focus countries 
for the President's ``Digital Freedom Initiative'' (DFI), announced by 
President Bush at the October 2003 APEC meeting, offers the opportunity 
for USAID to pursue Information and Communication Technology (ICT) 
solutions to development issues using a more strategic approach than 
was possible in the past.
    In recent years, USAID has integrated ICT solutions into over 
thirty development programs, including efforts in: (a) electoral 
management (including GIS-assisted establishment of voting districts); 
(b) establishment of a website for the National Parliament; (c) 
promoting pluralist civil society and tolerant Islamic values by 
disseminating information on religious tolerance on-line; (d) 
international trade promotion and small- and medium-sized enterprise 
development; (e) establishment of a Center for Energy Information in 
the Ministry of Energy and Mineral Resources to facilitate private 
sector investment; (f) promotion of decentralized and strengthened 
management of Indonesia's forests, protected areas and coastal 
resources through on-line information centers; (g) establishment of a 
local government on-line support center to share decentralized 
governance ``best practices'' and provide access to donor agencies, 
associations of regional governments and regional government 
directories; and (h) establishing a nation-wide Nutrition and Health 
Surveillance System for households with mothers and children under five 
years of age.
    Under the new fiscal year 2004-2008 Strategic Plan for Indonesia, 
USAID will further integrate ICT solutions into all assistance 
programs, to be coordinated under a DFI Plan that is currently in 
preparation. In addition to a special focus on ICT services and access, 
especially for the underserved, we will pursue specific ICT 
applications in our new basic education program, health and emergency 
relief services (including a proposed joint emergency information 
system with Microsoft and the Indonesia Red Cross), and local 
government service provision programs.

                              NORTH KOREA

    Question. Given the extremely closed nature of North Korea, can any 
programs be conducted inside that country to promote democracy and 
human rights?
    Answer. North Korea remains the most closed and isolated country in 
the world. The regime controls the people and ensures its survival by 
brutally restricting the flow of all information and ideas. In such an 
environment, it is virtually impossible to conduct any programs inside 
the country that overtly promote democracy and human rights.
    Question. What programs can be supported among North Korean 
refugees to create an organized opposition to the thugs in Pyong Yang?
    Answer. The United States is not pursuing regime change in North 
Korea; support for programs meant to create an organized opposition to 
the regime in Pyongyang would not be consistent with that policy.

                              WEST AFRICA

    Question. Do you agree that drug addicted, demobilized rebels in 
Sierre Leone and Liberia pose an immediate threat to the resumption of 
hostilities in the region--and easy recruits for terrorist 
organizations?
    Answer. Based on extensive discussions in Sierra Leone with NGOs, 
youth groups, women's groups, traditional leaders, communities and 
peacekeepers, drug addiction among ex-combatants has not been found to 
be a serious problem.
    In Liberia, however, the situation is different and drug abuse is 
thought to be a significant issue among (ex-)combatants. Despite these 
problems, they are not seen as a threat to the disarmament, 
demobilization and reintegration (DDR) process.
    Question. What programs does USAID sponsor to ensure that these 
addicts are treated for their addictions?
    Answer. USAID is well aware of the drug problems in Liberia and 
intends to use International Disaster and Famine Assistance funds to 
support activities that address the issue. The current Annual Program 
Statement (APS) ``Achieve Peace and Security through Community 
Revitalization and Reintegration'' (APSCRR) clearly states that, 
``USAID is interested in funding suitable drug treatment programs under 
this APS.''
    We are currently reviewing proposals in this area submitted in 
response to the APSCRR APS and plan to support activities that would 
begin in the next few months. Activities will focus on both drug 
awareness programs and the treatment of drug addiction through support 
groups and substance abuse treatment facilities, which would be linked 
with ongoing reintegration/employment programs.

                             SOUTH AMERICA

    Question. Does USAID have lessons-learned from efforts to counter 
drug cultivation in Central and South America that may be applicable to 
on going counternarcotics efforts in Afghanistan?
    Answer. Three lessons from counter-drug programs in Central and 
South America are important for counter-narcotics activities in 
Afghanistan and other areas.
  --Drug production typically takes place in areas where there is no 
        state presence. Expansion of state presence throughout the 
        entire national territory is therefore critically important. 
        Military and/or police forces must be able to arrest criminals 
        and control illegal activities that take place anywhere in the 
        country. The National Government must also provide, or support 
        effective local governments that provide, essential government 
        services such as access to justice, education, health, economic 
        and social infrastructure, and other services that earn the 
        trust, confidence and support of local people.
  --Local support for counter-narcotics programs is essential for 
        success. This support is gained through alternative development 
        assistance which increases legal employment and incomes as well 
        as through local government or community development programs 
        that provide local infrastructure and improved local 
        governments in exchange for community support to eradicate drug 
        crops.
  --If society views narco-trafficking as a foreign problem only, 
        people will not support the actions needed to root it out. 
        Communication programs are essential to teach and inform people 
        at all economic levels about the dangers of drug production and 
        narco-trafficking. People need information about how narco-
        trafficking affects their health, communities, the environment, 
        families, and the economy. They also need to see examples of 
        how narco-trafficking negatively impacts justice systems, 
        institutions and democracy.

                                PAKISTAN

    Question. Can you comment on the impact of U.S. assistance in 
Pakistan to counter the hateful ideology of madrassas and other 
extremists?
    Answer. The primary objective of USAID/Pakistan's education sector 
is to provide the knowledge, training and infrastructure to support the 
Government of Pakistan's educational reform program. USAID assistance 
emphasizes high quality education programs for boys and girls 
throughout Pakistan, including public and private schools and 
registered madrassas wishing to avail themselves of the assistance. Two 
pilot programs in early childhood education and adult literacy are 
proving highly successful in changing the approaches of teachers, 
parents and administrators and making public schools more effective and 
attractive to students and their parents. The Government of Pakistan is 
interested in expanding these programs nationwide.
    The ``Whole District Initiative'' provides materials and training 
to upgrade all schools wishing to participate in the initiative in four 
districts each in Balochistan and Sindh--two badly neglected areas of 
the country. These are demonstration projects, with the goal of 
replication in all districts of the country by Government with USAID 
and other donor support.
    The USAID Teacher Education project provides the opportunity for 
selected Pakistani educators to study in the United States and gain 
first hand knowledge of the American culture and values as well as 
academic training to become better teachers and mangers of educational 
services.
    USAID is exploring expansion of school feeding programs currently 
funded by USDA in one district.
    In June a project will begin to rehabilitate and refurbish 130 
shelterless schools across all the seven agencies in the Federally 
Administered Tribal Areas (FATA). Schools, water and health facilities 
are the priorities of these communities.
    Collectively, these measures may serve to undercut some of the 
appeal of Madrassa education in its more extreme forms. However, USAID 
programs cannot directly take on the problem of the Madrassas that 
foster or support terrorism. That responsibility must be assumed by the 
Pakistan Government.
    Question. How do you envision the democratic development of 
Pakistan, and what programs are supported by USAID to advance democracy 
in Pakistan?
    Answer. Recent developments indicate a positive trend towards 
democratic development of Pakistan. In 2002, Pakistan returned to 
democratic rule with elections of the national and provincial 
legislatures, with more than 70 percent of members being elected for 
the first time to parliament. This has created an opportunity to train 
these parliamentarians in the necessary skills to improve legislative 
governance, especially to be responsive to the needs of citizens. 
Pakistan has also opened up its electronic media to private sector 
ownership in the first time in its history. Now citizens have access to 
alternative choices and increased accountability in the media. Also, 
Pakistan is currently in the process of shifting political, 
administrative and fiscal responsibilities from central to local levels 
of government through a comprehensive devolution program.
    USAID built its governance interventions to capitalize on these 
developments through a three-year, $38 million program to help build a 
more participatory, representative and accountable democracy. It is 
designed to actively involve civil society, the key actors in eliciting 
democratic change in Pakistan, by (1) improving the capacity of 
legislators at national and provincial levels to effectively perform 
their legislative duties and better address the needs of citizens; (2) 
actively engaging civil society groups, media and political parties to 
address pressing social and economic issues; and (3) stimulating local 
governments to work with citizens to solve social and economic problems 
at the community level.
1. Improving the capacity of national and provincial legislatures to 
        respond effectively to the needs of citizens
    Program activities include:
  --Providing technical assistance and training in drafting specific 
        legislation, such as conducting background research and 
        drafting policy papers;
  --Assisting legislators and staff to improve legislative procedures 
        and processes such as functioning of committees; and
  --Support public forums where interest groups will discuss current 
        legislative agenda topics, from passing a budget to reforming 
        laws affecting women.
2. Civil society, media and political parties actively engaged in 
        addressing key economic and social issues facing Pakistani 
        society
    Examples of activities are to:
  --Improve the financial and operational sustainability of NGOs, such 
        as introducing efficient auditing software programs;
  --Develop the capacity of new, private radio stations to improve 
        their programming content, including professional quality 
        weekly news programs on women's issues;
  --Train journalists to improve the quality of reporting through new 
        university curriculum; and
  --Strengthen political party processes and structures, such as 
        improving intra-party communication and development of party 
        membership lists.
3. Local governments working with citizens to solve social and economic 
        problems at the community level
    Projects which are demonstrating to citizens that their local 
governments are part of positive solution include:
  --Small water systems for potable water and irrigation;
  --Ambulance services and improved health clinic equipment; and
  --Sanitation facilities such as latrines so that parents allow their 
        children, especially girls, to stay in school.
    Question. How will the fiscal year 2005 request for Pakistan--
particularly $300 million in economic aid--combat terrorism in that 
country?
    Answer. The U.S. program in Pakistan has counterterrorism as its 
priority strategic goal. All programs are designed to support the 
government of Pakistan to achieve their goal of becoming a modern, 
moderate Islamic state. U.S. assistance programs are varied but 
targeted to address critical barriers to achieving the social and 
economic prosperity which is essential to fight terrorism.
    Poverty and illiteracy are Pakistan's overriding limiting factors 
to becoming a modern state capable of offering alternatives to its 
citizens, and also to participating in the global economy. Without 
economic options and basic social services, the poor are easy prey for 
religious extremists.
    Economic aid for Pakistan addresses the need for a growing economy 
that can reduce poverty through increasing literacy, improving basic 
health services and expanding employment opportunities for the poor, 
especially youth and women. Education programs will strengthen the 
central and local governments in their ability to offer viable 
alternatives to religious schools. USG support ranges from sustainable 
investments such as updating education policy and teacher training to 
more immediate, practical investments in school infrastructure and 
teaching materials. Expanding access to basic health services is 
another targeted program which will help poor Pakistanis take advantage 
of economic opportunities. Through microfinance and small business 
loans, entrepreneurs will not only increase their own standards of 
living but also offer employment in their communities.
    In addition to a strong economy, Pakistan needs a stable democracy 
to become a moderate Islamic state. This requires strong institutions, 
trained civil society and government leaders, and an open environment 
for raising awareness of issues such as human rights. U.S. economic 
assistance programs offer training for legislators in basic governance 
processes which will strengthen Pakistan's national and provincial 
institutions. These programs will also expose legislators and their 
staff to the workings of modern Muslim and non-Muslim governance 
systems in other countries. Civil society organizations will be 
supported to prioritize, articulate and communicate citizen concerns to 
government officials at all levels, such as women's issues, poverty, 
and education.
    Other innovative assistance activities are being implemented in 
support of devolution. One program is helping local governments and 
communities work together for the first time to provide basic services, 
especially in health and education. Expanding this pilot program, which 
demonstrates transparency and accountability through direct experience, 
is a priority. It improves the quality of life for poor citizens and 
also reinforces the potential for a decentralized, grassroots 
democracy.

                               SYRIA/IRAN

    Question. What programs can be conducted in both Syria and Iran to 
foster political and social reforms?
    Answer. There are few options for fostering political and social 
reforms that can be conducted in both Syria and Iran with Foreign 
Operations funds for political or social reform. Sec. 507 of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 2004 (Division D, Public Law 108-199) prohibits 
both Syria and Iran from receiving any funds appropriated under this 
act.
    However, Sec. 526 (Democracy Programs) instructs, ``that 
notwithstanding any other provision of law, not to exceed $1,500,000 of 
such funds may be used for making grants to educational, humanitarian 
and nongovernmental organizations and individuals inside Iran to 
support the advancement of democracy and human rights in Iran.''
    Per this section of the appropriation bill, the Department of State 
is actively exploring opportunities to promote democracy activities 
within Iran, in accordance with this fiscal year 2004 congressional 
authorization. The Bureau of Democracy, Human Rights and Labor recently 
solicited Iran proposals and hopes to be able to fund projects within 
Iran this fiscal year. These projects will support the Iranian people 
in their quest for freedom, democracy, and a more responsible, 
transparent, and accountable government that will take its rightful 
place as a respected member of the international community.
    Lacking an authority that would similarly allow assistance for 
Syria, foreign assistance funds cannot be used to foster political and 
social reform in Syria.
    The Bureau of Educational and Cultural Affairs (ECA) of the State 
Department is able to use its base funding in Syria and has developed a 
full range of exchange activities to reach out to Syrians, with a 
special emphasis on women and youth. The following exchange activities 
are currently underway with Syria. They directly and indirectly address 
social and political reform by focusing on themes or individuals with 
the capacity to foster new approaches in Syria:
  --Twelve Syrian undergraduates are among the 71 youth from the Middle 
        East and North Africa to receive scholarships to U.S. colleges 
        and universities in 2004 under Partnerships for Learning 
        Undergraduate Scholarships.
  --The University of Oklahoma, funded through a grant from ECA, will 
        conduct a series of exchanges with Syria focusing on water 
        management and water conservation issues.
  --Ohio University, in partnership with ECA, is planning a summer 
        institute for teachers of English as a Foreign Language from a 
        half dozen NEA countries, including Syria. We currently have 
        three English Language Fellows in Syria and expect to continue 
        at this level in 2004-05. English language programs convey U.S. 
        values and encourage access to economic opportunity.
  --Columbia University's Center for International Conflict Resolution 
        is planning a one-year, multi-phased project to bring together 
        Syrian and American civil society leaders.
  --10 Syrian high school students (out of 440 students from the 
        region) will participate in the Partnership for Learning Youth 
        Exchange Program and spend an academic year living with 
        American families and studying in U.S. high schools.
  --The Fulbright program in Syria has grown in the last three years 
        into a vibrant program encompassing visiting scholars 
        (partially funded by Syria), visiting students placed in top 
        U.S. universities, American scholars, and students.
  --The International Visitor exchange program with Syria has averaged 
        about twenty participants a year. Projects have focused on 
        journalism, energy, micro-credit, women, tourism, and the 
        environment.
  --Each year, two to five Syrians participate in the Humphrey 
        Fellowships Program which provides mid-career professionals in 
        public service a year of academic training and professional 
        experience in the United States.
    Regarding Iran, ECA has initiated educational exchanges through a 
grant to the Council of American Overseas Research Centers (CAORC). 
CAORC, working with the American Institute of Iranian Studies, has a 
very active exchange program focusing on Iranian studies. If it is the 
political will of the Department to further develop ties with Iran, ECA 
will be a full partner in implementing exchanges which promote mutual 
understanding and respect, as authorized by the Fulbright-Hays Act of 
1961.

                           EGYPT/SAUDI ARABIA

    Question. With respect to United States aid for Egypt, what should 
we be doing differently in that country to ``drain the swamp'' that 
foments extremism?
    Answer. The U.S. Government promotes economic and political 
development through USAID programs that improve the lives and welfare 
of the Egyptian people. The program expands economic opportunities, 
improves education and health systems and provides for the expansion of 
basic infrastructure. In addition, U.S. assistance addresses critical 
issues in the area of democracy and governance.
    The United States reviewed its democracy and governance programs 
during the year as part of a comprehensive assessment of its bilateral 
assistance to Egypt. Programs in 2003 and early 2004 focused 
particularly on justice sector reform; civil society with a special 
emphasis on gender equality; media independence and professionalism; 
and responsive local governance. These USAID-funded projects supported 
reform-minded individuals and progressive organizations that seek to 
modernize Egypt.
    United States aid for Egypt can continue to identify and fund 
activities that foster inclusion, citizen participation and 
modernization. By strengthening civil society, promoting greater 
independence and professionalism in the media, and modernizing the 
judicial sector, USAID is creating a firm foundation for a flourishing 
democratic society. We have encouraged the Government of Egypt (GOE) to 
support new initiatives to conduct free and fair elections that include 
updated voter registration lists and multi-party platforms. We have 
worked with the GOE to strengthen a more independent and representative 
Parliament. In partnership with the U.S. Embassy, USAID continues to 
support progressive and reform minded individuals who have the vision 
and charisma to mobilize Egyptian citizens and policy makers towards 
more democratic policies.
    Pursuant to the President's Middle East Partnership Initiative 
(MEPI), we are supporting programs that affect ordinary Egyptians 
directly. For example, we are supporting the National Council for Women 
in order to promote women's access to legal services throughout Egypt. 
We recognize that empowering women and promoting human rights is an 
effective way to combat terrorism and extremism because it allows 
citizens to better direct their frustration and exercise their rights. 
One non-traditional but creative way to use U.S. foreign assistance 
would be to foster peace and reconciliation programs in the region, 
thereby reducing violence and the incidence of extremism.
    U.S. aid is also helping the GOE to create a globally competitive 
economy through policy reforms that will increase foreign and domestic 
investment, encourage export-oriented growth, improve workforce and 
business skills, and invest in information technology. These 
transformations will help bring about a more competitive economic 
environment within Egypt, allowing the country to reach higher levels 
in the global economy. Additionally, U.S. aid is providing assistance 
for educational reforms that empower teachers and parents at the local 
level. This support goes to training teachers to promote the vocational 
skills and critical thinking skills necessary to seek and hold jobs. 
When people are given an adequate education, are able to provide for 
their families with decent jobs and generally have more hope for a 
brighter future, they are able to make informed choices, leading to 
fewer tendencies to succumb to terrorist rhetoric.
    Question. What impact would greater freedom of association in Egypt 
have in terms of releasing societal pressures that may give rise to 
extremism?
    Answer. As noted in the 2003 Human Rights Report, the Government of 
Egypt (GOE) record on freedom of peaceful assembly and association 
remained poor. Both USAID and the United States Embassy in Egypt 
acknowledge that many serious problems remain. Through USAID-funded 
projects and diplomatic dialogue at both the senior and working levels, 
the USG encourages the GOE to create an enabling environment to foster 
greater freedom of speech and assembly.
    This year, regardless of regular demonstrations that have anti-
American sentiments, the United States Embassy strongly supported 
Egyptian citizens' rights to express openly and peacefully their views 
on a wide range of political and societal issues, including criticism 
of government policies and alliances. During the numerous unauthorized 
antiwar demonstrations, the U.S. Embassy reported on the large numbers 
of security personnel deployed to contain the demonstrators and 
followed the cases of those allegedly mistreated while in detention.
    It should be noted that from experience in other countries, it is 
difficult to predict the impact of greater freedom of association and 
speech. On one hand, it is possible that in Egypt there could be, for 
the short-term, an increased number of demonstrations with anti-
American undertones. Reform minded individuals and progressive groups 
seeking modernization and moderation could be discouraged in the short-
term from publishing their views in the media by pressures from 
fundamentalist voices. Civil society organizations, already restricted 
by the 2002 Law 84 that grants the Minister of Insurance and Social 
Affairs the authority to dissolve NGOs by decree, could be temporarily 
stifled, paralyzed from espousing any progressive or reform oriented 
platforms.
    On the other hand, the USG believes that freedom of association is 
defined too narrowly in the Egyptian context and needs to be broadened 
to include non-governmental organizations, the press, students, and 
professional associations. By increasing freedom of speech and 
association, this may encourage more reformist voices to participate 
and widen the space for political discourse. Through continuous 
dialogue in diplomatic channels and numerous USAID-funded programs, we 
encourage the GOE to encourage greater freedom of association and 
speech in the belief that this releases societal pressures and reduces 
the incidence of extremism.
                                 ______
                                 
               Question Submitted by Senator Mike DeWine

                                 HAITI

    Question. You are familiar with my bill, S. 2261, the Haiti 
Economic Recovery Opportunity Act of 2004. As you know, the bill is not 
a substitute for increased U.S. assistance, but rather a compliment. In 
a 2003 study, USAID concluded that the old version of the bill would 
have a dramatic impact on employment in Haiti, and the new bill goes 
even further in helping to ``grow jobs.'' Secretary Powell voiced his 
support of the bill while in Haiti, and again before this sub-
committee. Do you support the bill?
    Answer. I, along with Secretary Powell, support the Haiti Economic 
Recovery Opportunity Act of 2004. It is very important to help improve 
the economy of Haiti, the poorest country in the Western Hemisphere. 
This bill complements USAID's economic growth activities in Haiti.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

                        HUMANITARIAN ASSISTANCE

    Question. Mr. Natsios, there is nothing more basic to U.S. foreign 
aid than our humanitarian and development assistance programs. It is 
what the American people think of first, when they think of foreign 
aid.
    The President's has talked a lot about his commitment to combating 
world poverty. But, his fiscal year 2005 budget would make cuts in 
several key anti-poverty programs, including a $99 million cut in 
funding for international health programs and a $48 million cut in 
Development Assistance.
    I am sure this was an OMB decision and that you don't support these 
cuts. What effect will these cuts have, and how do you explain them 
given how hard we often have to work just to scrape together a million 
dollars here or there to keep good projects from shutting down?
    The Secretary of State has said that this budget represents a quote 
``commitment to humanitarian assistance.'' Given these--and other--
cuts, is that how it looks to you?
    Answer. As we all know, the United States is on a war-time footing 
and faces major budget challenges to meet the requirements of both 
homeland security and U.S. military defense needs overseas. But at the 
same time, foreign assistance is becoming a higher priority than it has 
been in many years, as evidenced by the President's additional funding 
requests for the Global HIV/AIDS Initiative (GHAI) and the Millennium 
Challenge Account (MCA).
    As I noted earlier in this hearing, the overall budget that USAID 
is currently managing also is much larger than it has been in many 
years. This increase is attributable to massive assistance efforts in 
Iraq and Afghanistan on top of maintenance of USAID's current 
portfolio. While there has been a slight decrease in USAID's 
traditional development accounts, we are already receiving some funds 
from the GHAI account, and additional transfers are likely. It is also 
anticipated that some USAID programs in countries that do not qualify 
for MCA programs (the threshold countries I mentioned in my opening 
remarks) may receive some MCA assistance to help them qualify later on. 
USAID will likely manage these programs, using MCA funds. USAID is very 
much on the front lines of major efforts to continue to assist those 
countries most in need, and I certainly agree with the Secretary's view 
that this budget reflects the Administration's commitment to maintain 
humanitarian assistance.

                               EDUCATION

    Question. Mr. Natsios, the President announced a new education 
initiative for Indonesia, a Muslim country where millions of students 
are enrolled in Islamic schools similar to the madrassas in Pakistan. 
This initiative calls for some $150 million over five years, or about 
$30 million per year. That, I am told, is enough to reach maybe 10 
percent of the students. In other words, we will be barely scratching 
the surface.
    If we are serious about this--and I support it--shouldn't we be 
spending amounts that will reach enough students to produce a real 
impact? And shouldn't we be doing the same thing in other predominantly 
Muslim countries?
    Answer. It is true that, in our program planning, USAID/Indonesia 
has estimated that activities funded under the $157 million, six year 
Indonesia Basic Education Initiative will improve the quality of 
education and learning for approximately four million students, or ten 
percent of the enrolled student population in our target group. The 
target population encompasses grades 1 to 9, or Indonesian primary 
school and junior secondary school. At the time the concept paper for 
the new education initiative was developed, USAID/Indonesia had 
proposed a $250 million, five year program. Clearly, additional 
resources would allow us to directly assist additional Indonesian 
students and teachers.
    We are, however, designing our education activities with an eye to 
replication at the local level, using Indonesian local government and 
central government resources. We are also working closely with a number 
of other international donors to agree on a more standardized 
``package'' of basic education approaches that can be extended to 
additional districts and students using other donor funding. In 
addition, we plan to work with a large number of Indonesian and 
international companies that have expressed an interest in supporting 
educational development, on a significant ``Indonesian Education 
Public-Private Alliance.'' Finally, we are working with the United 
States-Indonesia Society (USINDO) and the Indonesian Embassy in 
Washington to identify other potential partnerships.
    Through these innovative program approaches we seek to maximize the 
impact of the Indonesia Basic Education Initiative funded by the U.S. 
Government.

                 RECONCILIATION AND UNIVERSITY PROGRAMS

    Question. Mr. Natsios, I want to commend USAID for the way it is 
responding to our concerns about the need for a designated pot of 
money, with a designated person to manage it, to fund reconciliation 
programs and university programs. Both are strongly supported up here, 
and we need to be sure that universities and organizations that submit 
unsolicited proposals will not get lost in the bureaucracy down there.
    On the reconciliation programs, although most organizations that we 
know of are working in the Middle East--like the Arava Institute for 
Environment Studies--this is intended to be a worldwide program. We 
want to encourage organizations in places like Cote D'Ivoire, Colombia, 
and other conflict areas to participate, not only in the Middle East. 
And ideally, we would like to see a request in the President's fiscal 
year 2006 budget for these activities. So I appreciate your support and 
would welcome your thoughts on this.
    Answer. USAID's Office of Conflict Management and Mitigation (CMM) 
has been working closely with the State Department to develop a 
transparent, competitive process for the allocation of $8 million in 
the fiscal year 2004 Economic Support Fund earmarked for reconciliation 
programs. Several weeks ago both State and CMM staff briefed 
Congressional staff on progress in that regard.
    We intend to focus on critical countries representing all the 
regions of the world where we believe the provision of additional funds 
will have an impact. Country selection is based on a number of factors 
including a desire to assist reconciliation efforts among actors in 
countries currently experiencing conflict as well as those emerging 
from conflict. Proposals will be reviewed jointly by State and USAID on 
a competitive basis and judged against conflict criteria guidelines 
previously established by CMM.

                              USAID STAFF

    Question. Mr. Natsios, in my opinion, USAID does not have nearly 
enough staff, particularly in your field missions, to manage the number 
of contracts and grants you should be funding. Because of the shortage 
of staff, the trend has been in favor of big Washington contractors, 
which are not always the best qualified for the job. But they are the 
only ones capable of navigating the regulations for applying for 
contracts, which have become so burdensome and expensive that smaller 
contractors and NGOs can't compete. This is wrong, it has gone on for 
too long, and it has repercussions for everything USAID is trying to 
do.
    How many staff have you lost since the mid 1990s, and how can we do 
the job that needs to be done if you don't have the people to do it? 
Are you requesting the budget you need to support the staff you need?
    What are you doing to make it easier for smaller NGOs and 
contractors to compete?
    Answer. In 1990, USAID had 3,262 U.S. direct hire staff (USDH). We 
now have just under 2,000. Many believe that we compensated for the 
loss of staff in the 1996 reduction in force (RIF) by hiring U.S. 
personal services contractors (USPSCs) and Foreign Service Nationals 
(FSNs). This is not accurate. FSN staff declined from 5,200 to 4,725 
from 1996 to 2002, while USPSC staff increased slightly from 591 to 628 
in the same period.
    In fiscal year 2004, to begin recouping the loss of staff during 
the 1990's, the Administration requested Congressional support for the 
USAID Development Readiness Initiative. Built on the same concept as 
the Secretary's Diplomatic Readiness Initiative for the Department of 
State, USAID is seeking to increase its baseline staff from 2,000 USDH 
to approximately 2,500 over a four year period. In fiscal year 2004, 
USAID received adequate funding to hire approximately 50 additional 
people above attrition. This will allow us to fill long standing field 
vacancies, allow more in-service training and respond to new program 
requirements such as the President's AIDS initiative and new programs 
in Iraq, Afghanistan, and Sudan.
    In 1995, prior to the RIF, USAID moved less than half the dollars 
we obligated last year with over 170 people in the Office of 
Procurement. Today we have 123 people to handle the funding increases 
associated with Iraq, Afghanistan, and now HIV/AIDS. In order to handle 
this workload while we rebuild our staff, we have been forced to award 
larger contracts and grants. We have also set the funding levels very 
high on our Indefinite Quantity Contracts (IQC) to allow for more 
flexibility. Without appropriate staffing to administer the contracts, 
the Agency is concerned about proper oversight of the awarded 
contracts. USAID consequently needs the planned increase in procurement 
staff to adequately handle the funding increases associated with 
Administration priorities.
    At the same time, USAID is attempting to meet the President's 
directive against bundling contracts and the increased subcontracting 
goals from the Small Business Administration. USAID has expanded its 
use of small business set-asides for IQC contracts and expanded its 
evaluation criteria to emphasize the importance of subcontracting 
requirements. For example, under USAID's Iraq Phase II Infrastructure 
award, the solicitation document included an incentive fee for firms 
that propose subcontracting opportunities with small businesses beyond 
the Coalition Provisional Authority (CPA) minimum goal of 10 percent. 
In addition, USAID proposed an incentive award payment of $1 million to 
any prime contractor exceeding 12 percent of all subcontracted dollars 
to small, disadvantaged, woman-owned or disabled veteran-owned 
businesses. This incentive for prime companies to incorporate small 
business into their sub-contracting plans is a first for USAID. While 
not the typical set-aside procedure found in private sector practices, 
we feel this is a major step toward encouraging prime contractors to 
engage U.S. small businesses at a broader and more profitable tier, 
while providing essential exposure to greater opportunities.
    USAID's Office of Small and Disadvantaged Business Utilization 
(OSDBU) has also pioneered efforts to reach the small business 
community. In the fall of 2003, a Procurement Forecast was published to 
assist small businesses with anticipating Agency contracting 
opportunities for up to one year in advance. OSDBU also has a 
publication, ``Creating Opportunities for Small Business,'' available 
in booklet and ``mini-CD,'' which provides both an overview of doing 
business and hyperlinks to useful sites both within USAID and 
throughout government. OSDBU also hosts small, monthly sessions where 
small businesses can meet with and learn about upcoming business 
opportunities from a broad range of the Agency's skilled technical 
officers.

                                COLOMBIA

    Question. Mr. Natsios, in your prepared testimony, you mention 
Colombia, and that the, quote, ``only effective strategy is to 
literally clear the ground for the licit crops that will feed the 
nation while aggressively pursuing eradication of the others.'' 
Unquote.
    We are spending hundreds of millions of dollars each year to spray 
herbicide to destroy the coca. But the amount we are spending to help 
communities in these areas with alternative sources of income is 
woefully inadequate. The work USAID is doing is excellent, but it 
barely scratches the surface. Isn't this strategy doomed to fail, if we 
don't provide the resources to give people the means to survive without 
growing coca?
    Answer. Thank you for recognizing USAID's efforts. Colombia's 
problems are extremely complex and require a combination of ``hard'' 
and ``soft'' assistance. Military and police assistance is crucial 
because insecurity, lawlessness, and lack of state presence are at the 
heart of Colombia's problems. Military and police assistance create a 
positive security environment that is necessary for effective 
implementation of ``soft'' assistance like economic development, 
institutional reform, anticorruption, human rights, access to justice 
and humanitarian relief, trade, and private sector support to increase 
legal employment and incomes. But a program composed of only ``hard'' 
assistance cannot succeed. USAID's ``soft'' assistance programs are 
essential complements to the military and police assistance programs, 
and are needed to make gains from the ``hard'' activities permanent. 
``Soft'' developmental programs leave behind legal production systems 
and improved institutions at all levels which earn the trust and 
confidence of citizens and show them that they can work together to 
solve problems. Perhaps most importantly, soft side activities 
demonstrate that there is a legal way to survive and that citizens do 
not have to be part of a criminal organization that brings violence and 
insecurity into their communities and into their homes.

                           POPULATION GROWTH

    Question. Mr. Natsios, about 95 percent of world population growth 
is now occurring in the developing world. It is one of the defining 
characteristics of underdevelopment, and a key cause of political 
instability and economic stagnation in many countries. Shouldn't we be 
spending more on international family planning to slow population 
growth so that these underdeveloped economies have a chance to grow?
    Answer. In each year of the Bush Administration, the Agency has 
requested $425 million for population and reproductive health. The 
request level is $40 million higher than the appropriated levels in 
each of the preceding five years, which ranged from $356 to $385 
million.
    USAID has also has taken steps to be more strategic in allocating 
funding across countries. Beginning this year, population and 
reproductive health funds from the Child Survival and Health Account 
have been allocated according to criteria that emphasize need, taking 
into account population size and density, fertility, and indications of 
unmet need for family planning. By directing resources to countries 
with greater need--principally countries in Africa, Near East and South 
Asia--our funds can go further and have greater impact.
    As I stated in my remarks before the Senate Foreign Operations 
Subcommittee in April, the combination of a high concentration of young 
people, especially young men, with high rates of unemployment creates 
the conditions that foster political instability. USAID assistance for 
improving health, including family planning, combined with 
interventions that expand economic opportunity can help alleviate these 
conditions and bring greater stability to the developing world.

