[House Hearing, 114 Congress] [From the U.S. Government Publishing Office] STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2017 _______________________________________________________________________ HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION _________ SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS KAY GRANGER, Texas, Chairwoman MARIO DIAZ-BALART, Florida NITA M. LOWEY, New York CHARLES W. DENT, Pennsylvania BARBARA LEE, California ANDER CRENSHAW, Florida C.A. DUTCH RUPPERSBERGER, Maryland THOMAS J. ROONEY, Florida DEBBIE WASSERMAN SCHULTZ, Florida JEFF FORTENBERRY, Nebraska JOSE E. SERRANO, New York CHRIS STEWART, Utah NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full Committee, and Mrs. Lowey, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. Anne Marie Chotvacs, Craig Higgins, Alice Hogans, Susan Adams, David Bortnick, and Clelia Alvarado, Staff Assistants _________ PART 5 Page Assistance to Combat Wildlife Trafficking...................... 1 United States Engagement in Central America.................... 61 Department of State and Foreign Assistance..................... 175 Department of the Treasury International Programs.............. 341 United States Agency for International Development............. 413 _________ Printed for the use of the Committee on Appropriations _________ U.S. GOVERNMENT PUBLISHING OFFICE 21-440 WASHINGTON : 2016 COMMITTEE ON APPROPRIATIONS ---------- HAROLD ROGERS, Kentucky, Chairman RODNEY P. FRELINGHUYSEN, New Jersey NITA M. LOWEY, New York ROBERT B. ADERHOLT, Alabama MARCY KAPTUR, Ohio KAY GRANGER, Texas PETER J. VISCLOSKY, Indiana MICHAEL K. SIMPSON, Idaho JOSE E. SERRANO, New York JOHN ABNEY CULBERSON, Texas ROSA L. DeLAURO, Connecticut ANDER CRENSHAW, Florida DAVID E. PRICE, North Carolina JOHN R. CARTER, Texas LUCILLE ROYBAL-ALLARD, California KEN CALVERT, California SAM FARR, California TOM COLE, Oklahoma CHAKA FATTAH, Pennsylvania MARIO DIAZ-BALART, Florida SANFORD D. BISHOP, Jr., Georgia CHARLES W. DENT, Pennsylvania BARBARA LEE, California TOM GRAVES, Georgia MICHAEL M. HONDA, California KEVIN YODER, Kansas BETTY McCOLLUM, Minnesota STEVE WOMACK, Arkansas STEVE ISRAEL, New York JEFF FORTENBERRY, Nebraska TIM RYAN, Ohio THOMAS J. ROONEY, Florida C.A. DUTCH RUPPERSBERGER, Maryland CHARLES J. FLEISCHMANN, Tennessee DEBBIE WASSERMAN SCHULTZ, Florida JAIME HERRERA BEUTLER, Washington HENRY CUELLAR, Texas DAVID P. JOYCE, Ohio CHELLIE PINGREE, Maine DAVID G. VALADAO, California MIKE QUIGLEY, Illinois ANDY HARRIS, Maryland DEREK KILMER, Washington MARTHA ROBY, Alabama MARK E. AMODEI, Nevada CHRIS STEWART, Utah E. SCOTT RIGELL, Virginia DAVID W. JOLLY, Florida DAVID YOUNG, Iowa EVAN H. JENKINS, West Virginia STEVEN M. PALAZZO, Mississippi William E. Smith, Clerk and Staff Director (ii) STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2017 ---------- Wednesday, February 3, 2016. OVERSIGHT HEARING--ASSISTANCE TO COMBAT WILDLIFE TRAFFICKING WITNESSES HON. WILLIAM R. BROWNFIELD, ASSISTANT SECRETARY, BUREAU OF INTERNATIONAL NARCOTICS CONTROL AND LAW ENFORCEMENT AFFAIRS, DEPARTMENT OF STATE HON. ERIC G. POSTEL, ASSOCIATE ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT Opening Statement of Chairwoman Granger Ms. Granger. The Subcommittee on State, Foreign Operations, and Related Programs will come to order. Today's hearing is on oversight of assistance to combat wildlife trafficking. I would like to welcome our two witnesses, Ambassador William Brownfield, Assistant Secretary of the Bureau of Narcotics Control and Law Enforcement Affairs, Department of State; and Mr. Eric Postel, Associate Administrator, U.S. Agency for International Development. This hearing will address an issue we have followed closely for several years--international wildlife trafficking. This is a crisis and we must address it in an urgent manner. We can't afford to do business as usual. Not only are unique species at risk, but the continued surge in wildlife trafficking threatens international security and stability. The numbers are staggering: Over 120,000 African elephants were killed between 2010 and 2013. The current population is estimated at 400,000 to 600,000, down from 1.2 million in 1980. In South Africa, a record 1,214 rhinos were poached in 2014. Just 7 years earlier, that number was 13. Again, 7 years ago it was 13. Then, in 2014, 2015. Last week, South Africa released numbers for 2015 that showed a small decrease for the first time since 2007, but we know that rhino poaching has increased substantially in neighboring countries. These are just a few examples, but there are many other species that are suffering the same fate. There is also a human toll. We know that hundreds of park rangers have been killed by poachers, and just earlier this week there were news reports of a conservationist being shot while working to protect wildlife in Tanzania. Extremely sophisticated criminal networks, some with links to terrorists, are profiting from poaching. The illegal trade in wildlife is estimated at $8 billion to $10 billion annually. We can't afford to sit and think about what to do. We have to act. From fiscal year 2014 through fiscal year 2016, the subcommittee appropriated $180 million for wildlife trafficking. We want to hear about how this funding is being used to combat poaching and trafficking of wildlife, as well as to reduce demand for illegal wildlife products. There is a greater awareness of the problem today, but there is still so much work that must be done. The President issued an executive order in 2013 that we have a national strategy in place. There is a lot of talk about plans, but the subcommittee needs to hear about actions. A common complaint is that there is very little information publicly available on what the U.S. Government is doing to address the crisis. The subcommittee needs an update on how much of the funding has been spent, what has been achieved so far, how you evaluate programs, and what you plan to focus on going forward that will turn this tide and help bring an end to the illegal killing of these animals. Corruption is one of the main challenges we face in countries where wildlife trafficking is most prevalent. The funding we provide around the world must address this issue also. It is going to take a serious and sustained effort across the U.S. Government to make a real difference, and I hope you will be able to share with the subcommittee how the Department of State and USAID are doing just that. I will now turn to my ranking member, Mrs. Lowey, for her opening remarks. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mrs. Lowey Mrs. Lowey. Thank you very much, Madam Chairwoman, for calling this hearing. And welcome, Assistant Secretary Brownfield and Associate Administrator Postel. I join Chairwoman Granger in welcoming you and thanking you for your service. I also want to thank the chairwoman for convening this hearing on a topic of critical national security importance. Not only does illegal wildlife trafficking destroy some of the world's most treasured wildlife species for future generations, this criminal enterprise finances terrorist groups and militias, especially in Sub-Saharan Africa. Groups like Al Shabaab, Joseph Kony's Lord's Resistance Army, and the Sudanese Janjaweed have turned poaching and the illicit trade in endangered and threatened wildlife into one of the most lucrative criminal activities worldwide, estimated by the U.N. Environmental Programme between $50 billion and $150 billion annually. With the prospect of such large financial gain, poachers and traffickers have taken advantage of weak governments, law enforcement, porous borders, corrupt officials, and decimated elephant and rhinoceros populations. It is staggering that the elephant population in Africa has been reduced by one-half to two-thirds since 1980 and that rhino poaching increased by 7,000 percent between 2007 and 2014. In order to stop fueling the ruthless destruction of African wildlife and thwart a major financing source for terrorists, it is clear that our efforts must be better coordinated across a wide spectrum of actors: Law enforcement, port and border security, environment experts, NGOs, the private sector, multilateral institutions, and the leaders of countries where the demand for elephant tusk and rhino horn is most insatiable. In short, we need to focus on turning wildlife crime from a low-risk, high-reward enterprise to one of high risk and low reward. The administration's 2014 National Strategy to Combat Wildlife Trafficking was an important step in helping to prioritize and coordinate our considerable domestic and international response. I am interested to hear from you about its implementation and whether we are making progress. Specifically, are there gaps in our response that need to be addressed? I hope you will also update the subcommittee on China's level of cooperation as well as the other East Asian countries fueling this crisis. What progress has China made on its commitment to ban ivory imports and exports? How much pressure is the administration placing on other countries to do the same? Wildlife trafficking undermines much of the development progress we have made in Africa. It destroys livelihoods for impoverished communities, decimates landscapes, undermines security in the rule of law. That is why this subcommittee allocated $80 million in last year's omnibus for your agencies' efforts to combat poaching, a significant increase over fiscal year 2015. While there is broad bipartisan support for this funding, I hope you will assure members of this subcommittee that these funds are being put to good use and we are making appreciable gains. I look forward to your testimony. Thank you, Madam Chair. Ms. Granger. I now call the witnesses to give their opening statements. I would encourage each of you to summarize your remarks so we can leave enough time for questions and answers. The entire committee, all the members, are very interested in this issue. Your full written statements will be placed in the record. We will begin with Assistant Secretary Brownfield. Opening Statement of Ambassador Brownfield Mr. Brownfield. Thank you, Madam Chairwoman, Ranking Member Lowey, members of the subcommittee. Thank you for the opportunity to appear before you today. My thanks as well to the gentleman seated two rows behind me, to my right, for the loan of these reading glasses, permitting me to sound stupid on the basis of what I actually say and not due to blindness. I am here, members of the subcommittee, to discuss INL's efforts against wildlife trafficking. Had I appeared 4 years ago, I would have described a program budget of less than $100,000. I would have lauded the noble work of USAID, the U.S. Fish and Wildlife Service, and the conservation community in protecting endangered species. I would have spoken little of law enforcement. And I would have been wrong, because wildlife trafficking is organized criminal trafficking. And whether drugs, people, firearms, contraband, or slaughtered wildlife, countertrafficking strategies are similar. We attack traffickers at the source, where the product is created or the animals butchered. We attack traffickers in transit at chokepoints along border crossings, airports, and seaports. We attack traffickers' distribution systems at market destination, and we attack their financial systems at every stop along the way. In 2012, following a robust kick in the pants by this subcommittee, Federal law enforcement joined U.S. Fish and Wildlife colleagues in combatting wildlife trafficking. The President issued an executive order in 2013, followed by a government-wide national strategy in 2014, and the interagency community promulgated an implementation roadmap last year. INL pursues an international strategy built around four pillars. First, we develop legislative frameworks against wildlife trafficking. Law enforcement cannot combat trafficking if it is not a crime. Second, we build capacity to investigate and capture traffickers. This is normally a combination of equipment and training. Third, we strengthen capability to prosecute and convict traffickers. Law enforcement accomplishes little if traffickers are not tried and punished. And finally, we facilitate regional and global cooperation in both international organizations and cross-border cooperation. Congress, and this subcommittee in particular, have been generous in supporting this effort, appropriating nearly $100 million for these international efforts since 2013. You have every right to ask what this investment has produced. Today, INL manages more than $50 million in wildlife trafficking programs in 30 countries. Last year, we trained more than 1,000 law enforcement and justice officials in 50 sessions around the world. This year, we will train at all of our ILEAs and not just those in Africa and Southeast Asia. Last year, the Kenya, Uganda, Tanzania Operation Worthy II led to the arrest of 376 criminals, seizure of 4.4 tons of ivory and rhino horn, and dismantling of several trafficking networks. We developed a pilot K-9 detection program in key ports in Uganda, Tanzania, and Kenya. The dogs deployed to Kenyatta International Airport, and four seizures were made during the very first week. There are operational Wildlife Enforcement Networks in Southeast Asia, South Asia, North America, and Central America providing coordination, cooperation, and intelligence exchange. New WENs are getting underway elsewhere in Africa and Asia. We placed wildlife trafficking on the agenda of U.N. organizations. In 2015, the U.N. General Assembly passed a resolution calling on all member states to make wildlife trafficking involving organized criminal groups a serious crime. You will tell me, Madam Chairwoman, correctly, that much more needs to be done, and I will agree. We are still behind in this race to prevent extermination of some of the noblest species on the planet. But I would like to think that the traffickers can hear our footsteps approaching from behind. I thank the committee, and I look forward to your questions and comments. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mr. Postel Ms. Granger. Thank you. Mr. Postel, you are now recognized. Mr. Postel. Good morning, Chairwoman Granger, Ranking Member Lowey, and distinguished members of the subcommittee. I would like to thank you for holding this hearing and giving me the opportunity to testify. The United States Agency for International Development continues to be deeply concerned by the current poaching and illegal fishing crisis. Like my State Department colleagues here today, we strongly believe that the slaughter of thousands of animals and the murder of park rangers trying to protect these species must be stopped. Protecting wildlife is also critically important to USAID's mission to end extreme poverty. The rural poor often disproportionately depend on natural resources for their survival. The illegal wildlife trade threatens tourism that sustains developing economies. It fosters corruption, as you mentioned, undermines the rule of law, and discourages foreign investment. USAID is dedicated to building on our longstanding commitment to protect wildlife by both continuing to invest in strategies that work and testing new, innovative approaches. In accordance with the President's National Strategy for Combatting Wildlife Trafficking, our approach is focused on the entire chain involved in this, deploying a combination of tactics to address the complex problem. With your generous support, we have increased our investment to fight wildlife trafficking from $13 million in fiscal year 2012 to more than $55 million in fiscal year 2014. We have launched 35 new programs in the last 2 years, in addition to 30 that were already underway. The results are modestly encouraging, but much, much remains to be done. Last year, in addition to the work that INL is doing, we worked with another about 1,000 people across Asia and Africa to train them and help them use the skills they gained to contribute to the arrest of more than 500 poachers and traffickers. In the Philippines, an anonymous hotline generated more than 3,000 reports of illegal fishing that led to 25 arrests in 6 months. That model is now being deployed in seven more marine areas in the Philippines. Sustained long-term investment in community conservation in Nepal has resulted in the third consecutive year with no tigers or rhinos being poached in the country. And where this model can and is replicated, such as in northern Kenya, we are seeing some similar results. To dry up the market for illegal wildlife products, we also have supported demand reduction campaigns that reach more than 740 million people in Asia. We are optimistic that our efforts, in combination with the efforts of others in our government and around the world and many different organizations, are contributing to a downward trend in ivory consumption in the last year or so, as new research seems to be suggesting. In all cases, partnerships with government, partnerships with the private sector, with NGOs and civil society, are critically important. Our latest one involves working with representatives from key transportation and logistics companies and associations to address the role of transport companies in ending the illegal wildlife trade. And technology has an important potential to help us scale the reach and the impact of these interventions. Our Wildlife Crime Tech Challenge, which we did in partnership with National Geographic, the Smithsonian, and an NGO named TRAFFIC, recently announced 16 winners from around the world. These extraordinary innovators propose solutions that will help contribute to shutting down transit routes, strengthening evidence on the forensic side, reducing demand, or combating corruption. But despite these modest successes, the illegal wildlife trade, as you eloquently described, continues at unacceptable levels. Enormous challenges remain. Widespread corruption obstructs progress and many governments lack enough training and resources and, most importantly, the will to respond effectively. USAID will continue to respond aggressively to the crisis, strengthened by cooperation with new partners and counterparts in Congress and across the United States executive branch. Our response will require we pay attention to the whole problem, supporting law enforcement efforts on the ground, addressing the root cause of demand, supporting effective and accountable institutions, and investing in communities to end extreme poverty and enable them to have alternatives to poaching. Thank you all for your interest and strong leadership on this topic. I look forward to your questions and to your counsel. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. Thank you very much. I want to follow up on what you talked about in hearing from people and what they are doing around the world, because we really, as I said earlier, we can't conduct business as usual with this situation. The subcommittee held a series of roundtable discussions with conservation groups working in the field, and last year we heard from Tsavo Conservation Group that uses unique strategies to address wildlife poaching. Nontraditional partners like Tsavo sometimes have a difficult time being successful in receiving USAID funds. So what can USAID do to ensure funds are available to organizations doing important work, even though they have not had experience working with USAID in the past? Mr. Postel. Thank you for the question. As somebody who in my own business 20 years ago encountered some of the challenges of learning how to work with the Federal Government, I am very attuned to this, and under two successive administrators we have been working hard to be more open and to help people understand what is involved. I am very pleased that in Kenya one of the most recent procurements had, out of the six partners that are involved, five are new, one is an existing one. And we are trying, both on the level of the countries as well as in Washington, to have a lot more openness about what is coming, what are the opportunities. And also we know that some organizations need help with their capacity. So in a recent posting of a new grant opportunity in Kenya, they built into that the ability that some of the funds would be used--of course the bulk of it for working on this issue--but a very modest amount to help the organizations themselves improve their capacity. And similarly, in Washington, for instance, in the E3 Bureau, semiannually we do what we call an open house, and we publicize it through FedBizOpps and all kinds of other ways. We had 600 people there last week, more than half were new. And literally, every office director and their team is required to be there so that people can have a two-way dialogue, not only about opportunities directly to work with us, but to give us feedback on how to improve. So we are not in the perfect place, but I think we are making progress. The SBA seems to think so because we went from a C grade a few years ago to an A last year. So we have to keep working this. There are more improvements to be made. But we are definitely trying to be much better on that score. Ms. Granger. Thank you. As a former schoolteacher, I appreciate going to the A's. Ambassador Brownfield, we have heard from rangers and other law enforcement about the equipment they need to address poaching. In 2014, I asked you about the equipment and you said you wanted to focus on training first. So now that several years have passed, could you give us an update on equipment and how that has been provided and what additional equipment you might need? Mr. Brownfield. Sure. Madam Chairwoman, our thought process remains the same as when we started, which is to say our first focus is capacity building and training, and then as they develop the capabilities to make use of the equipment, then we phase the equipment in. In the course of the past year we have done some basic equipment provisions to both Tanzania and South African law enforcement, overwhelming rangers or those that are involved in ranger activity. Some of it has been gear that allows them to operate in wilderness-type environments. Some of it has been more specialized. For example, I believe, last week, if not this week, Secretary Jewell is in South Africa, and she was able to participate in a donation ceremony of night vision goggles for South African park rangers in the expectation that they will be used in their efforts to locate, identify, and take steps against poachers as part of their regular work and their regular activity. I suppose I would change what I said to you in 2014 when I said we will be overwhelmingly training now, to suggest that 2016 is the point where we should be seeing--and you have every right to expect to see--greater provision of equipment as the thousand or so a year that we train come online and are in a position to use them. At the same time, I feel it only fair to tell the committee, our approach in INL is to defer substantially to the judgment of our chiefs of mission in those countries and their country teams to tell us when these units, when these policing or law enforcement organizations are capable of making good use of the equipment. What we don't want to do is come back and report to you that we have provided millions of dollars of equipment and cannot at this time account for it or tell you where it has gone. I predict that by the time you summon me here by the end of this year, I will be in a position to talk much more than just Tanzania and South Africa as recipients of equipment from INL. Ms. Granger. And I hope you will be. Mrs. Lowey. Mrs. Lowey. Thank you, Madam Chair. There has been a great deal of discussion this morning on the enforcement efforts to combat wildlife crime. And this is a serious part of the problem and one we all take very seriously. But with a challenge this varied and involving so many players, I hope the approach of the U.S. Government is balanced and broad. For example, we all know that the lack of economic prospects often drives communities to become complicit in poaching or resistant to enforcement of antipoaching laws. So from encouraging community conservation to reducing demand and the economic benefits of poaching, how does our approach ensure that every angle of this problem is tackled? You can each decide who goes first. Mr. Postel. Thank you for your question. You are exactly right, there are all of these dimensions to it. And, of course, what happens is some in Washington, some in-country, where under the lead of our chief of mission they work with the government to look at what are the situations. And then also on the Washington side, we are looking and discussing with the whole interagency what are the situations in different countries. The demand side is especially but not exclusively focused on Asia. We are the second biggest--our own country is the second largest source for illegal products--so obviously Fish and Wildlife, Department of Justice, and others are focusing on that part of the problem. And we are working in Asia on a number of demand reduction projects to help reduce the underlying demand. And as you said, another big part is the community, so that people have alternative livelihoods. That is one of the areas where there has been a long track record. And in some countries where all the pieces of the puzzle come together there has been strong success; in Nepal and Namibia, in some spots in northern Kenya, and so forth. One of the things that has changed, as evidenced by the numbers that Representative Granger was mentioning, is that you have new players, and it is tied to very organized or sophisticated folks with heavy-duty weapons that are not local folks and have their own night vision goggles or whatever. So that is why we have got to work on all three, because sometimes they are overwhelming the community's ability to do this. So we have to work on all three, you are exactly right. Mr. Brownfield. And, Congresswoman, if I could just add two quick points. Part of the answer to your question as to how do we ensure that there is some degree of balance between what I would call the social and economic development side, which is to say, how to give communities in these vulnerable areas a stake in doing something other than poaching and butchering wildlife, connecting or balancing that with the law enforcement approach. By the way, a lesson that we have learned over 50 years in the counternarcotics area, and the lesson is there must be some degree of balance between the so-called soft side and the hard side. First, you are talking to two-thirds of the organizations that are responsible for managing this in our programs overseas: USAID, which obviously has a natural tilt towards the economic and social development side; INL, and the L of INL stands for law enforcement, which speaks for itself; and missing from this group is Fish and Wildlife Service. We are the three who are in a sense trying to coordinate these programs and projects specifically overseas. Back here in Washington, we do it through the task force that was established as a result of the U.S. National Strategy. And the task force that focuses on this is driven by the State Department, the Department of Justice, and the Department of the Interior, co-chaired by the three of them. Our objective in each case is to talk these issues through--and we do talk. In fact, even when you will find that, say, USAID and INL are working with the same international partner, we are doing it with a different focus in each case as to what that partner would be responsible for doing. Because your fundamental assumption is right: If we do nothing but law enforcement, all that we are doing is driving these communities deeper underground to continue to do the same thing. And I would suggest the opposite is true as well. If all we do is community development and alternative development for them with no consequences for wildlife poaching, they will continue to do it on their own time. Mrs. Lowey. Thank you very much. Ms. Granger. Thank you. I want to remind members that you have 5 minutes for your question and the responses from the witnesses also. Pay attention to that one. A yellow light on your timer or this timer right here will appear when you have 2 minutes remaining, and if time permits we will have a second round. I will call on Mr. Diaz-Balart first. Mr. Diaz-Balart. Thank you, Madam Chairwoman. Administrator Postel, you mentioned the use of technology in fighting illegal trafficking and poaching. Do we have an idea of how successful that has been? And do you have an idea of what is working and what isn't working? So in other words, are there bright spots and not-so-bright spots, and how do you do that? And if I may, let me just throw out the other question to Secretary Brownfield, which is, what is the connection between the trades of poached animals or animal parts, unfortunately, and, for example the drug trafficking or human trafficking networks? Are they not in many cases some of the same networks? And what is our approach to then go after that in more of a holistic fashion? So with that, I will yield to both of you. Mr. Postel. Thank you for your question and your support of many of these foreign assistance programs and humanitarian programs. The technology area is still evolving in a lot of organizations. It is not just Federal agencies, but NGOs and many other people are working and experimenting with different things. You might have seen Bryan Christy's article, an investigative piece looking at trafficking in East Africa, where they used a lot of technology, a tracking device, satellites, and other things to actually track the path of illegal parts into hands that really shouldn't be involved in this. So you see things like that. There are innovative data systems in place. We have supported several. There is one you can put right on your cell phone, and if any American or anybody is in Asia and they are in a market, they see something, or a policeman, they answer about six questions, and it will immediately show them pictures of things that it could come from and then guides them, this is illegal and a protected species and this isn't. So it is an evolutionary process. There are some things that clearly work. Some people have successfully used DNA to try to get a sense of from where the animal parts originated. But I think there is room for a lot more innovation. That is why we do the Tech Challenge and a lot more monitoring evaluation, to really see what is going to scale and what is going to work. Thank you. Mr. Brownfield. Congressman, while it is not my question to answer, I would mention one additional technological issue, which is kind of cool and I want to make sure that you all are aware of it. And that is, beginning about 2 years ago, a professor at the University of Washington in Seattle worked on a project, a program that was designed to determine whether DNA taken from ivory, seized at final market somewhere in the United States, could actually be backtracked to determine where that elephant or those elephants originally came from. And then if he had enough of a survey to be able to study, to be able to then identify the hot spots where elephants were, in fact, being poached in large numbers and to be able to vector the law enforcement community into those areas. We are at the 2-year mark. And while it is still too soon to say whether this is, in fact, tactically a useful piece of technology, it is one of the coolest new ideas that have come out in our time. Drugs and wildlife trafficking. You make an obvious and correct point. Criminal trafficking organizations are criminal trafficking organizations. More often than not they corrupt and penetrate the same government officials, the same organizations. They have to move their product, whether it is firearms, drugs, people, or trafficked wildlife, through the same airports, the same seaports, the same border crossings, and quite often the same organization is involved in doing the same thing. Are we drawing together the larger Federal law enforcement community to working the issue? Yes, we are. But it is happening more on a country-by-country basis. Some of them, in fact, are quite advanced. Tanzania right now has a monthly wildlife trafficking meeting of the country team members who are involved in this line of work. And they coordinate, so that, they determine if one particular Federal law enforcement agency and its counterpart through a judicial wire intercept program has developed information that perhaps was designed to collect on drugs, but, in fact, revealed something related to wildlife trafficking, they make that known and made available to the Fish and Wildlife Service representative or whoever may be responsible for wildlife trafficking. I see more of that today than I would have seen 2 or 3 years ago, and at the end of the day it is becoming increasingly holistic, which is why I concluded my statement saying I actually think we are making progress in winning this race. Ms. Granger. Thank you. Mr. Ruppersberger. Mr. Ruppersberger. One of the issues as far as getting on top of the issue is that you need intelligence to find out who the people are, what they are using, what their resources are, and that is extremely important. The first question is, are you working or getting enough intelligence in these areas to deal with that? But the second thing, and I think this is really important, I think, to be used in the right way, and could be a little bit expensive, but maybe there is a way that costs could be spread out, and that is using drones. Because these individuals don't have geographical boundaries. And I know drones have been mentioned in your field. But I think one of the first issues might be the cost, but there are ways to deal with that cost. And do you have people on your team, on your staff that are working with the intelligence agencies to try to get as much as you can in that regard? Mr. Brownfield. Congressman, let me take the two questions in the order that you offered them. Intelligence. Writ large, you are correct. One, intelligence is absolutely essential. Lord knows we have learned that lesson in the counternarcotics field for the last 50 years. And second, we still need to make progress. When we got our first global intelligence assessment, a little bit less than 3 years ago, of where kind of the world is on the wildlife trafficking issue, my observation at that time was this is a starting point, but it is a pretty basic starting point. A lot of work still needs to be done there. Where we have a much better story to tell, I believe, Congressman, is on a country-by-country basis where the U.S. Embassy has determined that this will be a priority. Countries like Kenya, Tanzania, South Africa, countries like Thailand, where the United States Embassy has said, for us this is a priority issue, bringing in then the law enforcement and intelligence community members and actually making them work together on this issue, there I think you do see very good local or countrywide progress. UAVs. I have been wrestling with UAVs generally on behalf of INL now for about a year and a half. A little over a year ago, we purchased three systems by the INL Air Wing, and we are in the process of testing them. But when I say testing, Congressman, I want you to understand, at this stage it is just figuring out how could we operate them, how many people would we need to deploy if we are going to deploy a UAV system, in what conditions can they fly, can they operate over water, must they be over land. We are still, in my opinion, which is not that of my Air Wing director, but we still have a few more of those questions to answer. This is, however, exactly the sort of thing where I would like to put UAVs against should we get to the position where we believe these are good, workable systems. But meanwhile, as you well know, a UAV system as a reconnaissance or intelligence collection system will work only so well as we are able then to get local host country law enforcement to react to the intelligence. It does little good to know that there is a poaching party at this specific location if we then cannot get a reaction to it. So we have two sets of issues. The first one I am going to solve and I intend to have solved before we have reached springtime in Washington, DC. The second one requires continued working with rangers and host country law enforcement. Mr. Ruppersberger. Just one suggestion. You don't need to reinvent the wheel. And I would think that we have a lot of successes in the intelligence field that use drones on a regular basis. You might want to reach out to those agencies to help you deal with that. Mr. Brownfield. Agreed. Agreed. Ms. Granger. Mr. Crenshaw. Mr. Crenshaw. Thank you, Madam Chairwoman. And thank you all. A couple questions. One is, you mentioned we have 35 new programs on top of 30 programs we already had. Maybe you could give us one or two real world examples of what those new programs are doing. There is a lot of money involved, and this is a serious problem. I want to know about our comprehensive programs. We know there is the demand side, we know there is the very highly profitable production side, and we know there are weak local institutions. So of those 65 programs you have now, how much time and energy do you spend making sure you coordinate those so that they are not each running off on their own little plan? On those three big areas of demand, production, and weak institutions, where do you think the priority of those 65 programs is? Mr. Postel. Thank you for your question, and also thank you for your focus and leadership on making sure that foreign assistance is very effective. So in terms of the new programs and the distribution and everything, so first of all let me describe from a couple different ways to slice the pie. So basically about two-thirds of them are focused on Africa, about 25 percent on Asia, with the rest Latin America and central programs like that transport partnership that I mentioned. Looking at it another way, about 65 percent involves enforcement work, 25 to 30 percent on community-based work, and about 7 percent on demand. That is by the dollars, but that can be deceptive, because, for instance, demand is not as financially intensive as some other activities. You are not necessarily buying equipment and things like that. So you can stretch the dollars further for the results. So it can be deceptive strictly by counting the dollars. Some examples. There is new work going out now in Asia on the demand side. For instance, in Vietnam one of the issues is that someone got the wrong idea that rhino horn would cure cancer. So the work there is focused on trying to correct those misconceptions. And there are other programs like that on the demand side. You heard about the hotline that I mentioned in terms of the fisheries in the Philippines. In Africa, in some cases it is a shift of geographies. As the chairwoman mentioned, in Tanzania there has been this huge increase in the elephant slaughter. The situation within the country varies. In other words, up north where mainly the iconic parks are and things, that is not the area. That is a big traditional area where the activities were. That is not the big increase for the killing. The killing is down south. So some of the new programs are focused on that in terms of both trying to stop it on the enforcement and the policy side and also some work on trying to increase investment so the tourists not only go up north, but south. So those are a couple of quick examples. And in all of this, both our ambassadors lead on a country level the coordination across the agencies to make sure there is not duplication, as well as with the other people. The British are active in a number of countries, other donors. So we have to make sure that and the NGOs, it is all well coordinated, we don't duplicate. And then of course, as the Ambassador and I both described, there are a lot of things done under the task force to make sure that there is no duplication or anything like that. I hope that gives a flavor of it. Mr. Crenshaw. Thank you. Ms. Granger. Mr. Serrano. Mr. Serrano. Thank you, Madam Chair. And thank you to our guests. It is interesting how things change and for the better. Fifteen years ago this kind of a hearing there would have been the conservationists and the environmentalists against or aside from the group that feels the development gets too involved in everything, and yet we now realize that this is a bigger issue than we thought. This is not just about preserving wildlife; it is about keeping money out of terrorists' hands. And so terrorists, being who they are, find any possible way to look for money. I just did a Google search, and all I did was ``wildlife trafficking images.'' And no matter how many times you see this, you can't get used to it, the hundreds and hundreds and hundreds of photographs of just lions' heads and elephants torn to pieces and just for the sake of making money, you know, as if they were not part of our Earth and our land. And it is a scary thought, but it is just something that we deal with. Let me deviate from my original questions here to ask you a question that someone might have asked but I missed. We always think of Africa, we think of Asia, but this also happens in Latin America, doesn't it? Can you comment on that, please? Mr. Postel. Thank you for your question and your longstanding interest in Africa and other areas. So it is absolutely also a problem in Latin America in a number of areas. Obviously, there is the whole illegal logging that goes on throughout the Amazon, and there are many species all through the Amazon Basin. So there is a lot of work to be done there as well. Mr. Serrano. And the logging then affects the species also, is that what you are saying? Mr. Postel. Yes. I mean, if people are wholesale cutting down the forest and destroying the entire ecosystem, all the different species have nowhere to go, nowhere to feed, and so forth. So there are linkages. And also it is just another form of the same criminality and these chains of people that work on all different forms of contraband. Mr. Brownfield. Congressman, if I might add from the law enforcement perspective. Mr. Serrano. Sure. Mr. Brownfield. One of the lessons that we have learned, and this kind of builds on Congressman Diaz-Balart's question earlier on, is that the trafficking organizations do actually overlap and connect. And it is not just drugs and wildlife. We have also learned that illegal logging, illegal mining, and the organizations that traffic that product are, in fact, tied in, in places, to wildlife trafficking as well. And we have also learned that with certain governments, it is easier to get their buy-in, their enthusiasm, their support for efforts to counter and combat wildlife trafficking if we tie it to something that from their perspective is a money loser for them. Peru, as an example, Peru is a country which believes it is suffering from a serious illegal mining and illegal logging problem. When we tie what we want to do on wildlife trafficking to that, we get much more support and enthusiasm from them, and we are able to train law enforcement organizations basically as antitrafficking organizations. If I could add to what you were saying and what the good Dr. Postel was saying in terms of our thinking for the future, when we got our fiscal year 2016 appropriation and we began to think of where the directions we would be moving on wildlife trafficking--and you will know if I get some of these wrong if someone behind me hits me in the back of the head--I said: So where should we be expanding or moving beyond our basic East and Southern Africa base and Southeast Asia base? My thinking is to expand more into Africa, up to and including West Africa; expand into Latin America, where you correctly note there are serious wildlife trafficking issues in Latin America, particularly South America; and expand into other areas, particularly in the financial systems and money- laundering processes of the wildlife trafficking organizations. When next summoned up here, I look forward to describing our thinking in terms of where we will be adding and increasing our efforts in this calendar year. Mr. Serrano. Thank you. Ms. Granger. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chair. Thank you, gentlemen, for your testimony today. Ms. Granger. Just a second. Mr. Serrano. I just wanted to make a quick ending comment. While it is important for us, as we always do, to criticize our own efforts and the efforts of the State Department and other groups, it is interesting to note that on this particular issue our government has been way ahead. Years ago--and this is something Mr. Diaz-Balart may be aware of--years ago, before we even thought of having any kind of getting close to Cuba, there was work between the Bronx Zoo, the Wildlife Conservation Society, and Cuban authorities, not in the government but in the civil society, on preservation of species and so on. So in that area we were probably way ahead of ourselves, but we still have to catch up with this new wave now. Ms. Granger. Thank you. Mr. Diaz-Balart. If the gentlewoman will yield for 5 seconds. It has always been clear that the Cuban regime treats animals much better than they treat their own people. I agree with you. Mr. Serrano. Boy, did I leave myself open for that. Mr. Fortenberry. Thank you, Madam Chair. To Mr. Serrano's comment, this is one of these issues, these concerns, problems that transcends boundaries. Conservation is the most conservative ideal, it is a progressive ideal. There is significant unity around the dynamic of not watching or sitting by idly while majestic animals are slaughtered for no reason, and then the connectedness that we have to not only international trafficking and the money flows that go to nefarious activities, but also the tie to the loss of a vision of sustainable-type development for other peoples. To that end, I appreciated your comments that there is this balance here between enforcement and community development. An overemphasis on either one is going to undermine the interdependency that is necessary between those two entities to actually achieve the goals. I think that is a thoughtful comment. In this regard, a number of us met last year, late last year, with several CEOs of major corporations, including Wal- Mart, and Harrison Ford, Han Solo, was there as well. Anyway, big investment on their part in trying to petition us to think creatively about conservation in a bipartisan fashion. One of the things I pointed out--the comments were particularly directed to the head of Wal-Mart--is that you do significant business in China, major, major manufacturing integration into China. Now, you look at us as government officials as having the ability to create the narratives for societal governance, but you may have potentially more power than we do. Given that China is one of the largest places for demand for illegal ivory, and I noted that you pointed out in your testimony that President Obama and the Chinese President apparently agreed that China would stop importing and exporting this, I would like you to unpack that further, because I don't think that is very well known. And then the second part of the question would be the role that international business can play in trying to again recreate a narrative, as we have done around many other important social initiatives, that this must be stopped. Mr. Brownfield. If I may start, Dr. Postel. First, Congressman, I could not agree with you or every other member of this subcommittee, because you have all referred to this directly or indirectly in your comments, that it is absolutely essential that we have partners, partners being other governments, partners being international organizations, partners being NGOs, whether they are global in nature or regional in nature, partners being the international or the U.S. business community. If we are not working with those partners, we are at a minimum--at a minimum--failing to make use of a very effective means to multiply the impact of whatever we are doing. And that would at least be stupid. And I would hate to be accused of stupidity unless I truly was intending to be stupid, which if you listen to my wife, happens at least 10 or 15 times a day. Second, China, and thank you for waiting until well into this hearing before we move into the issue, which I would call the 800-pound gorilla, who is actually not in the room but that is very much at play here. Working with the Chinese on this issue, something that I have been doing now for nearly 4 years, is a slow process. We work with them through their law enforcement organizations and institutions. My own summary would be, in 4 years we have moved from something that they are not willing to talk about at all to something that they are willing to acknowledge is an issue and that they have taken some ownership of. Mr. Fortenberry. What about this--I am sorry, the time is running out--what about this agreement? What level of agreement was reached? Would you explain that? Mr. Brownfield. In September of last year, during President Xi's visit, President Obama and President Xi agreed that they would take steps to eliminate the commercial trafficking in ivory. Important because China today is overwhelmingly the largest market for ivory in the world. And, as Mr. Postel has pointed out, we are not blameless in this regard as well. Two months later, at something called the U.S.-China Joint Liaison Group on Law Enforcement, which I co-chair, we got the Chinese--this is their Ministry of Public Security and their Customs Service--to agree that we would form a working group to develop details on how we would work to make this happen. Now, with many countries in the world you would say this sounds laughably little to have accomplished. With China it is, I would say, a step in the right direction. Also in the course of last year, for the first time they did a public ivory crush, where they, in public, before the media, with hundreds of people watching, did destroy beyond possibility of reuse a substantial amount of ivory. Does that stop the problem? No. Is it symbolic and therefore has at least some potential impact on their own officials and their own criminal elements? Yes. I would describe the Chinese issue as a work in progress. It is moving in the right direction. It is by no means moving as fast as we wish it would, and we still have a lot of work to do before we are both going to be in a position to say we are satisfied with where we are with China. Ms. Granger. Thank you. Mr. Stewart. Mr. Stewart. Thank you, Madam Chairwoman. And to the witnesses, for many years of service. It is something that I think many of us feel important but underappreciate it, which has been said here a number of times. I actually want to take just a second and tell you why I am interested particularly on the subject. One of them is I am just a recent convert to this, the beauty and really magnificence of these animals in this area. My wife and I spent, I don't know, 8 or 9 days in Africa last summer. It was a life-changing experience, particularly for my wife. I also sit on the Intelligence Committee. Africa is my area of assigned responsibility. I spend a lot of time in Africa, not, obviously, dealing with this issue, but with some of the more troubling aspects that that continent is dealing with in Al Shabaab and Boko Haram and others. Which leads me to my question. Ms. Granger. Can you just hold just a second? We are having a hard time hearing. Could you turn the mike up? Mr. Stewart. Yes. Well, I have such a big, booming voice. Ms. Granger. Ok. Would you speak a little bit louder? Mr. Stewart. Yes, ma'am, I will. Ms. Granger. We don't want to miss any of the words. Mr. Stewart. OK. Thank you. Is that a little better? I was there last spring and saw some operations against Al Shabaab and also Boko Haram, and the numbers of this are fairly startling. You know, what an animal is worth--and I will use Al Shabaab and some of the information that we have here from other sources, not provided by either of you--but they may receive something between $200,000 or $400,000 or maybe $600,000 a month on illegal ivory alone. Let's use the middle figure, $400,000. They pay their soldiers about $300 a month, which in the scale of things is actually fairly high. ISIS is paying their soldiers about $150 a month or something like that. But using that $400,000 a month figure, you are paying for something like 1,300 soldiers, full- time soldiers to fight in your army. It is a meaningful national security consideration, and we haven't talked about that much. Would you be able to respond quickly to two questions. Number one, because of this, Congress has considered withdrawing or withholding military aid to countries who we believe are not being our partner in trying to minimize or eliminate this trafficking. Is that a good idea or does that make it worse? And would you also address are there other terrorist organizations that we know are profiting from this as well and give us a sense of how much it means to them? Mr. Brownfield. Why don't I take a quick bite at that, Congressman. I would say, first, you have vectored in on one of the two organizations that are listed under our Foreign Terrorist Organizations proscribed list that we are confident and say publicly are engaged in wildlife trafficking. That is Al Shabaab. The other, by the way, is the Lord's Resistance Army further down to the south in the African continent. Mr. Stewart. So that answers my second question. You think it is only those two organizations? Mr. Brownfield. But I want to be careful that I have stated it in a way that makes sense. Those are the two that we are prepared to say are, in our judgment, unquestionably involved in this. Are there other organizations that may be? Yes, there are. My problem is I don't want to ring alarm bells if I can't then offer clear evidence as to why it is that we believe these other organizations, some in Africa, some elsewhere, are involved. Mr. Stewart. Mr. Ambassador, I have to tell you that I believe that there are. And in another setting I think you and I would agree that there is strong evidence. Mr. Brownfield. I believe it is possible as well. And, in fact, that is why I wanted to choose my words carefully. Mr. Stewart. I understand. Mr. Brownfield. And what Al Shabaab does, by the way, which is very similar to what the FARC used to do in Colombia on drugs, and that is it taxes. It taxes the trafficking organizations as they move the product through their territory, particularly through seaports and border crossings where they have some degree of influence and control. And they do make a substantial amount of money out there. Mr. Stewart. Very effective middleman. I am running short on time. Do you believe we should withdraw aid? Mr. Brownfield. And sanctions is a good question. You all pay me the big bucks to offer you my own judgment in terms of how we can accomplish what we want to accomplish internationally. Here is my judgment. I believe we already have some sanctions tools related to terrorism and support for or accepting the presence of terrorist organizations that are probably adequate to the task. My concern on unilateral sanctions tied to wildlife trafficking is that it will, as happens with sanctions on trafficking in persons, sanctions on drugs, turn a chunk of the international consensus that we have against us. I have no objection to sanctions of governments that are clearly tolerating and complicit in this. What I would want, however, is a tool that allows us to be very selective and very careful on how we apply those sanctions. I would like to have a broader conversation on this when we have another option. Mr. Stewart. Well, and maybe I will conclude by saying thank you. And I would like to follow up with you on that, because I recognize sanctions are a two-edged sword, that many times there are unintended consequences that come from that. But I think it might be a tool that we may be forced to implement here in a more aggressive way. But, again, Mr. Ambassador, I would like your thoughts at another time if we could. Madam Chairwoman, I yield back. Ms. Granger. Thank you. Mr. Dent. Mr. Dent. Thanks, Madam Chair. I apologize for being in and out of this meeting. I had some pressing business. But it is encouraging to hear about all your efforts to build capacity and to provide training and equipment to law enforcement engaged in combatting wildlife trafficking. Can you point to any specific law enforcement operations that have been especially impactful? Mr. Brownfield. In fact, Congressman, I can, and I would like to offer you four specific examples of operations that have actually produced measurable and concrete results. First, and we did the first of these in the year 2013, an international operation that involves more than 20 different governments called Operation Cobra. And you will be stunned to learn that it goes Cobra I, Cobra II, Cobra III, and Cobra IV. Each one has generated, up to this point, I think we are probably well over 400 individuals arrested. I have lost track of the number of tons of illicit product or animals that have been seized and the number of individuals and organizations that have been arrested for prosecution. That, by the way, is Asia, Africa, Europe, and the United States. A second operation is one that has been working only in the course of the past year and is Africa based, and it is called Operation Worthy. This particular operation has involved Uganda, Tanzania, and Kenya. And it, in fact, has produced nearly 400 arrests, 4.4 tons seized, and a good number of organizations taken down. A third operation, which is U.S. focused and U.S. internal, although focused on international organizations, is called Operation Crash, that is led by the Department of Justice and the U.S. Fish and Wildlife Service. And it also has nailed in the course of this past year more than 20 successful prosecutions and more than $5.5 million worth of assets seized. And finally, something that they have done themselves but they have done it with our equipment, our training, and our organizations created, the Philippine maritime service, in the course of 2015, has conducted operations vectored on wildlife trafficking; that is to say product being moved in or out. They have seized 23 vessels and they have seized more than $2.2 million worth of assets. Four specific operations that we can point to and say these are, at least to some extent, the result of our support and our training, assistance, and equipment. Mr. Dent. Most law enforcement actions you mentioned, I think you said Tanzania, Uganda, and Kenya, what are the other major countries where you have had these law enforcement operations? Mr. Brownfield. The Operation Cobra originally started as an operation focused on East Asia and Southeast Asia. It expanded to include parts of Central--I guess we call it Central Asia, Nepal. And, in fact, as the pipelines and the logistical lines passed through both Europe and Africa, we expanded into some of the source countries in Africa, such as South Africa, such as Kenya, such as Tanzania. And on the U.S. and the North America side, of course, we are dealing with the markets. Mr. Dent. My time has expired. I appreciate it. And I just have to tell you, you have got a great voice for radio. You must do voice-overs. You don't have to answer a question. Thank you. Mr. Brownfield. Make me an offer, Congressman. Ms. Granger. Thank you. We have time for a short round. And, Mr. Ambassador, if you will see that light right there, it will tell you when the time is up. I just have one short question because it was mentioned earlier about when we have huge amounts of ivory and the decision to destroy all that ivory. What was the result of that? It was confusing to me because I would think if we have all this ivory then it could slow down the need because the ivory is already there. They said, no, the intention, what happens is when you destroy it, it helps stop the poaching. And I didn't understand that. Is it successful? You mentioned one in China, but there have been several that are just enormous. Mr. Brownfield. Yeah. Madam Chairwoman, there have, in fact, been several here in the United States of America as well. I will give you the law enforcement theory behind the ivory crush, and that is, if you take ivory completely out of any commercial value whatsoever, you have the impact of discouraging the criminal networks from continuing to poach and acquire additional ivory. Now, there is a counterargument to that, and you hear this frequently in the conservation community, by governments who say the ivory has already been poached and by destroying it we are merely creating a requirement for more ivory. My own view, based upon my experience on working the drug issue, is hit the network at every point in the chain, including eliminating the product at market, because it sends a clear and unequivocal message to everyone, from the initial poacher up to the person who is selling the ivory illegally on the streets of New York, that, in fact, they will be stopped wherever they are on the chain. Ms. Granger. Thank you. Just something you would like to add to that? Mrs. Lowey. Mrs. Lowey. Thank you very much. I just wanted to follow up. We have talked a little bit about what China is doing in the big crush. I think it was in September that the Chinese President was here and they announced their commitment to a nearly complete ban on ivory import and export. If either of you would just focus on that for a minute. I was interested in what specific steps have been taken since that announcement, and are there examples domestically or on the part of the Chinese Government that indicate whether this pledge is being taken seriously? And what about other markets, especially in Asia? So I would like to hear some more about the Chinese enforcement, the cooperation with China, other than the big crush that happened, if you could. Mr. Postel. I will start it. Thank you for the question. We have seen work going on there both on the official side as well as by civil society, and I think both are equally important. One thing that can't be attributed strictly to the crush, but there seems to be some evidence that progress is being made, because the price of ivory in the illegal market in China has fallen 50 percent in the last 18 months. And some of that is just getting consumers to understand that. A lot of Chinese don't even know where the ivory comes from. That is why there are so many on the civilian side, so many efforts, whether it is Chinese actresses tweeting a picture of a butchered elephant, so people understand. I don't know if you will see it, but this is a picture of Yao Ming in the Bangkok airport in Mandarin sponsored by us as part of a whole campaign where the point is to tell the tourists, you know, that this is not a good thing to be done. So the government is pledging some things, and, of course, there is ivory, but also the government pledged in other areas. They have banned shark's fin soup from all their official government banquets. And there is a whole range of species on which we have to work with them. So there are concrete steps. But as the Ambassador said, it is a grind. It is slow. But, fortunately, sometimes they are wanting to follow what we are doing. So they were very pleased to brag about their crush, having matched our crush. And so sometimes our actions are another goad for them. Mr. Brownfield. Congresswoman, you asked specifically what have they done since the September announcement by the two Presidents. I would offer three things. First, the crush that we have talked about. In their defense, they did it publicly and it is something they have never done before. Second, 2 months later they did agree to establishing with us a bilateral working group among law enforcement officials to work this issue and put more flesh on the commitment that they made at the Presidential level. And third, they have not yet promulgated but released for circulation and consideration a new wildlife trafficking law. It has been reviewed by many people of the entire conservation community. I will not speak for everyone. What I would describe the law, as I have read it and understood it so far, is it moves in the right direction in some ways, in the wrong direction in some ways, and it unquestionably does not go as far as we wish it would go. Mrs. Lowey. Just one last comment, because I have seen many working groups being established. Anything specific coming out of it, or are they going to take a year to study it again? Mr. Brownfield. It is joint, Congresswoman, so my guess is we will be able to push it to a certain extent. The question will be how far are they willing to go. What I will commit to you is we will push them as far as we can push them and we will see how far they are willing to go to comply with their own President's commitments on this issue. Mrs. Lowey. Well, since it is almost the red light, so I guess you are not convinced of the seriousness of their commitment. And I know we both look forward to following up on this issue, and I thank you. Thank you, Madam Chair. Ms. Granger. Thank you. Mr. Fortenberry. Mr. Fortenberry. One quick follow-up as well. You talked about the necessity of ongoing partnerships, NGOs, business, and otherwise. But what other governments are engaged in this with resource assistance? You said the British. Are there other nations that have elevated this problem and have put resources to it, other than the ones where the problem exists? Mr. Brownfield. Congressman, I would give you lists in two categories. First, obviously, are the partner nations that are actually the source nations themselves. And the cooperation there is us trying to facilitate, build capacity, train or equip, and they would be-- Mr. Fortenberry. Yes. I don't think source nation is the right word. Beyond the source nations. Mr. Brownfield. You are talking about donors, others who are prepared to participate in this as members of the international community. The European Union as a whole participates in this. The British are in the lead in terms of who within the European Union are most focused on it. However, I am prepared to say good things--to a degree--about the French, about the Germans, about the Spanish, and about the Italians in terms of having stepped up to the plate to some extent. Canada is playing a useful role, and in some specific areas Japan. We bump into issues on Japan because in one area, whaling, they clearly are not participating in a helpful manner; in other areas they are. And in Southeast Asia, I have found at least one government--and probably two--and that is Thailand and Indonesia are playing both a helpful and energetic role putting some money, but more than that being willing to cooperate with NGOs, other governments, and international organizations that are trying to address the problem. Mr. Fortenberry. And where is this momentum coming from? Is it coming from us? Mr. Brownfield. I would suggest, first, I want to give the conservation community full credit. And since the era, I guess, of Theodore Roosevelt, they have, in fact, been doing exceptionally good work. There is no one on the planet who does not respect the conservation community and there is a reason for that. So I give them credit. Mr. Fortenberry. But it does seem like all of these initiatives are very new, government-to-government initiatives and NGO initiatives are new. So momentum for this is being driven somewhere. Mr. Brownfield. Yes. And I don't disagree with your assessment that the momentum is probably coming more by pushing from us than from any other identifiable government or organization. I just don't want to dismiss the efforts of others because at the end of the day we need them. Mr. Fortenberry. No, I am just looking for information. It is not some sort of judgment. I am just curious as to how this is happening and for the potential of what you have talked about in terms of problem solving and partnership with others. Because that is going to be obviously a necessary outcome in order to correct this problem. Mr. Brownfield. Because part of the solution--and I will do this in only 15 seconds--is we do have to keep the international community and specifically the United Nations engaged. If we can get through collective action certain activities to be made criminal around the world so that wherever you are doing it you are in violation of the law, it is going to make it a lot easier for us to get all governments of the world to cooperate. Mr. Fortenberry. Thank you. Thank you, Madam Chair. Mr. Postel. Just to supplement two quick things. One other group that is pivoting is the Global Environmental Fund, and they traditionally didn't work in that area and they are pivoting. And I think the other driver, in addition to everybody who was mentioned, is simply because of the connection on the security side, which is you have new voices coming to the table and saying, you know, this was important not just for conservation but for other reasons. And that is another driver that is affecting the British and ourselves and others. Ms. Granger. I thank the witnesses for appearing before the subcommittee today. Members may submit any additional questions for the record. The Subcommittee on State, Foreign Operations, and Related Programs stands adjourned. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Thursday, February 11, 2016 UNITED STATES ENGAGEMENT IN CENTRAL AMERICA WITNESSES HON. WILLIAM BROWNFIELD, ASSISTANT SECRETARY OF STATE, BUREAU OF INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS ELIZABETH HOGAN, ACTING ASSISTANT ADMINISTRATOR, LATIN AMERICA AND CARIBBEAN BUREAU FRANCISCO PALMIERI, DEPUTY ASSISTANT SECRETARY OF STATE, CENTRAL AMERICAN AND CARIBBEAN BUREAU OF WESTERN HEMISPHERE Opening Statement of Chairwoman Granger Ms. Granger. The Subcommittee on State and Foreign Operations and Related Programs will come to order. I want to welcome our witnesses. Thank you for appearing here today for this oversight hearing on U.S. engagement in Central America. For many years, this subcommittee has provided funds for our partners throughout Latin America. Without question, we know that what happens in these countries has an impact on the United States; our economies, our security, and even our health are closely linked. The latest example of this is the outbreak of the Zika virus, which is spreading explosively in the hemisphere, according to the World Health Organization. We want to hear from our witnesses about what the administration is doing to address the Zika virus in the region. Our countries are also connected because of migration. This spring will mark 2 years since the crisis at our southern border reached historic proportions. Members of this committee and a task force I led for the Speaker took notice. We worked together to address the unprecedented number of unaccompanied children arriving from Central America. But we know more needs to be done. According to the Department of Homeland Security, more than 68,000 unaccompanied minors were apprehended in 2014. More than three-quarters of them are from El Salvador, Guatemala, and Honduras. Another 40,000 more were apprehended last year. One reason these numbers decreased last year is because Mexico stepped up its efforts to apprehend minors from Central America before they reached the United States. In fiscal year 2015, more than 16,000 were detained by Mexico, and 13,000 were returned. Compare that to less than 2,000 removed by the U.S. Immigration and Customs Enforcement over the same period. Mexico's increased border security, which the United States has long supported through funds in our bill, is making a difference. While a total number of unaccompanied children arriving at the southwest border went down in fiscal year 2015, there has been a disturbing spike in the last few months. Administration officials have pointed to recent enforcement actions that may help reverse this trend, yet the number of children apprehended in January was still significantly higher than the same month last year. We must do more to address this problem where it starts. I have heard firsthand from leaders in Central American countries that they want their children back. We need to continue to work with these governments to return these children safely, and to keep more from making the extremely dangerous journey to the United States. The Central American countries have already taken a number of steps on their own. Guatemala passed a law increasing penalties on human smuggling. Honduras continued to crack down on drug traffickers and extradite fugitives to the United States. El Salvador, which is one of the most violent countries in the world, has started to implement a broad security plan in its most dangerous cities. These are steps in the right direction, but they require follow-through. The fiscal year 2016 State and Foreign Operations bill, provided $750 million in assistance to Central America; there are tough conditions on this aid. The countries must show they are improving border security, addressing corruption, and countering gangs, drug traffickers and organized crime. The fiscal year 2017 budget request includes $750 million in this subcommittee's jurisdiction for Central America. Before additional funds will be considered, the administration must demonstrate how the funds already provided will address the violence; the lack of opportunity contributing to the migration problem, and that these countries are meeting the conditions in our bill. Congress and the American people are expecting results. While the United States has a critical role to play in Central America's success, we should not do this alone. Other countries in the region have expertise, such as Colombia and Mexico. We should continue to encourage partnerships between these countries and El Salvador, Guatemala, and Honduras. We also need to ensure that other countries in the region facing their own security challenges, such as Costa Rica, receive our help. I look forward to hearing from our witnesses today on these very important issues, and I will now turn to the ranking member and my good friend, Mrs. Lowey, for her opening remarks. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mrs. Lowey Mrs. Lowey. Thank you, Madam Chair. Assistant Secretary Brownfield, Deputy Assistant Secretary Palmieri, Acting Assistant Administrator Hogan, I join Chairman Granger in welcoming you today. The news is often dominated by the devastating war in Syria and the resulting refugee crisis engulfing the Middle East and much of Europe. At the same time, but with less attention, we face another deplorable humanitarian tragedy in our own hemisphere. Horrific levels of violence, abject poverty, weak government, plague the countries of Central America. Half of the populations live in poverty and 30 to 40 percent is underemployed. Last year, El Salvador surpassed Honduras with the world's highest homicide rate: a 70 percent increase over 2014 levels. It has the highest concentration of gang members per capita in the region. In Honduras, the military police continue to eclipse civilian police in most law enforcement operations despite a long history of impunity and abuse by the military against civilians. In Guatemala, a shameless tax fraud scandal robbed the Guatemalan people of millions of dollars, and, finally, led to the President's resignation. Yet, the country is now led by an inexperienced former comedian with questionable ties to ex- military officials. It is little wonder that more than 70,000 unaccompanied minors tried to flee these three countries and cross into the U.S. during the summer of 2014, and why the numbers of children and families apprehended at our southwest border increased this past fall and winter, a time when numbers typically decrease. Until the underlying conditions driving migration change, I fear desperate Central Americans will continue to believe that fleeing to the United States is not any more dangerous or uncertain than staying home. That is why we have a clear, national security interest as well as a moral obligation to address this crisis. There was broad bipartisan support for substantially increasing assistance to the region in last year omnibus, which is an important first step. Now, we must allocate the resources wisely and prioritize good governance, the rule of law, education, job creation, and citizen security. Our response cannot rely solely on U.S. immigration enforcement efforts or those by our Mexican partners. I hope your testimonies will detail how the U.S. will scale up programs in the region and address what can realistically be accomplished this year. Additionally, I hope you will comment on what progress the three countries have made since announcing their Alliance for Prosperity plan. When will we see measurable results on security, justice reform, corruption, and tax collection? I also hope you will address deeply concerning accounts by human rights groups and local media of corruption, human trafficking, and other abuses against those apprehended and deported. To what extent are you working with the Mexican Government to increase humanitarian assistance and migrant protection? Are your efforts including rehabilitation services in the three countries? This refugee crisis is caused by dehumanizing levels of poverty, violence, gang activity, and failed governance. Congress and the administration must work together in a bipartisan manner to build partners on the ground, empower civil society, protect human rights, and defeat criminals. I do believe this can be achieved, but it is going to take leadership, vigilance, and wise allocation of resources. I look forward to your testimony. Ms. Granger. Are there other opening statements? I will now call on the witnesses to give their opening statements. All right. Ambassador Brownfield. Opening Statement of Ambassador Brownfield Mr. Brownfield. Sure thing, Madam Chairwoman. And I will be excruciatingly brief. Madam Chairwoman, Ranking Member Lowey, members of the subcommittee, thank you for this opportunity. I will skip the first page of my remarks by saying we all understand basically the nature of the challenges that are before us from Central America. We, from INL on the security front, believe we have developed a three-part strategy to address those challenges: a bottom-up approach to create greater community policing; a top-down approach to produce reforms and professionalization in the rule of law and law enforcement institutions; and operational support for law enforcement in the region. We believe we have programs now that address those issues; the place-based strategy in the 25 sites that are currently underway; what we are working with the Colombia assistance program; the CAPRI police training program based in Panama; regional border police training; Justice Department's regional legal advisers; COMPSTAT policing in Costa Rica and in Panama; and vetted units through all of the major problem countries in Central America. We believe they are producing results. Madam Chairwoman, I would suggest that we have, in our opinion, a strategy, programs to deliver on that strategy, and results which we can discuss in this hearing. I thank you very much, and I look forward to your questions. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mr. Palmieri Ms. Granger. Mr. Palmieri, please. Mr. Palmieri. Thank you, Madam Chairwoman, Mrs. Lowey, and the members of the committee for the support that you have given to our shared efforts in Central America to address these underlying conditions. Today's discussion is an essential part in achieving the security governance and economic progress that we all collectively hope to see in Central America. The U.S. strategy for engagement in Central America focuses on three pillars of action: security, governance, and prosperity. We designed it as a multiyear strategy that complements the four strategic lines of action of the Alliance for Prosperity, the plan of the Northern Triangle governments. The $750 million appropriated by Congress in fiscal year 2016 demonstrates the commitment and efforts we have to work with the Northern Triangle leaders to address these systemic challenges. At the same time, we have a responsibility to the U.S. Congress to fulfill the 2016 criteria outlined in the appropriations law. We began work already with the three governments on an ambitious and concrete plan for 2016, which will help us ensure we meet the conditions for the continued support of the U.S. Congress for the strategy in the Alliance for Prosperity. I look forward to answering your questions. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. Thank you. Ms. Hogan, you are now recognized. Opening Statement of Ms. Hogan Ms. Hogan. Thank you, Madam Chairwoman, Ranking Member Lowey, and distinguished members of the subcommittee. Thank you for the invitation to testify today. I am grateful for your support of USAID's work in Latin America and the Caribbean, and I am pleased to update you on our efforts in Central America. I would like to focus on what USAID is doing to help address the challenges the region faces. We see prosperity, improved governance and security, which are the objectives of the strategy for engagement in Central America as interdependent. We know that opening doors to employment and education for citizens, especially youths at risk of gang recruitment, crime, and violence, will bolster our efforts in security and lead to freer and more prosperous societies. That is why our prosperity programs include efforts to support small businesses and entrepreneurs, encourage private investment, train youths in marketable job skills, and improve agricultural productivity. In El Salvador, for example, we have helped 10,000 small- and medium-sized companies exceed $100 million in domestic sales and exports and create over 15,000 new jobs, 49 percent of which have gone to women. And in Honduras, our Feed the Future investments resulted in a 55 percent increase in incomes for more than 180,000 of the program's beneficiaries, some of the country's poorest people. These efforts to foster prosperity are only sustainable in an environment where democratic values and institutions flourish, where citizens can depend on basic social services, where impunity is reduced and civil society and the media can play their rightful roles. To that end, USAID governance programs include help to reform institutions to root out corruption, strengthen civil society's ability to hold governments accountable, improve financial transparency. For example, in Guatemala, we have supported the National Forensics Institute since its inception in 2007. This body is playing an instrumental role in collecting and analyzing the evidence that led to the indictment of the former president and vice president on corruption charges. Ultimately, none of our efforts in prosperity in governance will take root in societies that are plagued by insecurity. As you have heard, the heart of our security work is youth- focused, as we invest in programs that reach those that are most at risk of gang recruitment, crime, and violence. We are using tested approaches in the most violent-prone communities to create safe community spaces, provide job and life-skill training, and build trusts between police and residents. Already, we are seeing results of our crime prevention activities in El Salvador, where our initial analysis points to a 66 percent drop in homicide in the 76 communities where USAID targets its programming. This is all the more remarkable, given the country's 70 percent increase in homicides over the same period. To extend the impact of USAID's investments, we are forming partnerships with the private sector. We currently have 60 private-sector partners in the Northern Triangle from whom we have leveraged $150 million in support of our work with at-risk youth and our efforts to increase food security and grow incomes. USAID is well-prepared to implement the new strategy, and we are committed to efficient, effective, and transparent oversight of our programs. We use a full range of monitoring and evaluation tools. We are commissioning external impact studies to better inform our development work and we have established 5-year strategic plans in each of our field offices. In short, we are collecting hard data to inform our future programming so that we can take advantage of what works, and introduce new evidence-based programs. In conclusion, we believe that with policy reforms and increased investments on the part of the Northern Triangle governments, coupled with our new and innovative programming, the U.S. Government is well poised to achieve success. Thank you, Chairwoman Granger and the committee, for your support and leadership on the U.S. engagement in the Northern Triangle and I look forward to your questions. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. Thank you very much. Would you go back to your statement to what you said about El Salvador and the violence that was happening there, specifically the numbers? Ms. Hogan. Right. Last year, El Salvador saw a 70 percent increase in homicides nationwide. National police statistics that have been provided to USAID indicate that in the 76 communities where we have active community-level programs for crime and violence prevention, we have seen a 66 percent drop in homicide in those communities. Ms. Granger. Thank you. I just want to make sure that I understood that. Of course, we are very concerned about what is happening and very hopeful about the plans for the Northern Alliance and what is going on there. This is a very active subcommittee, and they are very involved in what we are dealing with. So I don't want to hear from you a year from now. I want us to have regular reports. We can do it in a very informal way but this subcommittee, like I said, is very anxious to help, and can help. And so I would hope that you would take that to heart. With regard to recent enforcement actions by the Department of Homeland Security, how is the administration deciding who is subject to removal procedures and what factors are considered? How are these funds involved, what are you doing with the children who have come across our southern border. In that big rush for 2 years what is happening with them, and how you are addressing that? Ms. Hogan. Do you want to start? And then I will talk about reintegration? Mr. Palmieri. Sure. We would--the strategy for engagement in Central America looks at getting at the underlying conditions in the region in the three countries of the Northern Triangle, but also to promote greater regional economic integration so we can create the economic opportunities that will keep people in their home communities. And so the program will work in those areas and in those communities that are most vulnerable, both to the violence, and to the lack of economic opportunity, so that these young people can stay at home in their home communities. With regard to the enforcement actions at the border, I would have to defer to the Department of Homeland Security for an answer on that issue. Ms. Granger. Yes, I am going to limit my questions, and hope that we can have another round of questions. I know those on this subcommittee also have hearings on other committees, so we can do that, and then we will have more rounds of questions. Mrs. Lowey. Mrs. Lowey. Well, I want to thank you very much for your testimony, and Ms. Hogan, you really answered my questions. And I think it is so important that we keep hearing your answers--I don't want to question your statistics. I do want to say I wish we could hear more success stories, but I constantly ask the question: How do we break away from the cyclical phenomenon of lack of security, lack of prosperity, lack of rule of law, nonsustainable governance? And to what extent have the Northern Triangle countries improved their governments, reducing levels of corruption, so we give the American people greater confidence that additional funds will be put to good use? What about police reform? Stabilizing neighborhoods? Degrading transnational criminal networks? I mean, we have a responsibility to ensure that our assistance promotes more efficient and sustainable energy, trade facilitation, transport, customs and border integration. Let me just stop at that because you mentioned some successes. Can you talk about all of the things that we really want to do, and give me confidence that some progress is being made? Ms. Hogan. Certainly, I would be happy to. Mrs. Lowey. Start with corruption in government. Ms. Hogan. Okay, great. Well, we will start with the fact that we saw what happened when civil society was supported to demonstrate peacefully in Guatemala which changed the administration with, not only the president and vice president, but half of the cabinet now sitting in jail and waiting, already been indicted and waiting for their trials. The fact that the incoming president has already agreed to the extension of CICIG, the U.N. agency that is responsible for investigating corruption, I think is a sign that there is that commitment there to really change things on the ground. And in Honduras also, we have seen the government there put forward something that would provide increase investigative abilities towards corruption charges. So that is a sign of change. The fact that they have come up with their own Alliance for Prosperity and have invested $2.6 billion in the implementation of that plan, is another sign of real commitment. And within USAID programming, we have been able to help governments establish better oversight of their financial management systems. For example, in El Salvador, we had a financial management program that helped to provide greater transparency on budget execution, also to develop an e-Procurement system that gives eyes on all of government procurements that people can actually see and hold governments accountable for. Going forward, we know that it isn't just government taking the right steps, but it is also empowering civil society to hold their governments accountable, which is why, under the new strategy, we will have the resources available to provide the kind of support that civil society needs in order to gain that kind of traction to hold governments accountable and to be able to report on abuses when they see them. Mrs. Lowey. I will take your advice and move on. Just let me say, I love to hear success stories, and I hope they continue. Ms. Hogan. We have got many more to share with you. Mrs. Lowey. Thank you, Madam Chair. Ms. Granger. Mr. Diaz-Balart. Mr. Diaz-Balart. Thank you, Madam Chairwoman. Just a couple of points, first, reiterating what the chairwoman said. It is really important that you all let us know, specifically, what is working and what isn't, so we can work together to try to move in the right direction. I really have two questions right now, Madam Chairwoman. One of them is, you all talked, and I think rightfully so, about security being such a priority. And without that, Ambassador, I think you cited what President Uribe was saying that you have to first have security, and then you can have a tipping point where you can go on to other necessary area such as development, et cetera. When the chairwoman was chairing this task force dealing with unaccompanied children, she led a group of us to Honduras and Guatemala. At the time, Honduras was the murder capital, I think, of the world, right? Now, El Salvador has been backsliding. It has hit 6,600 murders and it has the highest concentration of gang members per capita. El Salvador now is pretty much at the same situation where it was during the civil wars in the 1980s and 1990s. And so why? What has happened to El Salvador--and again, you have talked about some good success stories in certain areas, but overall, the numbers are alarming. So what is the major cause and what is it that we should be doing to try to see how we can reverse that? Mr. Brownfield. Congressman, let me take a first crack at this and let Paco add to or detract from as he wishes. I speak to you as a man who actually spent the years 1981 to 1983 in El Salvador, I guess, in the middle of their civil war. First, success story, Mrs. Lowey. Honduras' homicide rate is down, depending upon whose assessment you use, between 25 and 30 percent over the last 2 years. And we will not claim full credit for that, but I will insist that we get at least some acknowledgment and recognition. El Salvador has been moving in exactly the opposite direction, Congressman. One theory as to why is that several years ago, the previous government of El Salvador reached an accord with the organized gangs of the big cities of El Salvador, specifically San Salvador. It produced short-term results and a dramatic drop in violent crime and homicides. The truce no longer is in operation. It has surged. Skeptics at that time suggested that what the gangs were doing was using a period to rearm, reorganize, and recruit. I won't take a position on that. I offer that as a possible explanation as to why El Salvador and not the others. Mr. Palmieri. Sir, I would just add that the Salvadorean Government itself has developed this Seguro, Plan Seguro, which identifies the 50 most violent communities and the 11 priority communities where they are going to be investing resources. And we are aligning the assistance that we are receiving to try to make an immediate impact on that homicide level in those 11 priority communities. Mr. Diaz-Balart. Madam Chairwoman, just very briefly too, in the Appropriations Act, and this is a different issue, we establish conditions on aid to Central America, and we also require further reporting on economic investment conditions and commercial disputes between the United States. But I am particularly interested in these provisions about these disputes, because I am aware of the number of U.S. citizens with claims against, for example, specifically the government of Honduras. One of those companies, a cement plant, CEMAR in Honduras, which was expropriated by the government of Honduras, and they have been seeking remediation for many years. And it has been, frankly, met with relentless bureaucratic dead ends. So, I really would like to know how the Department of State and USAID intend to assist them and other U.S. citizens to resolve such disputes, and how you are monitoring what is going on, et cetera, because it continues to be a serious issue. Mr. Palmieri. We agree. We have to be active in protecting U.S. American commercial interests in these countries. And we are. Under the CAFTA process, there is a dispute resolution process that is available to investors. And in Honduras, specifically, we also have a bilateral investment treaty that they can avail themselves. With regard to the specific case that you have raised, the United States cannot insert itself directly into the judicial process of Honduras. However, we do continue to vigorously advocate for those interests of U.S. businesses in Honduras, and in the specific case, we have encouraged Mr. Cerna to avail himself of the arbitration, and dispute settlement mechanisms that are available to him. Mr. Diaz-Balart. My time is up. Madam Chairwoman, Thank you. Ms. Granger. Thank you very much. Ms. Lee. Ms. Lee. Thank you, Madam Chair and Ranking Member, for this very important hearing. And thank you all for being here. I wanted to follow up on a couple of things as it relates to the Northern Triangle. Last year, some of us visited Panama. We were with the President at the Summits of the Americas. It was a bipartisan delegation. We had the opportunity to meet with primarily all of the heads of state from Central America, and barring none, they thought that normalizing relations with Cuba and engagement with Cuba would help our overall efforts in Central America. So I wanted to ask you, has it helped, and if so, how? Secondly, with regard to the United Nations, the U.N. high commissioner for refugees, indicated that 82 percent of women and girls that the U.S. Government interviewed in 2015 from El Salvador, Honduras, Guatemala, and Mexico for expedited removal were able to prove that they have a significant possibility of gaining asylum and protection under international law as a result of the threats they received--they face in their home country; specifically, sexual assault. We, I guess, appropriated some funding to address sexual violence, narcotics, all of the issues that we need to really focus on, and one had to do with Guatemala in terms of their policy of creating sexual assault units. And so I am wondering, do we know much about these sexual assault units? Has there been progress addressing sexual assault? And if so, good. How is it working? If not, what do we need to do to make sure it is dealt with? Ms. Hogan. Thank you very much for your question. In fact, USAID has invested quite heavily in gender-based violence reduction in El Salvador. We have 22 centers for victims of gender-based violence where they can receive psychosocial support, legal assistance, alternative dispute resolution, and even job-skill training. We also have 12 centers for the prevention of gender-based violence, because we know that it is one of the lead causes of violence in the home in terms of youth then going on to perpetrate violence in crime outside of the home. In Guatemala, I worked there in the early 1990s, and then we were just starting to transition from the old system of justice to the new oral transparent system of justice. I was able to go back and visit just last year and now we have a 24- hour court that is established with a special center there for domestic violence crimes. And in that center, again, 24 hours a day, they have investigators, prosecutors, and a judge on site in addition to a full medical team and social service providers. That model has now been recreated eight times over in Guatemala, and so throughout the country, women are now getting access to immediate support from government when they are victims of crime. Ms. Lee. Has Cuba shifted dynamics in terms of our relationship with Central America countries? Mr. Palmieri. It is clear that the countries of Central America viewed the President's decision in a favorable light. However, for them, they have focused on their relationship with the United States, in particular, the efforts we are making to work with them to address these underlying conditions that spur undocumented migration from their countries toward our southwest border. And in that respect, their priority is a close, productive, and strong relationship with the U.S. Government, and they do plan to work with us to meet the specific conditions that are outlined in the legislation. Ms. Lee. Thank you. Ms. Granger. Thank you. Mr. Dent. Mr. Dent. Thanks, Madam Chair, and good morning. Over the past several years, my district and many others around the country have seen a dramatic spike in heroin use. In fact, my local law enforcement has told me, they told me this at a hearing I held, or a briefing I held several months ago, that the heroin they seized, most of which is being brought in from Mexico and Central America, is of increasingly higher potency and being sold at lower and lower prices. In fact, they even told me that the heroin they have seen in eastern Pennsylvania is the most potent they have seen anywhere in the country. What factors can you point to that would explain the significant increase in heroin supply and how the State Department is responding to those particular factors, and maybe Mr. Brownfield? Mr. Brownfield. Let me take a bite at that one, Congressman. And half of my answer is a matter of domestics, domestic politics, domestic law, domestic enforcement, but it all makes sense. In this case, supply is following demand. The argument, which I believe is a good one, is that over the last 20 years, we created the demand by overuse of prescription opioids, largely pain killers, which developed a dependency or an addiction which produced a demand for the opioid, and now the heroin market is meeting that demand at a cheaper cost than it would be for the users; whether in Pennsylvania, Florida, or Texas, they can get a heroin dosage at about one-quarter of the cost as it would be from-- Mr. Dent. That is entirely true where I live. Mr. Brownfield. So that is the starting point. Then what I assess, and we can have a conversation about this, is that the overwhelming majority of the heroin that is now entering the United States is coming from Mexico; not from Colombia, and for the most part, not from further down in Central America. Therefore, the impact is much more at our southwest border, much less in Central America itself. That said, is there heroin that is being produced in Guatemala? Yes, a small percentage of what you see in Mexico, but some. And is there heroin still being produced in Colombia? Yes, and it must transit the Central America corridor to get there. But the percentage is tiny compared to what is coming in from Mexico. And to conclude, early next month, I hope to join a group that will be led by the Director of National Drug Control Policy of the United States, Mr. Boticelli, to talk to the Mexican Government on next steps and what further we can do to address this crisis. Mr. Dent. Yes, thank you, because it is obviously a national issue. It is everywhere, and all of the deaths in my district in recent months did a drug overdose of either heroin or synthetic drugs. I mean, that is virtually 100 percent of the deaths. My second question is this: Many of us on the subcommittee are watching, with cautious optimism, the mission to support the fight against corruption and impunity in Honduras, and I don't know what that acronym is---- Mr. Brownfield. MACCIH. Mr. Dent. MACCIH, okay. It begins its work investigating corruption and impunity in the country. So while we hope this new organization will be as effective as the CICIG, that has been very successful, in Guatemala, there are obviously some different challenges in Honduras. What are some of the primary obstacles facing MACCIH, and how can the United States help them be successful in bringing real reform to Honduras, particularly regarding the illegal expropriation of private property? Mr. Palmieri. Thank you, MACCIH will--first, it is an agreement between the Honduran Government and the Organization of American States. We and other international partners will need to support it with funding, and we look to be able to do that. But the critical elements for its success is, it must have independence to operate with its partners inside Honduras. It must have the ability to signal and highlight cases that are not moving forward and should move forward. And the Honduran Government has pledged itself to working in a constructive manner with MACCIH in that area. Mr. Brownfield. I will add just one additional comment, Congressman. The head of CICIG, Ivan Velasquez, is in town right now. I have had a recent conversation with him. I won't be surprised if several others around this table have as well. What Velasquez has said is that there are two keys to success of a CICIG or MACCIH-type organization. One is independence from the government, which is to say, he gets to pick his own personnel, make his own decisions in terms of cases to investigate; and second, the authority to actually proceed on cases. In other words, he does not have--the government does not make the ultimate decision. And what he has said to me is, examine those two issues as you figure how we will work with MACCIH in Honduras in the months and years to come. Mr. Dent. Thank you. I see my time has expired. Ms. Granger. Thank you. Mr. Ruppersberger. Mr. Ruppersberger. I think last time I saw you, you were the Ambassador in Venezuela with Chavez who was giving you a hard time, or wouldn't talk to you, or what was---- Mr. Brownfield. The greatest 3 years of my life. Mr. Ruppersberger. Well, I see you survived and now you are Assistant Secretary, so it was all worth it, I guess. First, I want to make a statement. I think that our country has really not focused on two areas of South America and Central America and the crime and drug situation there. We put so such emphasis in other parts of the world, especially the Middle East, and it is amazing that you have been able to do what you have been able to do. All of the organizations, and that includes DEA, also who has very little resources. Now, one of the issues I do want to talk about is the issue of corruption, police corruption, and the corruption within--in politics and extortion. And it is my understanding there is a newspaper in, I think it was Honduras, that said that the corruption paid by the government to these gangs, organized crime, mostly drugs, were close to $300,000 a year sometimes. I mean, $300 million a year. I am wondering if that is a true statement and do we have the government itself--we know there is corruption dealing with that. The other part of my question will be the special group, I think you referred to, the special anticorruption group that is in different parts of, I think, Honduras, I assume Guatemala. And if you could just talk about those two issues: the crime, the extortion, what we are doing about it, and is it still pervasive there? Because in the end, unless the public have confidence in our elected officials and our police, especially our police, you are going to have that atmosphere if there is not a lot of trust. Mr. Brownfield. Congressman, here is my 30-second assessment. There are two driving factors that are creating a vast amount of corruption in Honduras and, quite frankly, throughout the Northern Triangle. First are the organized--the transnational criminal organizations, largely drug trafficking. They are professional criminals and their objectives are economic in nature. And the second are the criminal gangs. And in fact, the gangs that you see in El Salvador, Honduras, and Guatemala are the same gangs that--many of the same gangs that you see up here in the United States of America. There is no question whatsoever, that those two criminal institutions are penetrating and corrupting all three of the governments of the Northern Triangle. I am not going to parse words in terms of how many dollars are represented in terms of that corruption. I acknowledge that in all three of the governments, it is substantial at many different levels. What they are doing now to address them in both Guatemala, and, more recently, in Honduras, is establishing an organization, CICIG or MACCIH, to both investigate and bring cases against those in government who have been corrupted. They are also developing law enforcement organizations to both investigate and prosecute those crimes. There are TAG, or anti- gang units in all three of the countries, and there are, in fact, law enforcement units that are vectored on corruption. My conclusion would be to suggest to you that it has taken the region decades, if not centuries, to get into this situation and we have to acknowledge it is going to take some time to get out of it. Mr. Ruppersberger. My time is almost up, but I do want to say that you know how successful the program has been with the FARC in Colombia, and you were an Ambassador in Colombia also. What did you learn in Colombia that you might be able to use in this area? Mr. Brownfield. Yeah, if I had 10 hours I could probably fill them all. Let me offer three or four of the biggest hits. I come from west Texas, Madam Chairwoman. We have very few people out there so we talk a great deal. First, you have to concentrate on your law enforcement organization. In Colombia, that was the CNP. And literally, during a 10-year period, they expelled thousands of officers for corruption. There has to be an internal mechanism that purifies your own institutions. Second, you have to have programs that are in it for the long term. You cannot hold them to a standard of eliminating corruption in 3 months, 6 months, or even 3 years, or 6 years. You have to assume that it is going to take time. Third, you have to have consensus within the government and that means all three branches of government, legislative, executive, and judicial, that in fact, you will spend the resources and the time to accomplish it. Those are three that would come right off the top in terms of how to make long-term progress against corruption and impunity. Mr. Ruppersberger. And do you need resources and money? Mr. Brownfield. Without a doubt. Mr. Palmieri. If I could just add on that point, the Honduran Government itself, modeled after the Colombia experience, has put in place a security tax so that they can raise the resources that they need to undertake some of these reforms. And as part of the Alliance for Prosperity, as Ms. Hogan mentioned previously, there are the three governments investing $2.6 billion of their own money in 2016 to match the $750 million you so generously appropriated in the 2016 budget. Ms. Granger. Thank you. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chair. I believe it was you, Ms. Hogan, who testified that there was a turning point. Have we seen a turning point--in Colombia, governance in the Northern Triangle, in those three countries, whereby we can anticipate--have we seen a turning point whereby we can anticipate a stability of governance that will manifest itself in measures of societal wellbeing, decrease in violence, economic opportunity, decrease in migration? Ms. Hogan. Thank you for your question. I am an optimist, I think you have to be to work in this field of development. But I truly believe that this is a historic moment in Central America, whereby these governments are standing up and taking responsibility for their problems, investing their own resources, and trying to address these problems, and looking to the United States, and other donors for strategic partnerships. Mr. Fortenberry. Okay. How does that happen? Is it through an awakened leadership? Is it fatigued with the violence? Is it our input? Is it other bilateral partners' input? Tell me how-- why this trajectory is coming about right now. Ms. Hogan. I think that--well, I would say yes to all---- Mr. Fortenberry. Do you think the trajectory is real? Ms. Hogan. I would say yes to all of those points. I think the tipping point is what we saw happen in Guatemala, where through these this independent investigative unit called CICIG, they were able to bring cases to the public's attention that were so egregious that civil society stood up and said we will not tolerate this any longer, and that coupled with hard evidence by CICIG, and additionally, an empowered public prosecutor's office, as well a special high-impact court that oversees these trials, again, which were the beneficiaries of U.S. Government assistance, I think that was the tipping point. And I think Honduras sat next door and said, we see this wave is coming towards us. We want to get ahead of it. And then they, in fact, established their own similar investigative process. Mr. Fortenberry. What are your projections in regards to how we are going to see real measurements of outcome in this regard? It is murky right now. The violence is still very high. There is migration waves still coming even though they are lesser, and the economic problems are not clearly resolved. So do you have a timeline if this trajectory continues? Ms. Hogan. It is hard to give a timeline. As my colleague said, it is not going to happen overnight. But one of the things that we have seen is that when we have all hands on deck in a community that is very violent, and we help these communities take back their communities where they, frankly, haven't had any safe space in which to operate, it is street by street, block by block, and community by community. It is very labor intensive. But because we have been able to show success in the communities where we are working in terms of the reduction of violence, these governments have said, we see what is working. We want to invest our resources in scaling that up. And that is what Plan Seguro is in El Salvador. It is taking that model and bringing it to the 10 most violent municipalities to scale up our interventions. Mr. Fortenberry. Let me tell a quick story. I had the chance to visit in Guatemala, as well as Honduras rather recently. There is a little town called Dos Caminos, two pathways, where there is a project underwritten by the International Agricultural Corporation, Cargill, which provided the seed capital for the formation of a bakery that is run by women. The organization CARE, along with, I believe it is some shepherding through the Feed the Future Program, provided the ongoing technical assistance. It is an amazing transformation to see this bakery flourishing. The women who are involved, excited. Just years before they would have had a subsistence, not in starvation, but in what I call a benign poverty. One of the women had lost her husband 3 weeks earlier to the violence, but all committed to this vision of empowerment through this small little economic project. It was very encouraging to see, and obviously, this is the type of thing we want to scale that involves the full partnership of the private sector which ultimately has to be the longer-term solution here. But my time is nearing to be completed, but are we going to have another round, Madam Chair. Ms. Granger. Mr. Stewart. Mr. Stewart. Thank you, Madam Chair, and to the witnesses, thank you. It is an important issue. I would like to come to something that my friend, Mr. Diaz-Balart mentioned, and I want to go through this quickly. But it is worth, I think, emphasizing and using this as an illustration of a concern that many of us have, and that is this individual, Mr. Cerna, who some of you mentioned. The challenges down there are meaningful. We get that. There is drugs, there is violence, there is kidnapping, there is gangs. And how anyone would have economic opportunity in that environment is remarkable at all. But the only hope for the individuals there, for the families, is if there is some economic activity. They have to have hope of a job and some type of future. This is an environment that is very violent and very difficult to do, but it is much more difficult if the Federal Government is making it worse instead of better in some circumstances. And in some circumstances, they are. And I think that this individual is an example of that. You will not have foreign investment if the investors don't feel like there is respect for the rule of law. If they don't believe that they can go in there and protect their investment, and in this case, it was meaningful investment as is in many circumstances, tens of millions of dollars. And the Federal Government there essentially acted as, well, they are using their power to expropriate this business from this individual as they have in other circumstances. Essentially using, you know, their power to tax, and their power to threaten prosecution. I wish any of you, if you would, could you assure us that you are doing everything you can? You can't sway the gangs down there, but you can have influence over the Federal officials. And I just need some assurance that you are doing everything in your power to create that rule of law in an environment that would allow people to go down there and to try to make investments that will help the people down there. Mr. Palmieri. Yes, Mr. Stewart. The top priority, one of the top priorities for every U.S. Embassy is to assist the American citizens and to protect American investment overseas. Our embassy has been engaged in Mr. Cerna's case since 2002. It has a long judicial process that it has been subject to. Mr. Stewart. That is, indeed, very long, because that is going on 15 years now, 14, 15 years. Mr. Palmieri. Yes, it is. There are arbitration proceedings that are available for the settlement of that dispute, which the Honduran Government has offered to Mr. Cerna in the past. But more importantly, in the specific case, as part of the conditions in the legislation, we are working with the government to ensure that they are working toward resolving commercial business disputes and putting in place new strengthened rule of law procedures to protect foreign investment. Mr. Stewart. Well, and they just have to. I mean, this example, 14, 15 years now into it, and it is arbitration which is going to result in not a fair deal, in my mind. I mean, no one would look at that and say, well, that is good. I will go down there and investment $30 million in a business, and the government may take that from me. And 15 years later I may be in arbitration. I mean, no one is going to look at that and say that is a good place to go down and be. And once again, I don't mean to lecture because I know you know this, if there is no economic viability, there is no hope for this region. They have to feel like there is hope for their kids to get a job where they can sustain a family and you can't do that without capital investments. Mr. Palmieri. And that is exactly right. They have to create the conditions for foreign investment. Mr. Stewart. That is right, and that is true anywhere in the world. And if I could very quickly--in the few seconds I have. There is a bit of a talk about a kind of Central American spring, if you will, the protests in some of these countries where people are actually beginning to push back. Very quickly, are you optimistic? Is there something there we can look at and say this is good, you know, this might help? Mr. Palmieri. I think what we saw in Guatemala was historic. It was youth, students, private sector, civil society coming together, using social media platform, and using this external entity to really demand accountability. And it was successful in Guatemala. I think it is not just a wave in Central America. I think it is throughout the Americas that we are seeing this. And I do think it will continue to yield results. And