                   COORDINATION OF FOREIGN ASSISTANCE

    Question. Mr. Natsios, in your opening statement, you mentioned 
that ``development'' has been elevated as a third part of the 
President's national security strategy. I agree that development is 
important, but as the old saying goes, actions speak louder than words. 
I am concerned that the Administration's policies have undermined the 
ability to effectively coordinate foreign assistance by creating all 
sorts of new entities and initiatives. Let me give you some examples:
  --The Millennium Challenge Account, a new independent agency, will 
        eventually provide $15 billion in foreign aid.
  --The Coalition Provisional Authority, a Defense Department entity, 
        is administering, as you point out in your statement, the 
        largest foreign assistance program since the Marshall Plan.
  --A new AIDS Coordinator, whose physical offices are not even located 
        within either the State Department or USAID, will be in charge 
        of $15 billion.
    These are just the ones that I can remember.
    Has the proliferation of new entities and initiatives--all of 
varying autonomy and reporting to different agencies--undermined our 
ability to effectively coordinate foreign aid programs?
    Answer. With the greater understanding of the importance of 
development, as well as the increase in resources being devoted to 
development, it is not surprising that there are more actors involved 
in foreign aid today than there have been in the past. We are living in 
a more complex era and face a much broader range of challenges than we 
have in earlier years. We are very closely involved, either as 
implementers or in other capacities, of all the new foreign aid 
initiatives you cite, and believe USAID has a valuable role to play in 
helping to coordinate these initiatives.
    USAID has developed a very close working relationship with the 
entities you mention, and looks forward to coordinating efforts with 
various implementing partners. In the case of the Millennium Challenge 
Corporation, as a Board Member I will be directly involved in 
overseeing its operations. USAID is currently working closely with the 
MCC staff to develop a strong institutional linkage both in the United 
States and in the field.

                            SECURITY IN IRAQ

    Question. Mr. Natsios, when Congress was debating the Iraq 
supplemental last October, Ambassador Bremer stated that reconstruction 
efforts directly affect the safety of our troops. News reports indicate 
that the latest violence in Iraq has seriously hampered reconstruction 
efforts. Perhaps the best evidence of this is that only \1/9\ of the 
funds from the Iraq supplemental, passed 6 months ago, has been 
obligated and I suspect that far less than that has been actually 
expended. How seriously is the violence in Iraq impeding reconstruction 
efforts? Is this slow down in the reconstruction threatening the safety 
of our troops, as Ambassador Bremer suggested last fall?
    As we all know, USAID, as well as the Defense Department, relies 
heavily on contractors and NGOs to implement many of its programs. We 
all saw the tragic events in Falluja where American contractors were 
brutally murdered, leading to the standoff in that town. Isn't a major 
part of the problem in Iraq that the CPA cannot provide security for 
many contractors there? What is being done to improve the ability of 
contractors and NGOs to operate in Iraq?
    Answer. USAID has strict security guidelines for its staff and 
technical experts, and these guidelines have served us well. USAID's 
security officers coordinate daily with the security advisors of all of 
its implementing partners to ensure everyone has the most up-to-date 
information on the security environment to inform program decisions.
    Our work in Iraq has not stopped, despite the recent violence in 
some areas of Iraq. Where it is safe, our expatriates are on the job, 
and in almost every area, our Iraqi assistance staff is still working 
with their counterparts. Where the situation is unsafe, we have 
temporarily relocated some of our expatriate staff.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin

                               TERRORISM

    Question. Many have argued that especially since September 11, 
USAID needs to ensure that development assistance activities more 
directly complement the global war on terrorism. Through a variety of 
activities--basic education, health care, agriculture, expanding 
opportunities for women, job creation, micro-enterprise, promoting the 
rule of law--the United States can help counter conditions that give 
rise to terrorism. These programs and others like them have been core 
USAID priorities for many years, long before the terrorist attacks in 
the United States.
  --Given the requirement to augment American efforts to combat the 
        threat of terrorism, what changes have you made in designing 
        and implementing these activities so that they are more 
        effective in the fight against terrorism?
  --Is this a matter of simply spending more money on these critical 
        activities, or should the programs themselves be re-tooled and 
        re-focused in order to achieve the intended results?
  --What indicators will you most closely monitor in order to assess 
        the impact of development assistance and its contribution to 
        combating terrorism?
    Answer. The War on Terrorism has sharpened the focus of our 
development assistance programs. In addition to addressing the social 
and economic needs of countries which combat terrorism in the long 
term, USAID is also working with other U.S. government agencies to 
target our assistance on specific short-term programs in three areas: 
denying terrorist access to new recruits, funds, and sanctuary.
    To counter terrorist recruiting we are doing three things. First, 
in communities that have radical Islamic schools, we are supporting 
secular and moderate madrassas that provide an attractive alternative 
to radical schools. Second, we follow up with skills training for youth 
that gives them an opportunity for employment and a viable alternative 
to going to the terrorist training camps. Third, we couple this 
training with small enterprise development programs to provide 
employment and allow youth to make a legitimate contribution to their 
communities.
    USAID also supports programs aimed at denying terrorists resources, 
primarily from money laundering activities. To shut down this illegal 
flow of funds, USAID has provided hardware and technical assistance to 
the Financial Intelligence Units (FIU) of Central Banks in key 
financial hubs to prevent suspicious transactions that lead to money 
laundering operations. We have approved support to the Palestinian 
Monetary Authority to help set up their FIU with the intent of stopping 
the flow of illegal funds into the West Bank/Gaza region. We have 
supported similar programs in Indonesia and the Philippines. In 
conjunction with the support of the FIU we have enhanced our technical 
support for bank supervisors to focus on these same crimes.
    A third area of programs aims at denying sanctuary to terrorist 
training operations. USAID is working to strengthen weak governmental 
structures that might be prime targets for terrorists, as in 
Afghanistan where we have focused our assistance through the interim 
government to establish a stable national government. People need to 
have confidence that the government will provide the public services 
needed to recover, such as schools where children will not be subject 
to terrorist indoctrination and refugee resettlement and repatriation 
programs that will not be breeding ground for terrorists. To counter 
their attempts to use Muslim communities with weak governmental 
institutions as training camps, we target these communities for 
institutional reform programs for both government and NGOs.
    To monitor the impact of our counter-terrorism and development 
programs, we will use our normal performance indicators with specific 
additions tailored to counter-terrorism objectives. For instance, we 
will pay particular attention to high risk areas, such as closely 
monitoring the number of new students in secular or legitimate 
madrassas. We will also monitor attendance in skills training programs 
and the increase in employment in vulnerable sections of critical 
countries. In financial institutions, we will monitor the number of 
suspicious transactions investigated by the FIUs. We are also closely 
tracking the number of countries that implement counter terrorism laws 
and anti-money laundering laws. These and other indicators will provide 
a clear signal on the effectiveness of these counter terrorism 
programs.
    Question. Substantial sums of foreign aid resources are being 
directed at the so-called ``front-line'' states in the war on 
terrorism. With the exception of HIV/AIDS resources (which I support), 
funding for most other development aid activities in USAID's fiscal 
year 2005 budget proposal is either flat or reduced when compared with 
fiscal year 2004 budget levels.
  --Are you concerned that development priorities in countries not 
        directly related to counter-terrorism goals are being short-
        changed?
  --Some argue that unless a country is a strategic partner in the war 
        on terrorism or has a severe health crisis, the fiscal year 
        2005 foreign aid budget neglects them, even if assistance might 
        meet other important U.S. foreign aid objectives. How do you 
        respond to this criticism?
    Answer. What does an anti-terrorism program look like in a 
developing country? In addressing the root causes of terrorism, it 
would focus on developing respect for rule of law, through transparent 
and non corrupt practices; cutting off funding sources for terrorists 
by criminalizing money-laundering and prosecuting the offenders; 
providing options for legitimate ways for citizens to earn a living 
without fear of extortion; expanding education opportunities to reach 
the most disenfranchised groups to build hope for their own 
development; and building democracy and accountability within all 
elements of society. Not coincidentally, such programs also reflect the 
focus of USAID's development goals.
    Since its inception, USAID has been at the forefront of 
implementing programs that address the root causes of terrorism. While 
funding since September 11, 2001, has become more targeted with regard 
to correlating our programs with counter-terrorism programs, the nature 
of our work has not changed dramatically. Terrorist groups prey on the 
poor and weak countries as training grounds for their operations in 
other countries. USAID has both experience and expertise in developing 
effective programs to improve livelihoods of citizens in poor and weak 
countries, thereby eliminating the underlying conditions terrorist look 
to exploit. In this way, the goals of counter-terrorism and the goals 
of USAID are closely aligned and reinforce our national security goals.
    With the reality of funding constraints, allocation decisions are 
always a challenge. Thanks to the heightened emphasis the present 
Administration has placed on development as the third pillar of foreign 
policy, USAID has been able to expand its programs into countries of 
strategic importance to U.S. foreign policy. This expansion has come in 
addition to, rather than in replacement of, on-going programs in other 
needy countries.
    Question. In terms of the terrorist attacks that we have seen in 
recent months, the connection between failed states and the roots of 
terrorism appears to be more indirect than we used to believe. Instead 
of operatives coming out of places like Sudan and Afghanistan, for 
example, we seem to be witnessing the emergence of local terrorist 
organizations in states like Turkey and Spain taking up the goals or 
ideology of Al Qaeda.
  --How do you use foreign aid to fight an ideology that emerges in a 
        relatively wealthy state?
  --With this emerging successor generation of Al Qaeda-associated 
        operatives, from the perspective of counterterrorism, are we 
        missing the point in directing our resources toward so-called 
        front-line states? Where exactly is the ``front line''?
    Answer. The terrorist groups are primarily using poor and weak 
countries as training grounds for operations in other countries. 
Current terrorist groups have been able to link radical Islamic 
rhetoric with retribution for alleged grievances as a justification for 
violence. To win the ``war of ideas'' this linkage has to be broken and 
replaced with confidence in the law as a means to resolve grievances. 
USAID uses foreign aid to work on two fronts to achieve this objective. 
First, our Muslim Outreach and other democracy programs reinforce the 
principles of religious freedom and democratic governance, whether in 
``relatively wealthy'' or poor states. Secondly, we continue to 
encourage weak states to build stronger and more responsive 
institutions on the foundation of the rule-of-law. As one example, in 
response to terrorists' use of legitimate charities for funds, we are 
working to develop and pass anti-money laundering laws, detection by 
bank examiners, and the prosecution for these financial crimes through 
the courts. In addition, there are numerous other USG agencies with 
active counter-terrorism programs working in countries, particularly in 
the Middle East, where USAID does not have a presence.
    Front line countries are those countries easily exploited by 
terrorists, either for operational bases or for laundering money. The 
new generation of terrorists, regardless of where they come from, will 
continue to look for bases of operations, communication, and for 
financing. It is in these front line countries where we have the best 
chance of defeating terrorism.
    Question. What specifically would you say has been the effect of 
the war in Iraq on the roots of terrorism in the Middle East?
    In what demonstrable way is foreign aid to Iraq reducing the 
terrorist threat against the United States and its allies?
    Answer. The UNDP's ``2003 Arab Human Development'' Report 
identified lack of education and economic opportunities and a generally 
repressive environment as causes of the sense of hopelessness that 
leads to terrorism. The war in Iraq has overthrown an oppressive 
regime, enabling for the first time in decades citizens to have a 
greater voice in public dialogue, and participate more freely in 
political processes. Schools have been rehabilitated, allowing more 
children, especially girls, to return to school. In addition, over 
30,000 teachers have been trained in new teaching methods that enhance 
tolerance and respect for diversity in the classroom. Tens of thousands 
of jobs have been created for Iraqis, and extensive progress has been 
made in strengthening local government and the delivery of essential 
services to the local level.
    Lack of educational and economic opportunities and a generally 
repressive environment are major causes of the sense of hopelessness 
and disenfranchisement that leads to terrorism. Ill-educated, 
unemployed youth are a major demographic group in the Middle East and 
they provide a fertile field for terror groups. The solution is to 
provide the guidance and resources necessary to develop an educational 
system that gives a graduate the appropriate skills (including computer 
training) to be gainfully employed. Assistance to small and micro 
enterprises, including micro-credit, is crucial as small businesses 
provide a key opportunity for employment. A business-friendly policy 
environment must be developed to encourage foreign investment and 
expedite the development of local industries. In addition, democratic 
practices need to be supported, providing citizens with the opportunity 
to hold government officials accountable and to participate directly in 
the decision-making processes that affect their daily lives. All these 
are development activities that must be provided in order to reduce the 
growing terrorist threat.
    Question. If terrorists are increasingly using advanced 
technologies like the Internet to do such things as coordinate 
operations, find information about weapons of mass destruction, and 
recruit members, how are we ensuring that we provide foreign aid in 
such a way that we avoid enabling members of terrorist organizations to 
be more effective?
    Answer. Modern technology allows terrorists to plan and operate 
worldwide from the shadows. The Bali bombing was planned in Malaysia, 
and the explosives were purchased in the Philippines with funds 
siphoned off Islamic charities in the Middle East. This was all handled 
thought the internet. Today's terrorists are smart, technologically 
sophisticated, and linked worldwide.
    To beat these terrorists we must be smarter, more computer wise and 
better linked than they are. We must use technology to close-off their 
operating space, to push them out of the shadows. We are doing this by 
sharing data among nations, by equipping our partners with IT equipment 
that works together, and being on top of information that can lead to 
terrorist plots. As one example, USAID is currently working with 
Central Banks in several countries to spot money laundering activities, 
by providing the computer equipment so Bank Financial Intelligent Units 
can process suspicious transaction reports quickly, identify who is 
conducting financial crimes, and build the body of evidence necessary 
for conviction.
    Terrorist are quick to convey information from one country to 
another through modern communications. The law enforcement community is 
getting even better and faster at communicating information, using 
detection techniques, and connecting terrorist data bases. USAID is 
working with the newly established, Terrorist Threat Integration 
Center, which acts as a hub for information provided by all sources on 
terrorist activities, known or suspected terrorist individuals or 
organizations, and other related data---even the most remote data. This 
allows all the different organizations to have instant, on-line access 
to the most recent information on the terrorist activities.

                            MICROENTERPRISE

    Question. USAID has been a global leader in the area of 
microenterprise, but we need to coordinate our efforts with other major 
players--particularly the World Bank and the United Nations Development 
Program (UNDP). The Microenterprise for Self Reliance Act of 2000 
directs the administrator of USAID to ``seek to support and strengthen 
the effectiveness of microfinance activities in the United Nations 
agencies, such as the UNDP, which have provided key leadership in 
developing the microenterprise sector.''
  --What steps have you taken to strengthen the effectiveness of 
        microfinance activities in the UNDP?
    Answer. USAID and UNDP are both active members of the Consultative 
Group to Assist the Poor (CGAP), the 28-donor coordinating body for 
microfinance. USAID financial and technical support has strengthened 
donors including UNDP in a number of ways. Over the past 18 months, for 
example, CGAP has coordinated a ``peer review'' process to increase aid 
effectiveness in microfinance. Seventeen donors, including USAID and 
UNDP, have been assessed through this process. In each case, the peer 
review team has identified very specific areas for improvement and has 
proposed steps to strengthen the strategic clarity, staffing, 
instruments, knowledge management, and accountability of the 
microfinance activities of the agency being reviewed. The findings have 
been shared with other donors. UNDP has taken a number of concrete 
steps to respond to the findings, and Mark Malloch Brown, Administrator 
of UNDP, provides leadership to the microfinance peer review 
initiative.
    USAID has also worked with other CGAP members to develop stronger 
donor practices, including the recent drafting of core principles for 
microfinance that we expect to be endorsed by all CGAP members. At the 
last annual meeting, the CGAP member donors endorsed new requirements 
for membership, including comprehensive reporting of microfinance 
activities and results. We have also used CGAP to collaborate on 
developing new tools for microfinance donors, such as common 
performance measures. USAID, UNDP and CGAP took the lead in developing 
specialized microfinance training for donor staff, and many staff from 
UNDP and other donors have benefited from the week-long course.
    USAID also takes responsibility for developing knowledge and ``how-
to'' materials in specific areas, such as post-conflict microfinance 
and rural and agricultural finance. We invite participation from other 
donors in this work. Next month, for example, we will convene a donor 
forum on recent innovations in rural finance and their implications for 
the donor community. UNDP will, of course, be invited to participate. 
Finally, in the field USAID is often involved with UNDP in in-country 
donor coordination efforts in the microfinance arena.
    Question. I am concerned that the UNDP has not joined USAID's 
efforts (required by Public Law 108-31) to develop cost-effective 
poverty-assessment tools to identify the very poor--those with an 
annual income 50 percent or more below the poverty line as established 
by the government of their country--and to ensure that substantial 
microenterprise resources are directed to them.
  --Will you work with Congress to encourage UNDP to expand its 
        microenterprise efforts for the very poor and to use the 
        poverty measurement methods that USAID is developing so that we 
        can be sure that these funds are reaching the people who need 
        them the most?
  --What specific efforts do you believe will be effective in 
        convincing UNDP representatives of the importance of targeting 
        to the very poor?
    Answer. USAID has invited the Consultative Group to Assist the 
Poor's (CGAP) technical and financial collaboration in developing the 
poverty assessment tools, as a means to ensure that the broader donor 
community is aware of and involved in this important work. An ambitious 
work plan is underway to have the tools designed, field-tested and 
ready for implementation by USAID in October 2005. Over the coming 
year, we will be testing preliminary tools in the field with diverse 
partners. This should begin to provide evidence of the value and 
practicality of the USAID tools for other donors. We would welcome 
closer involvement of UNDP and other donors in this work, through CGAP 
or directly. We expect that the tools will prove sufficiently valuable 
and cost-effective to suggest ways for donors and practitioners to 
better serve very poor clients.

                        BASIC EDUCATION FUNDING

    Question. Mr. Natsios, last December, 18 Senators and 63 Members of 
the House wrote to the President urging him to use the G-8 Summit this 
June as a venue to launch a significant U.S. initiative on basic 
education and galvanize the world community to achieve the goal of 
education for all by 2015. Basic education is important to our 
strategic and developmental interests around the world. Our National 
Security Strategy recognizes the link between poor education and 
reduced security. Unfortunately, the Administration's budget request 
would cut basic education support by $26 million under Development 
Assistance.
  --Can you explain the proposed funding cut for basic education in 
        light of our strategic objectives?
    Answer. Education is a priority issue for this administration; it 
is an important long-term investment in sustaining democracies, 
improving health, increasing per capita income and conserving the 
environment. Economic growth in developing countries requires creating 
a skilled workforce. President Bush has helped to give education a 
strong profile in the G8 in recent years, and work is being carried 
forward actively both multilaterally and bilaterally. We are working 
internationally to support countries' efforts to improve their 
education programs and to produce measurable results on enrollment and 
educational achievement.
    Since the submission of the USAID fiscal year 2005 Congressional 
Budget Justification, projections on basic education levels have 
changed somewhat for both fiscal year 2004 and fiscal year 2005. While 
there is a $22 million reduction in Basic Education funded by the 
Development Assistance (DA) account from fiscal year 2004 to fiscal 
year 2005 (from $234 million to $212 million), the currently projected 
total for basic education from all accounts for each of fiscal year 
2004 and fiscal year 2005 is $334 million. The Administration intends 
to continue to maintain its strong interests in this area. In fact, the 
U.S. support for basic education from all accounts has more than 
doubled from fiscal year 2001 to fiscal year 2004, in recognition of 
its importance to giving people the tools to take part in free and 
prosperous societies.

                          COMBATTING HIV/AIDS

    Question. There is strong evidence that keeping children in 
school--especially girls who are much more susceptible to the AIDS 
virus--reduces the chance that they will become infected. A World Bank 
study reports that in Zimbabwe, girls who received primary and some 
secondary education had lower HIV infection rates--a trend that 
extended into early adulthood. In Swaziland, 70 percent of secondary 
school age adolescents attending school are not sexually active, while 
70 percent of out-of-school youth in the same age group are sexually 
active. Despite this, the focus has been on using schools as a venue 
for teaching about AIDS, rather than recognizing education as part of 
the fight against AIDS. I am pleased to see the Administration's 
recognition of the importance of education for AIDS orphans and 
vulnerable children, but given the value of education as the only 
vaccine against AIDS that we currently have:
  --Shouldn't the United States have a coordinated strategy on basic 
        education and HIV/AIDS prevention?
    Answer. Basic education is a priority for the U.S. Agency for 
International Development. It is the linchpin for success in many of 
our development activities, including family planning, child health and 
HIV/AIDS.
    In order to be successful in the fight against HIV/AIDS, it is 
essential that we wrap all of our development programs around HIV/AIDS 
programs. One of the first things I did when I became administrator of 
USAID was to issue a cable urging all of our missions to do this. While 
USAID has a large HIV/AIDS prevention program, we also have programs in 
education, agriculture and other sectors. Our missions have been 
working to integrate AIDS prevention messages into all of the other 
sectors.
    Question. Funds from many sources are now available to implement 
both treatment and prevention programs to combat AIDS, TB, and Malaria. 
The influx of funds is still not commensurate with the extent of the 
problem, but the increase in partners is welcome and needed. I would 
like a clarification of how USAID is making sure its work is 
complementary to that of the President's Emergency Plan for AIDS, 
Relief (PEPFAR), the Global Fund to Fight AIDS, Tuberculosis and 
Malaria (Global Fund), the WHO 35 Initiative, the World Bank, and 
other programs during the scale-up that is occurring on the ground.
  --How are staff coordinating on the ground with other donors?
  --What are you doing to improve the effectiveness of USAID and other 
        donor programs?
  --I envision a sea of paperwork for a country with 30-40 different 
        donors. What procedures have you put in place to limit 
        transaction costs and improve efficiencies relative to other 
        donors?
    Answer. On April 25, the U.S. Government convened a meeting, along 
with UNAIDS and the United Kingdom, to address this very topic. The 
meeting ended with a pledge that countries will have one agreed HIV/
AIDS Action Framework that provides the basis for coordinating the work 
of all partners; one national AIDS authority, with a broad-based 
multisectoral mandate; and one agreed country-level monitoring and 
evaluation system.
    These principles will allow donors to achieve the most effective 
and efficient use of resources, and to ensure rapid action and results-
based management.
    This is a goal that USAID has been working toward for long time. 
USAID staff have been participating for several years in a working 
group with many other international donors to set up standardized 
monitoring and evaluation indicators used by all donors.
    Question. In a press release of April 13, 2004, USAID announced the 
first round of grants made under the President's Emergency Plan for 
AIDS Relief (PEPFAR) with fiscal year 2004 funding. Five grants were 
announced for projects in just some of the 14 countries eligible for 
PEPFAR funding, totaling less than $35 million. Only three of these 
grants--totaling just $18 million were directed to Orphans and 
Vulnerable Children (OVC) programs. Not one of these grants exceeded $7 
million, even though all were for efforts in multiple countries. Given 
the magnitude of the orphan problem, and the grave consequences it has 
for the children, their families and communities, and for their 
countries, these efforts seems far too tentative and too limited, far 
smaller than the effort anticipated by Congress in allocating 10 
percent of fiscal year 2004 HIV/AIDS funds for OVC programs.
    While I compliment USAID for recognizing the importance of OVC 
programs in assuring the long-term economic and social development of 
poor countries, I am concerned that our financial support to date is 
too limited to effectively address the needs of the rapidly growing 
numbers of orphans and other children affected by AIDS.
  --Can you tell me how much of the fiscal year 2004 appropriation for 
        HIV/AIDS has in fact been committed to date for this purpose 
        and how much will be committed in fiscal year 2005?
  --Can you assure me that fully 10 percent of the 2004 appropriations 
        will be dedicated to this critical problem and that funding for 
        OVC programs will expand significantly from what appears to be 
        a slow and tentative beginning?
    Answer. In fiscal year 2004, the U.S. Government has allocated $50 
million, or 6 percent of the HIV/AIDS budget, to programs for orphans 
and vulnerable children. Levels for fiscal year 2005 are not available 
at this point.
    USAID has recognized the importance of funding programs to support 
children affected by AIDS for the past few years. Our programs in this 
area are beginning to grow significantly under the President's 
Emergency Plan for AIDS Relief. As you mentioned, grants for orphans 
and vulnerable children were some of the first announced under the 
Emergency Plan. These grants will provide resources to assist in the 
care of about 60,000 additional orphans in the Emergency Plan's 14 
focus countries in Africa and the Caribbean. Approaches to care 
services will include providing critical social services, scaling up 
basic community-care packages of preventive treatment and safe water, 
as well as HIV/AIDS prevention education.
    Prior to the implementation of the Emergency Plan, as of six months 
ago, USAID was funding 99 programs in 25 countries to specifically 
respond to the unique issues facing children affected by AIDS. In 
addition, USAID funds a consortium of groups who are working together 
as the ``Hope for Africa's Children Initiative.''
    Question. The HIV/AIDS pandemic has had an enormous impact on the 
world's youth. To date, 13-14 million children have been orphaned by 
AIDS, and that number is expected to reach more than 25 million by 
2010. This virtual tsunami' of orphans in sub-Saharan Africa will 
spread to new countries in Africa and to Asia as death rates from AIDS 
rise in those regions.
  --Within PEPFAR and other programs, what are you currently doing to 
        scale up efforts regarding AIDS treatment, health care and 
        getting these children into school?
    Answer. Under the President's Emergency Plan for AIDS Relief, 
caring for children affected by AIDS is one of the top priorities. 
While USAID has been working in this area for several years, we have 
recently been able to significantly scale-up our programs. We recently 
entered into agreements with the World Food Program and a consortium of 
organizations called ``Hope for Africa's Children Initiative'' to 
address issue specific to children affected by AIDS.
    In addition, the first round of grants USAID gave under the 
Emergency Plan were aimed at orphans and youth. Grants were given to 
five organizations for their work in 14 Emergency Plan focus countries 
to support children affected by AIDS and for abstinence and behavior 
change prevention programs targeted at youth.
    These grants will provide resources to assist in the care of about 
60,000 additional orphans in the Plan's 14 focus countries in Africa 
and the Caribbean. In addition, prevention through abstinence messages 
will reach about 500,000 additional young people in the Plan's 14 focus 
countries through programs like World Relief and the American Red 
Cross's Together We Can. USAID country missions also will receive 
additional dollars for orphans and youth upon the award of the 
remainder of the fiscal year 2004 President's Emergency Plan dollars.
    Question. The President's initiative on global AIDS includes a 
commitment to put two million people on life-saving antiretroviral 
treatment.
  --How many AIDS patients within all of our AIDS efforts are currently 
        under treatment?
  --How many mothers have actually received treatment to reduce mother-
        to-child transmission?
  --What is USAID doing to scale up the numbers treated through your 
        agency in the coming year?
    Answer. Treating two million people living with HIV/AIDS is the 
cornerstone of the President's Emergency Plan for AIDS Relief. With the 
first round of funds, an additional 50,000 people living with HIV/AIDS 
in the 14 focus countries will begin to receive anti-retroviral 
treatment, which will nearly double the number of people who are 
currently receiving treatment in all of sub-Saharan Africa. Today, 
activities have been approved for anti-retroviral (ARV) treatment in 
Kenya, Nigeria, and Zambia, and patients are receiving treatment in 
South Africa and Uganda because of the Emergency Plan.
    The first complete set of counts of patients served will be sent by 
U.S. Government country missions to headquarters early next Fall. As of 
March 31, 659,500 women have received services at ante-natal clinics 
with 76,000 women receiving a complete course of ARV prophylaxis to 
prevent mother-to-child transmission.
    USAID is working in a variety of ways to scale-up the numbers of 
people receiving ARV treatment. For example, we help developing 
countries establish effective and efficient supply chains, as a 
continuous, reliable flow of commodities is essential to ARV treatment. 
We also provide funding to ensure that health systems within developing 
countries are available to implement treatment programs.

                              TUBERCULOSIS

    Question. Tuberculosis is the greatest curable infectious killer on 
the planet and the biggest killer of people with HIV. Treating TB in 
people with HIV can extend their lives from weeks to years. I am very 
concerned that the President's 2005 budget actually cuts TB and malaria 
funding by some $46 million. And the President's AIDS initiative fails 
to focus on expanding TB treatment as the most important thing we can 
do right now to keep people with AIDS alive and the best way to 
identify those with AIDS who are candidates for anti-retrovirals.
    I was just in India where TB is currently a far greater problem 
than HIV--though AIDS is rapidly catching up--and a new WHO report has 
shown that parts of the former Soviet Union and Eastern Europe have 
rates of dangerous drug resistant TB 10 times the global average. TB 
rates have skyrocketed in Africa in conjunction with HIV, yet only one 
in three people with HIV in Africa who are sick with TB even have 
access to basic life-saving TB treatment. The cuts in TB funding are 
short-sighted; TB efforts should be expanded. We are missing the boat 
on this issue--at our own risk.
  --Will you push to expand overall USAID funding to fight TB to our 
        fair share of the global effort? (The United States is 
        currently investing about $175M in TB from all sources 
        including our contribution to the Global Fund.)
  --Will you ensure that the USAID makes it a priority to expand access 
        to TB treatment for all HIV patients with TB and link TB 
        programs to voluntary counseling and testing for HIV?
    Answer. Outside of HIV/AIDS, tuberculosis (TB) and malaria are our 
top priorities for infectious diseases. USAID is the largest bilateral 
donor providing support to the global effort to fight TB. Our total 
fiscal year 2004 budget (all accounts) for TB programs worldwide is $82 
million. This level has increased dramatically over the last several 
years, from just over $20 million in 2000. In addition, as you mention, 
the Global Fund to Fight AIDS, TB and Malaria supports grants for TB, 
and the USG is the largest contributor.
    In the fiscal year 2005 budget, we did have to cut our request for 
infectious disease funding overall to stay within our budget 
parameters. We will do everything we can to protect our core TB 
programs. Overall in TB, our priority is to expand and strengthen 
implementation of the WHO recommended DOTS (Directly Observed 
Treatments Short-course) strategy--which is the best means for getting 
effective TB treatment to patients. In addition, USAID is supporting 
critical research to identify better diagnostic methods, better and 
shorter treatment regimens and new approaches to improve program 
performance.
    With regard to TB and HIV/AIDS, we would strongly agree with the 
points you raised on the critical importance of getting access to TB 
treatment to those infected by HIV/AIDS. USAID is a leader in 
expanding, strengthening and testing approaches to improve the care of 
patients co-infected with TB and HIV/AIDS. One of the criteria for 
selection of our priority countries for TB is the prevalence of HIV. As 
such, we are supporting TB programs in many countries that have a heavy 
burden of both diseases such as South Africa, Kenya, Uganda, Ethiopia, 
Nigeria, Cambodia, and Haiti, as well as in countries such as Russia 
and India where TB is a serious problem and where HIV/AIDS is on the 
rise. In these and other countries, we need to expand access to DOTS in 
the general population, since many co-infected patients seek TB care 
without even knowing their HIV status.
    In addition, USAID supports country-level activities that 
specifically address TB-HIV/AIDS co-infection in Ethiopia, South 
Africa, Kenya, Malawi, Mozambique, Tanzania, Uganda and Zambia. These 
activities use HIV counseling and testing as an entry point to a 
package of prevention, care and support for those patients with 
suspected TB and/or HIV/AIDS.
    USAID also supports operations research to test approaches to 
improve identification and care of patients co-infected with TB and 
HIV/AIDS.
    Finally, TB technical advisors participated in the review of 
country plans to the President's Emergency Plan for AIDS Relief. While 
finalization of these plans is pending, TB-HIV/AIDS co-infection was 
particularly emphasized in the plans for Ethiopia, Mozambique, Nigeria, 
Tanzania, Rwanda, and South Africa.