in Honduras, the agreement with the OAS to establish MACCIH reflects the need for some external help to get and move forward on these corruption and transparency issues. Mr. Stewart. Well, and let's hope so, and let's facilitate that if we can, and encourage, and support those people because they are in a very difficult circumstance, but showing remarkable courage, in my opinion, so thank you. Ms. Granger. I will start a second round and say I appreciate all the members of the subcommittee for staying. I know you are very busy, and we are using the time very wisely. I want to ask you about the $750 million that Congress funded for fiscal year 2016 for this three-country alliance that has come together. I am very concerned because I worked on Plan Colombia, and it took years. Everyone knows it would take years there was that sort of commitment. Seven hundred fifty million dollars in 1 year, how is it going to be used? Where does it go? We said from the very beginning, this will be a multiyear effort and I am concerned about that enormous amount of money in 1 year, and how can it be used effectively? Thank you. Ms. Hogan. I would like to begin to answer that question for you, Madam Chairwoman. We did not wait for the appropriation to get started in planning on how we would use those resources. In fact, as early as the fall of 2014, after we saw the spike and we knew that the administration was going to ask for increased resources for Central America, USAID got started. And so we have been designing programs over the last year to 18 months in anticipation of these resources. And in fact, we have a very aggressive procurement schedule this year. We expect to obligate up to $490 million in new activities across the three pillars of the strategy before the end of this fiscal year. And our goal is to live within the pipeline standards of our agency so that we are good stewards of those resources. We spend them wisely, but we spend them quickly because the need is so great, and we think we have got the right procurement instruments in which to put those resources. Ms. Granger. Thank you. Mr. Brownfield. And if I can add, Madam Chairwoman, on the INCLE side of the House, and you will recall, of that $750 million, we come out to about $1 for every 2, 2\1/2\ that went to the USAID accounts. So what we are looking at this year is somewhere in the vicinity of $170 million, which was our 2015 appropriation now coming online for us. I would say the same thing as Beth. We are starting on programs that are already there. We are not starting at point zero. We have been involved in CARSI now 6, going on 7 years. We want to reinforce some of the justice sector, police reform, and border security programs that we believe are delivering value and have been for more than 5 years. We also want to do something new, which I can use 15 seconds to say is the place-based strategy, where in an unprecedented historical manner, USAID and INL are working together, community by community, barrio by barrio, in terms of developing an objectives-driven comprehensive approach in the hardest, toughest areas in the region. And I would hope, Madam Chairwoman, to be able to deliver you clear evidence of results, positive, I hope; if negative, then we will figure what we need to change. Ms. Granger. Thank you very much. I am going to change to Costa Rica now. I just got back from Costa Rica a very short time ago. I looked at the security challenges of that country because of the number of Cubans that were going through Costa Rica, primarily from Cuba to Ecuador. The fiscal year 2016 appropriations bill provided for increased funding for Central America, the regional security initiative. Some of those funds should be used for Costa Rica. Assistant Secretary Brownfield, how is the State Department planning on supporting Costa Rica, and specifically, what can be done to help their coast guard, which is very limited, to help them with drug interdiction at sea and the security forces to increase border patrols? They said a light has been shined on Costa Rica due to Cuban migration through that country, but they were much more concerned about human trafficking and drug trafficking that is going through Costa Rica, and how their limited Coast Guard, and our Coast Guard can address those challenges. Mr. Brownfield. Madam Chairwoman, your assessment and our assessment are not at all surprising. Exactly the same. First, our approach in terms of the total Central America INCLE budget for the last 5 years has been about two-thirds, 60 to 65 percent goes to the Northern Triangle three; the remaining one- third to two-fifths goes to the remainder of Central America, frankly, three of the four remainders in Central America. We have almost no program at all in Nicaragua. That would remain the same, but we have surged, as you well know, since you approved it, the amount--the total amount of funding available for Central America. I am therefore, hopeful, in fact, I am not hopeful, I am certain that we are going to increase by nearly 100 percent the amount of program INCLE funding available for Costa Rica. What do we propose to do with it? First, we want to reinforce some programs that are working. COMPSTAT, which is the computer-driven statistics that allow the Costa Rican police to put their personnel where they are most needed is a winner. Supporting, training, and developing border guard capability, which, in turn, controls, to some extent, the movement of other populations across their southern and northern borders has been a winner. The CAPRI police training program which is headquartered in Panama, but in fact, provides regional training to, among others, the Costa Rican national police is something we want to support. Their anti-gang program called GREAT is worth some effort. Maritime is the area that is going to be new in this coming year. I have had several conversations with the coast guard. The coast guard is prepared to put assets there. We are prepared to support them in terms of maintenance support, and building docks to help them control and use those assets. I hope to have a good story, which I will tell you as often as you are patient enough to hear in the course of this year on Costa Rica. Ms. Granger. I am not particularly patient, but I will listen. I am a former teacher, so I give you an A on that answer. Mrs. Lowey. Mrs. Lowey. I am not a former teacher, but as you can see, and our chairwoman has said this many times, we have on this committee people who are really committed to the work you are doing, and I couldn't help but think, Mr. Fortenberry, when you talked about this enterprise that was empowering women, I remember seeing this in many places in the world, and I still get excited after 25 years of seeing some of the success stories. And I must say, Madam Chair, when we have the caliber of people such as this, it gives me hope in-between the times that I am very depressed that we can't move more quickly in solving these problems. But I do want to thank you for your years of service, and I would hope that we can see more success stories such as that. And it is interesting, because I can remember them. I remember one I saw in Arusha, Tanzania, Land of Lakes, a wonderful project where they were empowering women and how the women stand taller, feel empowered, take charge, work and raise their families. However, I want to ask a question that is not related to all of these good comments we are telling you. If you could explain the administration's decision, on the one hand, to expand the number of Central American refugees permitted in the country recognizing the dire conditions in the Northern Triangle, while at the same time, increasing deportations of families. You may tell me that is someone else's job, but I would like to hear your response to it, and if you have any input. Mr. Palmieri. Yeah, excuse me. The administration's effort in Central America is to ensure that there is safe, legal, and orderly migration from the region. Undocumented migration through the region, through Mexico, leads people to being exploited, potentially trafficked, assaulted in many different ways. The administration has set up a Central America minors program in the region that allows minors to apply for refugee resettlement to the United States if they have a legal relationship with a person who can apply for them, sponsor them in the United States. With regard to the removals, the Department of Homeland Security has stated that those removal orders are based on final orders of removal after individuals have exhausted all of their claims for credible, fair, and refugee status. Mrs. Lowey. Well, I just want to say, it is causing tremendous turbulence in our communities, and that is probably not your direct role. I just thought I would get it out there. So thank you again for your service. We all look forward to hearing more success stories, understanding how challenging, tremendously challenging this is. Thank you. Ms. Granger. Mr. Diaz-Balart. Mr. Diaz-Balart. Thank you. Thank you very much, Madam Chairwoman. As you all, I am sure, know and have seen, this subcommittee chaired by Mrs. Granger is very, very, very good at asking for specifics. And frankly, less concerned about rhetoric and speeches. Let me just throw out one specific first, because the question came up about Cuba. Since the establishment of the relations there has been about almost a 90 percent increase in Cubans fleeing the island and coming to the United States, based on the increased repression. And it has been particularly difficult on Costa Rica. I want to thank you, Madam Chairwoman, for going there, and for meeting and seeing that firsthand. Those are some facts which obviously are not in dispute. So, Ambassador Brownfield, you mentioned that you think about 100 percent increase in what you can--of INCLE assistance to Costa Rica. I think it would be important if you keep us informed as to specifically how you are doing, what you are doing, and how whatever it is what you are doing is working, because Costa Rica has this additional challenge of not having a national military, per se, though they obviously have a national police. So if you could just keep us informed as much as you can on that, I think that would be helpful. Mr. Brownfield. Will do. I make that commitment, Congressman. And you are correct in your assessment. Costa Rica has always been perceived in Central America as the exception to the rule, kind of the Switzerland located in a difficult neighborhood. And the truth of the matter is, they are now encountering many of the same concerns, problem, and threats that the rest of the region is. Mr. Diaz-Balart. Secretary Palmieri, going back to the issue of the CEMAR issue in Honduras. As Mr. Stewart mentioned in response to you talking about, you know, the Embassy has been involved for 15 years. That is a pretty good example of something that hasn't worked. In other words, if, for 15 years, the U.S. Embassy has been trying to help and it hasn't worked, we have got a problem. So I would tell you, and again, going to how this subcommittee works, let me tell you what I expect, and I think what most of us expect. Right now, this subcommittee has put forward almost $1 billion. We expect the U.S. Government to exert leverage when it is time to stand up for the interests of the United States and also for property rights of American citizens. So I would tell you, with all due respect, that the issue of, you know, the Embassy forwarding, referring these individuals to a process, this has been going on for 15 years. So what I would ask specifically from you, sir, is I think all of us would ask, and you seem to think there is great interest, we are talking about property rights issues here. And again, if you don't solve that, you can kiss all of the $750 million good-bye. So if you could please get back to us, not on, you know, bureaucratic answers about, well, we have referred them to--no, no, what specifically, how can we exert--now that we should have additional leverage to make sure that our interests and that property rights' interests are actually followed? So what I would respectfully ask of you is, tell you that, answering that the same stuff that we have been doing for 15 years, is just not acceptable. And so how are you going to use that leverage? I don't want an answer from you right now, but I expect an answer, a specific answer as to how we are going to exert leverage, and, particularly, additional leverage to protect the interests of Americans and property rights, et cetera, if you would. Mr. Palmieri. I am very happy to do so. Mr. Diaz-Balart. Thank you. Thank you, Madam Chairwoman. Ms. Granger. Thank you. Ms. Lee. Ms. Lee. Thank you very much. Let me just comment with regard to Cuba. I think we have seen, and my colleague and I disagree. I think we have seen over 50 years of a non- engagement policy with Cuba. That hasn't changed one thing. So it is time to at least have normal relations and dialogue in the embargo. Perhaps through normal diplomatic relations, some of my colleagues' goals could be accomplished. Let me just say to Ambassador Brownfield, I, too, come from the southwest, El Paso, Texas. Mr. Brownfield. As did my mother. Ms. Lee. Born and raised there; my mother born and raised there; my grandfather, first African American letter carriers, spoke fluent Spanish. Border town of Juarez, and we know what has been happening in Juarez for many, many years now. I don't know if you would consider the decrease in murders and kidnappings a success story, or a partial success story, but could you kind of tell us how you see what is taking place in Juarez? Second, and as it relates to El Paso, because I know El Paso was one of the safest cities in the country in the United States, yet Juarez was one of the most violent, and so it was a very interesting period where those, the most violent and the safest city were side by side. Third, just with regard to the drug crimes and the drug trafficking, unfortunately, the African American community has been dealing with drug issues, and not the lack of rehabilitation and drug treatment services for many, many, many decades. You remember Iran Contra? I remember mass incarceration, and so it is unfortunate now that other communities are dealing with the drug epidemic. But I am glad to see a shift finally from locking people up, you know, because they use drugs, or deal drugs, to finding some sort of rehabilitation alternatives, because we don't want any community to experience what the black community has experienced, which has wreaked havoc in our lives. And we know where it started. And so the drug interdiction and dealing with these drug gangs in Central America is extremely important, and so I would like to just kind of know how you see now versus 20, 30 years ago, your efforts to try to stop this drug trade? Mr. Brownfield. Let me offer a couple of comments on both of your points, Congresswoman. First, Juarez, I am delighted to talk about Juarez because in a sense, it represents an example of what USAID and INL, what Beth Hogan and I are trying to accomplish with what we call the place-based strategy in Central America. Five or 6 years ago, I mean, I will be quite clear with you. There was a period of time where Juarez had a homicide rate of about 180 per 100,000, and 200 yards across the river, El Paso had a homicide rate that was under four. So a distance of maybe 200 yards, one was suffering 180 per 100,000, and the other something like 3.7 or something along those lines. Now, Juarez has become now, I mean, I won't call it the safest city in the world, but I believe they have brought their homicide rate down to somewhere in the 30s, and that is an astonishing accomplishment over 5 years. How have they done it? They did it with a version of what Beth and I would call the place-based strategy. Juarez city leaders and the Federal Government, in essence, did a grid of the map of Juarez, and in those troubled areas where the most homicides were occurring, they concentrated resources; not just police, although a lot of them were concentrated there, but also city and social services, employment generation, education, community centers. And in 5 years, Juarez has converted, I mean, it has literally been a complete turnaround. We would like to see that happening in San Salvador, in Guatemala City, in Tegucigalpa, and other cities in Central America as well. Drugs, writ large, you know as well as I do, particularly coming from the El Paso area, it is a complicated issue. It is a supply issue and a demand issue. It is where the drugs are produced, which tends to be south of the border, and where they are consumed, which is north of the border. And then there is a variation: bad news on heroin, it is surging. Cocaine, on the other hand, has dropped more than 50 percent in the United States of America. Is there a connection? Yes, there probably is. You are correct that in April of this year, all of the governments of the world will meet in New York for a special session of the U.N. General Assembly, where we will address where the world wants to go on drug policy for the next 20 years. And I, for one, am looking forward to a good conversation talking about realistic, pragmatic, logical steps that we could take that actually would bridge the gap between those who say legalize everything, and the other extreme who say prohibit everything. Ms. Lee. Thank you very much, Madam Chair. I just want to say, it is about time because we have lost in the black community a whole generation, maybe two generations of young African Americans as it relates to the lack of involvement and concern about the drug trafficking trade until, you know, unfortunately, now too many other people are being victimized and hit by it. So I am glad we are finally on it. Thank you. Ms. Granger. Thank you. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chair. I want to share a story with you which will become a quick admonishment, and then I want to turn to a question about gangs. Last year, we had a very lovely dinner hosted by the Ambassadors from Guatemala, Honduras, and El Salvador. And it was just a regularized attempt to create more ongoing relations between us and the diplomatic community. However, the dinner happened to be timed with the announcement from the administration that these countries were going to get $1 billion. So we walk into a very awkward situation of being thanked for something that we had not done, had not heard of, had not been briefed on. The point being, a lot of places in the world, when the President says something, when the Congress says something, that means it is. And so we were put in a very awkward position of gently working ourselves through that and saying, wait, wait, wait, time out. This has to be approved by Congress, and we want to know more details of the plan. So the admonishment is, expectations can get created by things that are said that may not translate into reality because we have the job of actually coming up with the law that would mandate or dictate what you all do. So I put that on the table for your consideration. But it was fine. It was a lovely evening, and I think we got through this. Second, I want to know, give me your insights into gang culture. We throw the word ``gangs'' around. The mobility of this culture, where it primarily emanates from, clearly, it is attached to drug trades, ungoverned space, corruption, habits of being, residual effects of past structures. I would like more insights into this. Ms. Hogan. Thank you very much for your question. I would like to start to answer that by saying that one of the things that we have benefited from while addressing gang culture is the work in the United States, particularly in Los Angeles and Chicago, where they have had great success in reducing gang violence. And one of the things that we have adapted from Los Angeles, is something that is called the YSET model and it is a series of indicators that helps one identify who are those children that are most at risk for joining gangs. And those are the kids that we are trying to focus on. We have a statistic that says that roughly 0.5 percent of people are responsible for 75 percent of crime. Mr. Fortenberry. Yes--I am glad you brought that up, because in a sense, this is a narrow band of persons who then seize the conditions that are ripe for manipulating others. Ms. Hogan. Right. Mr. Fortenberry. And getting to the heart of that I think, is the question for solving this. I'm sorry. Ms. Hogan. And so a couple of those indicators are things like, who are the kids who may have a family member in a gang? Who are the kids that are coming from broken homes? Who are the kids that have no parents at home after school and therefore are susceptible? Mr. Fortenberry. But those are U.S. measures, and these places---- Ms. Hogan. We are using those in Central America as well, and those are the kids that we are going after and why we have these community outreach centers is to give a safe place for these kids to go after school where they can get vocational training, they can have recreational training, they can get tutoring, and they have mentors watching over them and giving them adult supervision that they don't otherwise have. And so we are seeing a reduction in the number of kids who go into gangs as well as people coming out of gangs, because it is not a happy place to be. I mean, this is a very dangerous proposition for them. And so we have had example after example of kids who are maybe low-level members, maybe watch-outs, you know, lookouts, and they have turned around to come to our centers because they don't want to fall in the footsteps of their brother, cousin, uncle, who have been killed as a result of gang violence. And so I think, you know, we are using a model that has been effective in the United States and it is proving effective in Central America as well. Mr. Fortenberry. Thank you. Ms. Granger. I am hearing what you are saying. I also had concern because we were going in being congratulated for something we had not heard of. And before that happened, in meeting with the presidents of the three countries after we had the situation with the unaccompanied children, we said, we want to help you. The last thing we want is to take your children I said I asked the question of each president in the country, do you want your children back? Because if they had not said yes, adamantly, then our plan would have been different. But we said then, we are going to help you conquer the problems that would cause a parent to say, ``I am going to give you my child to take to another country. And all I am doing is paying you.'' It was a horrible thing as a parent to even consider. But when meeting with the presidents of those three countries. What concerned me is how unrealistic they were about what they wanted to do. Because they started with, we are going to have these Fortune 500 companies come to our country and that will put people to work. I said, not if they can't walk down the streets safely. So I was very pleased to hear that you had already started, done so much there. Also, we have to work with the governments of those countries to say, we are going to help but there is going to have to be a lot of work on your end, patience, and realistic expectations. Mr. Palmieri. And if I could just add, I think that intervention, the dinner, your engagement when the presidents came up in July of 2014, I think that helped catalyze their thinking that they needed a more comprehensive approach, and it led through the efforts of the Inter-American Development Bank to this creation of the Alliance for Prosperity. And the Alliance for Prosperity in Central America, really is an historic-opportunity moment for the United States because it is the first time, really, that Guatemalans and Salvadorans, and Hondurans agreed around the same set of circumstances and what the possible solutions could be. And the U.S., Congress' support in the fiscal year 2016 bill to provide $750 million just doesn't make the United States a partner to this effort. It sends a signal to other partners in the hemisphere and around the world that this plan has a chance. And we will work with you, the Congress, on those conditions and help those countries live up to the commitments they have made in the Alliance for Prosperity. Ms. Granger. Thank you. Mr. Ruppersberger, you may have the last question. Mr. Ruppersberger. Thank you. I want to talk about Zika, and the situation is becoming serious throughout the whole hemisphere. In your roles, all three of your roles, we, as a Congress, have to decide how we are going to focus, how we are going to fund it. There is already a debate whether we are spending too much money or not. In your role in the region we are talking about today, it seems to me that you have to be involved in a lot of health issues. But this is something that is growing. And yet, you have situations where I am sure your health workers were being threatened and intimidated by gangs, so if you could talk about generally how your role will be in dealing with the issue of Zika, what you need from us, and what you would like to see from us if you could get that? Mr. Palmieri. Yes, I will quickly give you the overview of how the Department is approaching it. First, there is a whole of government, U.S. Government approach to the Zika challenge writ large. In the region, the State Department is leading the diplomatic engagement, and we are working with organizations like the World Health Organization, the Pan American Health Organization, and Health and Human Services, and the Center for Disease Control to make sure that we are getting information out to American citizens in the region, taking care of our employees at embassies who could be vulnerable to the virus, and working closely with the regional governments. And then finally, we are also working to ensure that there is the appropriate scientific exchange as we work to address this, and I will turn to my AID colleague to talk about the programmatic elements. Ms. Hogan. Thank you very much for your question, and of course, it is of very grave concern for us as it impacts Latin America so directly. We have been working with our counterparts in the region, in the Ministries of Health, and elsewhere to help identify what their needs are concurrently with what we might be able to provide. And certainly, we can provide them with existing resources, help in developing public education campaigns on how to avoid contracting the disease, and protective measures that people can take, particularly pregnant women can take, in order to lessen their vulnerability to this. We have only had one request for assistance thus far from the region. It came from Jamaica to help them improve their diagnostic testing, and that has been responded to through our support through the Pan American Health Organization. With additional resources, there is much more that needs to be done that we are poised to do. Simulating private sector research and development of better diagnostic tools, as well as a vaccine; supporting the training of health workers in the community to help affected countries with information about best practices and supporting children with microcephaly; to support pregnant women's health, in particular, including helping them access repellent to protect them against mosquitos. As I mentioned, establishing education campaigns that will empower communities to take control of their actions--for example, limiting the amount of collected water that is a breeding ground for mosquitos; and then potentially issuing a grant challenge with something that we do as a call to the world basically to provide innovative ideas for new ways in which they can, and improved ways in which we can develop diagnostics, control personal protection, et cetera. It was through a similar--through a grant challenge that we were able to develop the new Ebola suit that was something that was an innovation in the treatment for that disease, so this has that same potential as well going forward. Mr. Ruppersberger. Thank you. Ms. Hogan. Thank you. Ms. Granger. Following that up, let me ask a question, and it is to Mr. Palmieri. Does the administration plan to use unobligated balances from Ebola to address Zika? Mr. Palmieri. I know that there is a presentation that has been made on the administration's response to this Zika virus and the budget request. If I could get you the specific response to that question, I will have that for you by the end of the day. Ms. Granger. Yes, that would be great. I thank the witnesses for appearing before the subcommittee today. Members may submit any additional questions for the record. The Subcommittee on State, Foreign Operations and Related Programs stands adjourned. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Wednesday, February 24, 2016. DEPARTMENT OF STATE AND FOREIGN ASSISTANCE WITNESS HON. JOHN F. KERRY, SECRETARY, DEPARTMENT OF STATE Opening Statement of Chairwoman Granger Ms. Granger. The Committee on State, Foreign Operations, and Related Programs will come to order. Mr. Secretary, I want to welcome you back to the subcommittee. We are looking forward to your statement. You recently noted that while funding for international programs represents just 1 percent of the total Federal budget, it may well define the majority of the history written about our era. Members of this subcommittee certainly understand the importance of these programs. The United States continues to show leadership in areas such as reducing poverty, fighting the AIDS virus, and stopping preventable deaths of mothers and children. However, there are countless security challenges around the world that grab the headlines every day. At the top of the list is the crisis in Syria and the surrounding region, which is being fueled by the Assad regime, ISIL, and other terrorist groups. This situation has grown more complicated due to Russia's increased involvement, and we want to hear your thoughts about the situation on the ground. We also are concerned that our allies and partners in the fight against terrorism, such as Egypt, Jordan, and the Kurds in Iraq, are not receiving the assistance they need. While there has been some improvement since I raised this issue with you last year, I want to reiterate that there is no excuse for bureaucratic delays. It is critical that our policies promote our national security interest and not undermine them. I question why the administration plans to phase out the cashflow financing arrangement from military sales in Egypt, which is one of the most reliable partners of ours in the Middle East. We must demonstrate our steadfast support to help Israel address the threats posed by Iran and its proxies. Now that a nuclear agreement is in place, we are all closely watching Iran's actions. You have said that some of the funds freed up from the sanctions relief could end up in the hands of terrorists. The threat to Israel is very serious. As you negotiate another long-term memorandum of understanding, it must be made clear that U.S. support for Israel's security is unequivocal. Another troubling development is the increased violence in Israel and the Palestinian territories over the last several months. We want to hear your thoughts about the prospects for getting the parties back to the negotiating table. We also want to hear what the United States can do to help stop harmful rhetoric and incitement. I want to turn next to Russia's aggressive actions against its neighbors. Many of us don't understand why Ukraine has not received lethal military aid or why the State Department budget proposes to reduce assistance to Ukraine by 55 percent from last year's level. We also see China asserting itself against the United States and our friends and allies in the Asia- Pacific region. We want to hear how this budget supports countries willing to stand up to China when their territory is threatened. We also watch with great concern as North Korea continues to defy international sanctions. We want to hear your thoughts on what more can be done to stop this rogue nation from its nuclear pursuits. In Afghanistan, a resurgent Taliban and a growing number of foreign fighters continue to threaten the country's security. We question how the $1.2 billion of foreign assistance requested can be effectively programmed in this environment. In the Americas, we see drug and gang violence, human trafficking, and lack of economic opportunity continuing to drive migration to the United States. The subcommittee held a hearing 2 weeks ago on assistance to Central America where we looked at these issues. We must see results before new funds can be considered. We are monitoring the new public health threat from the Zika virus spreading in this hemisphere and received a supplemental request on Monday. This committee has provided significant funding and the flexibility to address global health threats, and we want to hear how the administration will immediately address the Zika outbreak. We have additional questions about the administration's budget request for the State Department and foreign assistance programs. The total funding requested is roughly last year's level, but you propose to cut programs that have bipartisan support such as security assistance and humanitarian programs. At the same time, we see an increase is requested for administration priorities such as funding to combat climate change. One area that we all agree is a priority is preserving the safety and security of our Nation's diplomats and development officers. This subcommittee must be sure that funds provided will keep our people safe. In closing, I want to thank you and the men and women of the State Department and USAID for your work in promoting American interests abroad. We may not always agree on the policy or the means to achieve these goals, but the members of this subcommittee understand the need to engage with all the tools we have available. It is now my turn to turn to my ranking member and friend, Mrs. Lowey, for her opening remarks. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statment of Mrs. Lowey Mrs. Lowey. Thank you, Madam Chair. And, Secretary Kerry, it is a pleasure to welcome you before our subcommittee. Since you were sworn into office, the world has witnessed unprecedented levels of turmoil, requiring strong U.S. leadership on many fronts. Chief among them is the Middle East, and I do commend your attempts to bring about a cease-fire in Syria. However, as recent events prove, this requires the cooperation of Russia and Iran. I look forward to hearing your estimation of what it will take for both countries to work with the international community to end the senseless bloodshed and atrocities of the Assad regime, and specifically whether we have the leverage to end the conflict. To continue on Iran, despite differing opinions on the Joint Comprehensive Plan of Action, it must be vigilantly enforced, in combination with other sustained efforts to prevent Iran from ever developing nuclear weapons. The international community must have mechanisms in place to thwart Iran's destabilizing behavior in the region, particularly its ability to fund terrorists and export weapons to various proxies. It is critical this committee understand how the Administration will address these concerns and meet its commitment to bolster the security of our allies in the region, particularly Israel. These concerns are heightened with recent sanctions relief for the regime and on the heels of the first shipment in 3 years of Iranian oil to Europe last week. In addition to threats from Iran, Israel is threatened by radical extremism on several borders and combats almost-daily terrorist attacks by Palestinians. President Abbas has yet to condemn the shootings, car rammings, stabbings against innocent Israelis, yet he meets with terrorist families. Such behavior only incites more violence and makes the goal of two states for two people even more difficult to achieve. It has also been reported in the media that there have been talks between Fatah and Hamas to establish a new unity government. American support is predicated upon the Palestinian leader's commitment to resolving all outstanding issues through direct negotiations, which cannot progress if one party refuses to abide by the Oslo conditions of recognizing Israel, renouncing violence, and abiding by previous commitments. A unity government with an unreformed Hamas would be an unacceptable impediment to peace. As intractable as the conflict may be, I want to thank you for your efforts in trying to bring the parties together for a two-state solution, and I hope you will reassure us that the administration will maintain its indispensable role of mediator and veto any resolution before the United Nations in keeping with longstanding policy to defend Israel at the U.N. With regard to the Fiscal Year 2017 Budget Request, I am pleased it includes strong economic and security assistance for Eastern Europe to combat Russian aggression and for Central America to address the root causes of child and family migration. Continuing our investments to combat climate change, poverty, and disease is critical, yet the request reduces humanitarian and disaster assistance by more than $1 billion. With unprecedented human suffering and humanitarian needs around the world, I want to hear your rationale for such a reduction. Mr. Secretary, I share your concern that much of the Department's core programs are currently funded through overseas contingency operations, or OCO, which inaccurately reflects our commitment to key partners, international organizations, and humanitarian operations. Diplomacy and development are critical components of our national security. Diplomatic failure increases the risk of conflict or failed states and makes populations more vulnerable to radicalization. Congress must find a more responsible budgeting method to provide the resources to meet these challenges today, tomorrow, and into the future. And finally, I must state, yet again, my deep frustration with the administration's failure to prioritize international basic education. With more than 120 million children and adolescents currently out of school, the administration's proposed cut of 240 million from the amount appropriated by Congress makes zero sense. We cannot make sustained progress on any of our development goals, from health, to growing economies, food security, to building democratic institutions, if generations of children grow up without basic literacy skills. In fact, the White House's own initiative, Let Girls Learn, will be impossible to implement with this unacceptably low funding request. Mr. Secretary, I want to thank you again for your service to our country, thank you for your testimony here today, and your stalwart efforts to advance American priorities around the world. Thank you. [The information follows:] Ms. Granger. I will now yield to Chairman Rogers for his opening statement. Opening Statement of Chairman Rogers The Chairman. Thank you, Madam Chair. Mr. Secretary, good to see you. Thank you for being here to justify your budget request for FY 2017, for the Department of State and foreign operations. The importance of U.S. leadership in global affairs could never be more pronounced than now. Your job to promote American interests abroad, to pursue peace in regions bought by hundreds of years of historical and cultural strife; your job to ensure the safety of our people, our citizens living here and abroad, all of this of paramount importance at a time when the world could not be more insecure. I echo the concerns our leaders have just voiced about ISIS, and our need for a comprehensive plan to dismantle this merciless terrorist organization who have senselessly killed thousands of innocent women and children in horrible, horrific examples of hate and prejudice. They will stop at nothing to infiltrate this country and its allies. We need to provide the American people with a degree of comfort that the tragic events that transpired in San Bernardino cannot and will not be repeated on our soil, and the State Department needs to play a role in that effort. On the international level, the President has rightfully solicited the support of other nations in dismantling ISIS. Coordination will be key to defeating this shared foe, and the U.S. must support our allies in this effort. I echo the chairwoman's sentiment that any assistance to our friends must be delivered in due haste. I fear that countries like Russia are all too eager to fill a perceived vacuum in American leadership, and I hope you can address that concern here today, particularly as Russia continues to pursue aggressive maneuvers against its neighbors. With that in mind, let me echo the chair's support for Ukraine. The U.S. should support Ukraine during these tough economic times and continue to assist in efforts to protect their sovereignty, and we must provide, Mr. Secretary, the legal, lethal military aid this Congress has supported, and yet we see it being withheld. We want to ask you why. Turning to issues that concern our closest ally in the Middle East, Israel, first, we must maintain strong oversight over the nuclear agreement with Iran. Stability in the region, which is tenuous on a good day, depends on holding Iran accountable for its actions. I think most people in this room would agree that taking our soldiers hostage and testing a ballistic missile immediately after the Joint Comprehensive Plan of Agreement went into effect, was a bad start, to say the least. I hope you will provide us with an update today about the administration's efforts to make sure Iran lives up to its side of the agreement and what tools we have at our disposal if they don't. And I would remind the Secretary that just as this committee and the Congress controls the power of the purse, the Secretary has a purse to control as well around the world, and we hope that that leverage is properly used. Another matter that troubles our friends in Israel is the spike in violence and harmful rhetoric. We know you have very close relationships with leaders in the region. We want to know what you are personally doing to dial back this incitement and restore some measure of peace in this troubled territory. No aid should go directly to the Palestinian Authority unless the matter of incitement that is in our bill is addressed. Finally, Mr. Secretary, let me talk a moment about Zika. I have shared these thoughts with OMB Director Donovan yesterday and others involved, but they bear repeating somewhat here. I am very disappointed, Mr. Secretary, that the administration didn't take our committee's recommendation to use unobligated funds, laying there unused, for the immediate response to Zika. Now, you have asked for a supplemental request, and we are prepared to look at it carefully. But in the meantime, as an emergency measure, you have got moneys laying there. Go ahead and use it. You have our authority and our permission and hopefully our direction to go ahead and use, at least temporarily, the funds laying there that are not being used for Zika. When we authorized and appropriated the funds for Ebola a couple of years ago, we purposefully left the ability to use those funds for other diseases as well. And so we have another disease, Zika. Let's go ahead and use the funds that you have. And then if that proves to be inadequate, we can always go back to a supplemental. So can we talk? Thank you, Mr. Secretary. Ms. Granger. Secretary Kerry, please proceed with your opening remarks. There is a full panel of the members here today, and they have a lot of issues they would like to discuss with you, so I would encourage you to summarize your remarks so we have time to address all of their questions. A yellow light on your timer will appear when you have two minutes left. Opening Statement of Secretary Kerry Secretary Kerry. Well, thank you, Madam Chairman and Ranking Member Lowey and Chairman Rogers of the full committee, all the members. Thank you very much. My apologies for being late. I had a phone call that came in that I had to take at the last minute, and I apologize for keeping any of you waiting. Look, I want to just start by saying we really appreciate your tremendous work with us last year on a bipartisan basis to approve a budget that really does reflect our core national security needs. And I really look forward, this is the last budget of the Obama administration, and I look forward to a collaborative effort again this year because, as the chairwoman said and as Chairman Rogers said, we have got this vast array of challenges, unprecedented in terms of time. I must say I blanched a little when you said: Since you have been sworn in there has been an unprecedented amount of turmoil. I hope you weren't referring that that was because I was sworn in. But obviously we are facing challenges, needless to say. Let me just say that $50 billion is the total request when you add the OCO and the core elements and the AID. It is equal to about 1 percent of the Federal budget, and it is, frankly, the minimum price of leadership at a time when America is diplomatically engaged more deeply than at any time, I think, in history in more places at the same time. The scope of our engagement is absolutely essential in order to protect American interests, protect our communities, keep our citizens safe. We are confronted by perils that are as old as nationalist aggression and as new as cyber warfare; by dictators who run roughshod of global norms and some who change their constitutions at the last minute to stay in office beyond the requisite periods of time and cause violence by doing so; by violent extremists who combine modern media with medieval thinking to wage war on civilization itself. And despite the dangers, I believe deeply that we have many, many reasons for confidence as Americans. In recent years, our economy has added more jobs than the rest of the industrialized world combined. Our Armed Forces are second to none, and it is not even close. Our alliances in Europe and Asia are vigilant and strong and growing stronger with the passage of the TPP. And our citizens are unmatched in the generosity of their commitment to humanitarian causes and civil society. We are the largest donor in the world to the crisis of Syrian refugees, over 5.1 billion. We can be proud of that. We see and hear a lot of handwringing today, but I have to tell you, with all of my affection and the relationships for many of my colleagues and the relationships I have built around the world and my respect for the jobs that they do, I wouldn't switch places with one foreign minister in the world. Nor would I, frankly, retreat to some illusionary sense of a golden age of the past. There are so many things that are happening in the world that are positive and constructive, massive numbers of people brought into the middle class, diseases being defeated, on the brink of, because of our efforts, a generation being born free of AIDS in Africa. I mean, this is extraordinary. And there are great opportunities staring us in the face in terms of the energy future and other possibilities, the largest market in the world, frankly. In the past year, we reached a historic multilateral accord with Iran that has cut off each of that country's pathways to a nuclear weapon, thereby immediately making the world safer for our allies and for us. And I will note that the general in charge of the Israeli Defense Forces, General Eisenkot, just the other day made a speech in which he said that the existential threat to Israel from Iran has been eliminated. That is the chief of the IDF in Israel saying that himself. In Paris, in December, we joined governments from more than 190 nations. No easy task to get 190 nations to agree on something. But they approved a comprehensive agreement to curb greenhouse gas emissions and limit the most harmful consequences of climate change. Now we are determined to implement that accord and do everything possible to reduce the carbon pollution and grow economies at the same time, and we believe it is not a choice between one or the other. Just this month we officially signed a Trans-Pacific Partnership to ensure a level playing field for American businesses and workers, to reassert U.S. leadership in a region that is vital to our interests, and it will cut over 18,000 taxes on American goods that move into that region. We are asking Congress to approve that this year so we can begin to accrue its benefits as quickly as possible. In Europe, we are increasing support for our Security Reassurance Initiative. We are increasing it fourfold and giving Russia a clear choice between continued sanctions or meeting its obligations to a sovereign and democratic Ukraine. In our hemisphere, we are helping Colombia to end the globe's longest-running civil conflict, and we are aiding or partners in Central America to implement reforms and reduce pressures for illegal migration. In Asia, we are standing with our allies in opposition to threats posed by belligerent North Korea, and we are on the brink of achieving a strong United Nations Security Council resolution, which is now in both in Beijing and Washington for approval. We are working with Afghanistan and Pakistan to counter violent extremism, deepening our strategic dialogue with India, supporting democratic gains in Sri Lanka and Burma, and encouraging the peaceful resolution of competing maritime claims in the South China Sea. And with friends in fast-growing Africa, we have embarked on initiatives to combat hunger, to increase connectivity, to empower women, to train future leaders, and fight back against such terrorist groups as Al Shabaab and Boko Haram. Of course, we recognize that the threat posed by violent extremism extends far beyond any one region. You mentioned, Madam Chair and Ranking Member, the issue of education. And it is not going to be solved primarily by military means. So the approach we have adopted is comprehensive, and it is long term. Diplomatically, we are striving to end conflicts that fuel extremism, such as those of Libya and Yemen. We are deeply involved in trying to resolve both. But we also work with partners more broadly to share intelligence, to tighten border security, improve governance, expand access to education, and promote job training and development. And we have forged a 66-member coalition, an international coalition to defeat the terrorist group Daesh, and I am absolutely confident we are going to do that. Ms. Granger. If you could close down soon. Secretary Kerry. Well, let me just say quickly that the most critical thing, obviously, on the table at this moment in terms of this conflict resolution is the effort with Russia and Syria. We can talk about it a little bit in our questions, I am sure. But I talked this morning, the reason I am late, I was talking with Foreign Minister Lavrov, and we have a team that will be meeting in the next day or so, the task force for the cease-fire, cessation of hostilities. I am not here to vouch that it is absolutely going to work, but I am telling you this is the one way that we can end this war. The alternative is that the war gets worse, that Syria might be totally destroyed, not able to be put back together again. Everybody has said you have got to have a diplomatic solution at some point in time. The question will be, is it ripe, will Russia work in good faith, will Iran work in good faith to try to bring about the political transition that the Geneva Communique calls for. I just want to close by saying to everybody that I have been profoundly privileged to have the chance to work with all of you in support of an agenda that I believe reflects not only the most fundamental values and aspirations of the American people, but also carries with it, I am absolutely confident, the hopes of the world. That is the responsibility that you all have. That is what we are going to be talking about this morning. And I thank you very much for your forbearance, Madam Chair. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. Thank you very much. I am going to start the questions, and I would like to return to one of the topics I raised in my opening statement concerning the delays in delivery of the U.S. security assistance. The administration has asked our friends and allies to step up and play a greater role in the fight against ISIL, yet we need to do more to deliver our commitments to support them. The current foreign military financing and sale processes are cumbersome and are bogged down by bureaucracy, and the problems continue. I hear complaints about equipment delays to our partners, for example, Bahrain, Kuwait, and Egypt. That is why the fiscal year 2016 appropriations bill directed the Government Accountability Office to review this process and make recommendations. Mr. Secretary, what are you doing to expedite the delivery of important equipment to our friends and allies fighting ISIL, and what more needs to be done to this system? Secretary Kerry. Well, the whole procurement system could be sped up, and that is a huge challenge for the appropriations committees, and, frankly, the Pentagon and procurement process itself, together with the State Department and the White House. We try to move it as fast as we can, I can assure you. Over the past year, we have seen unprecedented stress put on our security assistance mechanisms, and, frankly, we have seen them respond pretty efficiently and pretty quickly. We are currently providing expedited assistance to Iraq, Jordan, Lebanon, Saudi Arabia, UAE, and other counter-ISIL coalition members, and I can go through a long list. We have provided the Peshmerga with more than 65 million rounds of rifle ammunition, 41,000 grenades, 115,000 mortar rounds, 60,000 antitank rounds, including 1,000 AT4s, more than 56,000 RPG rounds, 35,000 weapons, including rifles, antitank systems, heavy-caliber machine guns, counter-IED equipment, more than 150 vehicles, ambulances, mine-resistant vehicles. Additional equipment is on the way, 5 million rounds of more rifle ammunition. That is just the Kurds. In terms of Jordan, we continue to expedite it. We have delivered over--I just want to point out that we are in a massive process of providing materials. Now, we have created a special task force with the GCC countries, and I have met with them on three occasions now, I think, and we are going to be meeting again in the next weeks, and we have set up a special office within the State Department for the specific purposes of expediting materials to our allies and coalition partners precisely to be able to respond to any activities by other countries in the region, Iran or otherwise, but also to help them in terms of their coalition efforts. So I just have to tell you, everybody is cranking full speed. We are doing what we can. But as you know, we do have some budget limitations. Ms. Granger. You were speaking of the Kurds. The two that I hear the most from is Ukraine and their request for weapons to defend themselves, and then the Kurds. But the Kurds, the situation right now, the immediate crisis has to do with the price of oil and the flood of refugees. And it is a crisis, from everything that we have been told. What can we do to help them stabilize their economy and get them the equipment they need to fight ISIL? I still hear continually that the aid for the Kurds has to go through Iraq, that 17 percent that is meant for the Kurds just doesn't get there, and the small amount that does get there doesn't get there in time to be helpful. So what else can we do? Secretary Kerry. I have heard that, Madam Chair, about the question of some siphoning off. I don't know, I don't have specific evidence of it, but I have heard these allegations. And we have a team working, the Embassy in Baghdad is working very, very closely. It is a fact, indeed, that U.S. military assistance has to go through the central government, and that is required both by Iraqi law and by international law. And the reason for that is that part of our policy has been to try to strengthen the central government of Iraq and not to encourage a breakoff or the belief that the independent entities within the country can deal directly with the United States or other countries. So in order to strengthen Iraq, that has been the rule. But I will tell you that massive amount of effort now is getting to the Kurds. And the Kurds, frankly, have been quite extraordinary in their efforts to help fight ISIL. Ms. Granger. They have. Secretary Kerry. We need to say thank you to them. And we are training and working with them right now with respect to the preparations for Mosul, and that will continue. Ms. Granger. Thank you. Mrs. Lowey. Mrs. Lowey. Thank you, Madam Chair. And welcome again. And with appreciation, we thank you for all your hard work. Mr. Secretary, I know how hard you have been working and how many hours you have spent on the Israel-Palestinian peace process, and I share your deep frustration that the two sides are not sitting down face to face. Just last week, the Palestinian Authority Foreign Minister Riyad al-Malki said, quote: ``We will never go back and sit again in a direct Israeli-Palestinian negotiation.'' And now, once again, we see the international community attempt to step in and impose a solution on the parties, with the French proposal that includes a stipulation that if the talks fail, it will result in full recognition of a Palestinian state. I won't repeat all the terms of Oslo. You know them inside and out. So a few quick questions. I don't know how quick, we'll see. What is our position on the French proposal? What are you doing to oppose such one-sided actions by international actors? If the Palestinians believe that the international community will pressure Israel for them, what incentive do the Palestinians have to negotiate with Israel and engage in compromise? And what is the administration doing to convince the PA that they cannot refuse direct face-to-face negotiations and disavow them of the notion that the international community will impose a Palestinian state on Israel? Do we have any influence with the PA leadership at this point? Secretary Kerry. Well, I like to think some, but I think it is very difficult right now on all sides, to be honest with you. I think that, first of all, we do oppose unilateral efforts, but what is happening now is there is a multilateral movement that is growing that is concerned about any number of things. And I was just in Amman a couple of days ago. I met with President Abbas and encouraged him, obviously, to, first of all, make sure that the incitement is being addressed most directly, and we are working very directly with him with respect to any aspects of incitement. I have called him on occasion to encourage him to condemn acts of violence. He has on occasion, but not with consistency, regrettably. But, you know, it takes two sides to come to the table, and both sides have to really begin to offer something and begin to talk about the modality of doing that. I don't think that the situation is helped by additional settlement construction and building, and I think that we know we need to see measures taken on both sides to indicate a readiness and willingness to try to proceed forward and reduce the violence. There is no question. I mean, the average Israeli is living with day-to-day threats on life that could come from anywhere, whether it is a scissors attack or a drive-by of somebody in an automobile. But I will call to everybody's attention that there were news reports just 2 days ago of the chief of the intelligence in Israel submitting a report to the government, and the headline of the report that I read out of the Israeli newspapers was that unless there is a peace process there will be increased violence. So my hope is that everybody will take note of that, not as a threat, but as a sort of sense of reality about the downward spiral that comes if there isn't an active process, which is genuine, by the way. And I think that requires a slightly different formula than has existed previously. I believe that Prime Minister Netanyahu is preparing some major initiatives with respect to economics and some changes on certain relationship components of the security relationship in the West Bank and other things. But I have been very clear that, and I think everybody believes, there has to be some kind of political horizon that both sides can understand, a reduction and elimination of the violence and a real readiness to move forward in real ways that people can grab onto and understand with respect to the creation of a state. If that can happen, then I think it is possible to have progress. But it is not in our hands. Now, with respect to the French proposal, we are evaluating it. We don't have all the details. We are trying to get some details about exactly what it would seek to achieve and how and what the rules of the road would be. But I think it is a reflection of the frustration that the international community feels that what is happening in the region, without blame, without pointing fingers, without anything, just what is happening, contributes to the overall instability and turmoil that you referred to earlier. So that is why it is urgent, and that is why we remain committed to Israel, committed to Israel's security, committed also, however, to trying to move the process forward and bring the parties to the table. Mrs. Lowey. Let me just say, because my time is up, I appreciate your efforts, and I know how much time you have spent on them, and I am pleased to hear your commitment that the parties have to come to the table. As a result of Oslo, that is the only way that we can have two states, two people. And I want to express my appreciation. And I hope that means that you could not support a French proposal which would impose a solution on the parties through the United Nations. Secretary Kerry. Yeah, I don't know what their proposal is, but we have never supported something that is unfair to Israel or out of balance. That has never been the policy of our country. Ms. Granger. Chairman Rogers. The Chairman. Ukraine. In your budget request, you would slash funding for Ukraine activities by 55 percent, from $363 million down to $295 million. In the meantime, the National Defense Authorization Act of 2016 authorized 50 million for certain defensive lethal assistance. And so far, the only equipment that we have sent them has been nonlethal, and many people say that it is used in not very effective equipment at that. In the meantime, the government that we support in Ukraine, is teetering. The Prime Minister just survived a no-confidence vote in Parliament. A lot of political turmoil, mainly due in part, I am told, to the austerity reforms being implemented that have lowered standard of livings for the average Ukrainian. The IMF has not disbursed funds from its loan package since August. We can't get information out of the State Department. The budget request for FY 2016 included $275 million for a third billion-dollar loan guarantee to the government of Ukraine. But the administration has not answered this subcommittee's questions about when it will be finalized. Can you help us? Secretary Kerry. Yes. I can't speak to the lack of an answer as to when it would be finalized, but let me just speak to-- The Chairman. Perhaps someone in the room that is with your staff could help us with that. Secretary Kerry. As to when it is going to be finalized? I don't think the loan guarantee is currently under negotiation. It is the third loan guarantee that we have given. We put 2 billion on the table already in loan guarantees, and we are negotiating the third. But the uncertainties in the negotiation, Mr. Chairman, frankly, I don't think they can be laid at our doorstep. The reason the IMF has not been able to make a disbursement, and if you look at what Christine Lagarde sent, a 10-point requirement to the government in Kiev requiring them to move forward on their reforms, that is partly the reason for some of the turmoil that is going on. There is a significant amount of political disquiet. We have been addressing that very directly. Vice President Biden and I met with President Poroshenko in Switzerland a few weeks ago. We had further meetings in Munich. We have been pushing very hard to try to get the reforms in place that are, frankly, also required--some of the steps that are required as part of the Minsk Process. So we are pushing on it. But the request of USAID assistance is 294.8 million, which is actually an increase of 103.4 million over the 2015 amount. You are right, it is less than 2016, but it is more than 2015, and it is calibrated to what can be absorbed and put to good use in the context of where they are. But they have probably a $20 billion gap overall. What we are looking at is a situation where we need to have a significant reform effort, passage of laws, the Rada has to grab the bull by the horns here, President Poroshenko has to push these reforms through, and then there is a chance that this money will, in fact, reach the right people and do the right things. The Chairman. Well, I hope I am wrong in this, but I judge, perceive, that we are not doing all we need to do in Ukraine. And if that is so, it makes me wonder whether or not we are taking that position as a quid pro quo for Russia's assistance to us in Syria. Is that a possible angle here? Secretary Kerry. No, I think--look, we are very involved. We have had a series of conversations. President Obama raises the issue of Ukraine with President Putin in every conversation that he has had. I met with President Putin a few months ago. We talked significantly about Ukraine. We talked about it when we met at the U.N. last September. This has been a constant effort to try to move that process forward. Now, it is principally negotiated in the Normandy format between the French, Germans, and the Russians, and we weigh in and we are involved in an advisory fashion in that regard. So it is not appropriate for us to suddenly try to link the two, and I think it would be a mistake to do so. But, Mr. Chairman, let me just say to you, I am ready to defend anywhere the amount of work that our Department has done, Victoria Nuland and our team. Geoff Pyatt, our Ambassador, is superb and has done an extraordinary job working day to day to help move things forward. We actually were there present for days helping the Rada to be able to get the votes to pass some of the things that needed to be passed. So we are deeply, I mean, involved in ways that remain appropriate and sufficiently respecting the independence and sovereignty of the country, but we are pushing them and pushing them. We have elevated the fight against corruption. We are pushing the reform of the criminal justice system. We are enhancing their energy security by getting them to rely less on Russia. We have been strengthening their civil society. We have been working on their, very frankly, corrupt and difficult health system in order to transition it to a more effective model. We have taken huge defense reforms to modernize their military and security services. I mean, we are deeply involved in helping them--with other countries, I might add--to develop the capacity of governance necessary for the task that they face. And it is difficult. It is difficult ferreting out some of the levels of corruption that existed there previously. That is part of the challenge for President Poroshenko. That is part of the challenge that was put to, and very directly, by the IMF. And the point the IMF is making is they are not going to make a loan that is just going to be wasted and squandered by virtue of a corrupt process. So this challenge is complex, but it is being tackled very, very directly by our very dedicated and, frankly, very invested diplomats who want this to succeed The Chairman. Mr. Secretary, thank you for your service to your country. Secretary Kerry. Thank you. Ms. Granger. Thank you. Ms. Lee. Ms. Lee. Thank you. I want to thank you, Madam Chair and our ranking member, for this important hearing. I also want to thank Secretary Kerry. I want to thank you for being here today. And as we considered the President's last budget of his tenure, I want to just take a moment of personal privilege to thank you for your phenomenal work as our Secretary of State. It has really been a pleasure to work with you on so many issues, HIV and AIDS, Cuba, Iran. I think your leadership has really demonstrated the fact that our international affairs budget really is a reflection of our values and ideals as a country, and you have really put that forward to the entire world. So thank you very much. Secretary Kerry. Thank you very much. Thank you. Ms. Lee. On Cuba, I was delighted to attend the reopening of the Cuban Embassy in Havana with you. As you know, and this committee knows, I have been a strong advocate for ending the 50 years of failed policy with Cuba, and I am also pleased to co-chair our bipartisan Cuba Working Group here in the House. How has the opening of diplomatic ties with Cuba changed the perception of the United States? And how has that impacted our ability to advance our agenda, for instance, with CARICOM and in the Western Hemisphere and throughout the world? Also, along those lines, I just want to ask you, in terms of our democracy programs--in this committee and USAID, they know that I have been asking these questions since the incarceration of Alan Gross. How are these democracy programs now ensuring that contractors and subcontractors who work on them know what the laws are. Whether we agree or not with the country's laws, that they could be, unfortunately, arrested if, in fact, they engage in these programs, so that they know up front what risks they are taking in their participation with this, i.e., what happened with Alan Gross? And thank you for helping to make sure Alan Gross got out. Secretary Kerry. Thank you. No, I appreciate that. Thank you very much, Congresswoman Lee. I really appreciate your support in this effort. I know that some people disagreed with it, obviously, but I have to say that it is already creating change. You can see the transformation. There have been more than 50 delegations, congressional and Cabinet, that have traveled now to Cuba in the last year. People have seen for themselves there are regulatory changes that have taken place that have opened new opportunities for U.S. firms to export certain goods and services to Cuba. There have been agricultural delegations that have traveled there to explore how we could eventually, if the embargo is lifted, begin to change life for the Cuban people through better agricultural practices, better goods, actually sell American goods there, which we would like to do. We signed off on a pilot program for direct transportation and mail, which ought to begin soon. We just signed a-- reestablished scheduled air service between the United States and Cuba for the first time in more than 50 years. And we have actually empowered a Cuban private sector that now employs one in four Cubans. A private sector is emerging. And people in the United States can now send unlimited remittances to support private businesses and private microfinance and entrepreneurial training activities and a broad range of tools, materials, and supplies for Cuban entrepreneurs. I happen to believe, as does President Obama--and also the Cuban government has expressed its intent to expand development of communications in Internet on the island, to have a target of 50 percent of its households connected to the Internet by 2020, and we obviously endorse that. And the Cuban government recently opened 35 public WiFi spots, hotspots. So things are changing. It is not going to happen overnight. We always said that. President Obama was very clear, the transition will take time. We are not happy with the movement in some regard on areas of human rights. There have been some political challenges, obviously, and we are going to continue to press those issues. The President will speak to those things directly when he goes to Cuba. But we feel very, very strongly that this policy was geared to address the hopes and aspirations of the people of Cuba, and that is what it is beginning, in fact, to do, to take hold. And we believe nothing would speak to the Cuban people's aspirations and needs more than lifting the embargo so that we can not have to wrestle with everything that we are trying to do, but just let it happen. And I think what has happened in Eastern Europe is the greatest witness to what happens when you open up and allow the world to come in. And there are other places that respect that too. Myanmar and other people have been on a transition to democracy. Our Embassy is taking great care to make sure that people understand the rules, aren't stepping over any lines. One of the things we negotiated was an ability to increase the number of diplomats in Cuba, and we are in the process of doing that with this budget. We have asked you for the additional slots and funding for that. Ms. Granger. Thank you so much. Mr. Diaz-Balart. Mr. Diaz-Balart. Thank you, Madam Chairwoman. Mr. Secretary, good to see you, sir. Secretary Kerry. Thank you. Mr. Diaz-Balart. I was taken aback that you mentioned as a success the U.S. ag sales and independent business licenses, when both numbers are actually down. So it is an interesting thing that that would be the success of that story. Today is the 20th anniversary of the murder of three Americans and one American resident in international airspace ordered, according to himself, he, himself, has said it, by Castro. Just days before that, the President announced that he could be traveling to Cuba. Now, in December 2015, the President said that any trip of his to Cuba would be conditioned on improvement of human rights on the island. You, yourself, just said that that has been an area where things have not looked good. Facts. Let me put some facts on the table. Last year there were 8,616 political documented arrests in Cuba, a huge increase. Several political prisoners on the Obama-Castro list of 53 have since been rearrested. Cuba remains as the only country in the Americas to be classified as not free by Freedom House. Mr. Secretary, by any objective measure, the Castro regime has not improved its human rights records. If anything, it has gotten worse. So, again, facts. Please reassure us and show us, give us some facts of where the human rights situation has improved to reassure us that President Obama is not breaking his word of December 2015 when he said that he would not visit Cuba if human rights conditions had not improved. Where specifically, Mr. Secretary, have the human rights conditions in Cuba on the island improved? Secretary Kerry. Well, the agreement required a large number of people to be released, as you know, it was about fifty-- Mr. Diaz-Balart. Fifty-three, and a number of them, Mr. Secretary, have been rearrested. Secretary Kerry. Correct, and we believe they will be released, as is appropriate, and that signifies some listening, some movement. The fact that 50 of them were released-- Mr. Diaz-Balart. And rearrested. Secretary Kerry. Yes. We were disappointed that four--I think it was four or five. We have registered that. We were very disappointed in that. Mr. Diaz-Balart. Where specifically have human rights conditions improved? Secretary Kerry. But the President and we always said that component is not going to change as rapidly as other components, but it is changing. And you have to look at other countries that have gone through--and are going through--these kinds of transitions. I mean, we still, we deal with China. China is probably our biggest--I think it holds the most debt of the United States, one of the largest traders with the United States, and we disagree with China on human rights. Mr. Diaz-Balart. Mr. Secretary, I hate to--time is of essence. Where specifically have human rights improved? I would like you to reassure us that the President is not breaking his word when in December 2015 he said he would not go unless human rights conditions improved. I just want you to reassure me. Please, give me some facts. Secretary Kerry. Well, I just told you, they have improved in the sense that 53 prisoners who were in jail for political reasons were released. And I believe these others will be released. And the President is going to engage in this human rights discussion. I am engaging in this discussion. We just met with the Finance Minister of Cuba the other day. I talk to my colleague on a regular basis about this. I may be going down there before the President to have this discussion to some degree. So we are continuing to push on it. But like many---- Mr. Diaz-Balart. I don't hear any facts here, Mr. Secretary. You mentioned, for example, as a success, ag, but we know that the facts show that ag sales are down. Again, you keep mentioning, which I appreciate, that there were 53 prisoners released. A number of them have been rearrested. There were over, I just mentioned the number, 8,000 arrests, political arrests, not to mention 200 arrests every Sunday of the Ladies in White, along with the beatings of these women who are just trying to go to church on Sundays. So I am just trying to see, I don't want to be argumentative, I just want to see if you can give us some facts of where---- Secretary Kerry. I gave you facts. Mr. Diaz-Balart. So you are telling me that with 8,000 arrests-- Secretary Kerry. And people are engaged, one in four people in the country are now engaged in the private sector. Mr. Diaz-Balart. And the licenses are down. The licenses are down. Secretary Kerry. Beg your pardon? Mr. Diaz-Balart. The licenses of these so-called private independent businesses, the numbers have decreased. Secretary Kerry. No, there are an increased number of private businesses. There is a capacity to provide finance. There are people who are now able to open businesses who weren't before. Mr. Diaz-Balart. Do you have any of those numbers, because, again, the numbers that we have-- Secretary Kerry. I will get the specific numbers for you. I don't have the-- Mr. Diaz-Balart. Well, I just want you to reassure us, because, again, I just keep hearing in platitude. Secretary Kerry. I am trying to reassure you, but you don't want to be reassured. Mr. Diaz-Balart. Mr. Secretary, you are not giving me any numbers. Secretary Kerry. Well, I will get the numbers to you. We will get you the numbers. Mr. Diaz-Balart. So you have no numbers. And so, again, please reassure me. The President said he would not visit unless human rights improved. You are mentioning 53 political prisoners, out of which a