                         FEMALE GENITAL CUTTING

    Question. It is my understanding that USAID is developing a 
strategy for eliminating female genital cutting around the world. I 
would like to call to your attention the work of the group Tostan in 
Senegal, which has impressed observers by inspiring the mass 
abandonment of female genital cutting in more than 1,200 villages since 
1997. This kind of extraordinary progress should be encouraged.
  --What is the timetable for the completion of USAID's strategy?
  --What is the likely role of multi-dimensional programs such as 
        Tostan in that strategy?
  --What is your sense of whether it might be possible to begin 
        supporting effective programs such as Tostan even before the 
        strategy is completed?
    Answer. USAID will complete its FGC Abandonment Strategy and 
implementation plan by early summer 2004.
    Programs such as Tostan are currently integral to USAID's work.
    USAID incorporated eradication of FGC into its development agenda 
and adopted a policy on FGC in September 2000. To integrate this policy 
into programs and strategies, USAID:
  --Supports efforts by indigenous NGOs, women's groups, community 
        leaders, and faith-based groups to develop eradication 
        activities that are culturally appropriate and that reach men 
        and boys as well as women and girls.
  --Works in partnership with indigenous groups at the community level, 
        as well as with global and national policymakers, to reduce 
        demand by promoting broader education and disseminating 
        information on the harmful effects of FGC.
  --Collaborates with other donors and activist groups to develop a 
        framework for research and advocacy and to coordinate efforts, 
        share lessons learned, and stimulate public understanding of 
        FGC as a health-damaging practice and a violation of human 
        rights.
    USAID currently funds Tostan projects in Senegal, Guinea, Burkina 
Faso, and Mali.
    In addition to our work with Tostan, we are involved with other, 
comparable organizations. For example, in Nigeria, USAID's local 
partners include the Women's Lawyers Association and Women's 
Journalists Association. These groups work with us in programs 
involving community media and traditional media advocacy to change 
social norms regarding FGC.
    In Mali, we worked with an important women's Islamic group which 
reversed a previous stance when they affirmed that female circumcision 
is optional; that the practice is not mandatory under Islam.
                                 ______
                                 

             Questions Submitted to Ambassador Cofer Black

             Questions Submitted by Senator Mitch McConnell

    Question. Which terrorist groups are operating in Iraq, and do they 
receive support from Iraq's neighbors--if so, what kind of support?
    Answer. Terrorist groups operating or present in Iraq as of May 
2004 which have been designated by the United States as Foreign 
Terrorist Organizations (FTO) or under the Terrorist Exclusion List 
(TEL) include Ansar al-Islam/Ansar al-Sunna, and the Mujahedin e-Khalq 
(MEK). However, many individuals or entities with links to al-Qaeda, 
former regime elements, or other foreign terrorists or organizations, 
such as the network led by Abu Mus'ab al-Zarqawi or the Islamic Army in 
Iraq, have claimed responsibility for terrorist actions in Iraq, such 
as the August 2003 bombing of the UNHCR Headquarters. In addition to 
our extensive security and policing efforts within Iraq, we are also 
working with Iraq's neighbors, where possible, to track and cut off the 
cross-border flow of persons, weapons and funding to the terrorists in 
Iraq.
    Question. Has the Liberation of Iraq had an impact on the 
advancement of freedom in the region--such as increased calls for 
reform in Syria or Libya's recent opening to the West?
    Answer. U.S. resolve to see international law and more than a dozen 
U.N. Security Council resolutions upheld in Iraq clearly had a profound 
impact on most of the region, including on the historic decision by 
Libya's Muammar Qadhafi to give up his weapons of mass destruction and 
non-MTCR compliant missiles.
    Syria, however, remains a closed, autocratic state. We remain 
concerned about the repression of Syrian citizens, including religious 
and ethnic minorities. Given the nature of the Syrian regime, it is 
very difficult to gauge whether calls for reform from the Syrian public 
have increased over the past eighteen months. Syria also maintains a 
significant military and intelligence presence in Lebanon and continues 
to interfere in Lebanon's political life.
    In Libya's case, other factors also played a role, including a 
tough bilateral sanctions regime, years of sustained diplomacy, and 
United States and UK intelligence efforts to uncover the details of 
Libya's WMD efforts. It is also important to note that the courage and 
tenacity displayed by the families of the Pan Am 103 victims helped to 
persuade Libya to finally address the U.N. Security Council demands 
related to Pan Am 103, including transfer of the two suspects and 
renunciation of terrorism.
    Question. What is the nexus between the growing illicit narcotics 
trade and terrorism in Afghanistan?
    Answer. We do not know to what extent al-Qaida profits from the 
drug trade in Afghanistan. U.S. Government agencies have anecdotal 
reports of drug trafficking by elements aligned with al-Qaida, but 
there is no evidence that such activities are centrally directed. Al-
Qaida continues to rely on private donations and funding sources other 
than narco-trafficking for most of its income, and there is no 
corroborated information in U.S. Government holdings to suggest that 
drug trafficking provides a significant percentage of al-Qaida's 
income. We remain deeply concerned about the possibility that 
substantial drug profits might flow to al-Qaida, however, and continue 
to be vigilant for signs that this is occurring.
    The involvement of anti-government Afghan extremists in the drug 
trade is clearer. U.S. troops in 2002 raided a heroin lab in Nangarhar 
Province linked to the Hizb-I Islami Gulbuddin and officials from the 
United Nations and the Afghan Government report that the Taliban earns 
money from the heroin trade. Based on the information available, 
however, we cannot quantify how much these groups earn from the drug 
trade, nor can we determine what percentage of their overall funding 
comes from drugs.
    In addition, extremists and terrorists in Afghanistan may sometimes 
turn to the same network of professional smugglers used by drug 
traffickers for help moving personnel, material, and money.
    Question. Is this illicit trade undermining reconstruction efforts, 
and what impact might the drug trade have in the country's future 
development?
    Answer. Disrupting the growth of the narcotics trade in Afghanistan 
continues to be a focus of international efforts. The United States has 
developed our counternarcotics program in close consultation with the 
United Kingdom and is coordinating with the UK in seeking 
counternarcotics assistance from the G-8, EU, other major donors, and 
some of Afghanistan's neighbors. A number of donors, including NATO 
Allies, have already contributed to broader law enforcement, border 
security, criminal justice sector, alternative development, and demand 
reduction programs.
    If narcotics cultivation and trafficking were to continue unabated 
in Afghanistan, it would threaten all of the gains that have been made 
there over the past three years. Among other negative effects, a 
narcotics economy corrupts government officials, damages Afghanistan's 
relationship with the international community, makes criminals out of 
much of the Afghan public, makes addicts out of the youth, and stunts 
the country's legitimate economic growth. If the problem is not 
addressed, and the Afghanistan narcotics trade continues to rise at its 
current explosive rate, Afghanistan risks becoming a failed state.
    Question. Are Afghan officials involved in this trade?
    Answer. Given the pervasiveness of the drug trade in Afghanistan--
some estimates put it as high as 60 percent of the country's GDP--there 
is little doubt that Afghan officials are involved. There is anecdotal 
evidence of drug-related corruption within the Afghan police, the 
military, and the civilian government at national and provincial 
levels. President Karzai is keenly aware of the danger of government 
corruption and appears to be appointing high-level officials who he 
views as honest and trustworthy.
    Question. What role does the U.S. military play in counterdrug 
efforts in Afghanistan?
    Answer. As of May 2004, the U.S. military in Afghanistan has 
resisted active engagement in counternarcotics, out of concern that 
such assistance might turn the Afghan populace against U.S. forces. The 
military has agreed, however, to destroy drug-related facilities if 
found in the course of patrolling operations.
    Question. What threat does Afghan Islamic Fundamentalism pose to 
reconstruction efforts in Afghanistan?
    Answer. Islamic fundamentalism itself does not necessarily threaten 
reconstruction efforts in Afghanistan. Afghanistan is a deeply 
religious Islamic country, and that fact alone does not hamper our work 
there. In fact, many very religious Afghans are supporting our efforts. 
What does threaten our efforts are continued insurgent attacks--whether 
motivated by religion, politics, or other factors. Attacks on 
reconstruction workers and humanitarian organizations threaten to 
significantly slow our progress by increasing security concerns and 
costs.
    Even in the face of danger, our reconstruction efforts continue. As 
Coalition forces continue their fight against insurgents, we expect 
that the pace of insurgent attacks will slow.
    Question. As terrorist attacks have already struck the Philippines, 
Indonesia and Thailand, do you agree that the next major front in this 
war is Southeast Asia?
    Answer. As we have seen all too recently and tragically around the 
world, the threat from terrorism persists despite our best efforts and 
the progress we have made. Southeast Asia in particular remains an 
attractive theater of operations for regional terrorist groups such as 
Jemaah Islamiyah (JI). The governments in Southeast Asia continue to be 
reliable partners in the war on terrorism, but they face tremendous 
challenges to dealing with the terrorist threat. Most worrisome is the 
disparity between the level of threat--future attacks are a certainty--
and the capacity of host governments to deter attacks, disrupt 
terrorist activity, and respond to incidents. The USG remains committed 
to cooperating closely with partner countries in Southeast Asia to help 
them develop and improve the law enforcement, finance and other tools 
necessary to combat terrorism.
    Question. How cooperative are governments in that region on 
terrorism--particularly Indonesia, Thailand and the Philippines? Do 
they understand the imminent threat regional terrorists pose?
    Answer. The United States enjoys excellent CT cooperation with 
Indonesia, Thailand, and the Philippines. These governments take 
counterterrorism very seriously. The October 2002 Bali bombings 
demonstrated the threat that terrorism poses not only to their own 
citizens and government, but also to their economies. Since Bali, the 
Indonesian government has arrested over 130 Jemaah Islamiyah (JI) 
suspects and convicted over 100 JI and affiliated terrorists. In 2003, 
Thai authorities captured Hambali, JI's operation chief and Al-Qaeda 
point man in Southeast Asia, a significant blow to the organization and 
an important victory in the war against terrorism. In the Philippines, 
we have seen success as the Philippine National Police have thwarted 
plots in Manila and arrested suspected members of JI and the Abu Sayyaf 
Group.
    Question. Do you agree with Philippine President Arroyo's recent 
assertion that the Al-Qaeda-linked Abu Sayyaf terrorist group is a 
``spent force''?
    Answer. The Philippine government, working in part with the USG, 
has had some success against the leadership of the Abu Sayyaf Group 
(ASG). Several of the ASG terrorists involved in the kidnapping of 
Americans Martin and Gracia Burnham and Guillermo Sobero, for example, 
have been captured or killed. We are assisting Manila in everyway we 
can to keep the pressure on ASG. The ASG remains capable of launching 
terrorist attacks, however, as demonstrated by their responsibility for 
the February 2004 Superferry 14 bombing outside Manila which, killed 
over 100 people.
    Question. What should U.S. policy on terrorism be in those 
countries where repressive governments terrorize their own citizens, 
such as Cambodia?
    Answer. Comprehensive, effective U.S. counterterrorism policy is 
inseparable from overall foreign policy goals that advance good 
governance, human rights, promotion of the rule of law and promotion of 
economic and commercial development. We advance USG counterterrorism 
efforts by emphasizing these goals to our international partners on a 
bilateral basis and in various multilateral fora.
    In Cambodia, we are working with the government and civil society 
to implement good governance, promote human rights and greater respect 
for the rule of law and increase accountability. We have provided some 
limited counter-terrorism training to mid-level Cambodian officials 
through programs offered by the International Law Enforcement Academy 
(ILEA) in Bangkok.
    Question. What is your reaction to the recent news that Cambodia is 
re-opening Saudi charities shut down last year?
    Answer. On December 29, 2004, a Cambodian court convicted two Thai 
nationals and one Cambodian as accessories in ``attempted premeditated 
murder with the goal of terrorism'' for their role in supporting Jemaah 
Islamiyah (JI) operations chief Hambali while he was resident in 
Cambodia. They were sentenced to life imprisonment. A fourth 
individual, an Egyptian national, was acquitted. Hambali and two other 
JI operatives were convicted in absentia and given life sentences.
    The trial arose from the May 28, 2003, arrests of foreign members 
of the Umm al-Qura group, a Saudi-based charity that had been 
establishing schools for Cambodia's Cham minority community, an 
indigenous Muslim population. These convictions are a signal to 
terrorists that the Cambodian government is prepared to take effective 
action against those planning terrorist activities inside Cambodia.
    The Saudi-based Umm al-Qura charity has not resumed activities in 
Cambodia. The Mufti of Cambodia, Sos Kamry, has opened the Cambodian 
Islamic Center on the site of the former Umm al-Qura school. However, 
it has no relationship with the Saudi charity. Embassy personnel have 
visited the Cambodian Islamic Center on several occasions and have been 
warmly received by staff and students there.
    Question. Are there any links between Islamic terrorist 
organizations or individuals and Cambodian government officials?
    Answer. There is no evidence of links between Islamic terrorist 
organizations or individuals and the Cambodian government. The 
Cambodian government has taken decisive action against suspected 
Islamic extremist organizations and individuals in the closing the Umm 
Al-Qura School in May 2003 and deportation of many of its foreign 
staff. In December 2004, a Cambodian court convicted five individuals 
of plotting terrorist attacks, including the conviction in absentia of 
Jemaah Islamiyah operations chief Hambali.
    In March 2004 the Cambodian government demonstrated its commitment 
to combating terrorism by destroying with U.S. assistance its stocks of 
man-portable air defense systems (MANPADS).
    Question. How cooperative has China been in the war on terrorism, 
and what threat do indigenous Islamic fundamentalists in China pose to 
the Middle Kingdom and the region?
    Answer. United States-China counterterrorism cooperation is 
positive. We have been sharing information and consulting with each 
other to prevent terrorist incidents.
    The PRC is concerned about links between Xinjiang Uighur Autonomous 
Region separatist groups (composed mainly of ethnic Uighurs, but also 
other Muslims) and Islamic fundamentalists in Central Asia. There have 
been terrorist incidents in China, and there is evidence that some 
ethnic Uighurs have been trained in Afghanistan by Al-Qaeda. In 
September 2003, after careful review of all available information, the 
United States designated the East Turkistan Islamic Movement a 
terrorist organization under Executive order 13224. We have made clear 
to the Chinese, however, that counterterrorism cannot be used as an 
excuse to suppress peaceful dissent or the legitimate expression of 
political and religious views.
    Question. How do you explain Thai Prime Minister Thaksin's initial 
slow and ineffective response to terrorism in southern Thailand?
    Answer. The violence in southern Thailand appears to be an 
insurgency driven by historical separatist sentiment. We have not yet 
seen evidence of outside terrorist direction, although insurgents 
sympathize with global Muslim causes. In response to the ongoing 
violence in southern Thailand, the Thai government has increased the 
number of security personnel operating in southern Thailand and has 
announced development and educational programs to address long-standing 
tensions in the region.
    The Thai government remains a stalwart partner in the war on 
terrorism. In 2003, Thai authorities captured Hambali, Jemaah 
Islamiyah's operation chief and Al-Qaeda point man in Southeast Asia, a 
significant blow to JI. We are working with the Thai government to stop 
terrorists at border entry points by providing training and computer 
equipment to establish a name-check database called the Terrorist 
Interdiction Program. Through centers like the U.S.-Thailand 
International Law Enforcement Academy in Bangkok, we are providing 
counterterrorism training to law enforcement officers throughout the 
region.
    Question. How extensive are the activities of Saudi charities in 
the region, and do we know with any accuracy how many Islamic students 
from the region have been sent to Saudi Arabia or Pakistan for 
educational purposes?
    Answer. We have reports that Saudi charities are active in the 
region, particularly in Indonesia, as well as in southern Thailand and 
Cambodia, and we continue to monitor this situation. Many of these 
charities concentrate on community development projects such as 
building schools, but some contribute to anti-Western sentiments and 
espouse Islamic extremism. We are aware that Islamic students from the 
region do attend schools in Saudi Arabia and possibly Pakistan, but 
governments in the region have not been able to provide us with 
accurate counts of the number of students.
    Question. What connection exists between organized crime and 
regional terrorist groups in Southeast Asia?
    Answer. There is evidence that extremists and terrorists have taken 
advantage of the same network of professional smugglers used by drug 
traffickers for help moving personnel, material, and money. U.S. 
Government agencies have anecdotal reports of drug trafficking by 
elements aligned with al-Qaeda, but the evidence suggests that this 
activity reflects individuals' initiative and is not centrally directed 
by the organization. Al-Qaeda and regional terrorist groups in 
Southeast Asia continue to rely on private donations and funding 
sources, rather than trafficking for most of their income. We remain 
deeply concerned about the possibility that substantial drug profits 
might flow to al-Qaida and regional terrorist groups, however, and 
continue to be vigilant for signs that this is occurring. Kidnapping 
for ransom is another funding source, particularly for the Abu Sayyaf 
Group in the southern Philippines.
    Question. To what extent does the United States have a complete and 
accurate picture of terrorist groups operating in Indonesia, 
particularly Jemaah Islamiyah (JI)?
    Answer. Our picture of terrorist groups in Indonesia, particularly 
Jemaah Islamiyah (JI), is continually evolving. We have developed over 
time a clearer understanding of the senior leadership of JI, 
connections with other groups, JI's regional structure, and their 
training. However, we are aggressively seeking additional information 
about the group, in particular actionable intelligence that will enable 
us to disrupt future operations and track down JI leaders.
    Question. How would you characterize Indonesia's cooperation with 
the United States in the war on terrorism?
    Answer. Indonesia's counterterrorism cooperation with the United 
States is strong and getting stronger. The Indonesian government has 
taken decisive action against terrorism since the October 2002 Bali 
bombing; to date, they have arrested over 130 Jemaah Islamiyah (JI) 
suspects and convicted over 100 JI and affiliated terrorists. We 
continue to share relevant threat information and work together to 
prevent future attacks. The United States, along with other donor 
states such as Australia and members of the G-8, are working together 
to help Indonesia build its law enforcement and other capabilities to 
combat terrorism.
    Question. What are JI's funding sources?
    Answer. We know that much of the funding for terrorist groups in 
Southeast Asia is funneled through cash couriers, making it extremely 
difficult to track. In order to get into specific sources of funding, 
however, I would have to answer the question in a classified setting.
    Question. What role has Saudi Arabia (particularly Saudi charities) 
played in promoting Islamic extremism in Indonesia?
    Answer. Saudi charities are involved in many aspects of community 
building in Indonesia, heavily funding projects such as schools 
(pesantrans) and mosques. While providing schools is a great service 
for the poorer Indonesian communities, some of these schools promote 
Islamic extremism. We continue to speak with the Indonesian government 
about the importance of promoting moderate views on Islam, including in 
the school curriculum.
    Question. Please comment on the recent decision by Indonesia's 
Supreme Court to reduce the sentence of Muslim cleric Abu Bakar 
Ba'asyir.
    Answer. In September 2003, a Jakarta District Court convicted 
Jemaah Islamiyah (JI) spiritual leader Abu Bakar Ba'asyir of 
participation in treason and of various immigration violations. An 
appellate court overturned the treason conviction on appeal. 
Prosecutors and defense lawyers subsequently appealed to the Supreme 
Court, which reduced Ba'asyir's sentence to 18 months. Just prior to 
his April release, however, police re-arrested Ba'asyir on terrorism 
charges for his leadership of JI and his role in the August 2003 
Marriott bombing, as well as criminal charges for his role in the 
October 2002 Bali bombings. Ba'asyir's trial opened on October 28, 
2004, and is now continuing into its third month.
    Question. What impact will Bakar's pending release have on 
terrorist activities in Indonesia and throughout the region--especially 
in light of Bakar's public comment that ``we have to oppose America 
physically in Afghanistan, Iraq and elsewhere''?
    Answer. We were tremendously encouraged that the Indonesian 
government re-arrested Ba'asyir upon the expiration of his shortened 
sentence, and that Indonesian government prosecutors are now making a 
strong case against Ba'asyir in court. There is extensive evidence of 
Ba'asyir's leadership role and personal involvement in terrorist 
activities.
    Question. Is there any evidence that Indonesia's military is 
collaborating with indigenous terrorist groups and/or individuals?
    Answer. No, we do not have any evidence or indication that 
Indonesia's military is collaborating with indigenous terrorist groups 
or individuals.
    Question. To what extent is North Korea involved in the illicit 
narcotics trade, and is there any evidence that North Korean Drug 
Trafficking is used to support terrorism?
    Answer. Law enforcement cases and intelligence reporting over the 
years have not only clearly established that North Korean diplomats, 
military officers, and other party/government officials have been 
involved in the smuggling of narcotics, but also that state-owned 
assets, particularly ships, have been used to facilitate and support 
international drug trafficking ventures. Although some of the 
information gathered is incomplete or unverified, the quantity of 
information and quality of many reports give credence to allegations of 
state sponsorship of drug production and trafficking that can not be 
ignored. It appears doubtful that large quantities of illicit narcotics 
could be produced in and/or trafficked through North Korea without 
high-level party and/or government involvement, if not state support.
    The cumulative impact of these incidents over years, in the context 
of other publicly acknowledged behavior by the North Korean such as the 
Japanese kidnappings points to the likelihood, not the certainty, of 
state-directed trafficking by the leadership of North Korea.
    There is also strong reason to believe that there is party and/or 
government involvement in the manufacture of methamphetamine and heroin 
in North Korea , but we lack reliable information on the scale of such 
manufacturing.
    We believe the motivation for DPRK trafficking is primarily 
financial. We are unaware of any specific transfer of the proceeds of 
narcotics trafficking to any terrorist group.
    Question. North Korean criminals have surfaced periodically 
throughout Southeast Asia, including in Cambodia. What are the designs 
of these North Korean criminals and are they collaborating with 
regional terrorists?
    Answer. We have seen many reports of North Koreans involved in 
criminal activity. These reports point to involvement with narcotics 
trafficking, narcotics cultivation/production, using diplomatic status 
to smuggle controlled species, the counterfeiting and distribution of 
foreign currency, including U.S. currency, trade in fraudulent items, 
violation of intellectual property rights, and smuggling of tobacco 
products to benefit from differential pricing and to avoid taxation.
    We have seen clear evidence that North Koreans are involved with 
various organized crime groups on Taiwan, in Japan and elsewhere, but 
we are unaware of any contact between North Korean criminal elements 
and terrorists.
    Question. What programs can be supported among North Korean 
refugees and exiles to create an organized opposition to the thugs in 
Pyongyang?
    Answer. With the support of the Administration, Congress last year 
passed the North Korea Human Rights Act, and we are implementing the 
measures of the Act, consulting closely with Congress and with our 
allies, to promote improved human rights in North Korea. The specific 
objectives of the Act are to promote: respect for and protection of 
fundamental human rights in North Korea; a more durable humanitarian 
solution to the plight of North Korean refugees; increased monitoring, 
access and transparency in the provision of humanitarian assistance 
inside North Korea; the free flow of information into and out of North 
Korea; and progress towards the peaceful reunification of the Korean 
Peninsula under a democratic system of government.
     As explained in the Report of the Committee on International 
Relations, The North Korean Human Right Act ``is motivated by a genuine 
desire for improvements in human rights, refugee protection, and 
humanitarian transparency. It is not a pretext for a hidden strategy to 
provoke regime collapse or to seek collateral advantage in ongoing 
strategic negotiations. While the legislation highlights numerous 
egregious abuses, the [Congress] remains willing to recognize progress 
in the future, and hopes for such an opportunity.''
    The Act authorizes $2 million to be spent annually through fiscal 
year 2008 to provide grants to private, nonprofit organizations to 
support programs, including educational and cultural exchange programs, 
that promote human rights, democracy, the rule of law, and development 
of a market economy in North Korea. For fiscal year 2005, Congress has 
indicated that these funds should be granted to Freedom House to hold a 
conference on improving human rights in North Korea. The Act also 
expresses the sense of Congress that the United States should increase 
radio broadcasts into North Korea by Radio Free Asia and Voice of 
America to 12 hours per day, and authorizes $2 million annually through 
fiscal year 2008 to increase the availability of non-government-
controlled sources of information to North Koreans.
    In addition, the Act mandates the appointment of a Special Envoy 
for Human Rights in North Korea within the State Department. Among 
other responsibilities, the Special Envoy is charged with supporting 
international efforts to promote human rights and political freedoms in 
North Korea, engaging in discussions with North Korean officials on 
human rights, consulting with NGOs, reviewing strategies for improving 
protection of human rights in North Korea, and making recommendations 
regarding USG funding of programs to promote human rights, democracy, 
rule of law, and development of a market economy in North Korea. As you 
know, the first annual report of the soon-to-be-appointed Special Envoy 
on actions taken to promote efforts to improve respect for the 
fundamental human rights of people in North Korean is due on April 15.
    We will continue to work closely with the Subcommittee to promote 
improved human rights in North Korea.

                              WEST AFRICA

    Question. Is Hezbollah profiting from the diamond trade--or other 
illicit activities in that region?
    Answer. We do not think, based on the evidence, that Hezbollah as 
an organization directly participates in the diamond trade or other 
illicit ventures in west Africa. That said, Hezbollah profits 
indirectly from the diamond trade in west Africa. Hezbollah engages in 
widespread fundraising efforts worldwide, with particular emphasis on 
regions with sizable overseas Lebanese communities such as west Africa. 
Hezbollah raises money in west Africa from members of the Lebanese 
business community, some of whom are involved in both the licit and 
illicit diamond trade.
    Question. Is there a connection between Hezbollah and Al-Qa'ida in 
west Africa?
    Answer. We have seen no credible evidence indicating a connection 
between Hezbollah and Al-Qa'ida.
    Question. Do drug addicted, demobilized rebels in Sierra Leone and 
Liberia pose an immediate threat to the resumption of hostilities in 
the region--and as easy recruits for terrorist organizations?
    Answer. Yes, the rebels pose a threat to the region and could 
resume hostilities, however they are not likely recruits for 
International Terrorist Organizations. We strongly believe in the need 
for swift and effective reintegration and rehabilitation (RR) programs 
for disarmed and demobilized combatants worldwide, including in Liberia 
and Sierra Leone.
    The U.S. Agency for International Development is spending $60 
million on RR programs, based on our Depression-era Civilian 
Conservation Corps, in Liberia for 20,000 ex-combatants and 15,000 
others, including women and children associated with those fighters. 
The United Nations (UN) and European Union (EU) are creating programs 
in Liberia for another 23,000 ex-combatants, leaving a shortfall of 
60,000 people formally classified as ex-combatants.
    U.N. Secretary-General Annan recently said that another $60 million 
in RR programs are needed to employ, retrain, educate, and counsel 
these remaining ``volatile and restive'' ex-combatants in Liberia. As 
part of our supplemental budget request, we are proposing additional 
funding for reintegration and rehabilitation programs for Liberian ex-
combatants. A senior interagency delegation will visit Brussels and 
Luxembourg January 10-13 to urge the EU to spend more on similar RR 
programs.
    Diamond fields and forests in the Mano River region have attracted 
significant illicit commercial activity, and these governments have 
minimal capability to control their borders or enforce customs 
regulations. Strengthening their capacity to combat arms smuggling, 
money laundering, and other activities supporting terrorism is a top 
priority.
    Liberia is resource rich and potentially a good place for direct 
foreign investment that would help create jobs for the unemployed 
youth. We are working with the Government and international financial 
institutions to address pervasive corruption that is currently a major 
impediment to spurring economic activity.
    Question. Is there any evidence of al-Qaida operations in Colombia?
    Answer. There is no corroborated reporting that al-Qaida 
operational cells exist in Colombia. Colombia, like many other 
countries in the Western Hemisphere, could be vulnerable to 
exploitation by terrorists for safe haven, fundraising, recruiting, or 
spreading propaganda. The United States Government works on a bilateral 
and multilateral basis to enhance the counterterrorism capacity of 
Colombia, as well as other hemispheric partners, to prevent the 
movement of terrorists in the hemisphere, deny terrorists access to 
fraudulent travel and identity documents, strengthen border security, 
and combat terrorism financing.
    Question. Is Venezuela providing sanctuary to terrorist operating 
in Colombia?
    Answer. It is unclear to what extent or at what level the 
Venezuelan Government approves or condones the use of its territory as 
safehaven by Colombia's Revolutionary Armed Forces of Colombia (FARC), 
National Liberation Army (ELN), and United Self-Defense Forces/Groups 
of Colombia (AUC)--all three U.S. Government-designated Foreign 
Terrorist Organizations (FTOs).
    Venezuela has been unwilling or unable to assert control over its 
1,400-mile border with Colombia. Consequently, the FARC and ELN have 
used the area for cross-border incursions and have regarded Venezuelan 
territory near the border as a safe area for rest, recuperation, and 
probable transshipment of drugs and arms. The AUC has admittedly 
operated in Venezuela, principally targeting FARC and ELN groups 
operating there. The AUC does not appear to hesitate to cross the 
porous Venezuela-Colombia border to disrupt or exploit the FARC's and 
ELN's strategic supply lines.
    President Chavez' stated ideological affinity with the FARC and ELN 
limits Venezuelan cooperation with Colombia in combating terrorism. 
However, the Venezuelan and Colombian Governments have worked together 
in some cases to enhance border security and bring terrorists to 
justice.
    Question. Do we have a full and accurate picture of the 
proliferation activities of A.Q. Khan in Pakistan, and how would you 
characterize the Pakistani government's cooperation in determining the 
breadth and depth of Khan's activities?
    Answer. The Government of Pakistan is continuing its own 
investigation of the A.Q. Khan network and has already taken steps to 
shut down the network. It has shared information that it has developed 
from that investigation and it has agreed to continue to share 
information with us. The information Pakistan has provided to us has 
been important to our global efforts to dismantle the network. 
President Musharraf's efforts to shut down the activities of the 
network in Pakistan have contributed to our overall effort. However, we 
remain concerned that the network could be reconstituted. For this 
reason, we are reassured by President Musharraf's statements that Khan 
remains under close watch and his movements are restricted. It is also 
notable that Khan's pardon is conditioned on his continued cooperation. 
We remain concerned, however, about Pakistan's decision to release all 
of the individuals detained in connection with the Khan case, with the 
exception of Dr. Muhammed Farooq, formerly head of procurement at Khan 
Research Laboratories.
    Question. How cooperative has Pakistan been in engaging Al-Qaeda 
and Taliban remnants in Pakistan--particularly along the border with 
Afghanistan.
    Answer. Under the leadership of President Musharraf, Pakistan cut 
its ties to the Taliban and became a critical partner in the war on 
terror. The GOP is aggressively pursuing al-Qaida and their allies 
through large-scale military operations in the Federally Administered 
Tribal Areas (FATA). Along with the United States, Pakistani forces 
have borne the brunt of fighting against al-Qaida, facing intense 
resistance and suffering many casualties, including the deaths of at 
least 200 Pakistani servicemen. Pakistan's FATA military operations 
have significantly degraded al-Qaida's command and control capabilities 
in the region.
    In addition to these counterterrorist operations in the tribal 
areas, Pakistani law enforcement--maintaining close cooperation with 
the USG in border security and investigative training--continues an 
extremely successful anti-terrorist campaign in other areas of the 
country, particularly in major cities. Pakistani authorities have 
apprehended over 600 terrorist suspects, turning over to the United 
States such key al-Qaida figures as Khalid Sheikh Mohammad and Abu 
Zubaydah. The arrestees have provided valuable information leading to 
further investigations and arrests.
    While the GOP has been very successful in targeting members of al-
Qaida and other foreign militants throughout the country, it has faced 
more difficulty confronting Pakistani militants and the Pashtun-
dominated Taliban, which enjoys close ties to some local tribes.
    Question. Why have Afghan President Karzai and the U.S. Ambassadors 
to both Afghanistan and Pakistan been critical of Pakistani efforts to 
combat terrorism along the border?
    Answer. Pakistan had supported the Taliban government in 
Afghanistan prior to September 2001. Though President Musharraf 
withdrew his government's support and Pakistan became a critical ally 
in the war on terrorism, suspicions lingered in Afghanistan over the 
sincerity of the GOP's support for the new Afghan government. Despite 
the GOP's successful efforts to target al-Qaida and other ``foreigner 
fighters'' within the Federally Administered Tribal Areas (FATA), the 
GOP has faced more difficulty confronting the Taliban, who enjoy close 
ethnic ties with the FATA tribes, as a result of which problems remain 
with cross-border infiltration into Afghanistan.
    In recent months, there has been significant progress in Pakistani-
Afghan bilateral relations. President Musharraf was the first foreign 
leader to visit Karzai in Kabul after his October election, signaling 
GOP support for Karzai and his government. Additionally, the GOP has 
intensified its counterterrorism operations against al-Qaida remnants 
in Waziristan, and the activities of the Tripartite Commission are 
providing a useful forum for deliberations between Afghan, Pakistani, 
and U.S. military and security representatives at the working level on 
sensitive border and security issues.
    Question. How do you explain the reluctance of Egyptian President 
Hosni Mubarak to embark on much-needed political and legal reforms in 
Egypt?
    Answer. The Egyptian government always has stressed the need for 
gradual reform to preserve stability, but there are signs that mind-set 
is changing somewhat.
  --President Mubarak and other senior Egyptian officials always have 
        argued the need for a gradual process of political, economic, 
        and social reform to avoid social upheaval in Egypt, where 
        population densities in the Nile delta and valley are among the 
        highest in the world. They point to the 1977 riots that damaged 
        large swaths of Cairo after President Sadat removed bread 
        subsidies, and to their struggle against domestic Islamic 
        extremists in the 1980's and 1990s, as proof of the need for 
        such gradualism.
  --We and other donors have argued that, conversely, an insufficiently 
        rapid pace of reform is likely to increase rather than decrease 
        Egypt's instability in the mid- to longer-term. High-level 
        bilateral discussions and the Broader Middle East and North 
        Africa (BMENA) initiative are key venues for delivering that 
        message.
  --Over the past year, we have seen increasing signs that Egypt is 
        ``getting it,'' although the evidence is still much more on the 
        economic than political side.
  --The new Prime Minister and cabinet have announced and begun to 
        implement the most ambitious economic reforms in years, 
        including sharp cuts in tariffs, income and sales tax reforms, 
        reductions in subsidies, liberalizing Egypt's exchange rate 
        regime, and reinvigorating the privatization program, including 
        in the financial sector.
  --We will continue to urge the government to accelerate that reform 
        process, which we support through our USAID assistance program.
  --Egypt's political system remains dominated by President Mubarak and 
        the ruling National Democratic Party, and citizens do not to 
        date have a meaningful ability to change their government. 
        There are, however limited signs of liberalization, such as the 
        recent registration of two new political parties, tolerance of 
        a significantly more open debate on presidential succession, 
        the Government's agreement to our plan to make direct democracy 
        grants to NGOs without its approval, and its support for the 
        Alexandria meeting of intellectuals and declaration on the need 
        for reform in the Arab world.
  --We will continue to press the GOE at the highest levels to open up 
        its political system and improve its poor record on human 
        rights.
    Question. Has Mubarak's reluctance to create a more open and 
pluralistic society created conditions favorable to Islamic extremism 
and terrorist recruitment efforts?
    Answer. We believe that an overly cautious approach to economic and 
political reform in Egypt would be more rather than less conducive to 
instability in Egypt, while greater political and economic opportunity 
would provide more moderate outlets for the expression of public will. 
Our Broader Middle East and North Africa (BMENA) and Middle East 
partnership Initiative (MEPI) convey the same message region-wide.
    The lack of a credible legal alternative to the ruling National 
Democratic Party (NDP) appears to have caused many people to gravitate 
towards the still-illegal Muslim Brotherhood, generally considered the 
most powerful political group in Egypt aside from the NDP.
    Terrorists may also seek to exploit a lack of economic opportunity 
to advance their violent ideology.
    However, both the Muslim Brotherhood and the jailed leadership of 
the more radical Egyptian Islamic Jihad have publicly renounced 
violence as a means to political change in Egypt.
    We continue to believe, and to advocate with Egypt's political 
leadership, that it must open up its political process to provide a 
middle ground between the NDP and religious extremism.
    Question. What concrete steps has Saudi Arabia taken to crackdown 
on ``charities'' which seem bent on sowing sees of Wahabism intolerance 
wherever Muslim communities exist?
    Answer. Saudi Arabia has made important strides, both in 
coordinated steps with the United States and on its own, to combat 
terrorist financing. Most recently, on January 22, 2004, we jointly 
submitted the names of four overseas branches of the Riyadh-based al-
Haramain Foundation to the U.N. 1267 Sanctions Committee for world-wide 
sanctions, including asset freezing.
    The addition of these four entities made for a total of 10 United 
States-Saudi joint submissions to the U.N. 1267 Sanctions Committee 
since December 2002, the largest number with any country over that 
span, and we continue to work together to look for additional entities 
and individuals providing support to al-Qaida.
    The Saudis have announced that they will establish a Financial 
Intelligence Unit (FIU) to coordinate government efforts to monitor and 
track suspicious transactions. The Saudis also enacted an Anti-Money 
Laundering Law last year which criminalizes terrorist financing and 
money laundering.
    The Saudis have also removed cash boxes from mosques and shopping 
centers in an effort to enhance oversight and accountability of 
charitable giving.
    We are awaiting the establishment of the Saudi High Commission on 
Charities, which was announced in 2004. If approved and fully 
implemented, the High Commission will ensure government oversight of 
all charitable giving overseas.
    While there is more to be done, we are seeing clear indications 
that Saudi actions are having a real impact in terms of making it more 
difficult for suspect charitable branches around the world to obtain 
funding.
    Question. Do we have a complete picture of all the regions where 
Saudi charities are active--or a list of countries they have 
specifically targeted?
    Answer. The Saudi government supports relief efforts and 
educational programs in many areas of the world. Saudi officials have 
told us repeatedly that they do not support terrorists or terrorism 
anywhere in the world. We do have evidence that some individuals in 
Saudi Arabia provide funds to terrorists. Private contributions to 
HAMAS are a particular concern. Through our intensive, high-level 
dialogue with the Saudi government, we believe we have made important 
progress, but there is more to be done to see that funds in support of 
terrorism do not emanate from Saudi Arabia.
    Question. How can the flow of funds originating in Saudi Arabia--
particularly cash--be better monitored and interdicted?
    Answer. The 2004 Financial Action Task Force (the FATF, which 
produced a set of recommendations which define best international 
practice as regards procedures to combat money laundering and terrorist 
financing) report for Saudi Arabia states that: ``Significant steps 
have been taken to discourage large cash transactions and to encourage 
the use of bank transfers in order, inter alia, to improve the ability 
of the law enforcement authorities to monitor cash transactions. Saudi 
Arabia also monitors the physical movement of cross-border 
transportation of cash. The import or export of currency in excess of 
SR 10,000 must be declared at the border, or point of entry, and a 
record is maintained of declarations and investigations carried out if 
there are doubts as to the source of the money. Saudi Arabia applies 
strict controls on the movement of Saudi currency. Saudi banks are 
encouraged to buy any excess Saudi riyals that they may have 
accumulated in other countries, and persons leaving Saudi Arabia with 
large amounts of cash are encouraged to deposit the funds in a bank 
(and thus transfer the funds by wire or convert them to another 
currency) before departure. Consequently there is very little cross-
border transportation of currency.''
    The Saudis are establishing a Financial Intelligence Unit (FIU) to 
coordinate government efforts to monitor and track suspicious 
transactions. The Saudis also enacted an Anti-Money Laundering Law in 
2004 which criminalizes terrorist financing and money laundering. The 
Saudis have also removed cash boxes from mosques and shopping centers 
in an effort to enhance oversight and accountability of charitable 
giving.
    We will continue to work closely with the Saudis to better monitor 
cash flows and interdict illicit funding.
    Question. To what extent are Saudi charities or other Islamic 
extremist organizations active in the Balkans and what specific 
activities are they involved in?
    Answer. The vast majority of Muslims in Europe have no interest in 
and nothing to do with violent extremism. Hundreds of Islamic 
organizations are active in the Balkans ranging from business to NGOs, 
to political groups; the overwhelming majority are engaged in 
legitimate activities. In some cases, however, groups with extremists 
connections have been active in attempts at recruitment and Islamic 
extremists seem to hope to utilize the Balkans as a religious foothold 
in Europe and as a possible transit route to other locations. While 
some groups' rhetoric has on occasion been vocally anti-Western, actual 
attacks have been all-but non-existent. Nonetheless, we continue to 
monitor closely the activities of possible extremist Balkan groups.
    Question. Is there a rise in intolerance and extremism within 
Muslim communities in the Balkans as a result of these activities?
    Answer. The vast majority of Balkan Muslims, like Balkan Islam 
itself, are tolerant and moderate. Despite considerable missionary 
effort over recent years by extremists, most Balkan Muslims have 
maintained their traditional moderate approach to religion. 
Nonetheless, extremist groups on the fringes of Europe's Muslim 
communities continue to seek to recruit and propagandize, and 
particularly seek to target young people.
    Question. In May 2003, American Cargo Pilot Ben Padilla 
disappeared--along with a Boeing 727--in Angola. Do you have any 
updated information on Mr. Padilla's whereabouts, or information on his 
disappearance?
    Answer. Neither the aircraft nor the missing pilot has been 
located. Over the last year, we have received several reports of 
sightings of the missing 727, but in each case, the sighted aircraft 
has been shown to be a different aircraft.
    We and the FBI continue to monitor the situation.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

    Question. Mr. Black, I had a chance to read through some of Mr. 
Clarke's book, Against All Enemies. I should point out that he 
consistently praises your efforts to combat international terrorism.
    In one part of the book, Mr. Clarke talks about Mossad's policy of 
assassinating terrorists. He writes: ``The assassinations had also done 
little to deter further attacks on Israelis. Indeed, Israel had become 
caught in a vortex of assassination and retaliation that seemed to get 
progressively worse.''
    Do you agree with Mr. Clarke's assessment? As the United States 
moves forward with efforts to combat terrorism, how do we avoid the 
same trap?
    Answer. We believe that Israel has the right to defend itself from 
terrorist attacks. We have consistently urged Israel to carefully 
consider the consequences of its actions. We are gravely concerned for 
regional peace and security, and have urged all parties to exercise 
maximum restraint.
    Question. Mr. Black, Jordan has been indispensable in developing 
intelligence and helping to thwart attacks by al Qaeda against the 
United States. King Abdullah and the rest of the Jordanian Government 
deserve our thanks for the role they have played against terrorism, an 
in support of peace between Israel and the Palestinians--a role that 
has not always been popular with other Arab countries.
    Unfortunately, our relations with other Muslim nations pales 
compared to our close relations with Jordan, and even that relationship 
is under stress with the King canceling his visit. After September 
11th, there was an outpouring of good will towards the United Sates, 
including from moderate Muslim nations. That good will has been 
squandered, and today our reputation among Muslims around the world is 
in tatters. How do we regain the good will?
    Answer. Outreach to Muslim populations around the world is a 
priority for the Department, especially in the context of the war on 
terrorism. Many of our public diplomacy programs and initiatives are 
aimed at the Muslim-majority regions of the world, including 
communities in the Middle East, South Asia, Africa, East Asia and 
Central Asia.
    In order to strengthen our relationships with these communities, we 
must counter the false perception that the United States is anti-
Islamic. In addition, we must demonstrate long-term and sustained 
commitment to the well-being of Muslim populations.
    Our outreach to the Muslim world encompasses public diplomacy and 
development assistance programs that promote economic and political 
freedom, tolerance and pluralism in Muslim communities, as well as 
mutual understanding with Americans. We must not only provide 
assistance to these communities but be recognized for the assistance we 
provided.
    Political and economic conditions vary by region and country, but 
in all regions we must increase exchanges of students, scholars and 
religious and community leaders, publicize U.S. assistance efforts more 
widely, increase youth programming, expand English teaching and broaden 
media outreach in local languages. For example:
  --The Bureau of Educational and Cultural Affairs (ECA) provided $40 
        million in fiscal year 2004 for programs for the Arab and 
        Muslim World through their Partnerships for Learning 
        initiative. The fiscal year 2005 budget funds this initiative 
        at the $61 million level.
  --Under Partnerships for Learning, ECA is planning to bring 1,000 
        high school exchange students from countries with significant 
        Muslim population to the United States in fiscal year 2005, a 
        fourfold increase over fiscal year 2002, the first year of the 
        program.
  --The Bureau of Public Affairs is directing to the Arab and Muslim 
        world at least 50 percent of Department TV co-operative 
        projects, foreign media interviews, sponsored journalists 
        tours, and video news releases.
  --Thirty-four American Corners are currently in operation in cities 
        with significant Muslim populations. The Bureau of 
        International Information Programs is working with NEA and SA 
        to establish forty-three more American Corners in those 
        regions, including ten in Afghanistan and fifteen in Iraq.
    While we will continue to engage Islamic leaders and influential 
elites, we must also reach those young people who are the critical next 
generation in the war on terrorism.
    The President's Middle East Partnership Initiative (MEPI) 
integrates policy, public diplomacy and development and technical 
assistance programs throughout the region. MEPI's mission is to support 
economic, political, and educational reform in the Middle East and 
North Africa and to champion opportunity for all people of the region, 
especially women and youth.
    Question. In my opening statement, I mentioned the memo written by 
Secretary Rumsfeld. One of the other things he writes is--and I am 
quoting--``the cost-benefit ratio is against us! Our cost is billions 
against the terrorists' costs of millions.'' What is your opinion of 
the Secretary's assessment?
    Answer. The asymmetrical nature of the war against terrorism is one 
of the factors contributing to its difficulty: in general, destroying 
things--particularly when one has selected and focused on a specific 
target--is substantially cheaper than defending an infinite list of 
possible targets, which is the task that confronts us and our allies. 
At the same time, our greater resources give us the ability to go after 
the terrorists in a myriad ways and in myriad places.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

    Question. Central Intelligence Agency Director George Tenet and 
Director of the Defense Intelligence Agency, Vice Admiral Lowell E. 
Jacoby have testified publicly as to the pressing threat that Colombia 
poses to U.S. interests. In his testimony before the Senate Select 
Committee on Intelligence, Vice Admiral Jacoby testified that ``The 
Revolutionary Armed Forces of Colombia (FARC) remains the most potent 
terrorist threat to U.S. interests in Colombia.'' Of note is that the 
``FARC's perception that U.S. support is the direct cause of the 
Colombian government's recent successes, increases the likelihood the 
group will target U.S. interests in 2004.''
    Similarly, George Tenet testified that ``The FARC may increasingly 
seek to target U.S. persons and interests in Colombia, particularly if 
key leaders are killed, captured, or extradited to the United States. 
The FARC still holds the three U.S. hostages it captured last year and 
may seek to capture additional U.S. citizens.''
    As part of the ``Anti-terrorism'' package, the U.S. increased 
military presence and aid to Colombia. Since 2001, we have given over 
2.5 billion in aid and significantly increased our military presence.
    Has increased U.S. engagement in Colombia turned what was 
essentially a national revolutionary resistance and terrorist group in 
Colombia into a terrorist group that specifically targets and directly 
threatens the United States?
    Answer. The Revolutionary Armed Forces of Colombia (FARC) have had 
a long history of planning, threatening, and conducting terrorist 
attacks in Colombia, since its creation in 1964. The FARC have been 
responsible for conducting bombings, murder, mortar attacks, 
narcotrafficking, kidnapping, extortion, hijacking, as well as 
guerrilla and conventional military action against political, military, 
and economic targets in Colombia. Before significant increases in U.S. 
Government assistance to Colombia, the U.S. Government recognized that 
the FARC's terrorist activities threatened the security of United 
States nationals and the national security of the United States, first 
designating the FARC as a Foreign Terrorist Organization (FTO) in 
October 1997. In March 1999, the FARC murdered three U.S. Indian rights 
activists on Venezuelan territory after it kidnapped them in Colombia. 
The U.S. Government holds the FARC responsible for the safety and 
welfare of the three Americans it currently holds hostage and for any 
attack that it conducts against U.S. interests in Colombia, regardless 
of U.S. assistance levels to the Colombian Government.
    United States assistance to Colombia is dedicated to help the 
Colombian Government strengthen its democracy, respect human rights and 
the rule of law, and end the threat of narcotics trafficking and 
terrorism. To do so, we are carrying out programs to provide training, 
equipment, infrastructure development, funding, and expertise to the 
Colombian Government and civil society in the areas of counternarcotics 
and counterterrorism, alternative development, interdiction, 
eradication, law enforcement, institutional strengthening, judicial 
reform, human rights, humanitarian assistance for displaced persons, 
local governance, anti-corruption, conflict management and peace 
promotion, rehabilitation of child soldiers, and preservation of the 
environment.
    Question. During this year's annual threat report, CIA director 
George Tenet warned that ``al-Qaida has infected other organizations.'' 
He said that ``even as al-Qaida has been weakened, other extremist 
groups within the movement have become the next wave of the terrorist 
threat. Dozens of such groups exist.'' He named the Zarqawi network as 
an example.
    Al-Zarqawi, the Jordanian who is suspected of committing the Madrid 
bombings, is viewed by intelligence officials to be at the forefront of 
the next wave of terrorist threat. The next wave identified as fluid 
elements that are know to be collaborators of Osama bin Laden, who 
share his ideology but are more diffuse and operate outside his 
control.
    The Zarqawi network and another group with an al-Zarqawi 
affiliation, Ansar al-Islam, have been blamed for continued bombings in 
Iraq. The groups are suspected to attack Iraqi and foreign targets, 
especially Shiite pilgrims or Iraqi police and hotels inhabited by 
foreigners. Their aim is sowing discord and perhaps civil war and 
raising opposition against U.S. occupation.
    Tenet further testified that our main challenge now is ``preventing 
the loosely connected extremists from coalescing into a cohesive 
terrorist organization.'' He said that we had started to see a ``few 
signs of such cooperation at the tactical or local level.''
    (a) What is your assessment of the reach of these new diffuse 
organizations? What is our strategy to deal with these emerging 
threats?
    Answer. Locally-based groups ideologically linked to, but 
operationally distinct from al Qaeda, like those that carried out the 
March Madrid bombings, may represent the wave of the future. The threat 
we face is a global one and we prioritize responses to enable us act in 
an appropriate and effective manner to address differing challenges in 
different regions. The key to addressing immediate threats lies in 
developing timely, useable intelligence in conjunction with partners 
around the world. In the medium and longer terms, we must ensure that 
law enforcement and judicial authorities have the tools they need to 
prevent terrorists from achieving their objectives. In many countries, 
a government's inability to find, arrest, and prosecute terrorists is 
the main impediment to coping with the threat. We have therefore 
initiated cooperative programs designed to increase partner nations' 
will and CT capabilities and to build ties among United States. and 
foreign CT communities. These programs include long-term capacity-
building efforts in border security, criminal investigations, 
intelligence support, and training/advice to combat terrorist 
financing, as well as a robust Anti-Terrorism Assistance program to 
bolster the CT capabilities of law enforcement.
    Question. (b) How would you categorize the impact of the Zarqawi 
network and Ansar al-Islam on disrupting our reconstruction efforts and 
inciting opposition, especially among the Shia, against the United 
States?
    Answer. The violence and intimidation committed by the Zarqawi 
network, Ansar al-Islam and other terrorists and insurgents has clearly 
had an impact on the scale and pace of reconstruction. Nevertheless, we 
have made a great deal of progress in rebuilding Iraq's infrastructure 
and services and in preparing for the handover to an interim Iraqi 
government on June 30. New roads, bridges, schools, hospitals have been 
built; provision of local services like electricity and water, has been 
extended in many parts of the country; advisors are assisting Iraqi 
officials to develop strong, functioning institutions; many countries 
are engaged in training Iraqi police and security forces. The vast 
majority of Iraqi citizens--Sunni, Shia, Kurd, Turkomen, and others--
want peace and freedom and a better life for their children. We will 
continue to pursue the terrorist organizations so they cannot take this 
future away from the people of Iraq.
    Question. (c) What is the status of the Kurdistan Worker's Party or 
PKK? How has the Unite States-led occupation of Iraq affected the PKK?
    Answer. In April 2002 at its 8th Party Congress, the PKK changed 
its name to the Kurdistan Freedom and Democracy Congress (KADEK) and 
proclaimed a commitment to nonviolent activities in support of Kurdish 
rights. Despite this pledge, a PKK/KADEK spokesman stated that its 
armed wing, The People's Defense Force, would not disband or surrender 
its weapons for reasons of self-defense. In late 2003, the group sought 
to engineer another political face-lift, renaming the group Kongra Gel 
(KGK) and brandishing its ``peaceful'' intentions, while continuing to 
commit attacks and refuse disarmament. Kongra Gel now consists of 
Approximately 4,000 to 5,000 members, most of whom currently are 
located in a remote mountainous section of northern Iraq. Kongra Gel 
has claimed to be under a self-imposed cease fire, but they have 
continued to engage in violent acts in Turkey--including at least one 
terrorist attack--against the Turkish state in 2003. Several members 
were arrested in Istanbul in late 2003 in possession of explosive 
materials.
    The United States is committed to the elimination of the PKK threat 
to Turkey from Iraq. President Bush has said there will be no terrorist 
haven in a free Iraq, and that includes the PKK.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin

    Question. In January, USAID released a foreign aid ``white paper'' 
arguing that given the broad range of national security threats facing 
the United States, including the threat of terrorism, foreign 
assistance must go beyond more traditional humanitarian and development 
objectives. The white paper outlines five key operational goals that 
foreign aid should address: (1) promoting transformational development; 
(2) strengthening fragile states; (3) providing humanitarian relief; 
(4) supporting U.S. strategic interests; and (5) mitigating global and 
transnational ills. How do each of these goals contribute to making 
foreign aid a better tool and instrument for American policymakers in 
the global war on terrorism?
    Answer. Foreign aid can be a powerful CT tool for achieving our 
medium and long-term CT objectives. The five goals cited are designed 
to make it as effective as possible. Achieving these goals will enable 
us to better attain our overall objectives of defeating terrorist 
organizations with global reach by diminishing the underlying 
conditions of poverty, ignorance, intolerance, and desperation that 
terrorists seek to exploit.
    As I noted in my opening statement, we recognize that in many of 
the countries where we work, the overall institutions of the government 
and society are not sufficiently robust for the task of aggressive 
counterterrorism programs. For this reason, institution building is 
vital and all those tasks serve to do so. We should take the necessary 
steps to strengthen the institutions of our partner nations and thereby 
move less developed countries closer toward their full potential in 
combating terrorism. At the same time, we must also encourage and work 
closely with other international donor nations to provide resources and 
expertise in support of this goal.
    Question. How do you respond to those who argue that poverty is not 
a root cause of terrorism; that other factors, such as economic 
isolation and U.S. foreign policy positions that are perceived as being 
anti-Islam, are more important at getting at to the heart of why 
America faces this threat?
    Answer. Whole libraries have been written about the ``root causes 
of terrorism. Obviously, all of these factors contribute to the problem 
we now face. It is difficult to assess the true motives of these 
killers, apart from their desire to spread death, terror, and chaos. We 
have clearly seen their willingness to make outrageous claims and 
demands on the civilized world, and use whatever stated motivations are 
most expedient for their crimes.
    Question. In terms of the terrorist attacks that we have seen in 
recent months, the connection between failed states and the roots of 
terrorism appears to be more indirect than we used to believe. Instead 
of operatives coming out of places like Sudan and Afghanistan, for 
example, we seem to be witnessing the emergence of local terrorist 
organizations in states like Turkey or Spain taking up the goals or 
ideology of Al Qaeda. How do you use foreign aid to fight an ideology 
that emerges in a relatively wealthy state? With this emerging 
successor generation of Al Qaeda-associated operatives, from the 
perspective of counter-terrorism, are we missing the point in directing 
our resources toward so-called front-line states. Where exactly is the 
``frontline.''
    Answer. Unfortunately, the ``front line'' is everywhere. The threat 
we face is a global one and we continually monitor regions that could 
serve as terrorist sanctuaries. To that end we prioritize our responses 
to enable us act in an appropriate and effective manner to address 
differing challenges in different regions. Al Qaeda itself, now serves 
as an idea and an inspiration to a decentralized worldwide extremist 
network that exploits weak CT regimes and global linkages to recruit, 
raise funds, spread propaganda and plan and conduct terrorist attacks 
on almost every continent. The changing nature of the terrorist threat 
puts a focus on capacity building and on working with partner 
governments to build and sustain international will to continue the 
effort.
    Question. What specifically would you say has been the effect of 
the war in Iraq on the roots of terrorism in the Middle East? In what 
demonstrable way is foreign aid to Iraq reducing the terrorist threat 
against the United States and its allies?
    Answer. The war in Iraq removed a brutal dictator from power, 
eliminated a state sponsor of terrorism, and greatly reduced the 
ability of terrorists to freely use Iraqi territory for training or 
safehaven. A free, independent and democratic Iraq will have a positive 
effect on the region. In addition, the U.S. works through many 
different programs to develop other countries' will and capacity to 
fight terrorism and, through economic development and political reform, 
to diminish the conditions that terrorists exploit to advance their 
violent ideology. Enhancing security by helping the Iraqis defeat 
terrorists and criminal elements is one of the key elements of U.S. 
assistance to Iraq. The United States and allied nations are engaged in 
an extensive training program for Iraqi Police and Security forces; 
more plentiful and more capable security forces are critical to 
defeating insurgent elements within Iraq. U.S. assistance funds have 
also been prioritized to generate employment, stimulate economic 
activity, and provide immediate assistance to areas threatened by the 
insurgency. Additional State Department programs include Anti-Terrorism 
Assistance training, terrorist financing and anti-money laundering 
assistance, border security assistance and training, and diplomatic 
engagement. Activities and programs such as the Forum for the Future 
and the Millennium Challenge Account help strengthen our partners to 
more effectively combat terrorism.
    Question. If terrorists are increasingly using the advanced 
technologies like the Internet to do such things as coordinate 
operations, to find information about weapons of mass destruction and 
recruit members, how are we ensuring that we provide foreign aid in 
such a way that we avoid enabling members of terrorist organizations to 
be more effective?
    Answer. We seek to target our assistance to address key CT 
weaknesses in partner countries and work with our more capable partner 
to assist countries where the will is there, but abilities are limited. 
Rigorous screening of NGO program participants and others, as well as 
follow-up on programs and projects helps prevent misuse or diversion of 
U.S.-provided resources, including knowledge and technology.

                          SUBCOMMITTEE RECESS

    Senator McConnell. Thank you all very much. The 
subcommittee will stand in recess to reconvene on Tuesday, May 
18.
    [Whereupon, at 4:17 p.m., Wednesday, April 21, the 
subcommittee was recessed, to reconvene at 10:30 a.m., Tuesday, 
May 18.]


      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                  APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                         TUESDAY, MAY 18, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:35 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mike DeWine presiding.
    Present: Senators McConnell, DeWine, Leahy, Durbin, and 
Landrieu.

                          DEPARTMENT OF STATE

               Office of the U.S. Global AIDS Coordinator

STATEMENT OF HON. RANDALL L. TOBIAS, COORDINATOR

              OPENING STATEMENT OF SENATOR MICHAEL DE WINE

    Senator DeWine. Let me welcome all of you today. Senator 
McConnell asked that I preside and begin the hearing as he 
currently has another commitment, but he will be here shortly 
to join us.
    Today's subcommittee hearing on the fiscal year 2005 budget 
request for HIV/AIDS consists of two panels. Global HIV/AIDS 
Coordinator Randall Tobias will be the sole witness on the 
first panel, followed by DATA founding member Bono on the 
second.
    Senator Leahy and I will make brief opening remarks, 
followed by Ambassador Tobias. We will then proceed to 5-minute 
rounds of questions and answers. At approximately 11:20, about 
the time we may have a vote on the floor, we will move to our 
second panel.
    In the interest of time, I ask that our witnesses summarize 
their remarks and we will insert their full statements into the 
record. My colleagues should know that we will keep the record 
open for any written questions they wish to submit to our 
witnesses, and I request our witnesses to respond to these 
questions, of course, in a timely manner.
    Our hearing today is a chance for us to take a look at 
where we have been in terms of how our funding allocations have 
been spent in regard to AIDS and what the plans are for the 
future of the President's Global AIDS Initiative. We are 
privileged to have before us today on the first panel 
Ambassador Tobias, who serves as the Coordinator of this very 
important initiative. He will testify on the progress to date, 
as well as provide us with details on what lies ahead for the 
initiative.
    We have an historic opportunity with the funding that has 
been made available for the Global AIDS Initiative. I say that 
because the money, that money, can and should be used not only 
to fight HIV/AIDS, but also to lay a foundation for improved 
health systems in the developing world: health care systems for 
children, women, and families. The money that we put forward in 
regard to this fight against AIDS has the potential to yield 
tremendous dividends in other areas of public health.
    The fact is that in many of the countries that we will be 
spending and are spending this money for HIV/AIDS, many of 
these countries do not currently have a good health 
infrastructure. So it is really going to be impossible for us 
to deal with the AIDS problem without helping these countries 
build up that health infrastructure.
    So the two are going to be linked. One of the things that I 
want to explore with Ambassador Tobias today is how he sees us 
working with these countries to build up their health 
infrastructures.
    I think that is going to also, though, while it is a 
challenge, frankly it also has the benefit of providing extra 
dividends: that what we will end up with, we hope, in the 
future and what these countries and the people of these 
countries will end up with is not only fighting AIDS, but end 
up with the ability to do so much more in their health systems 
and end up with truly a good health system in many of these 
countries.
    What I hope to hear from Ambassador Tobias today are his 
plans on how to take advantage of the $15 billion in 
opportunities over the next 5 years. How can we make certain 
that we provide care and treatment to as many people as 
possible, treatment that includes the millions of children with 
HIV/AIDS and other infectious diseases like malaria and 
tuberculosis?
    Mr. Ambassador, having read your testimony, I know that you 
will speak to the issues of procuring low-cost antiretroviral 
medicines for adults. But what about the children? We need to 
ensure that children infected with HIV are not overlooked in 
the drug approval and procurement process. I would ask that in 
your comments you clarify what your office is doing to ensure 
safe pediatric formulations and how your office plans to 
increase the number of children receiving treatment.
    We know from experience that the core features of the 
prevention of mother-to-child transmission programs--voluntary 
counseling and testing, the establishment of pharmacies and 
drug distribution mechanisms, and the training of health care 
workers--all provide a sound foundation on which to build, on 
which to build expanded care and treatment. So I would like to 
hear from the Ambassador on his plans for the mother-to-child 
transmission program. What are your plans to increase the 
number of clinics capable of providing services to prevent the 
transmission of the virus from mother to child, especially 
since fewer than one percent of women have access to MTCT 
services in some of the most infected countries. What can we do 
to get more women treated before they give birth to HIV-
positive babies?
    Let me say again, we have $15 billion in opportunities to 
help build health care infrastructures, to increase the number 
of children, women and families receiving treatment and care, 
to invest in human capital development, and to put programs in 
place to take care of orphans and other vulnerable children.
    Let me again thank both of our witnesses for being here 
today, and also thank both of them for their great commitment 
to this cause. Ambassador Tobias, I look forward to hearing 
your vision on how we can take advantage of these opportunities 
and hearing what you have already done so far.
    Let me also say that I am pleased that Bono could join us 
and I look forward to hearing his thoughts on debt relief. We 
do not know anyone else who has really had the vision in this 
area and who has captured the attention of the public, not only 
in the United States but around the world, and we salute him 
for his great work as well.
    Let me at this point turn to Senator Leahy, the ranking 
member of this committee, who has also been just a great leader 
in this anti-AIDS work. Senator Leahy, thank you.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Mr. Chairman.
    You know, it is interesting, some of the odd couplings in 
the Senate. Not only is Senator DeWine a close personal friend, 
but we have, coming from different parties and different 
philosophical spectrums, we have worked very closely on these 
issues.
    Ambassador Tobias, I am glad to see you. I enjoyed our chat 
outside before we came in and I really would welcome the 
opportunity to travel to parts of Africa with you. I am 
delighted that a long-time friend, Bono, is here. He is a close 
friend of the Leahy family. We have spent time together, each 
member of the family with him, and we think the world of him.
    I met just briefly the lady from Uganda before and we will 
be seeing more of her, of Agnes Nyamayarwo. And I probably--and 
I apologize. I have probably totally butchered the 
pronunciation of the name, and the poor reporter here is 
getting panicky at how to handle that, and I know you will do 
better. But I admire--as I told you privately before, I admire 
your courage, I really do, and you are in our thoughts and 
prayers.
    When you think of the statistics--Ambassador, we talked 
about that outside. We talked about these horrible statistics--
8,000 people will die of AIDS today. And as you said very 
rightly, the number is overwhelming, but each one has a name. 
And you have seen those, as has Bono and the others, as I. My 
wife is a registered nurse. We have been in some of these 
clinics. We have seen the people who are dying.
    During the hour and a half of this hearing, 513 will die, 
856 will become infected. That shows we have yet to confront 
this disease.
    I support President Bush's AIDS initiative. I have been 
impressed with the progress you have made in the very short 
time since you took on this responsibility. We are allocating 
far more to this crisis. The momentum is positive. But the 
President and Secretary Thompson and others in the 
administration, as well as some in Congress who defend the 
President's budget, say we are spending as much as can be 
effectively used to prevent the spread of HIV and treat those 
who are sick.
    I disagree. I think that is misinformed. In any of your 14, 
soon to be 15, focus countries, the medical facilities are 
grossly inadequate, health care workers are too few, often 
poorly trained, they are always underpaid. Private voluntary 
organizations are overwhelmed. Orphans are caring for other 
orphans. People are dying alone, often ostracized by their 
families.
    There is a huge unmet need to build the capacity in those 
countries to fight this pandemic. That is how it is in your 
focus countries, which are shown in white on this chart I have 
got over here.
    In the rest of the world, with half the HIV-infected 
people, we either have no programs or funding has been frozen 
at the fiscal year 2003 level due to a shortage of funds. So 
while the rate of infection soars in some non-focus countries, 
funding there is actually decreasing when you consider 
inflation and the growing number of victims and people at risk. 
This is a terrifying, terrifying chart.
    The President has proposed to cut funding for the Global 
Fund to Fight AIDS, TB, and Malaria from $547 million in 2004 
to $200 million in 2005, at a time when the Global Fund says it 
needs $3.6 billion, of which our share would be $1.2 billion. 
And when we ask the administration, why can we not have 
additional emergency funding to combat AIDS, we are told we do 
not need it, we cannot use it.
    It reminds you a little bit of the Department of Defense, 
which, despite overwhelming evidence of the contrary, insists 
we do not need more troops in Iraq.
    Mr. Tobias, we should be allocating $28 billion next year, 
not $2.8 billion. We are 20 years late, we are $20 billion 
short.
    Three other quick points. First, the generic drug issue, 
which has been the subject of a lot of press attention and has 
taken too long to resolve. Now that U.S. drug companies are 
finally interested in manufacturing fixed-dose combinations, 
the administration's opposition seems to have miraculously 
disappeared and the FDA will soon be reviewing the safety of 
these drugs. It makes you wonder.
    Second is your emphasis on faith-based groups and 
abstinence. Faith-based groups have a role to play and where 
abstinence programs work we should support them, but we risk 
millions of new infections if we apply an ideological lens to 
prevention rather than relying on methods that have been tested 
and proven and that deal with the world as it really is.
    Then third is your definition of ``high risk'' group. I 
heard, for example, that a 15-year-old girl in sub-Saharan 
Africa, where the percentage of HIV-positive females can be as 
high as 20 percent, could not receive condoms under your 
program because she is not high-risk. Yet today that girl is 
more likely to become infected and to die of AIDS than she is 
to live her life free of AIDS, more likely to have it than not. 
Now, I hope that girl does not have to expose herself to HIV 
before she can receive condoms or even information about them 
under your program.
    Mr. Tobias, I have been trying for more than 15 years to 
get more funding to combat AIDS. I believe we could and should 
be doing more. But I hear good things, particularly from my own 
staff, who traveled there, and the Global Health Council, which 
I admire greatly, notwithstanding the fact it is based in my 
home State of Vermont, I hear good things about the way you are 
taking on this challenge, that you are doing it with great 
energy and openness. I commend you for that.