number of them have been rearrested. When there have been over 8,000 arrests, in anybody's math, fuzzy math or not, that is not a pretty good ratio when you have 8,000 arrests, 53 supposedly released, and a number of them have been rearrested. Again, please, if you could get back to us, reassure us that the President is not breaking this red line when he said he would not visit until there was a substantial increased improvement in human rights, sir. We have not yet to see it. Secretary Kerry. I am happy to get you the details on it, Congressman. Mr. Diaz-Balart. Our time is up. Thank you, Mr. Secretary. I appreciate it. Ms. Granger. Thank you. Before I call on Mr. Ruppersberger, between Christmas and New Years, I traveled to Costa Rica because I kept reading the stories of the Cubans that were going from Cuba to Ecuador and then from Ecuador to Costa Rica. I went to see them and to ask them why they were leaving. And the answer that I got, personally, was that there had been such a clampdown in Cuba since the deal was made with the United States that they felt like the only time they could leave was now. That was my experience. And I am going to go back. Mr. Ruppersberger, please. Mr. Ruppersberger. Mr. Secretary, thank you for being here. And I believe right now that this is one of the most dangerous periods for the United States throughout the world, whether the China-Russia threat, terrorism threat, Iran, all these different issues. I want to get into the issue of Iran. We had a lot of debate, and the agreement went forward with Iran. I think the focus, the focal point of the agreement, which a lot of people didn't see it this way, was to stop Iran from having nuclear weapons. It would have changed the Middle East, the makeup of the Middle East, and it could have been very dangerous. And, as we know, Israel is one of our most important and closest allies, and their security is very important to us, and we stand behind them. Now, I am going to ask two questions. According to the State Department, Iran continues to still be the world's leading state sponsor of terrorism in its quest to dominate the Middle East, expel our influence, that kind of thing. They are very active in Iran, in Iraq, in Bahrain, Yemen, Lebanon, Palestine, Central America. Quds Force is very active in a lot of these areas. The two questions I am going to ask--number one is what is the status after we have the agreement as far as the focal point of, number one, the issue of nuclear weapons? Where are we? Do we feel secure that the goal has been reached? We have independent examination; we want to make sure those examinations continue to move forward. And the second question is the issue of exporting terrorism. Can you talk about other sanctions? I think it is important that we understand that the United States still has, through the United Nations, we have a lot of sanctions on Iran as we speak now, as it relates to their exporting of terrorism. And I think it is important that you discuss those, what they are. An example: If Iran transfers money to Hezbollah, to the benefit of Hezbollah, would the U.S. immediately sanction the bank that did that? Those type of issues. Those are the two issues: status of the agreement, where we are now; and, secondly, what we are doing as far as Iran exporting terrorism and the sanctions that exist there. Secretary Kerry. Okay. Well, Congressman, Iran is compliant with the requirements of the JCPOA to date. There have been a couple of issues of interpretation of one thing or another that we have worked through in the mechanism that we set up to work it through, and it has been resolved. And they have taken some 19,000 centrifuges and reduced them to 5,060. They have taken their 12,000 kilograms of stockpile and reduced it to the requisite 300 kilograms that cannot be enriched above 3.67 percent. They have taken the calandria, which is the core of the plutonium reactor which was being built, not yet commissioned, they have taken it out and destroyed it, filled it with concrete. IAEA inspected--dried concrete. It is destroyed, cannot be used again. They have ceased all fissionable enrichment process at Fordow, stored the appropriate centrifuges in the appropriate places, allowed the inspections to take place. And so, in effect, they have moved the heavy water out, and it is on the market for sale. They have moved their enriched uranium out. The ship is now in Russia. Russians took that, where the highly enriched uranium--so every aspect of what we laid out as a requirement has been, in fact, carried out, which is why implementation day took place appropriately, with the IAEA signing off on it. Now, we will continue, obviously, very--and this was the whole purpose of the agreement. It is what we promised the Congress and the American people and the world. There will be an ongoing process of extremely intrusive but agreed-upon verification of the continued compliance with this agreement. And our intel community and Energy Department, which is responsible for our own nuclear weapons, have assured us that they believe they are capable of knowing exactly what is going on and that compliance is taking place. Now, with respect to Iran's other activities, we purposefully left in place the regimens for other sanctions. So sanctions for support of terror, for instance, sanctions for missile tests, sanctions for arms embargo, all of those are existent--sanctions for human rights. And we continue to monitor those. In fact, on January 17, we designated some three entities and I think eight individuals, seven or eight individuals, for violations with respect to the missile launch that had taken place previously. So we have put Iran on notice that those compliance measures will, in fact, be utilized, and we will continue to observe. Now, the Iranians have--we have intercepted, in fact, one dhow ship, a boat, a large boat, that was taking arms, we believe, to Yemen. And we also turned away a convoy very close to the period when we were completing the agreement, and that convoy turned back because we singled it out and said this would be a violation. So it wasn't violated because it went back, and they never did, in fact, send the arms, but the effort was attempted. So that shows how acutely we are watching it and how we have been able to actually have an impact. Mr. Ruppersberger. Thank you. Ms. Granger. Thank you. Mr. Dent. Mr. Dent. Thank you, Madam Chair. Good morning, Mr. Secretary. Secretary Kerry. Good morning. Mr. Dent. I am not expecting an answer to this question, but maybe one of your folks after the meeting can help me with this. It has to do with Colombian truck scrapping, believe it or not. American truck manufacturers, including some up in my district, recently welcomed the news that Colombia may be eliminating its one-for-one truck scrapping requirement, which requires an old truck to be scrapped for every new truck purchased. However, we have heard that this change may include a caveat that the requirement would only be eliminated for certain types of trucks, which would still pose a problem for many American manufacturers. And, obviously, we have a Colombian trade agreement, and this is a real source of concern for many. So the question I have is, what specific actions does the administration intend to take if Colombia continues to restrict its market for American-made trucks? I don't expect you to have an answer at this moment, but I would like somebody to at least be able to get back to me, unless you do have an answer. Secretary Kerry. No, Congressman, your expectation is going to be met. But I promise you we will get back to you very quickly. Mr. Dent. And the second question deals with Syria. As this committee considers the administration's request for funding to aid in the fight against ISIS, I have to ask, what do you see as our end game in this region, as it appears now that the Russians have successfully shored up the Assad regime and simultaneously increased their own clout in the Middle East? We have also seen Hezbollah in Iran, Iranian fighters increasingly engaged in that conflict, as well, on the side of Damascus. Meanwhile, Turkey appears to be using the conflict as an excuse to wage war against the Kurds, many of whom are actively fighting against ISIS. And you know the whole drill there. And, of course, the Turks are more interested in taking down Assad, it seems, at the moment, than fighting ISIS. A very complicated, convoluted situation. And, you know, I guess the issue for me is, what is our end game in Syria diplomatically? And just as importantly, is there a viable Sunni political infrastructure in Syria that is not radical and that could actually govern in the event we ever reached an agreement? Secretary Kerry. Well, the answer to your last question is, yes, there are Sunni who are extremely capable and moderate and very qualified businesspeople, very capable potential contributors to a resolution. But we don't want to divide this thing up or talk about it in a context of Sunni, Shia, Alawite, whatever. And it is up to the Syrians. I mean, the Syrians have got to make that kind of decision, which is why we are so supportive of the political process. Now, you ask what is the end game. The end game is actually shared--or, at least in statements and positions publicly put forward, the end game is stated by Iran, by Russia, by the United States, by the European community, and by the Arab countries. All share the notion of a Syria that is united, whole, stable, peaceful, protecting all minorities, in which you have the ability of the Syrian people through an election to choose their leadership free of coercion and of interference and free of foreign fighters and free of Daesh and so forth. Now, how do you get there? And, by the way, the Iranians and the Russians have signed on to that in the context of U.N. Security Council Resolution 2254. And they have also issued two communiques in the context of the Vienna meetings where they have embraced exactly what I just described--a whole, unified Syria in which the Syrian people decide the future. Now, Russia has long supported Assad. This is not a surprise to anybody, that Russia is supporting Assad. Russia also has a very specific interest in preventing terrorists from coming back to Russian soil. There are probably more than 2,000--not ``probably''--there are more than 2,000 Chechens fighting in Syria as part of the radical extremist elements, and Russia doesn't want them coming back and fighting them. So part of the Russian--part of the Russian strategy was to shore up Assad, who they feared might have been about to fall to Daesh and to Nusrah. So their concerns were that this would be greatly destabilizing to them. Now, they have other ulterior geographic, geostrategic, and other interests, and we understand that. But while Russia has succeeded in shoring up Assad, that doesn't end the process for Russia, because Russia is there and on the ground, and holding territory is hard. And if you have a persistent and continued insurgency against that government-- and you will if there is no peace--that is a problem for Russia. So, in the long run, Russia has an interest, we think, in working towards a legitimate political transition that can provide stability and a change in Syria. Mr. Dent. Without Assad? A transition without Assad? Secretary Kerry. We believe it cannot happen except without Assad. And the reason is that if you have barrel-bombed your people and gassed your people and tortured your people and starved your people, it is very hard to envision how you can take 12 million people who have been displaced, driven out of the country, and with over 400,000 killed, and have that guy sit there and say, oh, okay, everything's fine, let's go status quo ante. It is not going to happen. And Turkey, Qatar, and Saudi and others in the opposition have made it very clear war will not end if Assad stays. So Russia has to confront that. Iran has to confront that. And they have signed on, at least, to a structure that begins to confront that. The reality will be the test in the next few weeks and months, are they really supporting a genuine process of transition. And we will know very quickly whether that is for real or not. But if you really want to end the war, there is no way, it seems to me, to be able to ultimately do that without some kind of negotiated outcome. And it is going to require some compromise. So we are going to have to plow ahead. I am not vouching for the fact that this ceasefire will absolutely work and take place, but it is the one way to get to the discussion of the future of Assad and the possibility of a political transition. And since Iran and Russia have signed on to the idea of this political transition expressed in the Geneva Communique of 2012, we have to put that to the test. And President Obama is deeply committed to exhausting the diplomatic possibilities before we have to confront, if we have to, whatever plan B might have to be. Ms. Granger. Thank you. Ms. Wasserman Schultz. Ms. Wasserman Schultz. Thank you, Madam Chair. Mr. Secretary, it is good to see you. I want to first just recognize that next month marks the ninth year of anguish for Robert Levinson's family. And as heartwarming as it was to see our American citizens come home from Iran earlier this year, we still have had, you know, no progress on locating his whereabouts or moving towards being able to help bring him home and end his family's pain and return him to his home in south Florida. And so I appreciate your efforts, the efforts of President Obama and the administration, but would just underscore how important it is to continue to press Iran for their assertion, which has no credibility whatsoever, that they have absolutely no idea where he is or anything to do with his disappearance. And sticking with Iran, obviously, following the Iran agreement, which I supported, the most important step we have to take now is to make sure that we have a strong MOU, new MOU, with Israel that I know we are in the midst of negotiating. I had an opportunity to speak with Ambassador Shapiro at the end of last week, and we had a good conversation, but could you update us on where we are? And I know you can't go into excruciating detail here in this setting, but could you update us on the progress that we have made on finalizing that MOU with Israel? Because, obviously, making sure that we can maintain their security and continue to make sure that, with the tumult that continues to occur all around them, that they have the ability to keep their national security interests strong and protect their people. And, particularly, my concern is that, with the language that I am told is being included, that Congress be able to maintain our ability to continue to increase the support that is essential for Israel to keep her people safe. Ms. Granger. Mr. Secretary, before you begin, we have until 12 o'clock, and I want to make sure we get around to all the members. Secretary Kerry. Absolutely. I will try to be really quick. All right. Just very quickly on Robert Levinson, let me just make it clear: There is a process. And, in fact, we wrote into the agreement that saw the folks come back the other day a very specific inclusion of an ongoing dialogue and process on Bob Levinson. I met with the family just recently. I know they are disappointed. I understand that. I am very sympathetic to that. And how can you not be, when you see people come back and you are wondering what happened after all these years? But, as I told them and we have said publicly, we just have not had a proof of life since the last one--I think it was 2007? Am I correct? Around 2007 or 2008 or somewhere in there--2010, excuse me. And that was the last time. And I am pursuing, personally, the obvious questions that flow: From the moment of that last proof, what happened? And I have raised this very directly with my counterpart. We are trying to see if we can trace that back and work on that. So there is a process in place. And we are determined, and President Obama will not rest easy until we have exhausted every possibility. And we are going to try to get him back, if that can be done. With respect to the MOU, we are negotiating. We have had a 10-year MOU. It doesn't expire until 2018, but we would like to get it done. You all and the United States have given $3.1 billion a year for 10 years. There will be more, there is no doubt, because of the needs and because of the increased security process. We have done a very strong evaluation of what it is. We are taking into account all of the QME issues for Israel. I think it is fair to say that the level of cooperation with Israel, notwithstanding the disagreement over the Iran agreement, the cooperation on a day-to-day basis has really just never been higher or better. We have Iron Dome; we have constant communication. We are working very closely with Israel. And I have no doubt that an MOU will be reached, an MOU that will have a larger amount, subject to your judgments, and we will continue to provide Israel with the security that it needs and help it to be able to defend itself by itself. Ms. Wasserman Schultz. And our ability, as Members of Congress, to be able to address crises and emergency provisions? Secretary Kerry. For sure. Ms. Wasserman Schultz. And we have always had that, but---- Secretary Kerry. Yes. Ms. Wasserman Schultz. There have been discussions that our ability to do that might be restricted in the MOU. And so I want to make sure that---- Secretary Kerry. I am not aware of that detail at this point. Let me check on it, Debbie. I will get back to you. Ms. Wasserman Schultz. Lastly, you alluded, too, that the current MOU expires in 2018. Obviously, the situation-- Secretary Kerry. Everybody wants this ahead of time for planning purposes. I think it---- Ms. Wasserman Schultz. Yes. Well, and also because the circumstances have dramatically shifted, given that we have entered into an Iran agreement, which, as I said, I supported and I thought it was the appropriate way from Iran getting a nuclear weapon, but we also have to address the security concerns of that. Secretary Kerry. Sure. And they will be. Ms. Wasserman Schultz. Thank you. Ms. Granger. Mr. Rooney. Mr. Rooney. Thank you, Madam Chair. Mr. Secretary, last July, I introduced legislation with the co-chairs of the South Sudan Caucus, including Congresswoman Barbara Lee, requiring the President to submit to Congress a strategy to support the U.N. peacekeeping mission in the South Sudan, to investigate human rights abuses, and ease the intensifying humanitarian crisis. The bill also directs the administration to pursue high- level engagement with regional and like-minded governments in order to promote a better environment for the resolution of this crisis; to halt the flow of arms from all external sources; and to support the creation, implementation, and enforcement of the U.N. Security Council arms embargo and targeted individual sanctions on all parties to the conflict in South Sudan. While I was cautiously hopeful about the signing of the peace agreement, I felt and still feel strongly that, in order for it to succeed, that U.S. leadership and long-term planning is obviously critical. U.S. officials from the past and current administrations have been intimately involved and demonstrated incredible leadership to bring an end to the 17-year civil war between the north and the south. As you know, 5 years ago, the South Sudanese people finally achieved independence, and the U.S. gained a strong ally in South Sudan. But this civil war is devastating, obviously, and it shouldn't deter the U.S. from engaging in aggressive diplomacy to prevent another generation from a lifetime of war, the impact of which we are seeing manifest itself around the world. I commend the U.N. panel of experts for conducting what must have been an extremely harrowing investigation in South Sudan, and I am hopeful that their work will compel the international community to fully recognize the intensity in atrocities committed throughout the civil war, ranging from systematic rape and mutilation of women and girls to the recruitment and exploitation of children soldiers. Mr. Secretary, I would like to ask you sort of a long question because I might not be able to chime back in. But I just wanted to say, as you know, this country is 5 years old, and if we can offer any words here today of optimism for their future there, specifically with regard to missed deadlines, ceasefire violations, attack on humanitarian workers, restrictive laws against the press and civil society, NGOs. So we can assume that this peace agreement may be deemed a failure. What does the U.S. have in plans to facilitate the immediate coordination of African leaders, the EU, and other UNSC members to impose targeted sanctions on individuals who have committed violations of international humanitarian and human rights laws and to enact an arms embargo so that we can try to save the ceasefire, the peace agreement, and the future of the South Sudan? Secretary Kerry. Well, Congressman, first of all, let me thank you for your focus on this. It is really important. And I really appreciate the detail and depth of your concern about this. The United States is the largest donor in the world, since this conflict began, to the challenge of Sudan, South Sudan-- $1.5 billion. And we have been deeply involved. President Obama has been personally involved when he went over to Ethiopia. He held meetings. He has had personal conversations. I have had personal conversations. I traveled to Juba as Secretary and had conversations with President Kiir. I can't tell you how many phone calls I have had with President Kiir and with Riek Machar. And we have pushed very, very hard towards this peace process. Ambassador Don Booth has been diligently working away as a special envoy under very difficult circumstances. I don't think South Sudan has a better friend than the United States. And we have pushed very, very hard to have compliance with the international community's desire to end the conflict. They are at a critical stage now. The security forces for Riek Machar have now arrived in Juba. He is supposed to go there at some point in time to try to fulfill the mission of having this unity government as part of the peace process. And we have a very real agenda--post-conflict reconstruction, criminal justice, transitional justice--as part of the conflict resolution. We have committed $5 million to accountability to try to help lead in this process, in addition to the aid and other things we are doing. But the bottom line you raised at the end of your question--the sanctions. My message to South Sudan and to the leaders of the process is very simple: This takes leadership. If President Kiir and the people around him and Riek Machar and the people around him don't take on responsibility and deliver on this peace agreement, then the international community is absolutely prepared to put in place individual sanctions for a range of things, ranging from the corruption, to property that may be held in other places, to the crimes that may have been committed in the course of the war. And we are very serious about that. This is a critical moment for South Sudan's survival, and it is important for people who hold themselves up to be leaders to actually lead. Mr. Rooney. Thank you. Ms. Granger. Thank you. Mr. Serrano. Mr. Serrano. Thank you, Madam Chair. And thank you, Mr. Secretary, for your work, for your service to our country in many capacities. For many years, we always heard about Latin American countries telling us, why do you guys have this policy with Cuba, why don't you change it? Is it too early to notice whether they appreciate it? Is it too early to see a change in what Latin American countries are saying about that change we made? Secretary Kerry. Not in the least. We have been amazed by the receptivity of countries throughout Latin America as a result of this. It has changed our relationship with other countries in the region. And it has changed their relationship with Cuba and even with Venezuela. It has established creditability for the United States, in terms of our goals and hopes. And it really has opened up-- there is now a dialogue that is opening up that we may be taking part in with respect to Venezuela, and the credibility we have for that has come out of this transition of Cuba. Mr. Serrano. That is great. That is wonderful. And I will tell you, it was a special day in Cuba, for Barbara Lee, it was a special day for all of us in Washington to see that flag go up. I thought I would never see that happen, certainly in my time in Congress and maybe in my lifetime. So thank you. Thank you for your work. On a more mundane-type question, you have to switch now from an interest section that used to blare messages to the Cuban people and against the government to an embassy that behaves in a diplomatic fashion and so on. Physically and politically, is the change difficult or is it a transition---- Secretary Kerry. Well, it is not--I wouldn't call it--I wouldn't call it difficult. It has its challenges, yes, because we still have some limitations on the amount of equipment that we can bring in, but we broke through with an increase that haven't had in years so that we can refurbish the embassy, improve the equipment, have people be able to do a better job of managing the increased numbers of Americans now traveling. That is very important. We negotiated an increase in the number of diplomats that can be there. They are now able to travel throughout Cuba in greater numbers, and this will be important to being able to ascertain the needs of the Cuban people and being able to help us to do good diplomacy. So I think that, you know, as we have gone through this transition, we are recognizing that it is going to require additional funds from the committee. We have asked for that. But I think, over the course of time, this will evolve. And there is a natural growth. There is also some building of trust in the process, as we go forward here. They have to see that we are, in fact, adhering to the Vienna Convention and engaged in diplomacy and not other things. And we to have see that they are, in fact, improving human rights and improving the opportunities for their people. And that is how you will build the transition over a period of time. Mr. Serrano. Okay. And I will close with this. Is it true you are negotiating a Major League Baseball team in Cuba already? Secretary Kerry. I think there has been some discussion about whether or not there might be a visit at some point in time, appropriately, of the team. But I have nothing to do with any other negotiations. Mr. Serrano. Thank you, Mr. Secretary. Ms. Granger. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chair. Good morning, Mr. Secretary. Secretary Kerry. Good morning. Mr. Fortenberry. Thank you for being with us. Secretary Kerry. Thanks. Mr. Fortenberry. Mr. Secretary, I had the extraordinary privilege of being in the room with Pope Francis when he, in a very powerful moment, was given a small cross, a Christian crucifix. That crucifix had belonged to a young Syrian man who had been captured by the jihadists, and he was told to choose: convert or die. And he chose his ancient faith tradition; he chose Christ. And he was beheaded. His mother was able to recovery the body, recover this cross, and bury him. And she fled to Austria, which set the stage for this moment which I witnessed. Mr. Secretary, this is repeating itself over and over and over again against Christians, Yazidis, and other religious minorities in the region. In 2004, Colin Powell, when he was Secretary of State, came before the Senate Foreign Relations Committee--and I believe you served on that committee at that point--and declared what was happening in Darfur to be a genocide. There are 200 Members of Congress--in a bipartisan fashion, we have put our names on a resolution that is forthcoming that declares this genocide. There is a growing international consensus in this regard. The European Parliament has passed something similar. The U.S Catholic Bishops; Pope Francis has spoken out; Hillary Clinton has called it such; Marco Rubio; the International Association of Genocide Scholars. I want to note, as well, a word of thanks to you and President Obama for the quick action on Mount Sinjar that actually saved the lives of women and children, countless persons, who would have been wiped out and victimized. And so what I am urging here today is that you use the authority and power of your office to call this genocide; to help restore the rich tapestry of the ancient faith traditions in the Middle East; to stop this assault on human dignity and civilization itself; and to set, potentially, the conditions that we are all hoping and praying for that reestablishes stability and reintegration of these ancient faith traditions into the fabric of the communities and the Middle East entirely. I think the stability, the future stability, of the entire region depends upon this. Secretary Kerry. Well, again, Congressman, thank you for a very moving and eloquent description of the problem. And I appreciate--you were lucky to be in that room to witness that, and I certainly appreciate your reactions to it. And I share just a huge sense of revulsion over these acts, obviously. None of us have ever seen anything like it in our lifetimes, though, obviously, if you go back to the Holocaust, the world has seen it. We are currently doing what I have to do, which is review very carefully the legal standards and precedents for whatever judgment is made. I can tell you we are doing that. I have had some initial recommendations made to me. I have asked for some further evaluation. And I will make a decision on this, and I will make a decision on it as soon as I have that additional evaluation, and we will proceed forward from there. But I understand how compelling it is. Christians have been moved in many parts now of the Middle East, I might add. This is not just in Syria, but in other places there has been an increased forced evacuation and displacement, which is equally disturbing, though, you know, they aren't killing them in that case, but it is a removal and a cleansing, ethnically and religiously, which is deeply disturbing. So we are very much focused on this, and, as I say, I will make a judgment soon. Mr. Fortenberry. They have taken the conditions for life, as well as life, away from Christians, Yazidis, and religious minorities. And I bring up the declaration by former Secretary of State Colin Powell to demonstrate the power that the declaration actually has. Because, in doing so, he helped put a stop to that grim reality there in Darfur. I know you share deep sympathies in this regard. I just urge with you, plead with you, partner with us. There is a growing consensus that this is not only true and real but I think, again, it sets the condition for whatever future settlement we have to have. Thank you, Mr. Secretary. Secretary Kerry. Thank you. Appreciate it. Ms. Granger. Mr. Stewart. Mr. Stewart. Thank you, Madam Chair. And, Mr. Secretary, thank you for your service. And I have to say, I am just a little old Congressman, and I really mean that. I don't have the background that you do. But we view the world in a very different way. If men are from Mars and women are from Venus, we have kind of a whole Mars- Venus-Pluto thing going on here. And let me give you a couple examples, if I could. You said in your opening statement that you believe our alliance with Europe is strong and getting stronger. As a Member of Congress, especially as a member of the Intel Committee, I have a chance to travel and talk with world leaders, and this is what I hear again and again: Where is the United States? We don't know if we can trust you. We don't know if you are going to stand by alliances that have been in place for generations in some cases. We don't know if you are going to stand up to your adversaries. And the evidence of that isn't something that I see--it is not anecdotal. It is not something that I have read in newspapers. It is my own personal experience. Another example, if I could. You said that you are confident that we would defeat--you said Daesh, but most of us refer to ISIS or ISIL. I just don't believe this administration has a plan or the will to defeat them, and I am certainly not alone in that concern. And, with that being said, that we come from this from a different view, there are so many questions I would like to ask you. It is a target-rich environment. I would like to ask one quickly and then turn to Syria. Your own State Department has told us that the former Secretary has kept more than 1,600 classified emails on an unsecured server, of which your State Department classified 29, at least, as Top Secret. And recognizing that the definition of ``Top Secret'' is that their exposure would potentially cause exceptionally grave damage to national security, Top Secret is not a trifling thing. And so I wanted to read these emails. I wanted to know what was in them and what had potentially been exposed. And I am curious, Mr. Secretary, have you read these emails that were classified as Top Secret that were kept on the former Secretary's private server? Secretary Kerry. So let me answer the questions there that I think are relevant to the budget and the policy. On Daesh, yes, we have a plan. Let me be clear about that-- -- Mr. Stewart. Well, Mr. Secretary, I wasn't asking that question. I know that we---- Secretary Kerry. Well, you did ask a question. You said you don't think that we have a plan. And I want to make it clear we have a plan---- Mr. Stewart. OK. Secretary Kerry. And we are going to defeat--let me just finish now. Mr. Stewart. Well, actually, Mr. Secretary, this is my time, and I didn't ask that question. Secretary Kerry. Well, I thought it was your time to ask a question. Mr. Stewart. And my question was, have you read Secretary Clinton's emails that were on her server that have been classified as Top Secret? Secretary Kerry. No. No. I have not. It is not my job to do that. It is being thoroughly vetted through another process, and I think you know that. Mr. Stewart. Well, like me, though, it is not necessarily my job to vet that, but I was curious what was on those emails and what would be classified as Top Secret, so I went ahead and read them. I would encourage you to, sir, because I think that there is information on there that, as the Secretary, in your position, that you would want to know, I would think, what had been potentially been exposed. If I could in the last 2 minutes---- Secretary Kerry. We have appropriate people who are managing that through appropriate channels. And I think you know that---- Mr. Stewart. Well, I certainly do. Secretary Kerry [continuing]. Congressman. And I don't think it is appropriate to be characterizing something that the world can't read, which is being taken care of with more than 50 investigations by 8 or 9 committees. Honestly. Mr. Stewart. But, Mr. Secretary, I---- Secretary Kerry. So let's not fool round here. Let's talk about---- Mr. Stewart. Mr. Secretary, I didn't characterize those. It was your own department that characterized---- Secretary Kerry. No, you just characterized them without-- you said, I read them and I think it is important for people to have a sense of whatever. That is a characterization. Mr. Stewart. Well, the characterization of being Top Secret is not something that I characterized. Secretary Kerry. Right. And things get classified after the fact. And it happens in the Senate and the House. You folks send things on your BlackBerrys, and you send them sometimes from a foreign country. Mr. Stewart. Yes. But, having read these emails---- Secretary Kerry. Have they been classified? Mr. Stewart. But, having read these emails, I can assure you that this isn't a case of being overclassified. Having read them, I know that. Secretary Kerry. So let's come back to Daesh, because that is really important to the American people. We have taken back--the Iraqis have taken back 40 percent of the territory that they held in Iraq. We have liberated Tikrit--they have liberated Tikrit. They have liberated Ramadi. They are now moving on Hit. They are going to be doing that in Mosul. We have cut off the main road between Al-Raqqah and Mosul. The secondary roads are being cut off. There have been more than 10,000 air strikes. People have been eliminated from the battlefield. We are eliminating their money. They have cut their money to their fighters by 50 percent, in some cases eliminated it. We are taking away their source of revenue. And President Obama made it clear at the very beginning this was not going to happen over night, it is going to take time. There are a lot of people in that part of the world who are happy to fight to the last American. And the fact is that we are trying do this without having the last American on the ground, but, rather, getting forces there, training them, working them. We have special forces on the ground. Americans are in Syria; Americans are on the ground in Iraq. We are helping them to help themselves. And I think most Americans believe that is a pretty good way to get it done. I have heard the handwringing. And I referred to the handwringing in the beginning of my comments. I hear it. But we are making a difference. We have reassured Europe. We are going up to $3.4 billion. We have redeployed troops. We rotate troops through the forward frontline countries. And, frankly, we do more than any other country in the world---- Mr. Stewart. Well, of course we do more than any other country. We are the United States. And my time is up, so I will just conclude with this. There is no question that we have made some progress there. I wouldn't say that that isn't true. I would say--and you call it handwringing in a pejorative way, as if, you know, we are children who are just sitting with---- Secretary Kerry. Because it doesn't comport with the facts, Congressman. Mr. Stewart. There are legitimate concerns---- Secretary Kerry. The facts are that we are getting these things done. The facts are---- Mr. Stewart. Well, Mr. Secretary---- Secretary Kerry [continuing]. That we are providing for these folks. Mr. Stewart [continuing]. We could have an exchange about whether we are getting these things done. But it a legitimate concern on many of our part whether this administration has the will and a plan to move forward on this and to actually defeat them. Because I am not the only one who questions whether that is the case. And it is not only Americans who question that, as well. Many of our allies do. Madam Chairman, I apologize for going over. I yield back. Ms. Granger. Thank you. Secretary Kerry. Can I just say, Madam Chairman---- Ms. Granger. We have one last question from Mrs. Lowey and from me. Mrs. Lowey. Mrs. Lowey. Madam Chair, I just want to say I think the discussion of the emails in this forum, when we have the whole world here, seems inappropriate. And if I am not mistaken, in all the discussions I have heard, that Secretary Colin Powell had the same system in place. And, in fact, the emails that were sent to both Secretary Powell and Secretary Clinton were not classified at the time they were sent. Secretary Kerry. That is correct. Mrs. Lowey. So I think, in looking at the whole process-- and I am sure you, as the Secretary of State, are looking at the whole process. But I don't think this is the appropriate forum to deal with it. Ms. Granger. But I believe you had a question, didn't you? Mrs. Lowey. And I did have another question. Thank you so much. What I was so concerned about, Secretary Kerry, when you were talking about arms shipments outside of the JCPOA being turned around--and isn't it wonderful that they were turned around?