                           PREPARED STATEMENT

    Just as Senator DeWine and I work together, we all have to 
work together. You know, when somebody is dying of AIDS we do 
not ask them what their politics are. We ask what we could do 
to stop it. Again, you look at that map; your heart has to cry 
out.
    Thank you.
    Thank you, Mr. Chairman.
    [The statement follows:]

             Prepared Statement of Senator Patrick J. Leahy

    Mr. Tobias, we appreciate you being here. We all know the 
statistics. 8,000 people will die of AIDS today. Just during the hour 
and a half of this hearing, 513 will die and another 856 will become 
infected. To me, that shows that, so far, we have failed miserably to 
confront this disease.
    I support President Bush's AIDS initiative, and I have been 
impressed with the progress you have made in the short time since you 
took on this responsibility. We are allocating far more than before to 
this crisis, and the momentum is positive. But the President, Secretary 
Thompson, and others in the administration, as well as some in Congress 
who defend the President's budget, say we are spending as much as can 
be effectively used to prevent the spread of HIV and treat those who 
are sick.
    That is either misinformed, or disingenuous. In any of your 14--
soon to be 15--focus countries, medical facilities are grossly 
inadequate, and health care workers are too few, often poorly trained, 
and always underpaid. Private voluntary organizations are overwhelmed. 
Orphans are caring for each other. People are dying alone, ostracized 
by their families. There is a huge, unmet need to build the capacity in 
those countries to fight this pandemic. That is how it is in your focus 
countries, which are shown in white on this chart. In the rest of the 
world--with half the HIV infected people--we either have no programs, 
or you have frozen funding at the fiscal year 2003 level due to a 
shortage of funds.
    So while the rate of infection soars in some non-focus countries, 
our funding there is actually decreasing, if you consider inflation and 
the growing number of victims and people at risk of infection. And the 
President proposes to cut funding for the Global Fund to Fight AIDS, TB 
and Malaria from $547 million in 2004 to $200 million in 2005, at a 
time when the Global Fund says it needs $3.6 billion, of which our 
share would be $1.2 billion. Yet what we hear from the administration, 
when we try to get additional emergency funding to combat AIDS, is that 
we don't need it. We can't use it. It reminds me of the Department of 
Defense, which despite overwhelming evidence to the contrary, insists 
that we don't need more troops in Iraq.
    Mr. Tobias, we should be allocating $28 billion next year, not $2.8 
billion. We are twenty years late and $20 billion short.
    Three other quick points:
    First, the generic drug issue, which has been the subject of a lot 
of press attention, has taken far too long to resolve. However, now 
that U.S. drug companies are finally interested in manufacturing fixed-
dose combinations, the administration's opposition seems to have 
miraculously disappeared and the FDA will soon be reviewing the safety 
of these drugs. It makes you wonder.
    Second is your emphasis on faith-based groups and abstinence. 
Faith-based groups have a role to play and, where abstinence programs 
work, we should support them. But we risk millions of new infections if 
we apply an ideological lens to prevention, rather than relying on 
methods that have been tested and proven, and that deal with the world 
as it really is.
    Third is your definition of ``high risk'' group. I heard, for 
example, that a 15-year-old girl in sub-Saharan Africa, where the 
percentage of HIV-positive females can be as high as 20 percent, could 
not receive condoms under your program because she is not ``high 
risk.''
    Yet, today that girl is more likely to become infected and to die 
of AIDS than she is to live her life free of AIDS. I hope that girl 
does not have to expose herself to HIV before she can receive condoms, 
or even information about condoms, under your program.
    Mr. Tobias, I have been trying for more than 15 years to get more 
funding to combat AIDS. I believe we could and should be doing much 
more. But I hear good things--including from my staff and from the 
Global Health Council in my own state of Vermont--about the way you are 
taking on this challenge, with great energy and openness. I commend you 
for that. We need to work together.

    Senator DeWine. Mr. Ambassador, thank you very much for 
joining us. We do have your written statement, which will be 
made a part of the record, and will you please proceed.

              SUMMARY STATEMENT OF HON. RANDALL L. TOBIAS

    Ambassador Tobias. Mr. Chairman, members of the 
subcommittee: I am very pleased to be here to testify this 
morning in support of the President's budget request and to 
report to you on the progress in implementing the President's 
emergency plan for AIDS relief. I appreciate the committee's 
indulgence in the fact that we were scheduled to do this 
earlier and I was suffering from laryngitis, which as you can 
probably tell I am not totally over yet; and then on another 
occasion the President asked me to go to South Africa to 
represent him at the inauguration of the president.
    But I am very pleased to be here today and particularly to 
be here with my friend Bono. It would be hard to find anybody 
who is working any harder on this issue than he is. As you have 
both said, this is a fight where we need everybody we can find 
to work together.
    With your permission, I will submit a longer written 
statement for the record and I would like to make a few opening 
comments.
    As you are aware and as you have made reference to, in his 
State of the Union Address last year, President Bush called for 
an unprecedented act of compassion to turn the tide against the 
ravages of HIV/AIDS with $15 billion over 5 years, more money 
than has ever been committed by any nation for any 
international health initiative: $5 billion directed at 100 
bilateral programs, $9 billion intended for new or expanded 
programs in 14--soon to be 15--focus countries; and $1 billion 
intended to support our principal multilateral partner, the 
Global Fund.
    The goals of this program are to help provide 
antiretroviral treatment to 2 million people in the focus 
countries, contribute to the prevention of 7 million new 
infections, and to help provide care for 10 million who are 
infected or affected, including the orphans and vulnerable 
children.
    Today I am pleased to report that we have made significant 
progress in beginning to implement the actions that will be 
necessary to achieve the goals of this initiative. On February 
23, a very short time after Congress appropriated fiscal year 
2004 funding for the first year of the plan, I announced the 
first release of funds for the focus country programs, totaling 
$350 million. This money is already being used in 
antiretroviral treatment programs, prevention programs, safe 
medical practices programs, and programs to provide care for 
orphans and vulnerable children. With just this first round of 
funding, an additional 50,000 people living with HIV/AIDS in 
the 14 focus countries will receive treatment, which will 
nearly double the number of people who are currently receiving 
treatment in sub-Saharan Africa. Prevention programs will reach 
about 500,000 additional people and about 60,000 additional 
orphans will receive help.
    For each of the focus countries, we have recently completed 
reviews of their annual operational plans to be addressed with 
the remaining 2004 appropriation. These plans represent the 
overall U.S. Government-supported HIV/AIDS programs in each of 
the focus countries.
    As a result of these reviews, Mr. Chairman, we are already 
moving beyond this first wave of funding, and we will be 
providing to this committee and other congressional committees 
very shortly the required notification for the obligation of 
approximately $300 million in the next tranche of funding from 
the Global AIDS Coordinator's Initiative and an additional $200 
million in funds appropriated to the Department of Health and 
Human Services and the U.S. Agency for International 
Development. That will bring to about $850 million the funds 
that we will have committed to new or expanded programs since 
the first of the year.
    While our short-term focus has been on putting funds to 
work in the field quickly and with accountability to ensure 
that those in need get help as quickly as possible, we are also 
working to ensure that host governments and local organizations 
are well prepared to fight this deadly disease. And similarly, 
we need to ensure that our own U.S. Government staffs in the 
field are properly sized in order to do this increased task 
that they are facing.
    But this is all only the first step. In fiscal year 2005 we 
have requested $1.45 billion for the Office of the AIDS 
Coordinator as part of the President's $2.8 billion total 
request. The President's request represents a $400 million 
increase over fiscal year 2004. An appropriation of $2.8 
billion will keep the emergency plan on path toward meeting the 
goals that have been set by the President and the Congress and 
is in keeping with our belief that as the emergency plan takes 
root and is scaled up additional resources are clearly going to 
be needed to effectively deliver assistance.
    Mr. Chairman, in February I also submitted to Congress a 
comprehensive integrated 5-year strategy. This strategy is 
driving everything that we are doing in the Office of the 
Global AIDS Coordinator. We have enlisted the help of the U.S. 
chief of mission in each country to bring together the local 
country team so that everybody is working in a coordinated 
effort, and I am very pleased with the way that effort is 
working.
    Within that framework, we are striving to coordinate and 
collaborate our efforts in order to respond as best we can to 
the priorities and the strategies of each of the host country 
governments, challenges which in many cases are different. In 
addition, we are increasingly coordinating our own worldwide 
response with those of our international partners--U.N. AIDS, 
the World Health Organization, the Global Fund--as well as 
nongovernmental and faith-based and community-based 
organizations and increasingly private sector companies who are 
stepping into the fray.
    Since my confirmation 7 months ago, I have had the 
opportunity to visit many of the countries in which we are 
focusing our efforts, including South Africa, Uganda, Kenya, 
Botswana, Zambia, Namibia, Rwanda, Ethiopia, and Mozambique. I 
will be leaving in a few days to visit Nigeria, Cote d'Ivoire, 
and Tanzania, and then going to Haiti and Guyana in the early 
summer.
    Finally, Mr. Chairman, I would like to say a few words 
about our policy to procure antiretroviral drugs under the 
emergency plan, a topic that has generated a significant amount 
of interest. I have consistently and repeatedly expressed our 
intent to provide, through the emergency plan, AIDS drugs that 
are acquired at the lowest possible cost, whether they are 
brand name products, generics, or copies of brand name 
products, regardless of their origin or who produces them, as 
long as we know that they are safe and effective and of high 
quality.
    As you know, this past Sunday Health and Human Services 
Secretary Thompson and I held a joint press conference in 
Geneva, where the World Health Assembly is currently taking 
place. Our purpose was to make two very important announcements 
that impact these issues.
    First, Secretary Thompson announced an expedited process 
for FDA review of AIDS drugs that combine already-approved 
individual HIV therapies into a single dose, known as fixed-
dose combination. The drugs that are approved under this 
expedited process will meet all FDA standards for safety, 
efficacy, and quality. This new FDA process will include the 
review of applications that may come from research-based 
companies that developed the individual therapies and now want 
to put them into fixed-dose combinations, or the applications 
may come from companies who are already manufacturing copies of 
those drugs for sale in the developing nations.
    For my part, I announced in Geneva that when a new 
combination drug for AIDS treatment receives a positive outcome 
under this expedited FDA review, then the Office of the Global 
AIDS Coordinator will recognize that positive result as 
evidence of the safety and efficacy of that drug, and thus the 
drug will be eligible for funding by the President's emergency 
plan so long as the various international patent agreements and 
local government policies allow for their purpose.
    Where it is necessary to do so, I will also use the 
authority that has been given to me by the Congress to waive 
buy-American requirements that might normally apply.
    Thanks to the generosity of the American people, as well as 
the growing number of donor nations, the donors to the Global 
Fund, and other multilateral sources, the human and physical 
capacity to deliver AIDS treatment is being scaled up to make 
it possible for millions more patients to follow those who are 
already receiving this life-extending therapy. As 
infrastructure is scaled up, drug availability will also need 
to be scaled up to an unprecedented level in order to fuel this 
newly expanded set of health care systems that can deliver this 
treatment capacity.
    It is in some ways in large part because of the President's 
emergency plan that the issue of drug safety needs to be 
addressed on an entirely new scale. With such a massive 
expansion of ARV treatment, the stakes have increased. If we do 
not apply appropriate scientific scrutiny to this vastly 
expanding flow of AIDS medicines, we will run the risk of 
causing the HIV virus to mutate and overcome specific drugs or 
even whole classes of drugs, and that is why getting it right 
at the outset is so important and requires great care.
    Our commitment from the beginning has been to move with 
urgency to help build the human and physical capacity that is 
needed to deliver this treatment and then to fund the purchase 
of AIDS drugs to be used in providing this treatment at the 
most cost-effective prices we can find, but only drugs that we 
can be assured are safe and effective.
    Patients in Africa deserve the same assurances of safety 
and efficacy that we would expect for our own families here in 
the United States. There should not be a double standard. But 
how to do that has presented some serious challenges. So with 
our colleagues at the World Health Organization and UNAIDS and 
the Southern African Development Community, the U.S. Government 
has been carefully examining this issue and considering 
alternatives.
    Many of the copies of the research-based AIDS drugs that 
are on the market today in developing countries may very well 
be totally safe and effective. The challenge stems in part from 
the fact that they have never been reviewed by any of the 
world's stringent regulatory authorities, and the same will 
likely be true of the additional copies of these drugs that 
will be coming to the market in the days ahead as new companies 
and particularly indigenous companies enter this market, 
something that we expect and indeed hope will happen.
    Many people and organizations have noted the World Health 
Organization's prequalification pilot program and have urged 
that we simply rely on that. We have the highest respect for 
the World Health Organization and for its program. However, the 
World Health Organization is not a regulatory authority and 
does not represent itself as such. And in my conversations with 
Dr. J.W. Lee, Director General of the World Health 
Organization, as recently as 2 days ago, he has been very 
supportive, and has said so publicly, of what we are doing with 
this new program.
    For drugs that are used in the United States, the already 
existing answer has been FDA approval, whether it is generic 
drugs or brand name drugs. Now we have a process that every 
drug company in the world who wants to participate in this 
program can submit for review to the FDA and do this very 
expeditiously.
    Today the most limiting----
    Senator DeWine. Mr. Ambassador, if you could wrap up.
    Ambassador Tobias. Okay.

                           PREPARED STATEMENT

    Today the most limiting factor in providing treatment is 
not the drugs; it is the human and physical capacity in the 
health care system in Africa. But we are making progress on 
that and it is now time to get moving with the drugs.
    I pledge that the Office of the Global AIDS Coordinator 
will continue to move with urgency in all that we do, and I 
appreciate very much the opportunity to be here today.
    [The statement follows:]

              Prepared Statement of Hon. Randall L. Tobias

    Mr. Chairman, members of the subcommittee, I am pleased to appear 
before you to testify in support of the President's Budget request for 
fiscal year 2005 for global HIV/AIDS, and to report to you on our 
progress in implement the President's Emergency Plan For AIDS Relief.
    In his State of the Union address last year, President Bush called 
for an unprecedented act of compassion to turn the tide against the 
ravages of HIV/AIDS.
    The President committed $15 billion over five years to address the 
global HIV/AIDS pandemic--more money than ever before committed by any 
nation for any international health care initiative:
  --$5 billion intended to provide continuing support in the 
        approximately 100 nations where the U.S. Government currently 
        has bilateral, regional, and volunteer HIV/AIDS programs.
  --$9 billion intended for new or expanded programs to address HIV/
        AIDS in 14 of those countries that are among the world's most 
        affected--with a 15th country to be added shortly. The initial 
        14 countries account for approximately 50 percent of the 
        world's HIV/AIDS infections.
  --And finally, $1 billion intended to support our principal 
        multilateral partner in this effort, the Global Fund to Fight 
        AIDS, Tuberculosis and Malaria, which the United States helped 
        to found with the first contribution in May 2001.
    Today, I am pleased to report that we have made significant 
progress in beginning to achieve the President's, the Congress's, and 
the American public's goal of bringing prevention, treatment, and care 
to millions of adults and children courageously living with HIV/AIDS 
and replacing despair with hope.
    On February 23, just 4\1/2\ months after we launched the Office of 
the U.S. Global AIDS Coordinator, and less than a month after the 
Congress appropriated fiscal year 2004 funding for the first year of 
the President's Emergency Plan for AIDS Relief, I announced the first 
release of funds for focus country programs totaling $350 million.
    This money is being used by service providers who are bringing 
relief to suffering people in some of the countries hardest-hit by the 
HIV/AIDS pandemic to rapidly scale up programs that provide anti-
retroviral treatment; prevention programs, including those targeted at 
youth; safe medical practices programs; and programs to provide care 
for orphans and vulnerable children.
    These target areas were chosen because they are at the heart of the 
treatment, prevention and care goals of President Bush's Plan.
    The programs of these specific recipients were chosen because they 
have existing operations among the focus countries, have a proven track 
record, and have the capacity to rapidly scale up their operations and 
begin having an immediate impact.
    Our intent has been to move as quickly as possible to bring 
immediate relief to those who are suffering the devastation of HIV/
AIDS.
    By initially concentrating on scaling up existing programs that 
have proven experience and measurable track records, that's exactly 
what we have been able to do.
    With just this first round of funds, an additional 50,000 people 
living with HIV/AIDS in the 14 focus countries will begin to receive 
anti-retroviral treatment, which will nearly double the number of 
people who are currently receiving treatment in all of sub-Saharan 
Africa. Today, activities have been approved for anti-retroviral 
treatment in Kenya, Nigeria, and Zambia, and patients are receiving 
treatment in South Africa and Uganda because of the Emergency Plan.
    In addition, prevention through abstinence messages will reach 
about 500,000 additional young people in the Plan's 14 focus countries 
in Africa and the Caribbean through programs like World Relief and the 
American Red Cross's Together We Can.
    The first release of funding from the President's Emergency Plan 
will also provide resources to assist in the care of about 60,000 
additional orphans in the Plan's 14 focus countries in Africa and the 
Caribbean. These care services will include providing critical social 
services, scaling up basic community-care packages of preventive 
treatment and safe water, as well as HIV/AIDS prevention education.
    U.S. Government staff recently completed reviews of each of the 
focus country's annual operational plans to be addressed with the 
remaining fiscal year 2004 appropriation. These plans represent the 
overall U.S. Government-supported HIV/AIDS prevention, treatment, and 
care activities in each focus country.
    As a result of these reviews, Mr. Chairman, we will be providing to 
this Committee and other congressional committees the required 
notification for the obligation of approximately $300 million in the 
next tranche of funding from the Global HIV/AIDS Initiative account. In 
addition to that $300 million, another $200 million of funds 
appropriated to the U.S. Department of Health and Human Services and 
the U.S. Agency for International Development will be put to work in 
the field, bringing to approximately $850 million the funds already 
committed to new or expanded programs since the first of the year.
    As we make additional awards, the numbers of persons receiving 
treatment and care will increase substantially. I also expect our 
efforts to strengthen and expand safe blood transfusion and safe 
medical injection programs, as well as our efforts to strengthen human 
and organizational capacity through healthcare twinning and volunteers. 
And I also expect to place an additional focus on attracting new 
partners, including more faith-based and community-based organizations 
that can bring expanded capacity and innovative new thinking to this 
effort.
    Mr. Chairman, as I mentioned, our short-term focus has been putting 
funding to work in the field quickly and with accountability to ensure 
that those in need get help as quickly as possible. In addition to 
these important ideals and the achievement of our treatment, prevention 
and care goals, in the long term we are focused on strengthening 
indigenous capacity. We need to ensure that host governments and local 
organizations are well prepared to fight this deadly disease. 
Similarly, we need to ensure that our own U.S. Government staff in the 
field is properly sized to work closely with host governments over the 
next four years in accomplishing the goals of the Emergency Plan.
    But this is only the first step. In fiscal year 2005 we requested 
$1.45 billion for the Office of the Coordinator as part of the 
President's $2.8 billion request. With these funds we will continue to 
expand access to care, treatment and prevention and also take the next 
steps to build the necessary U.S. Government and host country capacity 
needed for this Initiative. To this end, we are working with HHS and 
USAID now to create a vehicle to help provide the necessary technical 
assistance to small indigenous non-governmental and faith-based 
organizations to become a more integral part of the solution to 
fighting HIV/AIDS in their country. We are also working with USAID, HHS 
and other relevant agencies to determine a long-term staffing plan.
    As I mentioned, the President's total Emergency Plan request for 
fiscal year 2005 is for $2.8 billion, a $400 million increase over the 
fiscal year 2004 appropriation--the first year of the Emergency Plan. 
This request is in keeping with our belief that as the Emergency Plan 
takes root and is scaled up, additional resources will be needed to 
effectively deliver assistance. An appropriation of $2.8 billion will 
keep the Emergency Plan on the path toward meeting the prevention, 
treatment and care goals set by the President and the Congress. The 
appropriation will also maintain U.S. leadership in the Global Fund to 
Fight AIDS, Tuberculosis and Malaria.
    Mr. Chairman, in addition to announcing the first round of funding 
and preparing to obligate the remaining fiscal year 2004 funds, I also 
submitted to this Committee and other appropriate Congressional 
committees in February a comprehensive, integrated, five-year strategy 
for the President's Emergency Plan for AIDS Relief.
    This Strategic Plan is guiding our efforts to deploy our resources 
to maximum effect:
  --We are concentrating on prevention, treatment and care, the focus 
        of the President's Emergency Plan.
  --In the 15 focus countries, over the five years of the Emergency 
        Plan:
    --We will help to provide anti-retroviral treatment for two million 
            people;
    --We will contribute to the prevention of 7 million new HIV 
            infections; and,
    --We will help provide care to 10 million people who are infected 
            or affected by the disease in the focus countries, 
            including orphans and vulnerable children.
  --We are not starting from scratch. Rather, we are capitalizing on 
        existing core strengths of the U.S. Government, including:
    --Established funding and disbursement mechanisms;
    --Two decades of expertise fighting HIV/AIDS in the United States 
            and worldwide;
    --Field presence and strong relationships with host governments in 
            over 100 countries; and,
    --Well-developed partnerships with non-governmental, faith-based 
            and international organizations that can deliver HIV/AIDS 
            programs.
    Starting with this foundation, we are implementing a new leadership 
model for those existing capabilities--a model that brings together, 
under the direction of the U.S. Global AIDS Coordinator, all of the 
programs and personnel of all agencies and departments of the U.S. 
Government engaged in this effort. This leadership model has been 
translated to the field, where the U.S. Chief of Mission in each 
country is leading an interagency process on-the-ground. In addition to 
the work that has been done to develop the programs for fiscal year 
2004 that we are or soon will be funding, in early fall each country 
team will submit to my office a unified five-year overarching strategic 
plan to define how the President's prevention, care and treatment goals 
will be achieved in that country.
    The Emergency Plan is built on four cornerstones, which guide my 
office:
    1. Rapidly expanding integrated prevention, care, and treatment in 
the focus countries by building on existing successful programs that 
are consistent with the principles of the Plan--as we have already 
begun with the $350 million announced in February.
    2. Identifying new partners, including faith-based and community-
based organizations, and building indigenous capacity to sustain a 
long-term and broad local response.
    3. Encouraging bold national leadership around the world, and 
engendering the creation of sound enabling policy environments in every 
country for combating HIV/AIDS and mitigating its consequences.
    4. Implementing strong strategic information systems that will 
provide vital feedback and input to direct our continued learning and 
identification of best practices.
    Within that framework, we are striving to coordinate and 
collaborate our efforts in order to respond to local needs and to be 
consistent with host government strategies and priorities.
    In addition, we intend to amplify our own worldwide response to 
HIV/AIDS by working with international partners, such as UNAIDS, the 
World Health Organization, and the Global Fund, as well as through non-
governmental organizations, faith- and community-based organizations, 
private-sector companies, and others who can assist us in engendering 
new leadership and resources to fight HIV/AIDS.
    Since my confirmation seven months ago, I have had the opportunity 
to visit many of the countries in which we are focusing our efforts, 
including South Africa, Uganda, Kenya, Botswana, Zambia, Namibia, 
Rwanda, Ethiopia, and Mozambique. I'll be leaving in a few days for a 
visit that will include Nigeria, Cote d'Ivoire and Tanzania.
    In these visits, I have witnessed how these countries have 
responded, in whatever way they can, to fellow community members in 
need. As we embark on this effort, it is inspiring to observe the 
remarkable self-help already under way in fighting HIV/AIDS by some of 
the most under-resourced communities in the world. With our support, we 
hope to broaden, deepen and sustain their efforts to combat the 
devastation of HIV/AIDS.
    That is why getting the first wave of funding released quickly 
after the appropriation was so critical, and I appreciate the 
Congress's assistance in ensuring that was able to happen. I again seek 
your support in ensuring that we are able to quickly move the 
additional resources about to be sent up so we can respond with the 
urgency these individuals in need require.
    Finally, Mr. Chairman, I would like to say a few words about our 
policy to procure anti-retroviral drugs under the Emergency Plan--a 
topic that has generated a significant amount of interest.
    I have consistently and repeatedly expressed our intent to provide, 
through the Emergency Plan, AIDS drugs that are acquired at the lowest 
possible cost, regardless of origin or who produces them, as long as we 
know they are safe, effective, and of high quality. These drugs may 
include brand name products, generics, or copies of brand name 
products.
    To define the terms here, when you or I go to our neighborhood 
pharmacy and have a prescription filled with a generic drug, we do so 
with the confidence that we are being given a drug that has undergone 
regulatory review to ensure that it is comparable to the version 
manufactured by the research-based company that originally created it, 
but no longer has the patent rights to the product. It is the same drug 
in dosage form, strength, route of administration, quality, performance 
characteristics, and intended use. Drugs that have not gone through 
such a process are more accurately described as copy drugs rather than 
generics, as they are sometimes called.
    This past Sunday, Health and Human Services Secretary Tommy 
Thompson and I held a joint press conference in Geneva where the World 
Health Assembly in currently taking place. Our purpose was to make two 
very important announcements that impact on these issues.
    First, Secretary Thompson announced an expedited process for FDA 
review of applications for HIV/AIDS drug products that combine already-
approved individual HIV/AIDS therapies into a single dosage. These 
combined therapies are known as fixed dose combinations or FDCs. Drugs 
that are approved by FDA under this process will meet all FDA standards 
for drug safety, efficacy, and quality.
    This new FDA process will include the review of applications from 
the research-based companies that developed the already-approved 
individual therapies and want to put them into fixed dose combinations, 
or from companies who are manufacturing copies of those drugs for sale 
in developing nations. There are no true generic versions of these AIDS 
drugs because they all remain under intellectual property protection 
here in the United States.
    For my part, I announced that when a new combination drug for AIDS 
treatment receives a positive outcome under this expedited FDA review, 
the Office of the Global AIDS Coordinator will recognize that result as 
evidence of the safety and efficacy of that drug. Thus the drug will be 
eligible to be a candidate for funding by the President's Emergency 
Plan, so long as international patent agreements and local government 
policies allow their purchase. Where it is necessary and appropriate to 
do so, I will also use my authority to waive the ``Buy American'' 
requirements that might normally apply.
    The issue of determining the safety and efficacy of the copy drugs 
is, in some ways, a positive problem to have. Many have argued over the 
years that bringing antiretroviral therapy to places like Africa on a 
large scale could never happen--that the problems were too complex. 
Well they were wrong. It is happening now--today.
    Because of the President's Emergency Plan For AIDS Relief, and with 
the partnerships between this initiative and those who are directly 
delivering treatment--the NGO's and faith-based organizations, the 
medical care-givers and the health-care delivery facilities of the 
governments of these nations themselves, just a few short months after 
launching the President's Emergency Plan, we have already increased by 
thousands the numbers of patients suffering from HIV/AIDS who are now 
on life-extending ARV treatment.
    Thanks to the generosity of the American people as well as a 
growing number of donor nations, the donors to the Global Fund and 
other multi-lateral sources, companies in the private sector, private 
foundations and others, as the human and physical capacity to deliver 
AIDS treatment is scaled up to make it possible, millions more patients 
will follow those who are already receiving this life extending 
therapy.
    Drug availability will also need to be scaled up to an 
unprecedented level in order to fuel this newly expanded treatment 
capacity. It is in large part because the President's Emergency Plan 
for AIDS Relief has made such a dramatic commitment to making drug 
treatment available that issues of safety need to be addressed on an 
entirely new scale. With such a massive expansion of ARV treatment, the 
stakes have increased.
    If we don't apply appropriate scientific scrutiny to this vastly 
expanded flow of AIDS medicines, we will run the risk of causing the 
HIV virus to mutate and overcome specific drugs or even whole classes 
of drugs. That could render our current drugs useless--and, incredibly, 
it could leave Africa even worse off than it is today. That's why 
getting this right at the outset is so important and requires great 
care.
    Our commitment, from the beginning, has been to move with urgency 
to help build the human and physical capacity that is needed to deliver 
this treatment, and then to fund the purchase of AIDS drugs to be used 
in providing this treatment, at the most cost effective prices we can 
find--but only drugs that we can be assured are safe and effective. 
Patients in Africa deserve the same assurances of safety and efficacy 
that we expect for our own families here in the United States. There 
should not be a double standard. But how to do that has presented some 
serious challenges. With our colleagues at the WHO, UNAIDS, the 
Southern African Development Community, and many others, the U.S. 
Government has been carefully examining this issue--and considering 
alternatives.
    Many of the copies of the research-based AIDS drugs that are on the 
market today in developing countries may well be safe and effective. 
The challenge stems in part from the fact that they have never been 
reviewed by any of the world's stringent regulatory authorities. And 
the same will likely be true of the additional copies of those drugs 
that will surely be coming on the market in the days to come, as new 
indigenous companies enter this market--something we expect and hope 
will happen.
    Many people and organizations have noted the World Health 
Organization's prequalification pilot program and have urged that we 
simply rely on it. We have the highest respect for the WHO and its 
program. However, the WHO is not a regulatory authority and does not 
represent itself as such.
    For drugs that are used in the United States, the already existing 
answer to ensuring safety and efficacy is simple: both research-based 
companies and generic companies submit their products to the U.S. Food 
and Drug Administration for review and approval. What FDA has announced 
is a process that will not only make it possible, but relatively fast 
and easy, for every manufacturer to now submit their AIDS drugs to that 
same scrutiny, including those that will only be made available in 
developing countries. If those drugs meet the appropriate standards--as 
we hope many or all will do--they can then be approved for potential 
funding by the President's Emergency Plan.
    I hope that FDA will receive applications as soon as possible from 
many companies that will want their drugs to be candidates for U.S. 
funding for use in the treatment programs of the President's Emergency 
Plan. If this process enables us to get safe and effective drugs at 
lower prices than we do now, that would indeed be a great success.
    Today the most limiting factor in providing treatment is not 
drugs--it is the human and physical capacity in the health care systems 
of Africa. The continent is desperately short of health care 
infrastructure and health care workers. Both are needed in order to 
deliver treatment broadly and effectively. We find that African leaders 
and African AIDS advocates are quite focused on addressing this 
limitation--because they know that all the drugs in the world won't do 
any good if they're stuck in warehouses with no place to go to actually 
be part of the delivery of treatment to those in need.
    But as we successfully attack that issue and Africa's capacity to 
deliver drug treatment grows, drug availability will become an 
increasingly significant constraint on treatment. We can't let that 
happen.
    For our part, I pledge that the Office of the Global AIDS 
Coordinator will continue to move with urgency in all that we do. 
President Bush has made clear to me that this is an emergency at the 
top of the list of America's priorities. We will act accordingly.
    Mr. Chairman, I am grateful for this Committee's resolve to defeat 
the HIV/AIDS pandemic. Your leadership and support has facilitated the 
speed with which we are responding to people in need, and that 
commitment will ensure our success--success that will be measured in 
lives saved, families held intact, and nations again moving forward 
without the shadow of this terrible pandemic.
    I would be pleased to respond to any questions you may have.

    Senator DeWine. Mr. Ambassador, let me turn to the 
prevention of mother-to-child transmission issue. Fiscal year 
2004 is actually the last year of this program. My 
understanding is that your plan is that beginning with fiscal 
year 2005 the budget does not provide any specific line item 
for this and that this program would be incorporated actually 
under your office.
    I wonder if you could tell us what you are anticipating for 
this program, how much you are looking at spending under your 
office, and what your plans are for the non-initiative 
countries for this program?
    Ambassador Tobias. Senator, the prevention of mother-to-
child transmission program has been very important, not only in 
treatment terms but also one could argue in orphan terms. I 
think you could make the case that the most effective orphan 
program we can have is keeping the mothers alive so that we do 
not have the orphans. The program to prevent mother-to-child 
transmission has been very effective. It is relatively 
inexpensive and it is a program that we will expand, not only 
in the countries in the program where it exists but well beyond 
that as we can.
    We are now going to something that is generally referred to 
as the mother-to-child transmission plus program, in that the 
mother-to-child transmission program per se really focused on 
protecting the health of the child and ensuring that when the 
baby was born the odds were improved that the baby would be 
infection-free. But what about the mother, what about the 
father, what about the siblings that are in that family? So the 
mother-to-child transmission plus program will begin to address 
those, too.
    This program, as you know, was started in the countries 
that became the focus countries. I think it gave us an 
important jump start on getting the emergency plan implemented. 
I would hope that we can find ways to take the lessons that we 
are learning in the focus countries and begin to expand those 
lessons into the so-called non-focus countries as we go forward 
and as funding permits.
    Senator DeWine. The plus program is certainly a wonderful 
idea and I think we all understand how important it is to keep 
the mother alive and keep the mother there for the children. I 
guess the concern would be that that prevents us--that focus 
might--you know, these are tough choices--might prevent us from 
moving forward into other communities and to other areas and 
expanding the mother-to-child program.
    What are the tradeoffs here? Let us be honest. What are we 
talking about?
    Ambassador Tobias. Well, you are exactly right with respect 
to the issue of tradeoffs. There are tradeoffs virtually 
everywhere we look.
    Senator DeWine. I mean, the mother-to-child program can be 
a fairly cheap program if you have got the infrastructure to 
implement it. It certainly is cheap as far as what the drugs 
cost if you can get the infrastructure going.
    Ambassador Tobias. I certainly do not anticipate that we 
are talking about an either-or situation here. I think that we 
need to, as you suggest, expand the mother-to-child 
transmission program, but with the building of increased 
infrastructure and the capabilities that we are putting in 
place I also believe that we can expand that into the mother-
to-child plus program also.
    Much of what we do will be driven by the policies that are 
established by the health officials and the government leaders 
in each of the countries in which we operate, and we need to 
pay close attention to that.
    Senator DeWine. Let me move to another area because I have 
one last question and my time is almost up. Let me move to the 
pediatric treatment, which I touched on in my opening 
statement. How does the President's 5-year strategy incorporate 
the special needs of children who are infected with HIV and 
require HIV treatment? What is the administration going to do 
to ensure that all HIV/AIDS drugs are available for pediatric 
use? And what is the administration going to do to ensure that 
both pediatric professionals and other HIV/AIDS workers have 
the necessary information and training to treat children 
infected with HIV/AIDS?
    Ambassador Tobias. I think you are very correct, Senator, 
that not only in this field but in other fields the amount of 
pediatric-specific research that has been done has been too 
little, and we clearly need more in this field. I will rely on 
the medical experts and the technical experts as to exactly how 
we need to address this, but we do need to expand the care to 
HIV-infected young people.
    But again, the best answer to that is the mother-to-child 
transmission program and things like that to keep that 
infection from going----
    Senator DeWine. No doubt about it, it is the most cost-
effective and we can save the most lives with the mother-to-
child. But still, every country I visited--and I visited a 
number of them--we have got kids out there who are dying and 
there are kids out there who could be saved if we could get the 
treatment to them, and we do not want to forget them.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.
    As you may have gathered by some of the demonstrators here 
this morning, there is some concern on the question of generic 
drugs. For months you had said: ``There is no process, no 
principles, no standards in place today,'' to assure the safety 
of generic fixed-dose combinations manufactured overseas. Now, 
many health experts and the World Health Organization disagreed 
with you.
    Now we have a new review process. How do you answer the 
fact that it appeared the review process came up after U.S. 
companies were interested in manufacturing their own fixed-dose 
combination drugs? And even then, how long is it going to take 
for this review process? I am just wondering if we have just 
one more unnecessary obstacle to getting these drugs out to the 
people who need them desperately.
    Ambassador Tobias. Well, Senator, first let me say that the 
World Health Organization does not present their 
prequalification program to be the equivalent of regulatory 
review. I would simply refer to the statement that has been 
released by Dr. J.W. Lee, the head of the World Health 
Organization, in total support of the program that we are 
putting in place to review these drugs.
    Senator Leahy. When will we have the drugs out there?
    Ambassador Tobias. The FDA tells me that if, for example, 
companies are applying today, which they could, that in some 
cases approval could be received in as little as 2 weeks. In 
some cases it could be 6 weeks or so, depending on the data. 
Then it will depend on the programs in individual countries. 
But we will be certainly ready to go.
    Senator Leahy. Would we have gone to a generic fixed-dose 
combination if American drug companies had not shown an 
interest in producing it themselves?
    Ambassador Tobias. Well, the announcement that I have read 
in the media, as you have, from the American companies, came 
after we announced this program, which we have been working on 
with the FDA for some time. I have said on a number of 
occasions that we are totally in favor of fixed-dose 
combinations. The issue has never been whether fixed-dose 
combinations are good or bad. I do not think there is any 
question with anybody that they are good because they make it 
easier for doctors to administer the program and patients to 
adhere.
    Senator Leahy. I am just trying to see what this is. This 
is today's New York Times and, for what it is worth: ``A WHO 
official familiar with both his agency's approval process and 
the outlines of the proposed American one said, `Although the 
United States has not exactly been in love with our 
prequalification process, they are now going to do exactly the 
same. If they want to create a parallel structure and do a good 
job, that is fine.' ''
    Let me ask you this--and I will put the whole article in 
the record. Over the next 5 years, you say you hope to prevent 
7 million new HIV/AIDS infections. We all agree that would be a 
great achievement. There are 5 million new ones each year. So 
even if you succeed, there will be at least 18 million new 
infected people by the end of 5 years, 2.5 times the number we 
have prevented.
    I raise this because in my opening statement you remember I 
mentioned the issue of absorptive capacity, what can we do. How 
did you come up with the number $2.8 billion for fiscal year 
2005? Could we not be doing a lot more? Because it seems to me 
we are in some ways chasing after the train. We are not keeping 
up with even the rate of infection, to say nothing about 
helping those who are direly in need.
    I am told by so many that we have the capacity, if the 
money was there, we have the capacity to do more. We have 
private organizations, private groups. The Gates Foundation did 
a lot more on this than the United States was willing to 
initially.
    [The information follows:]

            [From the New York Times, Tuesday, May 19, 2004]

              Views Mixed On U.S. Shift On Drugs For AIDS

                       (By Donald G. McNeil Jr.)

    AIDS activists and doctors who treat patients in poor countries 
greeted the Bush administration's shift in its policy on procuring AIDS 
drugs with mixed reviews yesterday.
    Many were delighted that the administration had decided to buy 
anti-AIDS cocktails that combine three drugs in one pill, and that it 
for the first time was willing to consider buying drugs from low-cost 
generic manufacturers, who are now the only companies making 3-in-1 
pills.
    ``I think it's fabulous,'' said Dr. Merle Sande, who treats 4,000 
AIDS patients in Uganda, most of whom cannot afford drugs. Most of 
those who can are on Triomune, a 3-in-1 pill from Cipla Ltd., an Indian 
company. Three-in-one drugs, he said, ``are exactly what we need out 
there.''
    At the same time, some activists expressed frustration that the 
White House had set up a new approval process overseen by the United 
States Food and Drug Administration when one overseen by the World 
Health Organization already existed.
    ``This just another roadblock,'' said William Haddad, an American 
generic manufacturer who now consults for Cipla. ``The W.H.O. process 
was a pain in the neck--it took us two years to get Triomune approved. 
Why do we have to bend over and let them kick us again?''
    Henry A. Waxman, a Democratic Los-Angeles area congressman who has 
harshly criticized the Bush administration's previous refusal to spend 
money on generic drugs said yesterday that he was ``disappointed that 
the plan does not involve cooperation with the World Health 
Organization.''
    ``We need to see the fine print before we can tell if the new 
process will actually improve access to these affordable, effective 
drugs,'' he said.
    Even though the administration indicated that it would waive the 
usual $500,000 fee for approving a drug and will let companies submit 
published data instead of starting new clinical trials, any new 
approval process involves reams of paperwork, legal expenses and time, 
critics said.
    The World Health Organization had no official reaction yet to the 
decision, a spokeswoman said.
    But a W.H.O. official familiar with both his agency's approval 
process and the outlines of the proposed American one, speaking on 
condition of anonymity, shrugged off the problem. ``Although the United 
States has not exactly been in love with our prequalification process, 
they are now going to do exactly the same,'' he said. ``If they want to 
create a parallel structure and do a good job, that's fine.''
    The official questioned how Tommy G. Thompson, the secretary of 
health and human services, could promise to approve new drugs in as 
little as two to six weeks unless it simply accepted all the data 
submitted to the W.H.O. ``For us, even if everything is perfect, it 
takes a minimum of three months,'' he said.
    Dr. Mark Goldenberger, director of the Food and Drug 
Administration's office that evaluates drugs for infectious diseases, 
said that ``two weeks would be at the extreme short end'' and would 
probably apply only to something like putting three already-approved 
drugs in one plastic blister pack, because all the agency would look at 
was the packaging.
    Asked if the F.D.A. would accept information gathered by W.H.O. 
inspectors, Jason Brodsky, an agency spokesman, said that there was not 
any agreement allowing it, ''but we would be willing to consider any 
information that we got from other countries in deciding whether or not 
we'd inspect.''
    On Sunday, as health ministers from around the world were gathering 
in Geneva for their annual meeting, the Bush administration made a 
surprise announcement that it would speed up its approval process for 
AIDS drugs to be bought for very poor countries and would consider 
generic drugs, 3-in-1 pills and letting different companies package 
their drugs together. The administration had been expected to face 
heavy criticism at the weeklong meeting for its previous reluctance to 
approve generic AIDS drugs.
    Some companies appeared to have been told of the administration's 
announcement in advance. Merck, Bristol-Myers Squibb and Gilead 
Sciences immediately issued a joint statement saying they planned to 
develop a 3-in-1 pill. GlaxoSmithKline and Boehringer Ingelheim said 
they were discussing packaging three of their drugs together.
    ``Obviously, they had inside information,'' complained Dr. Paul 
Zeitz, director of the Global AIDS Alliance, which pushes for cheaper 
AIDS drugs for the third world. ``That calls into question the honest 
broker role' of the U.S. government.''

    Ambassador Tobias. Senator, I think there is no question 
that the magnitude, the broad magnitude of this problem, goes 
well beyond the resources and the focus of the President's 
emergency plan. I do not think the emergency plan was intended 
to attack the entire problem. We need to get more resources and 
more participation from other people in the world.
    In 2003 the contributions of the U.S. Government for 
international HIV/AIDS totaled more than the rest of the 
world's governments combined. We are on a path so that in 2004 
our contributions may well be close to twice as much as the 
rest of the world combined. So we are doing a lot, but the rest 
of the world needs to do more.
    I think the issue is not where do these dollars fit in with 
the magnitude of the problem. It really is can we efficiently 
and effectively absorb the resources that we are bringing to 
bear and use them as well as possible, and I think reasonable 
people can disagree. But we are moving pretty quickly, and I 
think we will know more in the months ahead.
    Senator Leahy. My time is up, but I wonder if the chairman 
would allow me one more question here. And we should carry on 
that conversation.
    Ambassador Tobias. Yes, sir.
    Senator Leahy. Because I believe we could be doing a lot 
more than we are, and I believe we have set some artificial 
barriers to doing more.
    But I looked at an editorial today saying that the 
administration feels condoms are not effective in preventing 
the spread of HIV in the general population. I mentioned in my 
opening statement the 15-year-old African girl. ``On average, 
adolescents become sexually active at 16 to 17 years of age, 
some even younger. In some African countries, infections among 
women are rising fastest among those who are married. Sexual 
abuse and coercion within marriage is widespread.''
    I mean, how long do you have to wait to receive accurate 
information about the importance and effectiveness of condoms 
in preventing AIDS? You have taken--I understand this was taken 
off, this information was taken off the CDC and USAID web 
sites. How do we answer these questions?
    They say, in the editorial, it says: ``Randall Tobias, its 
AIDS Coordinator, has said numerous times that condoms are not 
effective at preventing the spread of AIDS in the general 
population.'' The editorial goes on to say: ``Mr. Tobias is 
wrong.''
    Here is your chance to respond.
    Ambassador Tobias. Senator, here is the report in my hand 
from the London School----
    Senator Leahy. School of Hygiene and Tropical Medicine.
    Ambassador Tobias [continuing]. The London School of 
Hygiene and Tropical Medicine, which allegedly does not exist. 
And it says exactly what I have said before, that in their 
study less than 7 percent of women used a condom in their last 
sex act with their main partner; less than 50 percent of women 
with casual partners used a condom.
    There is a new study from----
    Senator Leahy. Less than 50 percent do; does that mean 
that, say, 40 percent or so do?
    Ambassador Tobias. Well, this is again a study in a broad-
based population. But the point is--and let me make just one 
more reference. There is a new UNAIDS study out that was peer-
reviewed by the Population Council's peer review process, and 
just one quote from that: ``There are no clear examples that 
have emerged yet of a country that has turned back a 
generalized epidemic primarily by means of condom promotion.''
    Senator Leahy. Primarily, primarily.
    Ambassador Tobias. Yes.
    Senator Leahy. Do you believe they should be withheld----
    Ambassador Tobias. No.
    Senator Leahy [continuing]. From 15- or 16-year-olds?
    Ambassador Tobias. No, absolutely not. Our program is A, B, 
C.
    Senator Leahy. Absolutely not. A 15-year-old, it would not 
be withheld?
    Ambassador Tobias. The person that you described earlier, 
as I understood your description, would be someone that ought 
to have condoms available. I was in an area in northern Kenya 
recently where the incidence rate in 15- to 24-year-old girls 
is 24 percent and it is 4 percent in boys. But the evidence is 
that is not going to solve the problem, and we need to do a 
number of other things. That is why we are putting a lot of 
emphasis on the messages that Uganda has proven can be 
effective by getting young people to understand that if they 
delay the age at which they become sexually active and then if 
people who become sexually active reduce their number of 
partners, hopefully to one, those are the two factors that have 
been demonstrated to make a big difference.
    But condoms are an important part of our program.
    Senator Leahy. It would also help if that woman who reduces 
it to one, if her partner had reduced it to that one, too. 
Often that is not the case.
    Ambassador Tobias. Well, and that is where testing is so 
critically important. You are absolutely right.
    Senator Leahy. Thank you, Mr. Chairman.

             OPENING STATEMENT OF SENATOR MITCH MC CONNELL

    Senator McConnell [presiding]. Thank you, Senator Leahy.
    The President's HIV/AIDS initiative is focused on 14 
countries in Africa and the Caribbean. Congress added an 
additional country in the fiscal year 2004 Foreign Operations 
bill. Have you identified the fifteenth focus country and what 
criteria are you using to select that country?
    Ambassador Tobias. Senator, we have not identified the 
country yet. I have gotten input from a variety of sources 
throughout the government and beyond. We identified 39 
candidate countries that anybody could think of. We put 
together a list of criteria looking at the infection rate, the 
health care system, the national leadership, which is a 
critically important issue, and how helpful the leadership 
could be and so forth.
    We are in the process of getting that down to a very short 
list and I am hoping that in a relatively short time we will be 
in a position to make that selection.
    Senator McConnell. Some have expressed concern that the 
administration is actually shortchanging countries that are not 
on the focus list of 15 and that more should be done to address 
rising infection rates in certain non-focus countries. Do you 
have any response to those criticisms? And are non-focus 
countries targeted for increases in bilateral assistance next 
year?
    Ambassador Tobias. Senator, one of the important principles 
of the President's program is focus. It is to try to keep this 
from being an inch wide--or an inch deep and a thousand miles 
wide and not really being able to make an impact.
    But we also need to recognize that this is not a disease 
that respects political boundaries. So we need to do what we 
can in the so-called non-focus countries. I am looking for some 
ways to shift at least some amount of resources into some of 
the non-focus countries that are being hit the hardest. But I 
think it is very important that we not lose sight of the focus 
aspect of this program, because the focus countries really 
represent 50 percent of the infections in the world and I think 
it is very important that we make a major impact there.
    Senator McConnell. I agree.
    The fiscal 2005 budget request for a contribution to the 
Global Fund to Fight AIDS, Tuberculosis, and Malaria is $200 
million. In the fiscal year 2004 Foreign Operations bill 
Congress provided not less than $400 million as a contribution 
to the Fund, which was $200 million above the request.
    Has the congressionally mandated increase leveraged 
additional contributions from other donors? How can we get, for 
example, donors like Russia--$20 million, Saudi Arabia--$10 
million, and Singapore--$1 million--to contribute more?
    Ambassador Tobias. Well, I think there are a number of ways 
we can do that. One of them is leadership. I have asked the 
President to mention this subject every time he has the 
opportunity. The Secretary of State is doing the same thing. I 
think the work that Bono is doing to draw attention to this and 
encourage the rest of the world to step up to this is extremely 
important, because we need to make this a program that gets 
broad support from all governments.
    Senator McConnell. Do you think Congress should provide 
$400 million for the Global Fund next year? And if we did that, 
do you anticipate U.S. contributions exceeding 33 percent of 
the total amount contributed to the fund?
    Ambassador Tobias. Mr. Chairman, the amount that the 
President has requested in his budget of $200 million is 
consistent with the original $15 billion proposal. This is one 
of those arguable tradeoff areas in the sense that the 
incremental difference between what the administration 
requested and what was appropriated to the Global Fund is money 
that might have been available for us to use to focus on the 
non-focus countries.
    So it is a matter of the tradeoffs of how we want to do 
that. The Global Fund is a very important part of our overall 
strategy.
    Senator McConnell. Is it being effective, yielding results 
out in the field?
    Ambassador Tobias. Well, it is new. It is only 2\1/2\ years 
old. They are experiencing the kinds of growing pains that 
would be expected. We are putting money into technical support 
in countries where the Global Fund is issuing grants in order 
to try to help those countries, first of all, be more effective 
in writing their grant proposals to the Global Fund, and then 
in utilizing and implementing the resources that come from the 
Global Fund.

                           prepared statement

    Senator McConnell. I have great hope for the Global Fund 
over time. But again, it is relatively new and it is just 
getting started.
    Thank you, Mr. Ambassador.
    [The statement follows:]

             Prepared Statement of Senator Mitch McConnell

    Today, HIV/AIDS is recognized as a significant transnational crisis 
that poses an immediate and growing threat to social, economic and 
political stability across the globe. While it may be expedient to 
frame the pandemic in geopolitical terms, it is far more difficult--
indeed horrific--to comprehend the devastation of the virus in 
personal, human terms.
    The statistics are staggering. As many as 46 million people live 
with HIV/AIDS today, and an estimated 20 million have already perished 
from complications of the virus. Last year alone, 5 million people 
became newly infected, and 3 million died from AIDS complications.
    This viral holocaust creates widows and orphans and destroys entire 
families. It is especially brutal to youth, and saps the hope and 
promise of future generations. If left unchecked in developing 
countries, it is conceivable that HIV/AIDS will destroy entire 
societies, economies and political systems.
    Under President Bush's leadership, America has significantly 
increased its contributions to combating this disease. Over a five year 
period, we will contribute a total of $15 billion to HIV/AIDS programs 
and activities. Fifteen countries, primarily in Africa and the 
Caribbean, are the main focus of this initiative, although funding will 
continue to some 100 countries where we have ongoing programs, and to 
the Global Fund to Fight AIDS, Tuberculosis and Malaria.
    There are no shortages to the challenges in successfully managing 
this disease. Some argue that we--and other nations--should spend more 
on HIV/AIDS, and that we shortchange the cause by not providing the $3 
billion authorized by Congress in the AIDS bill.
    Perhaps America should spend more, but that will ultimately be 
determined by fiscal constraints. I would point out, however, that last 
year's budget request for HIV/AIDS programs exceeded the total amount 
provided from fiscal years 1993 through 2001. Further, the President's 
plan gradually increases spending over the five year period so that 
beginning in fiscal year 2006, the budget request exceeds $3 billion 
and tops nearly $4 billion in fiscal year 2008.
    Funding alone is not enough. To stem the tide of HIV/AIDS, nations 
must have committed leadership, the most basic health care delivery 
systems, and the capacity to absorb substantial assistance targeted 
toward the health and welfare of all people--regardless of ethnic, 
tribal, political, gender, or religious affiliation.
    It will be an uphill battle. Of the 12 focus countries included in 
the Transparency International Corruption Perception Index 2003, only 
one--Botswana--is above a half-way mark of five. Nine countries rated 
below a three. In 2003, Freedom House scored only four focus counties 
as ``free''--seven were rated ``partly free'' and three ``not free''.
    ``A business as usual'' approach by focus countries will only 
translate into more lost lives and greater tragedy for millions of 
people. Many stand ready to help, including such faith-based 
organization as Lott-Carey International (LCI). I strongly encourage 
the Coordinator's office to use the experience and indigenous contacts 
that LCI and other groups bring to this effort.
    Let me close with brief comments on Burma and South Africa--
countries which represent the range of freedom in the developing world. 
In Burma, a military junta daily abuses and denies the rights of its 
citizenry, including access to even the most basic health care and 
medicines. While we may not accurately know the extent of the HIV/AIDS 
infection rate in Burma, we do know that the pandemic cannot be 
addressed by an illegitimate regime that places the welfare of the 
people far below the acquisition of Russian MiGs, nuclear reactors and 
money laundering.
    In South Africa, a country whose journey toward democracy has been 
nothing but inspirational, the lack of political will by the Mbeki 
government to address the HIV/AIDS pandemic head-on has wasted precious 
time in stemming the tide. South Africa's heroes are the health care 
workers at the grassroots level; the current government must be willing 
to partner with them--and available science--to combat the disease.
    It is my hope that in the future President Mbeki will be as 
vigilant on this issue as both our witnesses here today.

    Senator McConnell. Senator Durbin.

             OPENING STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. Mr. Ambassador, thank you very much.
    Sometimes I get the impression that different rooms on 
Capitol Hill are really living in different worlds. Last week 
we entertained people from the administration who, having told 
us in February they would need no additional funds for the war 
in Iraq, had a different point of view and came to tell us that 
they needed $25 billion and then, Assistant Secretary Wolfowitz 
said, maybe $50 billion on an emergency basis.
    The reasoning was hard to argue with. They said the war is 
not going well, our national interests are at stake, we cannot 
turn our back on our commitments, and we cannot turn our backs 
on people whose lives are at stake as well.
    I might say the same thing about the global AIDS epidemic. 
That war is not going well either, our national interests are 
at stake, we cannot turn our back on our commitments, there are 
people who have their lives at stake.
    As I look at the administration, I thought that the 
President's announcement a little over a year ago of a $15 
billion commitment was historic, receiving broad bipartisan 
support. His first budget request, the first of the 5 years was 
$2 billion. With the kind efforts of Senator DeWine and my 
colleagues, we raised that to $2.4 billion on the floor.
    Then came this year's budget request of $2.8 billion, still 
short of the mark of keeping up with the $15 billion 
commitment. With Senator Lugar and Senator DeWine and others, 
we brought this up to $3.3 billion in the budget resolution.
    But, going to a point that Chairman McConnell raised, how 
can we rationalize or justify such a dramatic decrease in our 
commitment to the Global Fund? You received a letter from Dr. 
Feicham on March 25 of this year and he made it clear that the 
amount that we are talking about appropriating for the Global 
Fund is dramatically inadequate. For this effort to reach its 
goal and to save lives across America, he believes $1.2 billion 
is needed from the United States.
    I think good evidence is there to support that position. 
Why do you feel that, instead of increasing our commitment to 
the war on AIDS, that we can start retrenching and pulling back 
in this next fiscal year?
    Ambassador Tobias. Well, Senator, the budget request for 
2005 is in fact the same amount that the administration 
requested in the previous year and that is reflected in the 
billion dollar component of the first $15 billion request. I am 
very supportive of the Global Fund, but I am also very 
supportive of the President's emergency plan. I want to be sure 
that we are not making tradeoffs that get in the way of our 
doing the things that we are demonstrating we can do of getting 
the money out and getting it to work very quickly.
    Dr. Feachem is talking about the broad need out there. I 
think we need to focus on the money we are getting out the door 
today and next month and in the next year.
    Senator Durbin. So do you think he is overstating his need 
for next year?
    Ambassador Tobias. No, I do not think he is overstating the 
need, but he may be overstating the ability to utilize those 
funds that quickly. But again, I want to make clear that the 
Global Fund is certainly a very important aspect of our overall 
strategy.
    Senator Durbin. I would say, Ambassador, that that is a 
fundamental error of this administration. I believe it is 
important for us to maintain our bilateral commitment to the 14 
nations, ultimately 15. But the Global Fund is serving a large 
part of the world that we are not addressing with bilateral 
assistance. I have seen that part of the world--India for 
example, desperate to see their Global Fund projects not only 
initially authorized, but carried on. When we fall so far short 
of what is needed, it is going to mean a cutback on fighting 
this epidemic in India.
    Let me also address the cutbacks in the budget relative to 
TB and malaria, a cutback of some $46 billion. I have been to 
India just a few weeks ago to see DOTS, the Direct Observed 
Therapy, and it is done on the cheap. I saw it in a shoe store 
in one of the poorest neighborhoods in New Delhi.
    How can we, in light of the fact that TB is such a killer 
and linked so many times to HIV/AIDS, how can we rationalize or 
justify cutting back in our commitment to TB and malaria?
    Ambassador Tobias. Well, TB and malaria are very important 
components of the program. Testing people who have HIV to 
determine whether or not they have TB and can be put into TB 
programs is a very important component of this. We do need to 
stay very focused on TB and malaria.
    Senator Durbin. We need more than focus; we need money. 
Focus is good; money is better. In this situation, a little bit 
of money goes a long, long way. Ten dollars for the therapy to 
deal with tuberculosis, and the observation of a shoe store 
owner of a person taking their medicine has created a health 
infrastructure which nobody knew could exist in this country, 
this vast country of India.
    I am just troubled by the fact that with such facility we 
talk about $25 billion more here and $50 billion more there, 
and when it comes to these issues of the war on AIDS and the 
war on tuberculosis, frankly, we are talking about a hollow 
army and a hollow commitment. I think we can do better. I think 
the President called on us to do better. But frankly, the 
President's rhetoric is not matched by his budget numbers, and 
people will die as a result of that.
    Ambassador Tobias. Well, we are very much on a path to meet 
the President's commitment of $15 billion over 5 years and we 
are implementing the needs in people and infrastructure in a 
very aggressive way. I think as we get more health care system 
improvement in place we are certainly going to be able to 
implement more quickly.
    Senator Durbin. My last point--thank you for your 
forbearance, Mr. Chairman--is that is an argument I 
categorically reject, and here is how it goes: We cannot give 
them the money; they do not have the health infrastructure. 
Well, how do you get the health infrastructure? You start 
training people to be doctors and nurses and medical 
professionals. You start setting up clinics.
    How are they going to do that? Is this supposed to spring 
just automatically? I think we have to invest in the 
infrastructure to deliver the drugs, to bring the people in, to 
monitor their activity, for public education. To say we are 
going to wait on the infrastructure before we send the money 
means basically we may not ever send the money.
    Ambassador Tobias. Well, we are not waiting on the 
infrastructure. That is exactly where the initial money is 
going, is to help build the health care systems and the 
infrastructure. The greater operating expense going forward is 
going to be the things that we put into that system.
    But there is no question that the magnitude of this problem 
is well beyond what this program is focused on and we need to 
get more help from everybody that we can find that will provide 
help.
    Senator Durbin. Thank you.
    Senator McConnell. Thank you, Mr. Tobias.
    Thank you, Senator Durbin. We are going to complete your 
appearance right now, Mr. Tobias. Any Senators who wish to 
submit questions in writing, may do so. We have a vote at 
11:30, so what I am going to do is to have a very short recess. 
We are going to catch the vote. We will come back and have the 
second panel as soon as I return, which will be shortly.
    Senator Leahy. Mr. Chairman.
    Senator McConnell. Senator Leahy.
    Senator Leahy. If I might, there will be questions for the 
record. I would just let Ambassador Tobias know that one 
question I will ask, and I really want a straight answer on 
this, is that we have been told that even though the 
administration's own experts have rated some of the faith-based 
organizations very, very low as to their abilities, they are 
getting preference for funding.
    I have some faith-based organizations I feel highly about. 
But what I feel most urgently is to do something to stop AIDS, 
and I do not want to think, with all the money we are doing, 
that it is being passed out as a political goodie. So look at 
my question. It is a very, very serious one.
    Senator McConnell. All right. We thank you, Mr. Tobias. We 
will take a brief recess and then resume the hearing shortly.
STATEMENT OF BONO, FOUNDER OF DATA, DEBT AIDS TRADE 
            AFRICA
ACCOMPANIED BY AGNES NYAMAYARWO, NURSE AND AIDS ACTIVIST, UGANDA