--my reaction was, is this a cat-and-mouse game? Or is there a real understanding with Iran that they have a responsibility to comply with the U.N. sanctions, the other sanctions in place, and they shouldn't be arming other nations in the region that are just causing one incident after another where people are dying? So I am a little puzzled about that and why Iran is not complying with the other sanctions that are very clearly in place. Secretary Kerry. I think, Congresswoman, what you have is-- sometimes independent actions by independent entities is very hard to measure. But, as you know, the IRGC opposed the Iran agreement bitterly. Mrs. Lowey. Right. Secretary Kerry. The IRGC wanted to have a nuclear umbrella, and the IRGC resented--the IRGC does certain things. And so we, in contacting the government, made it clear that we would take steps if indeed they were going to deliver anything. And since nothing was delivered, there was a response that seemed to be appropriate. Now, it is not a cat-and-mouse game, no. If we find something happening, we are going to respond, as we did on the missile launch. But---- Mrs. Lowey. May I ask you--because I know we are all going to be cut off and you have to leave. But, Mr. Secretary, with great respect, when you said the IRGC is independent---- Secretary Kerry. No, I said sometimes things happen. I am not saying that. We don't know what happened. What we do know is that nothing happened; we didn't have a transfer. We don't know for sure what was on there. We didn't inspect it. So we saw a convoy, and we told them it would be better not to push the envelope here, and they didn't. Now, I didn't know specifically what was loaded in there or what--I am just saying to you that I think you need to have your facts. When we have the facts, like the missile launch, we responded, and we will in the future. We do know, also, that there are weapons that have come out of Iran, gone through Damascus, gone to Lebanon. And we have made it very clear, very clear, that that is an invitation to response, no question about it. Mrs. Lowey. Because we are limited on time, I will pursue this with Secretary Lew, because I understand these sanctions are being overseen by his department. Treasury is responsible for this series of sanctions. And I think it has to be made very clear that this is unacceptable even if we don't catch you. Thank you. Secretary Kerry. Well, I mean---- Ms. Granger. Thank you. Mrs. Lowey. Thank you for your work. Ms. Granger. Mr. Secretary, the committee has given the administration significant funding and flexibility to address local health threats, including broad authority to use funds to address public health emergency of international concern, and, of course, that is Zika, which has been declared by the World Health Organization. Mr. Secretary, to use this authority, you have to declare it in the national interest to respond to such emergency. I am going to ask a quick question because all I need is one word, ``yes'' or ``no.'' Do you intend to make this declaration so you can access existing funds immediately to fight the Zika outbreak? Secretary Kerry. You are right, I do have that ability. And the Zika virus is still being analyzed and evaluated with respect to exactly what it is going to require, how much it is going to require. We are concerned about it, which is why we have requested the additional money. But we are also concerned about Ebola on the other side possibly resurging. And, yes, there is some money left over in there, but we don't know how much either one is really going to demand. So we are loathe to take what has already been appropriated for Ebola, with Zika coming down the line and yet to be determined how big and how broad it is going to be. So it is premature to make that decision. I am well aware of the authority, obviously. If it suddenly started to move more rapidly and we had a greater sense of broad threat to the public which required a more immediate response, obviously we would move in an emergency way to take from wherever. But right now that is just not the way to deal with it, in our judgment. We are trying to keep them on separate tracks. Ms. Granger. As we conclude the hearing today, I wanted to raise an issue that I continue to hear about from my constituents and also from Members. So for this one, just please provide for the record an update on the refugee screening process and highlight what changes have been made to the process to better ensure that refugees admitted for resettlement in the United States do not pose a threat to our country or the community in which they are resettled. That came up about the Syrians that we were looking at. Secretary Kerry. Yep. Ms. Granger. So if you could submit that for the record. Ms. Granger. I thank you again for your time, I thank you for your energy and all the effort you have given to world crises. Secretary Kerry. Thanks so much. Ms. Granger. Thank you. Secretary Kerry. Madam Chairman, again, I just want to say to you thank you. You have been terrific. When I have needed to call you urgently, you have been available. And, likewise, the ranking member. You both have been enormously helpful, and we are very grateful for the bipartisan effort. Thank you. Ms. Granger. Thank you. This concludes today's hearing, and members may submit any additional questions for the record. The Subcommittee on State, Foreign Operations, and Related Programs stands adjourned. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Tuesday, March 15, 2016. DEPARTMENT OF THE TREASURY INTERNATIONAL PROGRAMS WITNESS HON. JACK LEW, SECRETARY, DEPARTMENT OF THE TREASURY Opening Statement of Chairwoman Granger Ms. Granger. The Subcommittee on State, Foreign Operations, and Related Programs will come to order. I would like to welcome Secretary Lew to discuss the fiscal year 2017 budget request for the Treasury Department's International Affairs programs. The funding under review today supports contributions to international financial institutions, such as the World Bank and regional banks, other contributions to multilateral funds and technical assistance programs. The budget request totals $2.3 billion, a $5 million increase above fiscal year 2016. While this may seem like the budget is virtually straight lined from last year, the budget includes a number of new requests. Turning to the World Bank and the regional development banks, I remain concerned about the funds this subcommittee provides. I would like to hear from you today about the efforts these institutions are making to publicly track funds and provide independent evaluations of program effectiveness. Additionally, I have been following the growth and contributions by USAID and the Department of State to trust funds managed by the World Bank and other financial institutions. I am concerned about the lack of oversight of these taxpayer dollars. The 2016 omnibus included a shift in U.S. resources at the IMF from emergency fund to the general quota and required a number of reforms. I hope you can discuss any recent developments. Also included in the administration's request is $250 million for the Green Climate Fund. Mr. Secretary, I don't have to remind you of the strong opposition by many members of Congress to any funding for this purpose. Finally, the United States government is providing an increasing number of loan guarantees to foreign governments. I will ask you about loans and loan guarantees later. I know you have taken a personal interest in boosting economies of our allies and partners. Secretary Lew, thank you for being here today. You have many important topics to discuss. And I will now turn to my ranking member, Mrs. Lowey, for her opening statement. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mrs. Lowey Mrs. Lowey. Secretary Lew, I join Chairwoman Granger in welcoming you here today. I thank you for your service to our country. The President's 2017 budget request reflects the importance of our continued investments in international financial institutions, such as the IMF and the World Bank, which offer a cost-effective way to leverage taxpayer dollars and promote our own economic and national security interests. Additionally, the Treasury Department leads the world in disrupting terrorist financing networks, enforcing sanctions against violators of international norms and providing technical assistance to countries serious about strengthening their own financial management and accountability systems. Your department plays an essential role in these vital efforts, and I look forward to hearing from you on how the request would further these important undertakings. First, with regard to Ukraine, a U.N. panel reported last week that more than 9,000 civilians have been killed since the conflict started in April 2014. Given Russia's ongoing aggression, I would like to know what effect U.S. and E.U. sanctions have had on Putin. Specifically, I would like to know if Russia has retaliated economically against us or our allies, and if there are additional punitive economic measures we should be considering. Second, Iran recently gained access to billions of dollars in unfrozen assets following implementation of the Joint Comprehensive Plan of Action. Please update this subcommittee on how the regime has used the money so far and the effectiveness of U.S. sanctions on Iran for its financial support of terrorism, human rights abuses, export of weapons, and ballistic missile testing. Third, we should all applaud the climate change commitments reached last year in Paris, as well as the announcement last week by President Obama and Canadian Prime Minister Trudeau on reducing methane emissions. Failure to provide the adequate resources to address an impending environmental catastrophe risks creating conditions for even greater dangers, including failed states and populations more vulnerable to conflict and radicalization. Instead, U.S. efforts to combat climate change helps developing countries increase their own resiliency, mitigate instability caused by population displacement, and address declines in the global food and water supply. That is why it would be very useful to hear specifically how the administration's request of $409 million in Treasury programs to address climate change, including the Green Climate Fund and the Global Environmental Facility, would help protect the environment, U.S. national security interests, and job creation at home. Fourth, faced with limited resources, members of our subcommittee constantly weigh funding for bilateral versus multilateral programs. Unfortunately, last year the House mark eliminated funding for several international financial institutions, which would have jeopardized the interests of the United States and harmed struggling communities abroad. I hope we can avoid such divisive and counterproductive proposals this year, and instead recognize that U.S. confidence in these institutions is paramount. I look forward to hearing from you on the administration's oversight of the operations of the World Bank and other international financial institutions, including for example, the ongoing review of the World Bank's environmental and social safeguards. Finally, Congress approved last year the long-overdue IMF quota and governance reforms. I would appreciate hearing how these reforms have helped advance U.S. interests in the institution and bolster equitable participation in global economic decisions. And thank you very much for being with us today. Ms. Granger. Secretary Lew, please proceed with your opening remarks. There are many issues that members want to discuss during our time with you today, so I would encourage you to summarize your remarks so that we have time for you to address questions. The yellow light on your timer will appear when you have 2 minutes left. Opening Statement of Secretary Lew Secretary Lew. Thank you, Chairman Granger, Ranking Member Lowey. It is good to be here to discuss the 2017 Treasury budget request. Since my testimony last year, our economy has continued its record-breaking streak of private sector job creation, which has reached 6 consecutive years and more than 14 million jobs. Over the last 2 years, we have experienced the strongest job creation since the 1990s, and at 4.9 percent, the unemployment rate is half its peak in 2009. We continue on a sound fiscal path, with the deficit from fiscal year 2009 to 2015 falling by almost three-quarters, to 2.5 percent of Gross Domestic Product. With the passage of the omnibus spending bill in December, we helped to build on this momentum. It will contribute to our economic growth and it will help to rebuild our international leadership. As you both noted, the agreement included critical IMF quota and governance reforms that have helped to preserve the central role of the United States in the international economic system and to advance our economic and national security objectives. The budget agreement also demonstrated that we have the capacity to find common ground on difficult issues. It lays the foundation for addressing some of our long-term challenges, but a lot of work remains. That is why this year's budget includes critical investments in our domestic and national security priorities. Treasury's 2017 budget request builds on a significant year for international development, which in addition to IMF quota reform, saw the adoption of the Addis Ababa action agenda and the 2030 agenda for sustainable development, and culminated in a successful Paris climate agreement. Our fiscal year 2017 request makes investments in some of the most cost-effective ways to reinforce economic growth at home and respond to critical international challenges like poverty, environmental degradation, and food insecurity. For example, the World Bank's International Development Association provides a cost-effective means to support the world's poorest countries. Every dollar contribution from the United States leverages almost $13 in contributions from other donors and the World Bank's internal resources. Our request also begins to address some of our prior unmet commitments to the international community and provides additional funding for Treasury's Office of Technical Assistance (OTA), to broaden its efforts to build effective public financial institutions by advising and training government officials in developing countries. These investments in multilateral development banks (MDBs) like the World Bank and the regional development banks help to support our national security objectives, increase economic growth, and reduce poverty. The assistance and technical know- how of the MDBs has nurtured the economic reforms, infrastructure and social investments that have driven the growth of some of our most strategic trade partners. They play an important role in building sustainable and transparent economic growth in emerging and developing countries, and more and more we have come to see the MDBs as vital partners in helping to address national security threats. In addition to meeting our current commitments to the MDBs, it is urgent that we work with Congress to address our prior unmet commitments, which now approach $1.6 billion. At the World Bank, this is particularly urgent because failure to meet our commitments this year will result in a loss of U.S. shareholding that could impact our veto power, damage our credibility, and weaken our ability to shape policy priorities. When it comes to global challenges like climate change, food insecurity and gender imbalances, the world continues to rely on multilateral institutions, and strong U.S. leadership within them, to help developing countries make concrete investments. And U.S. contributions to specialized multilateral funds leverage resources from other donor countries and the private sector, significantly multiplying the impact of American taxpayer dollars. In particular, I want to focus on two such funds: the Global Environmental Facility (GEF) and the Green Climate Fund (GCF). The GEF delivers benefits to the United States and global community by protecting the environment, including preserving the ozone layer, supporting fisheries, combating wildlife trafficking, and reducing mercury pollution that can contaminate our food supply. As you know, the President pledged $3 billion to the GCF, which our budget request supports in part. The GCF is designed to be a key element of the collective global effort to build resilience and reduce carbon pollution. The fiscal year 2017 budget request also includes important funding for a variety of other programs, including the Central American & Caribbean Catastrophe Risk Insurance Program, the Global Agriculture and Food Security Program, the International Fund for Agricultural Development, and the World Bank Global Infrastructure Facility. Finally, Treasury is seeking $33.5 million for OTA, an increase of $10 million over the fiscal year 2016 enacted level. Our request reflects a strong and increasing demand for OTA to support U.S. foreign policy, national security, and economic priorities in Central America, Africa, Asia, Ukraine and other regions. The request also supports my commitment at the 2015 Financing for Development Conference to double OTA's assistance and significantly increase U.S. Government support for domestic resource mobilization by 2020, helping countries to better raise and manage their own financial resources. Treasury's international programs are some of the most cost-effective ways to reinforce economic growth at home and to respond to critical challenges abroad. Specifically, U.S. leadership in international financial institutions enables us to influence how and where resources are deployed, often on a scale that we cannot achieve through our bilateral programs alone. It is crucial that we continue to have bipartisan support for these institutions to ensure that our influence remains as strong today as it has been over the past several decades. And with that, I look forward to answering your questions. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. We will begin with the questions. I want to remind members and the witness that you have 5 minutes for questions and the responses. The yellow light on your timer will appear when you have 2 minutes remaining, and it will be followed by a red light which means you get thrown out of here, I think--is that what happens? If time permits, we will have a second round of questions. I will begin. The fiscal year 2016 appropriations bill included funding and authority for a third loan guarantee for the government of Ukraine, but this agreement has not been finalized by the administration. Loan guarantees from the United States have helped boost Ukraine's sovereign rating, which was raised last fall. However, in fiscal year 2017, there are no funds requested for another loan guarantee. Mr. Secretary, I am concerned about Ukraine. I know that you are concerned. The administration is also concerned about Ukraine. I know from the press that there has been a lot going on with their government. I know they need the U.S. loan guarantee, but I think all of us are concerned that we ensure that reforms are being implemented by that government. How can the United States use its leverage? Secretary Lew. Chairman Granger, I think we agree completely on the importance of Ukraine, and we have had a great working relationship with you and with the subcommittee to show united bipartisan support for Ukraine. The two loan guarantees that we have put in place have been essential as part of an international package to give Ukraine the chance to rebuild its economy in the face of terrible aggression and to get itself into a place where it has the possibility of a successful future. In fact, they have turned the corner sooner than expected and had a period of economic growth earlier than expected. We are working with them on the third loan guarantee. The details are still being worked out. One of the conditions of each of our loan guarantees is that they meet their fiscal commitments and they also meet the commitments to government reform. We have been very clear, as has the IMF, that both of those commitments are critical, not just to keep the support flowing, but for Ukraine to have a viable future. I know this is a period of turmoil in Ukraine politically; we continue to work with the finance ministry on the terms of the loan guarantee. Obviously, the situation has to settle down politically for them to either form a new government or not. The test will not change; the test will be, do they stick to their fiscal reforms, both on the spending and the tax side? And do they stick to their anti-corruption reforms, which are just as critical. We have made that, at the highest level, an issue. I invest a lot of time personally with the government of Ukraine. They value the role that we play; frankly, they value the fact that we keep reminding them what they need to do to have a stronger future for their country. Ms. Granger. I know you and I have discussed that and how important it is. I have been there three times, and we all agree we would like to help, but they have to help themselves, and I appreciate your staying with that. The second question I have, Iraq has faced declining revenues because of low oil prices, we all know that. The government of Iraq has stated that they may raise funds on the international capital markets later in the year. In the fiscal year 2016 omnibus, authority was included for up to $2.7 billion in direct loans for Iraq for military purchases. In the fiscal year 2017 budget request, the administration is requesting a second loan for Iraq for military assistance, as well as a sovereign loan guarantee for economic assistance. First, what is the timeline for issuing the loan that was authorized in fiscal year 2016, and how much funding will be needed to subsidize that loan? And second, what actions will the government of Iraq need to take to receive the second loan for military assistance and the new loan guarantee requested in fiscal year 2017? Secretary Lew. Chairman Granger, the support for Iraq, we believe is critical. Iraq needs to have economic stability if it is going to have political stability. We are urging Iraq to take very tough actions to counter ISIL and to be a partner in that effort. But with the lower price of oil, they are under a great deal of economic pressure. I think the Foreign Military Financing (FMF) action was an important way to make sure that they have the resources they need to build their defense, but also to create the cash flow for them to manage towards a more stable, economic future. We are probably several weeks away from finalizing the details of the first FMF loan. The State Department takes a lead on that; we are consulting with them. The exact cost of it will depend on the terms. I believe that the outer limit is $250 million, but it could be less than that, depending on the duration and the tenor of it. We look forward to working together with you on additional provisions for 2017. One of the things that Iraq will have to do, not unlike the conversation we just had about Ukraine, is put some economic reforms in place. They are in the midst of working with the IMF on a standby agreement. That would put in place the architecture for reforms that we could build on with our loan guarantees. I think they understand that it is a package and that they need to have those reforms in place. It has been a challenge, but that is something that I think, again, they need to do it for their own future. And it will be something that our ability to enter into the loan guarantees is connected to. Ms. Granger. Thank you. Just one part about the loan guarantees. The dispute between the Kurds, and their regional government and Iraqis over oil revenues, the U.S. must use its influence to try to resolve this matter. I think we have all watched the Kurds and what they have tried to do, and the real risks they have taken. So, finding a solution to this issue, I think, and I believe it should be a condition of Iraq receiving loans and loan guarantees. Do you agree with that? Secretary Lew. Treasury has consistently encouraged the government of Iraq and the Kurdistan Regional Government (KRG) to work together to implement the revenue sharing agreement. My understanding is that their 2016 budget contains provisions for the resumption of the 2015 oil deal. We will continue to work with them, because having an orderly resolution of that internally would be the best outcome. Ms. Granger. Thank you. Mrs. Lowey. Mrs. Lowey. Thank you. Mr. Secretary, I remain very concerned with how Iran will spend billions of dollars of unfrozen assets, which has been valued between $50 billion and $150 billion. Just 2 weeks ago, Iran's ambassador to Lebanon pledged $7,000 to each of the families of Palestinian terrorists who committed acts against Israelis. In your estimate, exactly how much money has Iran acquired since implementation of the JCPOA? What is the administration's strategy to combat Iran's funding of terrorist groups and supply of weapons, and do you have numbers for how much money Iran provides Hezbollah, Hamas, Palestinian, Islamic, jihad and Shia militias in Iraq? And do you believe these figures are likely to increase as a result of sanctions relief? Secretary Lew. Congresswoman Lowey, let me answer that question as best I can in this room, and we can have a conversation in a different setting where we possibly could go into some more detail. Iran's nuclear commitments have been capped. That is very important; it means that Iran is backing out of its pathway to a nuclear weapon. We have, pursuant to the agreement, lifted only the nuclear sanctions, but we have lifted the nuclear sanctions, as we have to--if there is an agreement--that is the purpose of sanctions to get the policy changed, and the sanctions have to accordingly be reduced. We have not lifted sanctions on terrorism, we have not lifted sanctions on regional destabilization, we have not lifted sanctions on human rights violations. We continue to work, as we always do, to identify targets where there are actions taken that require designation; we have made a number of designations since the agreement was reached, we will continue to do so. In terms of the total amount of money, it has not changed from where we were when we were presenting the agreement over the summer. There is roughly $100 billion of resources out there, of which only about $50 billion could actually go back to Iran, because the others are tied up for reasons that make them unavailable. Iran's own estimate is they have, theoretically, access to maybe $30 billion. We have actually seen a very slow return of those monies to Iran. They are having a challenging time dealing with the international financial system, but that money will begin to flow. One of the things that we know is that the backlog of needs in Iran is tremendous. The domestic pressure is for spending on domestic needs, both human and infrastructure. As I said in July, I wish I could say not a penny would go to malign purposes, but money is fungible and I cannot say that. What I do believe, and what we continue to see, is that the activities that Iran funds that we very much want to stop, things like the funding of terrorism, are being stressed, which means they are not accessing the kinds of sums that would give you reason to believe that there is a significant change in the shape of what they are doing. But I am happy in a different setting to go into whatever detail we have. Mrs. Lowey. I would like to do that, because I am very concerned, obviously, about where the money is going and how much more money Iran might receive. If you can share with me the status, which has been raised here before, of multilateral bank loans to Iran and what steps is the department taking to ensure international financial institutions are complying with United Nations sanctions on Iran? And can you assure this subcommittee that the U.S. will continue to oppose any World Bank loans to Iran until they are in compliance with all bilateral, multilateral sanctions, human rights, missile testings, supporting terrorism, et cetera? Secretary Lew. We do continue to oppose them. There have not been new loans to Iran, there are some old loans out there, I believe. I am happy to get back to you with the details. But we have made clear that we will continue with the position that we have had. Mrs. Lowey. I see my yellow--I have a couple more minutes. The administration has pledged to strictly enforce existing sanctions in Iran, other than those relaxed under the JCPOA, and that is why the SFOPS bill last year included a reporting requirement on the status of implementation and enforcement of bilateral multilateral sanctions against Iran, and actions taken by the U.S. and international community to enforce such actions. Now, if you could quickly--otherwise, we will continue-- what is the status of the report? Beyond the 11 entities supporting Iran's missile programs, has the administration imposed any sanctions targeting Iran's non-nuclear activities since the JCPOA was reached? For instance, sanctions for supporting terrorism, supporting the Assad regime, human rights violations, and supporting Shiite militias in Iraq? Secretary Lew. In terms of the report, my understanding is the report is due in June or July, and the work is being done on it. I am happy to get back to you with details on that. In terms of the sanctioning or the designation of entities, we have continued; 11 Hezbollah-related targets were sanctioned under terrorism authorities for terrorism-related activities and a number for missile activities. I am happy to get a list to you. Mrs. Lowey. Thank you, and I know that the chair and I, and this committee are very concerned. We understand that is separate from the nuclear agreement. Secretary Lew. Yes. Mrs. Lowey. But I think it is important that we get specifics and the administration is aggressive in making it clear to Iran that this is serious and we are going to stop it. Secretary Lew. We have been very clear, throughout the negotiations and since, that the lifting of nuclear sanctions does not take away the sanctions on terrorism, regional destabilization or human rights. The designation process, as you know, is a very time- consuming and cumbersome one. We will continue to go through it, as we have information, as we have the ability to make designations, and it is something that I pay a lot of attention to. Mrs. Lowey. Thank you very much, Madam Chair. And just one other comment, when you are preparing this report, I am very interested in the transfer of that $7,000 to the Palestinians who are committing terrorist acts. Thank you. Ms. Granger. Mr. Diaz-Balart. Mr. Diaz-Balart. Thank you, Madam Chairwoman. I want to first thank Mrs. Lowey for that line of questioning, and I think we all share your concerns. And I would like to be there if you are going to have a classified on that. Mrs. Lowey. Thank you. Mr. Diaz-Balart. Mr. Secretary, good to see you sir. Let me stay on the sanctions issue, but in a different part of the world. You now have more sanctions relief to the Castro regime, but we are asking nothing in return. Your new regulations effectively authorized the Castro dictatorship to use the U.S. financial system as a flow through for their international transactions. Mr. Secretary, let's be very clear. The Cuban people aren't shuffling dollars through Europeans banks or through Panama. It is only the Castro regime. Let me give you an opportunity to correct me. Do you know what percentage of non-regime players, Cubans, are using the international system to--you know, for financial ways, how many are using it? Is it only the regime, which is 100 percent according to the numbers that I have. Do you have different numbers or is it 100 percent, just the regime that you are facilitating this for. Secretary Lew. Congressman, I know that we disagree on the---- Mr. Diaz-Balart. I am just trying to get some facts. I am trying to get the facts from you. Secretary Lew. I am happy to ask for the technical staff to come back. Mr. Diaz-Balart. Well, you have a number of--you have a dozen people here with you. Secretary Lew. Well, the purpose of our relief of the Cuban sanctions is within the law, not go outside of the bounds of the law, but within the law, to try and increase contact between the United States and Cuba because the policy of the last 50 years has not worked. Mr. Diaz-Balart. Mr. Secretary, again, there are a couple of things here. It is not Cuba. What you are doing is helping and only helping the regime. I want to help Cuba. But you are helping--what you are doing is only helping the regime, unless you can correct me. That is well--another area, where you are only helping the regime. Secretary Lew. I am happy to go through the elements of what we have done, but we have---- Mr. Diaz-Balart. Well, I am trying to get some facts from you sir. Secretary Lew. The facts are what we have tried to do is increase people to people contact. We have tried to increase the availability of communications for the Cuban people. Mr. Diaz-Balart. I am asking you very specifically about the financial transactions. Secretary Lew. I--the bank accounts---- Mr. Diaz-Balart. Right. I am hoping that you can prove me wrong, but I will bet that you are not going to be able to. Moreover sir, this isn't for telecom or ad sales--which, by the way, are exempted by law. It is a blanket authorization for all of the regime's activities. Now, what statutory authority do you perceive to have to authorize such transactions which are clearly inconsistent with federal law? Secretary Lew. Well Congressman, we have complied with all of the prohibitions, both in the embargo and in the specifically, prohibited financial activities. What we have done is we have addressed the sanctions that were put in place by executive action, removing those executive actions. We have been very careful to stay within the bounds of what is not an open space. We have made clear that we would do otherwise if we did not have those constraints, but we have acted within those constraints. Mr. Diaz-Balart. Mr. Secretary, again, what I am asking is what statutory authority do you have? Do you perceive that you have? Because federal law is very clear that there are exemptions for three areas and what this does is way beyond that. So, what statutory authority--where is that statutory authority? Secretary Lew. Well, there are regulations that were put in place under the Trading with the Enemy Act by executive action. Those are being changed by executive action. None of the activities prohibited by the Libertad Act are addressed by the changes made. We have obviously made the changes, very cognizant of the legal landscape. We have worked, within that, to relieve what we can relieve, but not that which we cannot. Mr. Diaz-Balart. Mr. Secretary, you are aware that General Clapper said that when it comes to threats from foreign intelligence entities, he said, Russia and China pose the greatest threat, followed by Iran and Cuba. You are aware of that? Secretary Lew. I have not seen that comment, but---- Mr. Diaz-Balart. All right. Well, you should be aware of that. So, again, in this particular area, how are you going to--what are you going do to help, make sure that you are not helping to finance--since again, these--this part of the new reg that I am talking to you about, deals which allow the regime access to U.S. financial institutions? What steps are you going to take to make sure that it is not used in a way to go against our national security interests, which again, according to General Clapper, after China and Russia, Iran and Cuba are the next greatest threats? Secretary Lew. As you know, the embargo still limits very, very significantly, what the amount of activity between the U.S. and Cuba can be. We have taken the actions we have taken in order to open up the ability for commerce, and people-to- people contact and the financing necessary to support that, but not in violation of the provisions that prohibit certain kinds of financial activity. We have worked in that space because we think the policy of the last 50 years has failed. That this is a way to advance the cause of change in Cuba and to get to a result which is a-- benefit to the Cuban people. Mr. Diaz-Balart. Mr. Secretary, my time is up. Hopefully, we will be able to continue the conversation. Thank you madam. Ms. Granger. Mr. Ruppersberger. Mr. Ruppersberger. Secretary, I am going to not leave the issue of these sanctions, but I want to get into Iran. First, in response to Iran's illegal missile tests, the U.S. imposed sanctions on 11 entities and individuals for the provision of missile related technology to Iran. The Iranians paid for that technology, but no financial institution was sanctioned for the transaction. And the technology arrived in Iran by either boat or plane and yet no shipping line or airline was sanctioned. Now my questions are, shouldn't we be going after the infrastructure that allows Iran to continue its missile program? And, did any financial institution or transportation company facilitate a transaction that supported Iran's missile program? Also, can you commit to sanctioning companies that facilitate the provision of support to Iran's illicit activities? Now, on the recent missile sanctions, Congress was notified of the sanctions. And then the administration pulled back the sanctions till after implementation day and that was the release of American prisoners. During the period of delay, were the sanction companies able to move assets, such that when the sanctions were issued, there were no assets to freeze. And where--were any assets belonging to these entities actually frozen? Now, that is a lot out there if you want me to resay it, but basically, where are we as it relates to the sanctions with Iran? Secretary Lew. So Congressman, we have, as you indicated, designated the entities that we identified that were involved in supporting the missile program in Iran. We continue to investigate other entities and can only bring an action when we have a fully developed foundation for a designation. We are continuing to build additional actions. I think that it is premature to talk about entities until we reach the stage of designation, but we are looking at a wide range of entities involved in supporting the missile program. Mr. Ruppersberger. Another issue. I think the public is confused about the appeal with Iran as it relates to nuclear. And no question, that that did stop Iran from moving forward, which really, probably solidified some very serious issues that could have occurred with other countries buying nuclear weapons if that was not done. And I think it is also important to note, that we have still sanctions as it relates to terrorism and other issues that you talked about. But this is very important we continue moving ahead because, in my opinion, Iran