    Senator McConnell. This hearing will resume.
    Our second witness needs no introduction. In this town he 
is known as much for his music as he is for his work on behalf 
of HIV/AIDS and debt relief. He is an effective spokesman for 
these causes and his political skills are as good as any on 
this subcommittee, perhaps even better.
    So welcome, Bono. I understand that with you is Ms. Agnes 
Nyamayarwo, a nurse and AIDS activist from Uganda. I will leave 
the formal introduction of her to you, but I would request Ms. 
Nyamayarwo take a seat next to Bono, if you will. We want to 
give our colleagues an opportunity to ask questions to someone 
whose personal insights will undoubtedly be very, very helpful.
    Before you make a brief opening statement, let me take a 
moment to thank you for your eloquent description in Time 
magazine, Bono, of a woman we both admire and support, Burmese 
democracy leader Aung San Suu Kyi. Last week she, the National 
League for Democracy and ethnic nationalities made the 
courageous and correct decision to boycott the junta's sham 
constitutional convention in Rangoon.
    I unabashedly use this opportunity, while the spotlight 
shines on a high-profile activist such as yourself, to 
highlight her plight. At this critical moment she and the 
people of Burma need the world's attention and support. I am 
pleased that the United Nations, the European Union, Japan, 
Malaysia, and Thailand have expressed concern with the regime's 
unwillingness to move forward in a meaningful reconciliation 
process with the NLD and the ethnic minorities.
    The Burmese people should find encouragement from these 
remarks. As we approach the anniversary of Burma's 1990 
elections and last year's massacre, which almost took Suu's 
life, I would urge my colleagues in both the Senate and House 
to quickly renew import sanctions against the junta. Bono, I 
know you agree that we cannot fail Suu Kyi or freedom in Burma.
    Senator Leahy will be back shortly and I will allow him to 
make his comments then. I think what we will do is proceed, 
Bono, with your opening remarks.
    Bono. Thank you very much. Thank you very much, Chairman 
McConnell. It is an honor to be asked to share my thoughts 
today. I would like to thank friends Leahy, DeWine, and Durbin. 
When they come back I will. They have shown great leadership on 
this subject and, I have to say, patience in dealing with a 
rock star, and a rock star who asks for a seat at your 
distinguished table, then refuses to leave. And frankly, there 
is a lot of people who wish I had stayed in the studio, 
including my band.
    But you let me in the door. You let me in the door on debt 
relief. We have worked together on AIDS and the Millennium 
Challenge. And now I am going to abuse your hospitality by 
hanging around, talking loudly, when you really ought to be 
hearing from people who truly live the subject, like Jim Kim at 
the World Health Organization or a treatment advocate like 
Zackie Achmet in South Africa, or indeed a true heroine like 
Agnes here, whom many of you know.
    But I promise to talk briefly and politely. I think it is 
really brilliant to be here, and my testimony will be suitable 
for family audiences. Your children, your country, are safe, 
safe from my exuberant language.
    I have just come back from Philadelphia and it was an 
extraordinary day there yesterday with various religious groups 
and student activists. We are putting together a campaign to 
unite everybody all across the country, all across the United 
States, to unite the country under this issue of AIDS and 
extreme poverty.
    I think we are going to succeed. You listen to these people 
talk about America taking the lead on this and you would be 
very proud. I think they know--their message to me was: This is 
a critical time. And I think we all agree with that.
    We are making progress in the fight against AIDS. We are 
gaining speed, building momentum, but only as long as we keep 
our foot on the gas, because, Senator, as you know, we have a 
lot more road ahead. Our success so far should make us 
confident, but it cannot make us content. We are off to a great 
start. Only you here can make sure that it is not a false 
start. If we stop at AIDS, oddly enough, we will not beat AIDS, 
because we need to do more about the conditions, the extreme 
poverty in which AIDS thrives.
    But lest this sound like a burden or ``more money, more 
money,'' can I just say this is actually the exciting bit, 
because we can use this disease to knock poverty out. This is 
an incredible opportunity for America. I am not a Pollyanna on 
this stuff. I have seen it work. I have seen it save and 
transform lives.
    Just at this moment in the world, it just feels important, 
as a fan of America, to see America knocking poverty out and 
taking the lead on AIDS. I think it is a great, great message.
    So let me talk a little bit about the results that we are 
seeing, because a few years back I was here to talk about debt 
cancellation and I think it is important that I give you a 
report back on what we did with that money. I remember sitting 
in your office, Senator McConnell, and going through this, and 
you were listening to this. It was my first sort of foray here 
and you were very patient with me as I had my hand in your 
wallet.
    But I feel an obligation to explain to you all on this 
committee what we did with that money, because it is an 
astonishing thing, and I hope America is aware of what it did. 
There are 27 countries who had chronic debts owed to the United 
States from way back and they have been cancelled. With that 
money there has been astonishing results.
    Three times the amount of children, where Agnes is from, 
three times the amount of children going to school. What an 
astonishing thing. I have even had Senator Frist witness some 
of this stuff. Together we saw water holes built by moneys 
freed up by debt cancellation. When others said the money was 
going down a rat hole, in fact it was going down a water hole. 
A very, very proud moment for me and I hope for America.
    So more recently we have been working together on the 
Millennium Challenge, something we worked on with this 
administration and then across with support on both sides of 
the aisle. This is important stuff and I am not sure people 
have--it has really sank in what the Millennium Challenge was 
all about. It is important. It is a paradigm shift because it 
is rewarding countries that are fighting corruption and that 
are actually tackling poverty and the poverty of their people.
    Because wherever we go in America, that is the only issue 
we hear about that makes people cautious about development 
assistance. They want to know that the money is going to the 
people it is promised to. So corruption is absolutely essential 
that we deal with.
    The Millennium Challenge is this kind of new way of seeing 
aid as a reward for people who do the right thing. Where there 
is civil society, clear and transparent process, good 
governance, let us fast track those people. It is common sense 
and, by the way, it is going to be imitated around the world 
and it was invented here in this city. It is a new paradigm 
shift, deserves a lot of support.
    The President asked you for $2.5 billion for 2005 and I 
figure that is a little more persuasive than my asking you, but 
I will just urge you to support him on that. DATA, D-A-T-A, the 
organization I helped start, has found that the 16 well-
governed poor countries selected for the Millennium Challenge, 
are ready to use all of that funding on sound poverty reduction 
plans. They need only what you can give them, which is really a 
chance. So it is a good start, but only that, a start.
    We are not here today for a victory lap. We are here to 
pick up the pace, because AIDS, as Senator Durbin mentioned, is 
outrunning us. It is killing 6,500 Africans a day, 7,000 
Africans a day. Whoever you are talking to, the number is hard 
to stomach. 9,000 more Africans a day infected.
    The most incredible part about this is it is fully 
preventable and treatable, which is an incredible opportunity 
for America. As I say, at this moment of all moments, when 
people are not necessarily sure about us in the West that our 
intentions are benign even in Europe and America, there is a 
lot of suspicion about our intentions in the rest, in the wider 
world, this is an incredible opportunity because America has 
the power to make this stop. It is an achievable goal.
    There will soon be a day when AIDS is gone. There will be a 
vaccine, it will be gone. I think when the history books are 
written, would it not be nice to see the United States right 
out in front. Like going to the Moon: We did it first, there it 
is.
    The tough thing about this realization that we have the 
power to make it stop is that it means we have actually got to 
do something about it. For the first time in history, we have 
the know-how, we have the cash, we have the life-saving drugs. 
Do we have the political will?
    Ambassador Tobias does. As we heard, he sees the fire 
raging and he has got a fire brigade. That is a great thing. He 
needs your support, fully funding of around $2.5 billion for 
the bilateral programs. Every dollar counts.
    That is why the debate over generic medications is so 
frustrating, because when there is a fire raging you do not 
fight it with bottled spring water; you turn on the hose and 
put the fire out. There are safe generic drugs saving lives 
right now at a fraction of the price of their brand-named 
twins. Here is an advert for one sitting right beside me, 
someone who is a great advertisement for those generic drugs. 
And we have to ask the experts, like Medecin Sans Frontier, one 
of the first people to involve ARV's in the treatment of AIDS. 
They are doctors. They believe it is safe.
    I think what we talk about--President Bush when he spoke 
about AIDS he was very inspiring because he spoke about 
bicycles: We will get them on bicycles and motorcycles. This is 
exactly the tone, this is what we need. But the bicycles right 
now are wrapped in red tape, is the truth, and we need to cut 
through the red tape. We need the spirit of that announcement 
of $15 billion over 5 years in the actual follow-through.
    So we have this news in the last couple of days that could 
be great news, that we are considering generics and fast-
tracking a breakthrough on generics in 6 weeks. But this is, 6 
weeks of red tape, is very costly. That is 250,000 lives. So I 
would just caution us, this 6 weeks.
    So Americans want the biggest bang for their buck, that is 
true. They want to treat as many people as possible. Let us get 
together on that and make sure they get the biggest bang for 
their buck.
    Every dollar counts, but some dollars count for triple. By 
this I am talking about the Global Health Fund, an essential 
part of the fight and a vital partner to what the United States 
is doing. Every contribution America makes gets other countries 
to kick in more. Tony Blair says so, so does President Chirac, 
so does Paul Martin. I know because I have spoken to all these 
people recently. I make their lives miserable, too, you will be 
relieved to hear.
    But to date the United States has made one-third of the 
fund's contributions. I would urge you to maintain that 
commitment in the neighborhood of $1.2 billion for next year. 
Yes, the fund has growing pains, but the fact that it is 
growing in scale and in impact, not only on AIDS but on other 
killer diseases that worsen it like malaria and TB, is 
encouraging.
    Of course miracle drugs alone are no miracle cure. We 
cannot defeat AIDS unless we do more about the extreme poverty 
in which it spreads. Otherwise our efforts will come to naught. 
You cannot take a pill if you do not have water to swallow it, 
clean water that is. You cannot strengthen your immune system 
if there is no food in your belly. And you cannot teach kids to 
protect themselves if they do not go to school. That is why the 
Millennium Challenge and other key programs you fund through 
USAID are essential.
    More investment is needed, a lot more investment is needed. 
President Bush has asked for a lot more, over $21 billion in 
total for foreign ops in 2005. I think that is because he, like 
many of you, sees that a victory in this battle is vital to 
national security.
    Our issues, people tend to think of them as fringe, not 
central to the action here in Washington, D.C. If I can 
convince you of one thing, it is that at this time in the world 
these issues that you have gathered to talk about on this 
committee has a role to play in very central policymaking that 
will affect the way America is viewed everywhere in the world. 
It is where America meets the world, outside of commerce and 
the military.
    The Senate, in passing a bipartisan budget resolution, has 
gone a step further on these issues, and I applaud that. I 
trust the Senate will hold on to increases in the 
appropriations process. I do want to say thank you personally 
to the Senate for their leadership here and all of you sitting 
here. It is very, very, very important.
    Let me say this in closing. I know I spend a lot of time in 
this country and I am sure it is too much for your liking. But 
I also spend a lot of time in buses, truck stops, town halls, 
church halls, and I am not even running for office. But I have 
spent a lot of time in this country campaigning on these 
issues.
    You know what is amazing? Everywhere I go, people feel more 
American when you talk about these issues that affect people 
whom they have never met and who live far away. They feel more 
American. It is kind of extraordinary to me as an Irishman to 
observe this.
    I think that they are thinking big, as you always have. 
Sixty years ago there was another continent in trouble, my 
continent Europe in ruins after the Second World War. America 
liberated Europe, but not just liberated Europe; it rebuilt 
Europe. This was extraordinary. And it was not just out of the 
goodness of your heart, which it certainly was. It was very 
smart and strategic, because the money spent in the Marshall 
Plan was indeed wise money. It was a bulwark against Sovietism 
in the cold war.
    It was 1 percent of GDP over 4 years, I believe. I would 
argue that this stuff we are discussing today is a bulwark 
against the extremism of our age in the hot war. I believe 
there is an analogy.
    I believe brand USA, because all countries are brands in a 
certain sense, never shone brighter than after the Second World 
War, when a lot of people in my country and around the world 
just wanted to be American--wanted to wear your jeans, wanted 
to listen to your stereos, wanted to watch your movies. That 
was because this is an astonishing place, America.
    It cost money, that place in the world, I know, and I know 
how expensive the Marshall Plan was--point one. We are looking 
for numbers that I think are about half that to completely turn 
the world around at a time--on a positive thing, like a health 
crisis, making that a positive thing. So please bear with us.
    In turbulent times it is cheaper and smarter to make 
friends out of potential enemies than to defend yourself 
against them. A better world happens to be a safer one as well. 
I think it is a pretty good bargain.

                           PREPARED STATEMENT

    The attention of the world might sometimes be somewhere 
else, but history is watching. It is taking notes and it is 
going to hold us to account, each of us. There is so much you 
can do with your power, with your leadership, to ensure that 
America here is on the right side of history. When the story of 
these times gets written, we want to say that we did all we 
could and it was more than anyone could have imagined.
    Thank you.
    [The statement follows:]

                       Prepared Statement of Bono

    Thank you, Chairman McConnell. It is an honour to be asked to share 
my thoughts today. Let me also thank some very good friends: Senators 
Leahy, DeWine, Durbin and so many others who have shown such leadership 
on these issues.
    And such patience in dealing with a rock star who asks for a seat 
at your distinguished table, then refuses to leave or to turn down the 
music he's blasting. Frankly there are a lot of people who wish I'd 
stay in the studio--including my band.
    You let me in the door on debt relief; we've worked together on 
AIDS and the Millennium Challenge; and now I'm going to abuse your 
hospitality by hanging round and talking loudly when you really ought 
to be hearing from someone who knows better--a medical doctor like Jim 
Kim at WHO, or a treatment advocate like Zackie Achmet of South Africa, 
or a true heroine like Agnes, here, whom many of you know.
    That said, I promise to talk briefly--and politely. Though I think 
it's really brilliant to be here my testimony will be suitable for 
family audiences. Your children, your country, are safe from my 
exuberant language.
    I've just returned from your nation's first capital--Philadelphia--
where my organisation, DATA, and an array of other groups launched a 
new effort we're calling ``The ONE Campaign.'' These organisations 
represent millions of Americans, from evangelicals to student 
activists. They came from all over the country. And they're speaking 
with one voice in the fight against AIDS and extreme poverty.
    What are they saying?
    They're saying--as I think we all agree--this is a critical moment.
    We're making progress in the fight against AIDS. Gaining speed. 
Building momentum. But only as long as we keep our foot on the gas. 
Senators, as you know, we've got a lot more road ahead.
    Our success so far should make us confident. But it can't make us 
content. We're off to a great start--but only you can make sure it's 
not a false start. If we stop at AIDS, we won't beat AIDS. We need to 
do more about the conditions--the extreme poverty--in which AIDS 
thrives.
    Now, I'm not a Pollyanna on this stuff; I've seen it work. I've 
seen it save and transform lives. So let me talk briefly about the 
results we're seeing.
    As I mentioned, I met many of you a few years back when we worked 
to cancel the debt that burdens the poorest countries. Today, 27 
countries--almost all in Africa--are investing that money in schools, 
vaccinations, and roads instead of in debt payments. In Uganda, I've 
stood with Senator Frist at a clean water well built thanks to debt 
relief. Debt money didn't go down a rathole--it went down a waterhole.
    More recently, we've all worked together on the Millennium 
Challenge. This is smart money, new aid in new ways, rewarding poor 
countries who are leading in the fight against corruption. Though it's 
only just up and running, it's already having an impact, encouraging 
countries to reform.
    The President has asked you for another $2.5 billion for 2005. I 
figure that's a little more persuasive than my asking you, so I'll just 
urge you to support him on that. DATA, the organization I helped start, 
has found that the 16 well-governed poor countries selected for MCA are 
ready to use all of that funding on sound poverty reduction plans. They 
need what only you can give them: a chance.
    All in all, then, we've made a good start. But only that. A start.
    We're not here today for a victory lap; we're here to pick up the 
pace. Because AIDS is outrunning us, Senators; it's killing 6,300 
Africans a day, infecting 8,800 more Africans a day; and the most 
incredible part is it's fully preventable, it's fully treatable.
    We actually have the power to make this stop. But the tough thing 
about that realization is that it means you've actually got to do 
something about it. For the first time in history, we have the brains, 
we have the cash, and we have the life-saving drugs. But do we have the 
political will?
    Ambassador Tobias does. As we heard, he sees the fire raging and he 
is leading a fire brigade, and that's a great thing. He needs your 
support, full funding of around $2.5 billion for bilateral programs.
    Every dollar counts. That's why the whole debate over generic 
medications is frankly frustrating. When there's a fire raging, you 
don't fight it with the finest spring water You turn on the hose and 
put the fire out. There are safe generic drugs saving lives right now 
at a fraction of the price of their brand-name twins.
    I know that Americans want to get the biggest bang for their buck: 
to treat as many people as possible. That's the whole point, right? If 
that's your goal, isn't the administration's position on generics 
untenable? Hopefully this is starting to change, we still need to hear 
the details.
    As I said, every dollar counts, and some dollars count for triple. 
I'm talking about your contributions to the Global Fund--an essential 
part of the fight and a vital partner to what the United States is 
doing. Every contribution America makes gets other countries to kick in 
more. Tony Blair says so. So does President Chirac. So does Paul 
Martin. I know because I've been making the rounds with the tin-cup in 
those countries too.
    To date, the United States has made one-third of the Fund's 
contributions--I urge you to maintain that commitment, in the 
neighbourhood of $1.2 billion for next year. Yes, the Fund has had 
growing pains, but the fact is it's growing--in scale and in impact: 
not only on AIDS but on the other killer diseases that worsen it, 
malaria and TB. Combined with bilateral, this is about $3.6 billion 
which is allowed under last year's law.
    Of course, miracle drugs alone are no miracle cure: we can't defeat 
AIDS unless we do more about the extreme poverty in which it spreads. 
Otherwise our efforts will come to naught. You can't take a pill if you 
don't have clean water to swallow it. You can't strengthen your immune 
system if there's no food in your belly. And you can't teach kids to 
protect themselves if they don't go to school.
    That's why the Millennium Challenge and other key programs you fund 
through USAID are essential. More investment is needed a lot more. 
President Bush has asked for a lot more--over $21 billion total--for 
Foreign Operations for 2005, because he, like many of you, I think, 
sees victory in this battle as vital to your national security. The 
Senate in passing a bipartisan budget resolution has gone a step 
further on these issues, and I applaud that. I trust the Senate will 
hold onto its minimum amounts and keep up the pressure for more.
    Let me say this in closing.
    Senators, I spend a lot of time in this country. Maybe too much for 
your liking. I spend a lot of time in buses. At truck stops. In town 
halls. In church halls. I do all this, and I'm not even running for 
office.
    But you know what's amazing? Everywhere I go, I see very much the 
same thing. I see the same compassion for people who live half a world 
away. I see the same concern about events beyond these borders. And, 
increasingly, I see the same conviction that we can and we must join 
together to stop the scourge of AIDS and poverty.
    Americans are thinking big. As you always have. You know, almost 60 
years ago, another continent was in danger of terminal decline--not 
Africa, but Europe. And Europe is strong today thanks in part to the 
Marshall Plan. It was great for Europe, but it was also great for 
America. Brand USA never shined brighter.
    Today we need the same audacity, imagination, and all-out 
commitment of a modern Marshall Plan. The Marshall Plan built a bulwark 
against Communism; today, for half the cost, we can build a bulwark 
against the extremism of our age.
    In turbulent times it's cheaper, and smarter, to make friends out 
of potential enemies than to defend yourself against them. A better 
world happens to be a safer one as well. That's a pretty good bargain.
    The attention of the world might sometimes be elsewhere, but 
history is watching. It's taking notes. And it's going to hold us to 
account, each of us. There is so much you can do, with your power, with 
your leadership, to ensure that America is on the right side of 
history. When the story of these times gets written, we want it to say 
that we did all we could, and it was more than anyone could have 
imagined.
    Thank you.

    Senator McConnell. Thank you very much, Bono.
    Ms. Nyamayarwo, I see that you have a piece of paper in 
front of you. Do you want to make a brief statement as well?

                 SUMMARY STATEMENT OF AGNES NYAMAYARWO

    Ms. Nyamayarwo. Thank you so much. I am happy to be in this 
house today. I want first of all to introduce myself. I am 
Agnes Nyamayarwo. I come from Uganda from an AIDS organization 
called TASO, the AIDS Support Organization in Uganda. I am a 
nurse and working as a volunteer with this organization.
    I have lived with HIV for 15 years. I want to share with 
you briefly what happened to my family with the AIDS epidemic. 
My husband died of AIDS in 1992. My youngest son died of AIDS 
at the age of 6\1/2\ because I passed the virus to him 
unknowingly. You can imagine as a parent giving a death 
sentence to a child. It is very painful.
    My other son, who was age 17, got overwhelmed by the 
problem of AIDS in the family and suffered depression and he 
disappeared from my family and up to today I have never seen 
him again, still searching for him.
    I have been very lucky. I have been on treatment, 
antiretroviral treatment. I started by taking generic drugs and 
now I am on the branded drugs from TASO, which is supported by 
the U.S. Government, and I am very grateful for that. Actually, 
I see that they work the same, because I was down and I started 
with generic drugs and they improved my life, and now that 
there are branded drugs I started taking branded drugs and they 
work exactly the same.
    Last year in July I met with President Bush and I told him 
I was in treatment and my life had improved, but my concern is 
the other people living with HIV in Uganda and in Africa who 
die every day. And every time I go back to the community, where 
we move around creating awareness about HIV/AIDS, I find so 
many people have died, so many people dying. That is very 
painful indeed.
    The President promised that he was going to give treatment 
to all people living with AIDS in Africa quickly and 
immediately. It is almost a year now. We have just got money to 
start on treatment on not even a quarter of the people in my 
organization. So it has given me hope, it has given us hope, 
all of us. But we are still asking for more.
    In my work with DATA I have been in about 10 States in 
America. It exposed me to many Americans and their response was 
excellent and they were willing to help. This has always given 
me a lot of hope, although every time I go back my people think 
I have carried medicines for them. But I tell them: I have 
hope; Americans are ready to help.
    Today I am here to request this house as you are going to 
make decisions on the programs to fund just to remember me, my 
family, and all the people living with HIV in Uganda and 
Africa, and the many orphans in Africa, and the young people 
who need the education, because the more they keep in school 
the more they delay to get infection, and the more they are 
educated the more they know about how they can avoid catching 
HIV. So good education is very, very important.
    Then we also have that problem of poverty. Even with the 
mother-to-child transmission, mothers are given the medicine to 
reduce the infection, but these mothers have to give the 
formula and they do not have the formula. They do not even have 
the money to buy it. Or if they have it, they may mix it with 
dirty water and these children end up dying of diarrhea. So 
clean water is also very, very important.
    I am still also asking you to really look at the trade with 
Africa. It is very important because one day maybe we shall be 
able to stand on our own. So please, help us fight AIDS and 
poverty in Africa.
    Thank you so much.
    Senator McConnell. Thank you very much.
    Even though this hearing is about HIV/AIDS, I do want to 
address once again, Bono, an issue that you and I are extremely 
interested in. For the record, do you support renewal of import 
sanctions against the Burmese junta, as Senator Leahy and I 
have proposed?
    Bono. I do not just support it; I applaud it as loudly as I 
can. Let me say, your leadership on this--there is no one 
leading support for Aung San Suu Kyi like you, and to have 
Senator Leahy by your side, and make sure that this is the 
support of all Americans is amazing.
    These toenail-pullers, these thugs, are also running this 
country like a business, so the place they will feel the pain 
is in business. Sanctions are crucial.
    Senator McConnell. One of my big frustrations, which I know 
you share, is that the only way sanctions are going to really 
have an impact is if they are multilateral. Is there anything 
we could do that we are not currently doing to convince the 
European Union that a tougher approach ought to be in place 
toward the generals in Rangoon?
    I had hoped that the attempted assassination of Suu Kyi 
last year might have gotten their attention, but apparently 
not. What thoughts do you have about how we get the Europeans 
fully engaged in the sanctions regime?
    Bono. I am deeply ashamed as a European of the pitiful lack 
of volume in support for her. I think Prime Minister Blair has 
been doing some good work, but we need more and we need the 
rest of Europe to pay attention. I will personally speak to 
Roman Prodi, who is the President of the European Union, about 
this and see at their next meeting if we can get a resolution.
    Senator McConnell. In your statement you indicated that 
America must have the political will to combat HIV/AIDS. How do 
you cultivate political will in countries that do not respect 
the basic rights of their citizens? In Burma, for example, 
where, instead of stopping HIV/AIDS and poverty, the junta may 
actually be spreading the disease and misery through rape, 
forced labor, and illicit narcotics?
    Bono. I think what is extraordinary about the Millennium 
Challenge Account, which I was talking about earlier, is that 
it provides assistance for countries who are doing the right 
thing by their people and tackling corruption, etcetera. I 
think with Burma we have a particular evil to deal with that 
needs a different and stronger response.
    So I would suggest sanctions. I think they should be 
punitive and I think those people should feel our mettle. They 
cannot walk over this woman, who is a true hero. In a way, with 
the Millennium Challenge we are trying to encourage the kind of 
leadership she represents. This is the future in the end for 
all of the issues that we are talking about today, is 
leadership. Leadership is everything.
    Even with AIDS, we talk about A, B, C. What is important is 
a balanced approach. But you know, the reason why abstinence 
and these kinds of programs, preventive programs, worked in 
Uganda was because of another letter ``L'', ``L'' for 
leadership and ``L'' for local, understanding the local. To me, 
Aung San Suu Kyi is great leadership.
    Senator McConnell. Ms. Nyamayarwo, in Cambodia sex workers 
refused to participate in a Gates Foundation-funded anti-HIV 
drug test because of concerns with potential long-term health 
impacts. How do we ensure that impacted groups, such as 
Cambodian sex workers, have the will themselves to participate 
in education and treatment programs?
    Ms. Nyamayarwo. Back in the country where I come from, they 
have been asking us about the sustainability of this treatment 
and that was--maybe that may have been the same reason why in 
Cambodia these people are not going in for this treatment. But 
as a person living with HIV I told them that for me if I live 
another 5 years for my children that is very important indeed, 
because they will have the guidance from me and the parental 
care.
    So I think maybe we need to, Uganda needs to go and share 
with those people what is happening in Uganda and what we 
people living with HIV in Uganda feel about this treatment.
    Senator McConnell. Thank you.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.
    Bono, you and I have been friends for many years. I think 
we also, on this Appropriations Committee, we also sit on the 
question of money for terrorism, and of course if somebody 
comes up and says this is for terrorism we can find enormous 
amounts of money.
    But I was struck by something you said in your statement, 
and I wrote it down: A better world is also a safer world. That 
really goes to the bottom line on everything you are trying to 
do. You have seen probably more than anybody this effect of 
AIDS and what is being done to combat it. You have traveled 
everywhere.
    You heard me ask Mr. Tobias about the potential of these 
countries to absorb more funds. Can they absorb more funds? And 
if they can, what would they spend it on? What should they 
spend it on?
    Bono. You know, we use this word ``absorptive capacity'' a 
lot, but the truth is there is a distributive capacity problem. 
I think what I object to sometimes was when it is characterized 
as, oh, Africa or whatever country in Africa or elsewhere, they 
just could not take the money, so it is kind of their fault. I 
object to that.
    I think what we should say is: Yes, there are difficulties 
spending the money effectively and efficiently, but we have to 
spend on building the capacity. That is what you do in an 
emergency, in a war. You have to build the infrastructure. And 
this is a war against AIDS.
    What is great about this war is we really are going to win. 
The only opposition is our own indifference.
    Senator Leahy. But you also have a chicken-egg sort of 
thing.
    Bono. Yes.
    Senator Leahy. You say building the capacity, but that can 
be done. There are models for doing that in parts of the world, 
bringing in everything from the roads to the training. We are 
not talking about building Johns Hopkins in every village that 
we see.
    Bono. No.
    Senator Leahy. But the basics are so absent. And I agree 
with you, we could be doing more.
    We are somewhat limited in time and I know you have to 
leave. An area that we are aware of, we do not talk enough 
about: What about AIDS orphans? What do we do to help the AIDS 
orphans?
    Bono. There is your chaos right there. Again, maybe 
sometimes it is obvious. It sounds grating to always describe, 
to describe the war against poverty as being connected to the 
war against terror, but I did not say that; Secretary of State 
Colin Powell said that. And it is very wise when a military man 
starts talking like that.
    There is a connection. We have a situation now--and I have 
seen it first-hand myself--where you have children bringing up 
children. And we should see Africa as not the front line in the 
war against terror, but it might be one day. You take a country 
like Nigeria, Nigeria is an oil-wealthy nation. It has 120 
million people. It is the whole of west Africa, essentially. In 
northern Nigeria every week a new village falls under sharia 
law and they are then--we have the madrassas, we have the 
schools that teach them to hate us.
    So these groups, they take advantage of the chaos, though 
in northern Nigeria the chaos is not as great as it is in 
southern, in some of the southern African countries. It is an 
example, the AIDS orphans is an example of the chaos waiting 
for order to be brought to it, either by them or by us. I am 
arguing that it is cheaper to prevent the fires than to put 
them out later.
    Senator Leahy. Oh, I agree with you.
    Mrs. Nyamayarwo, like you my wife was trained as a nurse, 
and I appreciate our conversations we had before this hearing. 
I do not know if I mentioned to you, we traveled to Uganda back 
in 1990. We visited a TASO center. We met HIV-positive 
volunteers there. In fact, most of the volunteers were HIV-
positive. We were so impressed by their courage, their 
selflessness, and the fact they were helping others even though 
they were living under a death sentence.
    In Uganda, if you could just take that one country, what 
has worked best in combatting AIDS? What could you use the 
most?
    Ms. Nyamayarwo. In Uganda it is not one thing, but first we 
have the good leadership of our president who has been open 
about HIV and AIDS and accepted to support us. The government 
has involved people living with HIV, and people living with HIV 
have got the heart to save other people's lives, like the 
volunteers in TASO. Myself, after losing my child to AIDS, I 
felt I should go out with those volunteers and talk to people, 
talk to parents, so that they do not go through what I went 
through, because it was very difficult for me, to try to save 
lives, go to schools and try to save the youth, to know more 
about HIV/AIDS.
    I think the education has been very, very important on this 
issue. That is why I feel that education is real great. Then 
there is one problem which still stands, is the poverty. The 
orphans remain vulnerable. It is going to be like a circle, re-
infection, because they do not have the support. Debt 
cancellation helps children to go to school just through 
primary. They cannot go to secondary schools, they cannot go to 
technical institutions. If all that is in place, I think we 
shall be able to really fight AIDS in Uganda.
    Senator McConnell. Thanks.
    Senator Leahy. Thank you very much.
    Senator McConnell. Because of the lateness of the hour, we 
are going to do one round of questioning and we will have to 
submit the others.
    Senator DeWine.
    Senator DeWine. Mr. Chairman, thank you very much.
    Mrs. Nyamayarwo, thank you very much for your very 
compelling testimony. We just very, very much appreciate it.
    Bono, thank you very much for being with us again. Again, 
very compelling testimony as well. You have really been at the 
forefront. If you look at the issues that matter, the 
Millennium Challenge, you have advocated for that. Debt relief, 
that matters so very much. AIDS. All three of those issues, you 
have been there. You have been a leader.
    Your testimony today I think has been so compelling because 
you have talked about AIDS from really a holistic point of 
view, that we cannot just look at AIDS separately; we have to 
look at it from the point of poverty, we have to look at it 
from the point of view of the whole medical system when we go 
into these countries that is connected to everything else.
    You truly understand this issue. You have done such a good 
job, I think, of focusing the public's attention on AIDS. I 
would just ask you, as you have gone around, not just in the 
United States, but in other countries, what works and what does 
not work when you are either addressing people in towns in the 
United States or when you are dealing with leaders in other 
countries? What is compelling and what is not compelling when 
you talk about this issue? What works and what does not work? 
And how are we doing with other countries, too?
    Bono. I think we need both bilateral and multilateral, is 
the truth. But we need them, we need everyone talking together. 
What does not work is when we play politics with people's 
lives. When everyone can get--when there is a parity of pain 
and sort of parity of applause--I think it is important there 
are people in other countries who are doing a lot more as a 
percentage of their GDP than the United States, and they get 
very upset when, just because the United States is giving more 
money--they say, well, hold on a second; we are spending a lot 
more as a percentage. So that does not work.
    I think some humility in saying we have different ways of 
doing things, but we want to work together and we are not 
trying to score points, that works. I think this is an 
opportunity to unite people in a way that there is very little 
else out there to. I think you have--what else are President 
Chirac, President Bush, and President Blair going to agree on?
    This is the one thing they can all hold hands on, and I 
think that might be a good symbol right now in the world. Maybe 
not holding hands, but--and I think seeing the historic side of 
things works. To tell--I know it is an absurd, an Irish rock 
star to do this, but to explain that when the dust settles and 
when the history books have been written, this entire era will 
be remembered for probably three things: the Internet, the war 
against terror, and what we did or did not do about this AIDS 
virus and what it did, what it did.
    It will be astonishing, like your children, like me, 
reading about the bubonic plague in the Middle Ages, which took 
a third of Europe. A third of Europe died from the bubonic 
plague, the Black Death. Now, imagine if China, say, had 
treatment at that time that could have saved those lives, but 
did not get it out there because, ah, it was a little difficult 
and it was expensive. How would we be reading about China now? 
That is the position we are in. That is where Europe and 
America is right now, and I think it is a great opportunity.
    Senator DeWine. Thank you very much.
    Thank you, Mr. Chairman.
    Senator McConnell. Thank you, Senator DeWine.
    Senator Durbin, you are it. After you finish the hearing is 
completed except for whatever questions that we may want to 
submit. So if you would proceed.
    Senator Durbin. That is a lot of pressure, Mr. Chairman.
    Senator McConnell. See how short you can be.
    Senator Durbin. Well, I thank you very much.
    I want to thank our witnesses for your patience in waiting 
for us to vote and come back and do other things in an 
extremely important session.
    Thank you for your leadership. I have told you, Bono, that 
you are a consummate pest on Capitol Hill and please keep up 
your good work, pestering us to be mindful of the rest of the 
world and what we are facing.
    It is no, I think, revelation that over the past several 
weeks we in America have been embarrassed and ashamed by some 
of the disclosures in the world press. The President has said 
and we have repeated that what happened in that prison is not 
indicative of American values. What I have found interesting in 
your tour of Wheaton College and other places in my State was 
that time and again you have said that you find us to be a good 
and caring people, and as a good and caring people there are 
things that we can do to prove that premise.
    I find the same thing when it comes to this commitment, 
when it comes to global AIDS. You really call on us to do our 
best and I think we should and we must.
    I would like to ask you specifically on this Global Fund 
issue. I am very concerned. If we do not increase the $200 
million commitment in this budget to a much higher level, I am 
fearful that ongoing projects may be cut back and new ones will 
not even be considered. What has been your impression of the 
work of Global Fund and if they had to retrench and fall back 
the impact it would have on this battle?
    Bono. There are some difficulties with the Global Fund 
right now, growing pains. I might suggest that some of those 
difficulties come out of an environment and a mood where they 
just do not want to make a mistake, because they know if they 
do make a mistake there is a lot at stake. I actually, I can 
understand their caution. They just do not want to screw up, 
and I think as a result things have moved a little slowly 
there.
    However, they have in Richard Feachem a really great 
leader. They have in their structure of the organization a 
really great design. And I think in a funny way it is a very 
American design. It is McKinsey Management. They have a 4 
percent overhead. They have auditors in place, PriceWaterhouse, 
Stokes Kennedy Crowell, all these people. Where the money is 
being spent on the ground, they have cut deals with them to 
make sure that these things are being effectively operated.
    Is there enough money out the door at the moment? No. But 
remember, they cannot--without having the cash in their bank, 
they cannot even have the discussion with the groups on the 
ground.
    The most important message to get out to Americans about 
the Global Health Fund is it is not a new bureaucracy. They are 
just supplying people in the regions who have effective 
programs with more money. They are scaling them up. It is 
really important. Some people do not understand that.
    So I think they are critical, they are extremely critical, 
because President Bush's brilliant AIDS initiative only applies 
to 16 countries. So this is the other side. This is the rest of 
the world. It has to work. It will work.
    I tried to say to them, you know, you are going to make 
mistakes; it is wonderful that you are so careful, but actually 
you are going to make mistakes; relax just a little bit about 
that.
    Senator Durbin. If I might ask you one last question. I do 
thank the committee for their patience here. People here in the 
audience earlier were removed with signs relative to drug 
companies and pharmaceutical companies and how much they are 
doing. I have heard you say something which is kind of self-
confessional about your own attitude in dealing and working 
with pharmaceutical companies and drug companies. Tell us now 
what you think is the appropriate approach to make certain that 
as quickly as possible affordable medications are in the hands 
of the poorest people in the world?
    Bono. Okay. Well, let me just say I fully, fully understand 
the frustration of my friends behind me who have their hopes 
raised when they hear of a $15 billion AIDS initiative and then 
have them dashed when they hear that none of the money is going 
to go to the cheapest drugs.
    What I would say to this issue is we need the 
pharmaceutical companies, is the truth. We need their brains, 
we need their know-how, we need their scientists. But there is 
an opportunity for them here to compete that they have not as 
yet made. They could really be heroes of the hour here. We need 
them.
    I want them involved, and I am not going to ask a business 
to behave like a philanthropy. I do not think we should do 
that. But make their profits. Sure, make their profits--just 
not on the greatest health crisis in 600 years, on the backs of 
poor people. I think they do a great business. I am happy for 
them to make profit on me, make profit on my friends, make 
profit on everyone in this room, in this country, but not on 
what is going on in the everyday lives of people like Agnes 
here.
    So I would say these drugs are a great advertisement for 
America. I told President Bush: Paint them red, white, and 
blue, you know, whatever. Get them out there. They are the best 
of the West.
    So that is my own position and I hope that is clear.
    Senator Durbin. Thank you, Agnes. Thank you, Bono.
    Thank you, Mr. Chairman.
    Senator McConnell. Thank you, Senator Durbin.
    Thank you, Bono. Thank you, Ms. Nyamayarwo. It is nice of 
you to be here and to tell your story. It was very helpful.

                     ADDITIONAL COMMITTEE QUESTIONS

    There will be some additional questions which will be 
submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
             Questions Submitted by Senator Mitch McConnell
    Question. Voices for Humanity (VFH), a Kentucky-based non-profit, 
is slated to receive funding from USAID for a pilot project on HIV/AIDS 
education in Nigeria using cutting edge information technology. I 
strongly encourage you to follow VFH's efforts in Nigeria.
    What importance do you place in using cutting edge information 
technology to educate and inform illiterate or semi-literate 
populations?
    Answer. The unprecedented goals set by the President's Emergency 
Plan for AIDS Relief--to provide treatment to 2 million persons living 
with HIV, to prevent 7 million new HIV infections, and to provide care 
to 10 million people infected and affected by HIV/AIDS, including 
orphans and vulnerable children, will require that we actively seek new 
approaches to addressing HIV/AIDS, including through the use of cutting 
edge information technologies to reach as many people as possible.
    The Emergency Plan not only brings hope through the commitment of 
extraordinary resources, but, as important, the opportunity to find new 
and more effective ways to fight the HIV/AIDS pandemic--our approach 
will not be ``business as usual.'' We are committed to implementing 
programs that are responsive to local needs--countries and communities 
are at different stages of HIV/AIDS response and have unique drivers of 
HIV, distinctive social and cultural patterns, and different political 
and economic conditions. Effective interventions must be informed by 
local circumstances and coordinated with local efforts.
    The Office of the U.S. Global AIDS Coordinator has met with 
representatives of Voices for Humanity to be briefed on their project 
in Nigeria and will be meeting with them again as the project is 
implemented.
    Question. Faith-based organizations, such as Lott Carey 
International (LCI), have decades of experience working overseas and 
have cultivated broad contacts among indigenous organizations and 
groups.
    A. What are your goals and objective for utilizing faith-based 
organizations in combating HIV/AIDS?
    B. Do you have a recruitment plan or strategy to increase 
participation of these groups?
    C. How many faith-based organizations currently receive funding for 
HIV/AIDS activities--from USAID and your office?
    Faith-based and other organizations interested in combating HIV/
AIDS have contacted the Subcommittee to complain that the process for 
securing funding under this initiative is NOT user friendly.
    D. Are you aware of these difficulties, and what steps can you take 
to ensure that the funding process is less bureaucratically cumbersome?
    Answer. In implementing the President's Emergency Plan for AIDS 
Relief, we have sought to fund a broad range of innovative new 
partners, including faith-based and community-based organizations, to 
bring not only expanded capacity but also innovative new thinking to 
our efforts. Faith-based organizations not only bring expanded capacity 
and innovative new thinking to our efforts, but they are also among the 
first responders to the international HIV/AIDS pandemic, delivering 
much needed care and support for fellow human beings in need. Their 
reach, authority, and legitimacy--like other organizations--identifies 
them as crucial partners in the fight against HIV/AIDS, and we are 
committed to encouraging and strengthening such partners.
    Our intent in the initial, first round of grants under the 
Emergency Plan has been to move as quickly as possible to bring 
immediate relief to those who are suffering the devastation of HIV/
AIDS. The Office of the Global AIDS Coordinator chose programs in the 
first round because they have existing operations among the focus 
countries of the Emergency Plan, have a proven track record, and have 
the capacity to rapidly scale up their operations and begin having an 
immediate impact.
    By initially concentrating on scaling up existing programs that 
have proven experience and measurable track records, an additional 
175,000 people living with HIV/AIDS in the 14 initial focus countries 
will begin to receive anti-retroviral treatment. Prevention through 
abstinence messages will reach about 500,000 additional young people, 
and assistance in the care of about 60,000 additional orphans will soon 
commence in those same countries.
    As of March 30, 2004, we have partnered or sub-partnered with some 
45 faith-based organizations. Grants to these organizations total 
$57,528,298 thus far, and we are committed to expanding our work with 
both new and current faith-based organizations as Emergency Plan 
implementation progresses.
    We recognize that the windows for applications in our initial 
rounds of funding have been relatively quick, and anticipate that 
future rounds will allow more time for applicants to prepare and submit 
funding proposals.
    Question. Repressive regimes that commit widespread human rights--
such as the Burmese junta's policies of rape, forced labor, and use of 
child soldiers--have a direct and substantial impact on the general 
health of the population.
    A. What programs or projects can the Coordinator's office support 
to better understand--and mitigate--the impact widespread human rights 
violations have on populations, including the failure to prioritize 
HIV/AIDS prevention and treatment in places such as Burma, China and 
Russia?
    B. How can ``political will'' be cultivated in repressive countries 
to address the HIV/AIDS pandemic, or to ensure the treatment is 
provided on an equitable basis and not only to supporters of a regime, 
for example?
    Answer. The Emergency Plan for AIDS Relief Emergency Plan is the 
largest commitment ever by a single nation toward an international 
health care initiative. The vision of the President's Plan embraces a 
multifaceted global approach to combating the HIV/AIDS pandemic. Within 
this global framework, leadership is a fundamental lever to ensure that 
governments respect human rights and appropriately prioritize HIV/AIDS 
prevention, treatment, and care.
    The mission of the U.S. Office of the Global AIDS Coordinator is to 
work with leaders throughout the world to combat HIV/AIDS, promoting 
integrated prevention, treatment, and care interventions. While we are 
proceeding with an urgent focus on 15 countries that are among the most 
afflicted nations of the world, we continue to pursue on going 
bilateral programs in more than 100 countries, including Burma, China, 
and Russia. Our Five-Year Strategy for the Emergency Plan, released in 
February, articulates our goals, including a commitment to encourage 
bold leadership nationally at every level to fight HIV/AIDS.
    Under the Emergency Plan, USAID's fiscal year 2004 budget for its 
South East Asia Regional HIV/AIDS programs includes an additional $1 
million for programs in Burma, primarily in Shan and Karen States, 
which border China and Thailand. We are committed to ensuring that our 
assistance is consistent with our primary objectives of supporting 
democracy and improved human rights in Burma. No assistance is being 
provided directly to the regime. Our support is channeled though 
established international non-governmental organizations, such as 
Medicins Sans Frontiers, renowned for their resistance to government 
interference. In conjunction with the President's Plan, HHS recently 
launched its Global AIDS Program (GAP) in China, the offices of which 
HHS Secretary Tommy G. Thompson helped inaugurate in October 2003. In 
an unmistakable demonstration of leadership, U.S. Ambassador to China 
Clark Randt led the Embassy delegation and attended a ceremony at the 
rural village with the first recorded case of AIDS in China. In March 
1998, the United States and Russia began collaborating to control the 
spread of HIV and other sexually transmitted diseases. Since then, the 
United States and Russia have steadily advanced joint programs for HIV/
AIDS prevention and capacity building. At their bilateral summit 
meeting in September 2003, Presidents Bush and Putin committed to 
reinforce this joint cooperation and coordination. At the just held G-8 
Summit in Sea Island, they reaffirmed the U.S.-Russian HIV/AIDS 
Cooperation initiative with focus on: prevention, treatment, and care; 
surveillance and epidemiology; basic and applied research, including 
vaccine development; bilateral policy coordination in Eurasia and with 
the Global Fund for AIDS, Tuberculosis, and Malaria; and involving 
senior officials in support of public-private partnerships to combat 
AIDS. Such leadership at the highest levels underscores the President's 
commitment to ensure that all governments pursue appropriate national 
strategies to confront the HIV/AIDS pandemic as the global health 
emergency it is.
    Regarding political will, as noted above, the Emergency Plan places 
a high value on leadership to persuade all governments to address the 
HIV/AIDS pandemic and to ensure that HIV/AIDS services are provided on 
an equitable basis to all comers based on clinical eligibility, 
particularly with repressive government. We are committed to encourage 
our partners, including multilateral organizations and other host 
governments, to coordinate at all levels to strengthen response 
efforts, to embrace best practices, to adhere to principles of sound 
management, and to harmonize monitoring and evaluation efforts to 
ensure the most effective and efficient use of resources.
    In the global battle against HIV/AIDS, it is imperative that the 
many actors coordinate their efforts and make maximum use of increasing 
but still limited resources. To this end, in April, the United States, 
through the Office of the Global AIDS Coordinator, was instrumental in 
achieving donor government approval for a set of principles dubbed the 
``Three Ones'' by UNAIDS. These basic principles, aimed at coordinating 
national responses to HIV/AIDS and applicable to all stakeholders 
involved in country-level HIV/AIDS, are: one agreed HIV/AIDS Action 
Framework that provides the basis for coordinating the work of all 
partners; one National AIDS Coordinating Authority, with a broad based 
multi-sector mandate; and one agreed country level monitoring and 
evaluation system.
    The ``Three Ones'' Principles provide a constructive framework for 
coordination while permitting individual donors to fulfill their own 
program goals and mandates and disburse money to partners in their own 
ways, without having any one government or organization claim exclusive 
ownership of the coordinating authority. For the Emergency Plan, our 
focus worldwide is anchored in care, treatment, and prevention 
available to all comers based on clinical eligibility.
    Question. On March 9, 2004, Director of Central Intelligence George 
Tenet testified that HIV/AIDS continues to endanger social and 
political stability, and warned that the virus is gaining a foothold in 
the Middle East and North Africa, ``where governments may be lulled 
into overconfidence by the protective effects of social and cultural 
conservatism''.
    Do you agree with the Tenet's assessment that HIV/AIDS is gaining a 
foothold in the Middle East and North Africa?
    Answer. As it has around the globe, AIDS is certainly gaining a 
foothold in the region. Although the Middle East as a region has one of 
the lowest rates of HIV/AIDS infection (an estimated 0.3 percent) of 
its adult population, even this rate is higher than East Asia and the 
Pacific region, and by UNAIDS' estimates the Middle East and Near Asia 
has the second-highest rate of increase of HIV after the former Soviet 
Union and Eastern Europe. While not a health and social crisis 
presently, HIV/AIDS is a growing and potentially serious problem in the 
region.
    Drug use is on the rise in the Middle East, and in some countries 
such as Bahrain and Iran, injecting drug use is the primary cause of 
HIV infection. Prevailing social attitudes, cultural norms and 
religious tradition limit discussion of premarital sex, homosexuality, 
and adultery, all sexual behaviors that contribute to the spread of 
HIV/AIDS. Civil society, which in many other regions actively combats 
the disease, has not yet taken up the HIV/AIDS problem in the region. 
Unsafe medical practices are also a mode of HIV/AIDS transmission in 
countries such as Algeria and Iraq.
    The underlying vulnerability of the region, therefore, is 
significant, especially given rapidly changing social norms in many 
countries and exposure to high-risk behaviors for HIV/AIDS 
transmission. Poverty and pronounced gender inequality in the region 
are also drivers of the epidemic.
    While not calling for large-scale interventions or program 
investments, the HIV/AIDS situation in the region needs to be closely 
monitored. Middle Eastern and North African governments need to be 
urged to assess the vulnerability of their own countries and respond 
appropriately. Leadership by religious and political leaders at all 
levels at this early stage of the epidemic is the most effective means 
to ensure that its potential destructiveness is not realized.
    Question. AIDS orphans generally do not have access to education in 
Africa, which often requires the payment of a school fee.
    Do school fees create obstacles to stemming the spread of the 
disease by excluding vulnerable segments of the population to both the 
traditional ABC's and ``Abstain, Be Faithful, use Condoms''?
    Answer. Many children in Africa, particularly those impacted by 
HIV/AIDS, are unable to attend school because their families do not 
have the resources to pay school fees. This is particularly an issue 
for children orphaned due to HIV/AIDS. As part of a comprehensive 
assistance package for children affected by AIDS, school fees are 
sometimes included. However, it is important to note that school fees 
are often only one of several barriers to accessing education, and the 
right intervention can only be determined at the local level.
    Basic education is the linchpin for success in many of the U.S. 
Government's development activities, including family planning, child 
health and HIV/AIDS. In order to be successful in the fight against 
HIV/AIDS, it is essential that we wrap all of our development programs 
around HIV/AIDS programs. We have been working around the world to 
integrate AIDS prevention messages into all of the other sectors, 
including education.
    Question. Given Rotary International's superb work in combating 
polio internationally, do you have any plans to use Rotary--and its 
networks--to tackle HIV/AIDS, malaria or TB issues?
    Answer. In implementing the President's Emergency Plan for AIDS 
Relief, we have sought to fund a broad range of innovative new partners 
to bring not only expanded capacity but also innovative new thinking to 
our efforts. We would welcome the opportunity to consider partnering 
with Rotary International in our efforts, especially in countries such 
as Kenya with strong local clubs. Health and Human Services Secretary 
Tommy G. Thompson traveled with the Chairman of the Rotary 
International Foundation, Jim Lacy, to India, Pakistan and Afghanistan 
in April 2004, and encouraged him to fund ways for the Foundation and 
individual Rotary chapters to engage with the President's Emergency 
Plan.
    Question. The 2002-2003 outbreak of SARS in Asia highlighted 
deficiencies in mounting a concerted international response to a 
rapidly spreading disease. In a recent GAO report, delays in the 
initial response were attributed to China's reluctance to share 
information on SARS or to invite specialists to investigate the 
outbreak in a timely manner.
    A. With respect to HIV/AIDS, are there particular countries that 
are less than willing to provide information or access to international 
medical specialists to help stem the spread of the disease?
    B. Given that SARS underscored weaknesses in many Asian 
governments' disease surveillance systems and public health 
capacities--to say nothing of communications systems and effective 
leadership--how confident should we be that these same governments are 
capable of monitoring HIV/AIDS?
    Answer. In Asia, as with other regions of the developing world, 
there has been a perceived reluctance on the part of some countries to 
share specific information, including numbers of HIV/AIDS cases, issues 
relating to safe blood supplies, and other information relating to the 
treatment and care of HIV/AIDS patients. There are a number of 
political, cultural, economic, and security reasons that influence some 
East and Southeast Asian countries to withhold valuable information 
during health and environmental crises and fail to seek appropriate 
outside assistance. In recent years, the world has increasingly 
acknowledged the dire threat that HIV/AIDS poses, not only as a health 
crisis, but also as a threat to economic growth, an overwhelming burden 
on health care infrastructure, and the potential for undermining 
national stability. Recently, there have been positive developments in 
Asia demonstrating a new level of political will to meet the challenges 
imposed by the pandemic. In addition, the inadequate response to the 
SARS epidemic served as an important lesson, particularly for China, on 
the consequences of inaction during a health crisis. Since the Severe 
Acute Respiratory Syndrome (SARS) emergency, China has significantly 
strengthened its political will to openly address the HIV/AIDS 
pandemic. China has formed the State Council Working Group on HIV/AIDS, 
which includes 21 ministries and has increasingly sought information on 
the most effective way to respond to HIV/AIDS, including dialogue on 
technical assistance to support the health care sector and health 
infrastructure.
    With regard to monitoring for HIV/AIDS, along with an increased 
level of political will to effectively address HIV/AIDS, many Asian 
countries now recognize the importance of significantly improving data 
quality. For example, in China, the Global AIDS Program of the U.S. 
Department of Health and Human Services has a surveillance component as 
part of its technical assistance project in China. This will help the 
country develop systems to monitor rates of infection and the impact of 
prevention programs. The Chinese government is supportive of this type 
of technical assistance, and continues to work with donor countries and 
nongovernmental organizations to develop more effective strategies in 
the fight against HIV/AIDS.
    Question. What weight do you put on efforts to combat malaria--
which kills over 1 million people a year--and what is the role of your 
office in anti-malarial efforts of the U.S. Government?
    Answer. As you suggest, opportunistic infections, such as 
tuberculosis (TB) and malaria, play a fundamental role in the overall 
health of HIV infected individuals. Malaria is the most common life-
threatening infection in the world. It is endemic in more than 90 
countries, and a child dies every 30 seconds from it, mostly in Africa. 
Causing more than one million deaths and 500 million infections 
annually, malaria impedes economic development in Africa, Asia, and the 
Americas. Because of the annual loss of economic growth caused by 
malaria, gross domestic product in endemic African countries is up to 
20 percent lower than it would have been if there were no malaria in 
the last 15 years.
    The Emergency Plan for AIDS Relief, will coordinate and integrate 
anti-malarial efforts into HIV/AIDS prevention, care and treatment. 
This is especially critical in the context of providing HIV care to 
pregnant women. Moreover, the Office of the U.S. Global AIDS 
Coordinator is committed to coordinating with the global anti-malarial 
activities of both the U.S. Agency for International Development and 
the U.S. Department of Health and Human Services.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

    Question. Do you agree that any faith-based organization that 
receives U.S. funds, if it provides information about condoms the 
information must be ``medically accurate and include the public health 
benefits and failure rates of such use?'' Do grant agreements with 
faith-based groups require them to adhere to this requirement, as 
Senator Frist and I recommended in a colloquy on the Senate floor? How 
do you plan to monitor adherence to the law?
    I am told that funding for USAID's commodity fund to purchase 
condoms has remained stagnant for several years, despite the steady 
increase in HIV infections. Do you plan to spend more on condoms in 
fiscal year 2005 than last year, or less?
    Answer. In the Acquisition and Assistance Policy Directive dated 
February 26, 2004, the U.S. Agency for International Development 
mandates that information provided by any organization receiving 
funding--including faith-based groups--must be medically accurate. 
Specifically, the following wording is now included as a standard 
provision of all new agreements, as well as older agreements that add 
new funding:

    ``Information provided about the use of condoms as part of projects 
or activities that are funded under this agreement shall be medically 
accurate and shall include the public health benefits and failure rates 
of such use.''

    Organizations not in compliance could be considered in violation of 
the terms of their agreement.
    The Commodity Fund was established in fiscal year 2002 to remove 
financial constraints to the availability of condoms for missions who 
wish to make them available as part of their AIDS prevention programs. 
The amount allocated for this purpose increased in 2003, and then 
remained constant in 2004. Funding decisions have not yet been made for 
fiscal year 2005, but the importance of this resource is acknowledged. 
Total condom shipments--paid by central and field resources--have 
increased significantly from 233 million units in calendar year 2002 to 
550 million units expected by final shipment in 2004.
    Question. The Administration declined to apply the Mexico City 
Policy to HIV/AIDS funds, but there is still confusion in the field 
about this. Can you clarify for U.S. officials and foreign NGOs that 
there is no legal impediment to supporting a foreign NGO for AIDS 
prevention or treatment efforts, even if that organization would be 
barred under Mexico City from receiving family planning funds?
    Answer. As you note, the Mexico City Policy applies only to 
assistance for family planning activities by foreign non-governmental 
organizations, not to assistance for HIV/AIDS funding or other health 
activities that do not involve assistance for family planning. The 
President's extension last year of the Mexico City Policy to State 
Department programs expressly did not apply to HIV/AIDS assistance. Any 
group, subject to other relevant provisions of U.S. law, will be 
eligible to apply for HIV/AIDS funding under the President's Emergency 
Plan.
    Question. The Statement of Managers accompanying the Fiscal Year 
2004 Foreign Operations Act requires you to report back to us by April 
1 (60 days after enactment) on how much the Administration will spend 
this year on AIDS prevention activities and what amount of that will go 
towards ``abstinence until marriage'' programs. As far as I know, the 
report has not been submitted, or am I mistaken? When will we get it?
    A provision in the United States Leadership Against HIV/AIDS, 
Tuberculosis and Malaria Act of 2003 requires that at least one-third 
of all global HIV/AIDS prevention funds be set aside for ``abstinence-
until-marriage'' programs. When Senator Feinstein offered an amendment 
to the Fiscal Year 2004 Foreign Operations Appropriations bill to 
clarify the congressional intent of the provision, you wrote a letter 
to Senator McConnell that was read on the Senate floor expressing 
opposition on the grounds that it would have restricted the 
administration's flexibility and undermined your ability to implement 
the full variety of abstinence until marriage approaches.
    How exactly do you define an ``abstinence-until-marriage'' program? 
Was this definition available during debate on the Fiscal Year 2004 
Foreign Operations Appropriations bill? If not, why were you so sure 
that Senator Feinstein's amendment would have undermined your ability 
to fund the full variety of abstinence until marriage approaches?
    If a program is successful in leading to increased abstinence with 
a comprehensive message that places a priority, rather than exclusive, 
emphasis on abstinence, would it be eligible for funds under the one-
third earmark?
    Based on your experience, is it appropriate to devote one-third of 
prevention funds to abstinence until marriage programs? If so, what 
empirical evidence do you base that on?
    Answer. First, the Office of the U.S. Global AIDS Coordinator 
apologizes for the delay in submitting the report in question to 
Congress. The Office is working on completing the report and submitting 
it to Congress within the next several weeks.
    Under the Emergency Plan for AIDS Relief, the ``ABC'' model 
(Abstinence, Be Faithful, and, when appropriate, correctly and 
consistently use of Condoms) will support behavior change for the 
prevention of the spread of HIV. The Emergency Plan will balance and 
target the application of A, B, and C interventions according to the 
needs and specific circumstances of different populations and 
individuals.
    The success of the ABC model in countries such as Uganda, Zambia, 
and Ethiopia, among others, has demonstrated that promoting behavior 
change and healthy lifestyles, including abstinence and delayed sexual 
initiation, faithfulness and fidelity in marriage and other committed 
relationships, reduction in the number of partners, consistent and 
correct use of condoms, and avoidance of substance abuse, has been and 
can be successful in preventing the spread of HIV/AIDS.
    Abstinence-until-marriage programs, as part of a comprehensive 
prevention approach, should appeal to the specific needs of specific 
groups. For example, in many countries the average age of marriage is 
17 or 18. Once married, a message underlining the importance of 
faithfulness is more appropriate than an abstinence-only approach that 
would be appropriate for unmarried, single, school-age youth. Reliable 
data exists to show that youth can and do respond to abstinence-until-
marriage messages and programs, and that delaying sexual activity and 
being faithful to one partner is not only protective for young people 
but can also have widespread impact on the growth of the HIV/AIDS 
pandemic.
    As such, under the Emergency Plan for AIDS Relief, abstinence-
until-marriage programs will include two goals:
  --Encouraging individuals to be abstinent from sexual activity 
        outside of marriage as a way to be protected from exposure to 
        HIV and other sexually transmitted infections (STIs). These 
        activities or programs will promote the following:
    --Importance of abstinence in reducing HIV transmission among 
            unmarried individuals;
    --Decision of unmarried individuals to delay sexual activity until 
            marriage;
    --Development of skills in unmarried individuals for practicing 
            abstinence; and
    --Adoption of social and community norms that support delaying sex 
            until marriage and that denounce forced sexual activity 
            among unmarried individuals.
  --Encouraging individuals to practice fidelity in sexual 
        relationships, including marriage, as a way to reduce risk of 
        exposure to HIV. These activities or programs will promote the 
        following:
    --Importance of faithfulness in reducing the transmission of HIV 
            among individuals in long-term sexual partnerships, 
            including marriage;
    --Elimination of casual sexual partnerships;
    --Development of skills for sustaining marital fidelity, including 
            the ability to voluntarily seek counseling and testing to 
            know the serostatus of persons in relationship;
    --Endorsement of social and community norms supportive of 
            refraining from sex outside of marriage, partner reduction, 
            and marital fidelity using strategies that respect and 
            respond to local customs and norms; and,
    --Diffusion of social and community norms that denounce forced 
            sexual activity in marriage or long-term partnerships.
    Question. The President's Emergency Global AIDS Plan does not 
ensure that additional funds will be available for developing safe and 
effective microbicides. The plan appears to leave this to the 
discretion of HHS and NIH. Yet NIH spends barely 2 percent of its HIV/
AIDS research budget on microbicides.
    Given that married women who get infected from their husbands 
urgently need options like microbicides, what if anything do you plan 
to do to mobilize more funds for this research?
    Answer. Microbicides, once successfully developed, will help reduce 
the transmission of HIV/AIDS. Under the Emergency Plan, the National 
Institutes of Health (NIH) within the U.S. Department of Health and 
Human Services (HHS) is pursuing a comprehensive program for 
discovering, developing, testing, and evaluating microbicides for HIV 
prevention. HHS/NIH is the major federal sponsor of microbicide 
research and development. The Emergency Plan provides opportunities for 
HHS/NIH to expand its HIV Prevention Trials Network, a worldwide 
network of clinical trial sites established to evaluate the high 
priority area of safety and efficacy of non-vaccine HIV prevention 
interventions such as microbicides. As we use the tools available today 
to bring immediate relief to the millions suffering from consequences 
of HIV/AIDS, we will continue to pursue strategies, such as 
microbicides, that will allow us to make greater strides against this 
disease in the future.
    We appreciate the concerns voiced by many about the vulnerabilities 
of women and girls to HIV/AIDS, including women coerced or forced to 
have sex, and who have few options for negotiating sex with their male 
partners. There is increasing recognition that women and girls 
represent nearly half of all HIV infections worldwide and that the 
disease disproportionately affects them in many ways. HHS/NIH supports 
an extensive AIDS research portfolio on women and girls. The President 
preceded his announcement of the Emergency Plan by his announcement in 
June 2002 of his $500 million International Mother-and-Child HIV 
Prevention Initiative for Africa and the Caribbean. That initiative, 
now part of the Emergency Plan, is intended to treat one million women 
annually and reduce mother-to-child transmission of HIV by 40 percent 
within five years or less in target countries.
    Several U.S. Government agencies, including the U.S. Agency for 
International Development (USAID) and the U.S. Department of Health and 
Human Services (HHS), are working with women's organizations, public 
health groups, and others to define mechanisms to address even better 
the gender dimensions of the HIV/AIDS pandemic. For example, USAID is 
supporting policy changes, research and interventions that address 
issues related to gender and HIV/AIDS and seeks to reduce women and 
girls' vulnerabilities to HIV/AIDS. Such activities include public 
outreach materials and peer-education programs directed toward men and 
boys to address cultural norms about violence and sexual promiscuity; 
promotion of abstinence and fidelity; research on issues related to 
women's vulnerability, including cross-generational sex, stigma, and 
gender-based violence; and identifying and training women's grassroots 
organizations to participate in policy making processes regarding HIV/
AIDS.
    Question. We have reports of preferential treatment in the 
allocation of U.S. funds to ``faith-based'' organizations. We have 
heard that in several instances, organizations with little or no 
experience in public health; with ideological or religious objections 
to offering information about safer sex and condoms; and whose 
proposals for funding received low scores under review by technical 
experts, nevertheless were given preference for funding over other 
organizations with strong technical capability and long-term 
experience. Can we get copies of the recent proposals and scores 
evaluating organizations that are receiving funding?
    What specific guidelines are there to ensure that scientific, 
medical, and public health expertise is put above religious or 
ideological preferences in the granting of contracts?
    Answer. In implementing the President's Emergency Plan for AIDS 
Relief, we have sought to fund a broad range of innovative partners, 
including host government agencies, non-governmental organizations, 
faith-based organizations, networks of persons living with HIV/AIDS and 
their families, and U.S. institutions, to bring not only expanded 
capacity but also innovative new thinking to our efforts. The Office of 
the Global AIDS Coordinator has provide general guidance to U.S. 
Government agencies in the field to foster partnerships with a broad 
array of organizations, including organizations that minimize 
administrative and other costs that do not directly contribute to 
prevention, treatment and care for persons in needs. Guidance has also 
been provided that a partnering organization should not be required, as 
a condition of receiving assistance, to endorse or use a multi-sectoral 
approach to combating HIV/AIDS, or to endorse, use, or participate in a 
prevention method or treatment program to which the organization has a 
religious or moral objection. Neither should any organization advocate 
against any other component of the U.S. Government's programs. In 
reviewing funding proposals, criteria for the eligibility of 
applications include that organizations have a track record of 
experience in directly providing or assisting in providing treatment, 
care and prevention in the focus countries of the Emergency Plan.
    Faith-based organizations were among the first responders to the 
international HIV/AIDS pandemic, and deliver much needed care and 
support for fellow human beings in need. Their reach, authority, and 
legitimacy--like other organizations--identify them as crucial partners 
in the fight against HIV/AIDS; we are committed to encouraging and 
strengthening such partners. No organization, secular or faith-based, 
however, has received preferential treatment in funding on the basis of 
its affiliation or background.
    Our intent in the initial, first round of grants under the 
Emergency Plan has been to move as quickly as possible to bring 
immediate relief to those who are suffering the devastation of HIV/
AIDS. The Office of the Global AIDS Coordinator chose programs for 
funding in the first round because their recipients have existing 
operations among the focus countries of the Emergency Plan, have a 
proven track record, and have the capacity to rapidly scale up their 
operations and begin having an immediate impact.
    By initially concentrating on scaling up existing programs that 
have proven experience and measurable track records, an additional 
175,000 people living with HIV/AIDS in the 14 initial focus countries 
will begin to receive anti-retroviral treatment. Prevention through 
abstinence messages will reach about 500,000 additional young people, 
and assistance in the care of about 60,000 additional orphans will soon 
commence in those same programs.
    Regarding copies of proposals and evaluation scores, the Office of 
the U.S. Global AIDS Coordinator did not contract directly for these 
proposals, but rather worked through our partner U.S. Government 
agencies--the U.S. Agency for International Development and the U.S. 
Department of Health and Human Services. Each has advised that federal 
executive guidelines establish that absent a Committee request (and the 
strict protections that are imposed pursuant to such release), 
proposals or evaluation materials are not released to Members of 
Congress as a matter of course when they contain (1) proprietary 
business confidential or ``competitively useful'' information and (2) 
protectable deliberative process and privacy information that might be 
publicly disclosed pursuant to such release. Please see, by reference, 
Federal Acquisition Regulation 5.403 and <http://www.usdoj.gov/oip/
foia_updates/Vol_V_1/page3.htm>. Both HHS and USAID, however, have 
expressed their willingness to release, on an expedited basis, the 
requested Request for Applications (RFA), which include the evaluation 
criteria, and any actual awards that have been made, such awards being 
appropriately redacted to reflect business proprietary or privacy 
concerns.
    Question. Our law requires recipients of U.S. funds to have a 
policy opposing prostitution and sex trafficking. However, Senator 
Frist and I made clear in a colloquy that this requirement would be 
satisfied if the grant agreement for United States funding states that 
the grantee opposes prostitution and sex trafficking, rather than by 
requiring the grantee to have an explicit policy to that effect. Is 
that colloquy being followed, both with respect to United States and 
foreign organizations?
    Answer. As you note, Section 301(f) of the United States Leadership 
Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (Public Law 
108-25) states that ``No funds made available to carry out this Act, or 
any amendment made by this Act, may be used to provide assistance to 
any group or organization that does not have a policy explicitly 
opposing prostitution and sex trafficking.'' Also of note is Section 
301(e), which expressly prohibits funds from being used to promote or 
advocate the legalization or practice of prostitution or sex 
trafficking; yet does allow for the provision of HIV/AIDS prevention, 
treatment and care services to victims of prostitution or sex 
trafficking.
    Proper implementation of these two provisions is critical, and the 
Office of the U.S. Global AIDS Coordinator intends to implement the law 
consistent with the U.S. Government's opposition to prostitution and 
related activities, especially those that contribute to trafficking in 
persons. To this end, Congress's views, including the legislative 
history, report language and floor statements, have been informative 
and helpful.
    To ensure that the relevant provisions of Public Law 108-25 are 
met, both the U.S. Department of Health and Human Services (HHS) and 
the U.S. Agency for International Development (USAID) require that 
primary grantees affirmatively certify their compliance with the 
applicable restrictions regarding prostitution and related activities 
prior to the rec