is still exporting terrorism and that type of thing. I see I still have a green lignt--so I want to get into another area very quickly. And that is the issue of the China's new Asian infrastructure investment bank. Those of us who have been in numerous countries--and I know that I would see in Kenya and in Libya and--well, not Libya, but I saw in other different countries--what? Yemen, is an example. A lot of Chinese buildings. Like I remember having a conversation with the former President of Libya, I mean--Yemen. I think it is such a tough place now, forget it. In saying, the Chinese give us a lot, but we just still don't like them. So, I was glad to hear that, but when we are talking about the Chinese--going forward with this new infrastructure bank, this could have impact on us. How do you think we should deal with that? Secretary Lew. So our position on the Asian Infrastructure Bank (AIB) has been, on the one hand, we think it is a good thing that there is more support for international infrastructure investment in Asia. But it is very important that it be done in a way that is consistent with standards, like the standards that we pursue in our multilateral development banks that we are involved in. We have made that case to all the participants, we have made that case to the Chinese, and I think we have had a lot of success. They have now adopted operating rules that are very much leaning towards observing the kinds of norms that we support in the multilateral institutions that we contribute to. We are not part of the AIB, so we are not in the inside making those rules, but I think our effort on the outside to put a bright light on that---- Mr. Ruppersberger. But my issue there is that could be dangerous. A lot of our European allies, a lot of our allies are using this fund, which is really buying relationships and influence. Secretary Lew. But it is an international fund, they will have to work on a multilateral basis, not just a bilateral basis. I think what you have described is a fair description of their bilateral economic activities. What we have made clear is that for a multilateral institution, they are going to have to operate in a different way, where it violates norms that a lot of the countries that have signed up to the bank would have to object to. The jury is out, they have not made their first loans yet. I think that a year ago the discussion of standards in the context of the Asian Infrastructure Bank was a soft conversation. I think because we have put a bright light on the importance of that, it has become a very loud conversation, with the right commitments being made. But now the question is what will the actions be, and we will start to know when they make loans. The more they partner with the multilateral institutions that have high standards, the more likely they are to operate in a way that is consistent with the kinds of norms that are good for a growing, global economy, and other values that we pursue in the multinational space. Mr. Ruppersberger. OK. Thank you. Ms. Granger. Mr. Dent. Mr. Dent. Thank you, Madam Chair. And I would like to follow up on the questions of Mr. Ruppersberger and Mrs. Lowey with respect to the Iran sanctions. There have been more ballistic missile launches by the Iranians, in violation of U.N. resolutions and certainly not in the spirit of the nuclear agreement. Billions of assets have been unfrozen. Iran, in my view, is now in a position to become much more of a regional hegemon. Right now, the Russians are up at the U.N. protecting Iran, voting with them, protecting them even though the Iranians have violated the U.N. resolutions with respect to the ballistic missile launches. They have humiliated Ambassador Power, put a thumb right in her eye and our country's eye. The question I have is: Do you believe that Russia is more aligned with the United States or more aligned with Iran when it comes to Syria and the broader Middle East crisis? Secretary Lew. It is a complicated question to explain what Russia's motives are. Mr. Dent. It is not so tough--on Iran right now. Secretary Lew. Let me explain how I see the Iran agreement coming together and the role that the international community played. Russia was part of the agreement to put sanctions in place and to enforce the sanctions. It brought Iran to the table that led to a nuclear agreement. The nuclear agreement has real important impact. It means that Iran is now out of the process of developing a nuclear weapon. I totally agree that the missile launches are provocative and violate other understandings. We have made clear through our efforts to sanction entities and our indication that we are going to continue to identify targets as we have the cases to do so, and that we will take the appropriate actions. But I think the importance of the global community being together forcing Iran to the point where it had to back away from its nuclear program is a very very significant accomplishment. Mr. Dent. I can't believe, though, that knowing how the Russians are behaving with respect to the missile launch, do we think that they would actually ever support us on a snap-back sanction in the event the Iranians were to violate the nuclear agreement? This does not portend well. Secretary Lew. The way the snap-back sanctions were set up, we have the ability, unilaterally, to snap back sanctions on our own and no party in the security council has the ability to block the snap-back. So the snap-back was set up in a way where if there is a violation of the nuclear agreement---- Mr. Dent. But what if they don't impose sanctions themselves? I mean, if the--if our partners don't impose-- reimpose sanctions? Secretary Lew. Well, first of all, to the extent that there are U.S. sanctions, those have consequences beyond the U.S. Secondly, to the extent that the international sanctions snap- back, those have international binding power. We cannot force other countries to put bilateral sanctions in place, but the agreement set up the snap-back so that both U.S. and U.N. Security Council sanctions will snap-back if there is a violation. There has not been that violation of the nuclear agreement. So the fact that these missile launches are being made it not a violation of the body of the nuclear agreement. But we are taking actions unilaterally in response to that and we are working at the U.N. to---- Mr. Dent. If I may,--it seemed that the Iranian nuclear agreement was designed in large part, in the President's words, to help Iran get right with the world. It seems to me, based on the actions I have seen with the missile launch and their other nefarious activities in the Middle East, that they are not getting right with the world. Do you think they are getting right with the world? Secretary Lew. That is not what I think the purpose of the nuclear agreement was. The purpose---- Mr. Dent. That is what the President said. Secretary Lew. The purpose of the nuclear agreement was for Iran to be forced out of the business of developing a nuclear weapon so that they would not have it and they could not transfer it to the third party that would destabilize the region and the world. Having accomplished that is an enormous contribution to greater peace and stability. That does not mean that Iran is a good actor in other areas. That is why we still have all the other sanctions, tools and actions in place. Mr. Dent. It just seems to me that because of this agreement, we lost all our leverage in that part of the world, and it doesn't seem that, in my view, that the Middle East is-- that we are getting Iran to help us in any way diplomatically on any issue. There is no detente. Secretary Lew. There would be a lot more danger in the world if Iran was closer to a nuclear weapon. The fact that we have reversed that clock, they are farther away, and they are not on the path to gain time is an enormous change. That does not mean that Iran is a country that we can point to as adopting standards or activities that we accept. They do an awful lot of things that we consider to be just plain wrong and beyond the bounds. That is why we have all the other sanctions still in place. Mr. Dent. I yield back. It looks like my time is up. Ms. Granger. Thank you. Ms. Wasserman Schultz. Ms. Wasserman Schultz. Thank you very much. Mr. Secretary, welcome. It is good to see you. I guess it is best to ask my--I will ask my questions all at once. And I can help you if you need assistance in what I am asking, if you get side-tracked. I want to ask you a little bit about the Green Climate Fund, because I know that, you know, we have made a significant commitment and we have also encountered some challenges, to be diplomatic, with the Republicans' willingness to provide the initial tranche of funding so that we can be a full participant. It appears that because we don't have any funding in the continuing appropriations act for FY 2016 that we have kind of ceded things now to the Green Climate Fund to the Department of State. Can you talk a bit about why it is so essential that we make sure we provide--that we meet our commitments? And, you know,--thank you--I was wondering what that was-- -- Secretary Lew. I did not know what it was either. [Laughter.] Ms. Wasserman Schultz. My congressional district is really ground zero when it comes to global warming and climate change. I mean, we are really at a stage where just yesterday, there was news that approximately 30 percent of our population in South Florida could either have to drastically alter their environment where they live or be engulfed by water. So if you could address that. Piggy-backing on that question is I would like you to address our for the first time participating in the CCRIF, which is the catastrophic risk pool, which is shared by a variety of countries in our--in our region. We have experience with a catastrophic risk pool in Florida. Again, being in the midst of, you know, a consistent and regular pathway in hurricane alley. And it has proven to work. And this one appears to be functioning well. So if you could address that. And then also, the Global Agriculture and Food Security Program is something I have an interest in. And, you know, I know we made a challenge pledge. And if you could talk about our progress in making sure that we continue our leadership and ensure that we can meet our commitments. Secretary Lew. Starting with the Green Climate Fund, I think what you describe as being the situation in South Florida is unusual, but not typical--not atypical. It is happening in cities around the United States on the shores. It is happening around the world. It is a national security threat as well as an economic threat. The Green Climate Fund is a way to bring the world community together in a multilateral effort where we get leverage, where our contribution is supported by other countries of the world; and it gives us the ability to see the kinds of investments in building resilience that the world needs. That includes both what happens at shorelines, but it also means we are going to be developing energy and environmental technologies that reduce the use of fossil fuels; that improve the quality of inter-generation efficiency in agriculture and forestry. In addition to building the security that comes from reducing the risk of dramatic climate-related events, it also opens new export markets for American products and technologies. We are one of the leaders in the world where there is an appetite for what we produce, but without financing is not an ability to purchase it. So I think both from an environmental point of view, an economic point of view, and a national security point of view, it serves our national interests very well. With regard to the Central American & Caribbean Catastrophe Relief Insurance Program--we have requested funding for the fund, which is a multi-donor trust fund that would support the expansion of catastrophe risk insurance in Central America. Just like South Florida, the countries in the Caribbean are highly vulnerable to natural disasters and catastrophe risk. Building fiscal resilience is really important to making sure that they can respond when catastrophes occur and maintain political stability when catastrophes occur. We have seen too often that without there being a risk insurance program, we need to go in and bilaterally provide support because there is urgent need, and they are our neighbors, and we have a need to make sure that there is both an ability to address those catastrophic events, but also maintain stability. On the GAFSP, continuing to support the pledges we have made is very important. We have made real progress on the food security front. I am particularly attached to this. I helped develop this initiative in a former part of my life when I was at the State Department. You go around the world and there is an understanding that to feed the people in your own country and to feed people around the world, we need to harness both technology and we need to harness best practices, and that is what these funds do. But again, it is on a multilateral basis, where U.S. support is leveraged by international partnership. We have made a request that would fill in some of the gaps in the funding, and I see we are out of time, but I am happy to get back with the details. Ms. Granger. Thank you. Mr. Crenshaw. Mr. Crenshaw. Thank you, Madam Chairman. Thank you for being here today. Let me follow up a little bit on this sanction business, because I have a couple of questions. One is: You mentioned that we lifted the nuclear sanctions, but we haven't lifted the other sanctions. It seems like the only reason that they came to the table was due to the nuclear sanctions that really wrecked their economy. So they came to the negotiating table. Do you think the non-nuclear sanctions, the ones that are left there, are they really going to have any kind of impact? Because it doesn't seem like they are doing much. We are talking about doing things and designating things. But it doesn't seem to change the behavior. On the snap-back provisions that you talked about, I wonder if you really believe those things are going to work. Because on one hand, you will have a lot of little, small incremental violations that won't trigger the nuclear sanctions, and they will nickel-and-dime along the way. All of a sudden the international community will wake up and realize it is almost too late to stop them. The other part of that is: Do you really believe that companies believe in these snap-back provisions? Because if you really believed that these provisions were going to snap back, and you want to do business in Iran, and you knew Iran was in the business of doing bad things and violating treaties, et cetera, would you really want to go in there and do business knowing that these sanctions might come back into play? Wouldn't you avoid that in the long run? Talk a little bit about those two things. Secretary Lew. Congressman Crenshaw, both of those are, I think, excellent questions, and I would say that on--with regard to the nuclear sanctions versus the other sanctions, while we had the toughest nuclear sanctions, the toughest sanctions regime that we have ever put in place with the world community, Iran was still able to fund terrorism, they were still able to fund regional destabilization. So there was leakage even with the nuclear sanctions because not everything comes through sanctioned entities and not everything can be stopped with sanctions. Our goal is to make it as hard as possible for them to do those activities. I do not believe the shape of the resources they have for those activities will change dramatically. But we should not kid ourselves, even with the nuclear sanctions, they were finding ways to support terrorist activities. So we have to keep on it, we have to be attentive to any entity that we can make it harder and harder for them to work through. But if you look at the nuclear sanctions, it was a case where the world community came together and said on some things we do not agree, but on the question of whether Iran have a nuclear weapon, there was total agreement. That was why that sanctions regime was as tough as it was, and when Iran agreed to roll back its nuclear program, there had to be a rollback of the specific nuclear sanctions. We have never rolled back the non-nuclear sanctions and we will continue to designate under them. On the question you asked about the snap-back and the willingness of companies to do business, there is not a rush of companies and financial institutions actually executing on doing business. We have made it clear where the nuclear sanctions were lifted, it would not be keeping our agreement to say that it was a violation of our rules, our laws, if things that are not sanctioned become the basis for doing business. But there has been a reticence in the global community. Mr. Crenshaw. You think that is partly the threat of the snap-back? Secretary Lew. I do not know that it is a threat of the snap-back or if it is a threat that because there is enough other maligned activity going on that there is more risk with Iran or if it is because Iran has conducted its business affairs in the world that make it difficult to rebuild those normal business relations. What I can say is we have an obligation to keep our part of the bargain. We have to lift the nuclear sanctions, which we have done, we have to make it clear we are not going to take action under the nuclear sanctions, and then businesses, financial institutions, will have to make their own decisions whether they want to be in that market. But I do not think we ought to be suggesting that the nuclear sanctions continue to be a barrier. We have been clear about what sanctions remain in place, we have a Web site that is very clear, we answer questions all the time. If you believe in sanctions as a tool for effecting change of policy, maligned policy, you also have to believe in relief from sanctions when those maligned policies change. In the case of the nuclear sanctions, they worked. In the case of these other things, we have to continue to be on the case. When we see entities that are involved in supporting terrorism, we have to be willing to continue to act against them. Mr. Crenshaw. Well, I think it is a great concept if they really believe that they are going to snap back. I think we need to make sure we are vigilant and don't let them ease along and we wake up one day and say---- Secretary Lew. If they violate the nuclear agreement, the snap-back would kick in. They have not yet. Mr. Crenshaw. Great. Thank you. Ms. Granger. Ms. Lee. Ms. Lee. Thank you very much. Good morning, Mr. Secretary. First of all, let me say thank you once again for being here and for your tremendous leadership at Treasury. As the co-chair of the bipartisan Cuba Working Group and as someone who has worked on establishing just normal diplomatic relations with Cuba for decades, I really want to commend the administration for the bold steps it has taken to re-establish diplomatic relations with Cuba. Now there is bipartisan support for what the administration is doing and for even more normalization in terms of passing both of our bills ending the travel ban and lifting the embargo, but there is also bipartisan opposition to that, as you know, even on this committee, so this is truly a bipartisan issue both on the pro and con side. But I think the public is with those of us who want to see normal relations. The announcement this morning is very significant in terms of the amendments to the Cuba sanctions regulations, especially ahead of the President's historic trip to Cuba. So could you sort of lay out what these changes are as it relates to banking and finance and people-to-people exchanges? And then second, I want to raise--and I have raised this before with regard to medical advances--hopefully this is bipartisan--in terms of the issue with regard to diabetic foot ulcers. Both the House and the members of the Senate have communicated with the Treasury Department with regard to the fact that first an estimated 25 million Americans are affected by diabetes and more than 2 million affected by diabetic foot ulcers. Now OFAC has previously granted a license for clinical trials for Hebropo P treatment which is still unavailable in the United States for those suffering from DFU, and the Biotech Institute in Cuba has been, you know, leading in terms of this innovative treatment. And we are trying to figure out how we can at least go for clinical trials as well as for, if the clinical trials work, the opportunity for people with diabetes and diabetic foot ulcers to benefit from this treatment because, of course, you know, in communities of color, diabetes is a very big issue. And we have seen--many of us have seen and we know the results of this very effective treatment. Secretary Lew. Congresswoman, just to start with what the actions taken today are, there is an expansion of banking and financial services which permit U-turn transactions so that without having direct financing, money can pass through the U.S. financial system. There is an expanded authorization for educational exchanges that do not involve academic study so that individual travelers can engage in people-to-people travel so that the travel does not have to be under the auspices of an organization. There is an expansion of the authorization to pay salaries so that the limit on salaries will not stop the employment, and certain dealings in Cuban merchandise will be permitted. There are a number of other actions in the Commerce Department area that I am less familiar with the details of, but that get into permitting additional trade and commerce and civil aviation. We believe that, again, as I responded earlier, that we have acted within the boundaries of the law. If the law were different, we would be able to do more than we are doing. But we have eliminated restrictions that were the result of executive action and we have been respectful of the legal boundaries. So while we might prefer to have a more normal commercial relationship, until the laws are changed, we cannot have a truly normal commercial relationship. On the specific question you asked about diabetes, you have asked me about this before--I have passed it along to our OFAC team. I can't comment on specific OFAC applications, but OFAC is reviewing that application. Ms. Lee. Okay, thank you very much. Madam Chair, I just want to make a note that the U.S. International Trade Commission estimated that the opportunity cost to U.S. exporters of maintaining the embargo is around 1.2 billion per year, so it is really in the United States' economic interest to move forward with normalized relations. Thank you again. Ms. Granger. Thank you. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chairman. Good morning, Mr. Secretary. I stepped out of the room for a moment and I walked back with a St. Patrick's Day flower. I was just---- Secretary Lew. Well adorned. Mr. Fortenberry [continuing]. Visiting with my florist from back home. Let me make a general comment to you about what I perceive and then I would like your perceptions before going into policy details. The United States after World War II was cast into the role really of the world's lone superpower, and we did so--we took on that role at great expense to ourselves both in terms of lives as well as monetary transfers to other countries. And in doing so, we created a certain dynamic, a certain foundation for international order and stability. In the period in which we are living and in which there has been rapid globalization and integration, it seems that this post-World War II construct is under great stress, and the multilateral institutions that have worked toward those original goals. I would like your perspective on that and then what you perceive we would need to--how do we evolve a more robust 21st century architecture that demands that other responsible nations of the world re-commit to more robust types of partnerships with us on this fundamental question of stability. Secretary Lew. Congressman, that is a question I spend an enormous amount of time thinking about and working on because I think you put your finger on why it was so important that we do the IMF quota reforms. We were in the penalty box, because we negotiated quota reforms that let other countries that had grown substantially, have a larger share, and under terms that were very advantageous to the United States, but for 5 years we were unable to finalize it. That put us in a position where the world started to ask is the U.S. committed to the post-World War II institutions that it helped build. We have removed that question by having an agreement on doing IMF global reform, we have kind of lifted ourselves to be able to ask exactly the question that you asked and to be part of the conversation about taking it to a place that works in the 21st century. One of the real advantages of other countries coming of age, reaching a level of a greater participation is they then have greater responsibility, and we have to demand that kind of responsibility as part of the institutions that we still have a dominant voice in. We have to maintain the dominant voice if we want our values and our standards to be the ones that drive the debate. Earlier, we were talking about the Asia Infrastructure Bank. Even when we are not in an organization, we have a very strong voice about what norms should be. I believe that the world of the future is going to be a world that is very different from the ashes after World War II. We had most of the world's wealth, we had most of the world's manufacturing capability, the world had no choice, we were generous, we stepped forward, we created a period of unprecedented economic reconstruction and growth, and we have a more peaceful prosperous world because of it. Going forward, we are going to need to embrace countries that are coming into their own and have them subscribe to the standards that we want to live by. I think the worst thing we could do would be to step away from that international stage, because if we do not play that role, others will. Mr. Fortenberry. Well, this is the exact source of the tension because I agree with that comment in its substance. However, when the United States is not getting the best deal or when other countries hide behind our largess or continue to push us out in front, which has been the traditional role, when they are fully capable of participating in a more robust manner, it is simply not fair. And the electorate not only perceives this, but feels it, and so that is why I think what you are ultimately talking about, and what we all ought to be talking about, is a value proposition as to what true governance structures mean in terms of justice, and how people build out systems economically and culturally that protect human dignity and have the enforcement mechanisms to do so. To Mr. Ruppersberger's point, for instance, in traveling through Africa, China is everywhere. I remember being in Liberia, and seeing a brand new shiny soccer stadium. Liberia of all places, in such proximity to United States. I asked one person, ``Why does China trade so much with Liberia?'' They said, ``we are waiting for you.'' In other words, again, this perception, in certain areas of the world anyway, which incline toward who we are, toward our narrative and the values we hold--and the institutions that give rise to their largess or their potential largess as a country, being corrupted by other nations who do not share these values. Secretary Lew. We have called on China, in particular, to step up and play more of a role in making concessional loans-- contributions to international facilities that make concessional lending available. China is no longer the developing country, it is one of the two largest economies of the world. Responsibility goes with that. They are stepping into that space, tentatively, and they will not necessarily always want to do it the way we want them to do it. The more they are involved in organizations that we help shape the standards and the values for, the more likely we are for the multi-lateral cooperation to move in the right direction. When you go to a lot of the countries where China has done business bilaterally, it is not a simple, good news story. There is a lot of damage left behind, and I do not think that, on a multi-lateral basis, that can be tolerated. Ms. Granger. Mr. Stewart. Secretary Lew. I do not think it should be the work they work bilaterally either. Ms. Granger. Mr. Stewart. Mr. Stewart. Thank you, Madam Chairman, Secretary. It is good to be with you as always. We have heard a bit of talk in this hearing so far about sanctions. I would like to concentrate some about--around North Korea now. We haven't discussed them which surprises me a little bit. You know, Leader Kim Jong Un is a very interesting person; I would sure love to see a psychological profile on him. It would be fascinating, I am sure. I don't think that we understand him very well. He is very unpredictable, he is very aggressive and, you know, it is interesting to know with all the talk that we have had about sanctions, especially vis a vis Iran and the nuclear agreement which we spent a lot of last year talking about, their ballistic program which we spent some time recently talking about, but North Korea is already there. I mean, the thing we are hoping to avoid with Iran, North Korea is there; we know that they have had three or four, maybe more, successful nuclear tests. And recently they launched a missile which, under the guise of a satellite, but it was certainly more than that. You know, the KN-08, for example, is a frightening new technology and one that we can't ignore. And if I could make a second point, we can't effectively sanction North Korea without Chinese help because they are their largest trading partner by far. And recently the Under Secretary for Treasury, Terrorism, Financial Intelligence, and I know--this is actually leading to my point now. I know that you know this, Beijing--you went to Beijing and Hong Kong. Secretary Lew. He is in Beijing today. Mr. Stewart. Okay, today. My question is this, could you give us an update on, forging a stronger cooperative effort between us and China regarding these sanctions because, again, it doesn't matter what we do. We--it is not going to be effective without Chinese cooperation and they haven't been very cooperative with us in the past. Secretary Lew. Well, I think if you look at the U.N. Security Council resolution that passed just about two weeks ago, the fact that China supported very tough international sanctions is a very significant development. Mr. Stewart. I agree. I think it is a meaningful step. Secretary Lew. China has a kind of--regardless of country, they have a view that international, not unilateral, sanctions are the appropriate way to go. So they are always more committed to multilateral sanctions than they are to what we do on our own. I think the fact that they agreed to, frankly, the toughest set of sanctions that anyone thought possible to get out of the U.N. and it was put into place I think is very meaningful. I was in China the week after the U.N. Security Council at the G-20 meetings, and I had conversations at the highest levels in China, and I can tell you that they do not view this as something they are doing for us. They look across their border and it makes them very nervous that they cannot explain some of the actions that are reckless and that are destabilizing. So our--acting Under Secretary--we are waiting for Senate confirmation, hopefully that will come soon--is in China now. I have not had a readout of his meetings but he was meeting with people who are in the business of the implementation--and sanctions regimes are all about implementation. Mr. Stewart. Yes. Secretary Lew. They are theory until you implement them, and I am looking forward to getting that report. Mr. Stewart. Which is actually the core of my question, sir, and that is, it is easy to agree to sanctions, many nations do that. But have no intention or to comply with those sanctions or to help carry them out, well, they either have no intention or in some cases they have no ability; it is just so against their economic interests that they just can't do it. Is your read that China will be more aggressive in implementing these sanctions than we have seen in the past? Secretary Lew. They have certainly indicated a high level of concern and the need to be clear. That is why they supported the resolution. They have indicated an intention to implement it, and the reason that we have followed up--with Acting Under Secretary Szubin's visit is to take it to the next level. This is not something that is just a 1-day effort. We know from these sanctions programs that it is grueling day-to-day work. You have got to identify the entities, act against the entities, and then make it clear that they will be the kind of international cooperation to actually shut the valves down. I think it is a very significant statement to North Korea that China is part of this international effort. Mr. Stewart. I agree, and I wish that it had happened earlier, actually, because we are a long way down that road now and Acting Under Secretary Szubin, as you have said, I think you and he working together can really make a meaningful difference for us with--in an area of the world that I don't think we give quite enough attention to as we focus in other dangerous places, as well, so-- Secretary Lew. We give a lot of attention to it but it deserves as much attention as we can give it. Mr. Stewart. I understand. Thank you. Thank you, Mr. Secretary. Ms. Granger. Thank you. We are going to have another round, or going to try to. The President is coming here to the Capitol for a lunch meeting and we may have a problem getting out of this room so if you will keep in mind the time and if we--if that happens, we will make sure that we close it down and get out. I think--Secretary Lew, I think you will be able to get out. We may be stuck in here so I am just going to turn to Mrs. Lowey for her question. Mrs. Lowey. Thank you very much, Madam Chair. Mr. Secretary, we have sought incentives to bring Russia into step with the world community. But Russia's strategic foreign policy goals remain elusive. Now, I remember having a long talk a couple of times with Secretary Kerry in 2013, and I kept saying, what does Russia want? There was already tremendous damage in Syria at that point 3 years later. Now it has been 5 years. And although the Secretary tried to meet with Putin and meet with Lavrov, and had a lot of discussions, look how many more lives and how much destruction has taken place. So it is clear that Putin plays by his own rules, shows no interest, except when it is convenient, in international cooperation, and appears only interested in aggression. Additionally, some countries in Western Europe continue to have very significant and economic investments with Russia. So I just want your view. Do we have--or is there a coordinated international strategy on imposing sanctions against Russia or do they just have the upper hand? Is the threat of new sanctions having any effect on Putin, particularly with regard to the oligarchs, over Syria and Ukraine? How has Putin reacted to the sanctions levered on Russia by the United States and E.U.? What measures has Russia taken to retaliate against sanctions? So, basically, we couldn't do anything with Russia in 2013. The devastation continues. Is there any way that the international community can cooperatively put pressure on Russia and work together? Secretary Lew. We have obviously had a very complicated relationship with Russia over the last few years. We have put in place--not just the United States but with the G-7--very powerful sanctions against Russia on Ukraine. We have maintained unity amongst our European allies in keeping those sanctions in place. We designed those sanctions to minimize the spillover and target them towards the people closest to the decision making. I think they have been very effective. It is a little hard to attribute the exact amount of impact because with the price of oil dropping as fast as it has, there have been multiple things hurting Russia's economy. But Russia's economy is in terrible shape and the sanctions are a part of that. They are now trying very hard to put together a Euro-bond financing and they are having trouble getting any financial institution to cooperate with them, even though it is not technically sanctioned. What I can say about the Ukraine experience is we have had united action. It has had an impact. I cannot tell you it has changed fundamentally their policy. There is a way out for them; they could implement the Minsk Accords. If they implement the Minsk Accords, the Europeans and we would be very happy to lift the sanctions. The purpose the sanctions has changed the policy and get Minsk implemented. But we have also made clear that those sanctions will remain in place and that means that the pressure builds over time because sanctions have that effect. At the same, we have worked with Russia on a number of issues. We talked about the Iran negotiations, just a few years ago, working on getting the chemical weapons out of Syria was something we worked together on. And now, obviously, Secretary Kerry has been involved in negotiations on Syria that are a bit out of my immediate realm of responsibility. But they are obviously important conversations. I think we are going to have to manage this relationship, understanding that the things we do have an impact. We can maintain unity on things like Ukraine sanctions and that Russia will continue to make decisions based on its own national decision making and its perception of its national interests. But what I could tell you is that the Russian economy is in much worse shape today than it would have been if the sanctions had not been in effect, and that is causing a lot of wear and tear in Russia. Mrs. Lowey. Now, I probably have hardly any time, but since it is last, why don't I let you conclude by sharing with us the monetary benefits there are to the U.S. in participating through these institutions, and how are the results measured and evaluated? You can say it---- Secretary Lew. Well, in 15 seconds, I think that if you look at our ability to project our policy objectives--just take Ukraine. We would not have been able to put a $17 billion package together alone for Ukraine. Working with the IMF and with our international partners, we could. That is replicated on many fronts, whether it is dealing with Ebola or dealing with other crises around the world, or great needs like food security and climate. I think our ability to leverage our values, our objectives, our policies through these multilateral institutions is just an enormous asset to our national security and our economic security. Ms. Granger. Thank you. Mr. Diaz-Balart. Mrs. Lowey. Thank you for your leadership. Thank you, Madam Chair. Mr. Diaz-Balart. Mr. Secretary, sticking with the theme of sanctions, on February, OFAC licensed a U.S. company to build a factory at the port of Mariel, which by the way, happened to be the port from which the Castro regime smuggled the weapons to North Korea from. The venture at the Mariel port is run by Almacenes, SA [Spanish spoken] a company of the Cuban military. Cuba's ministry of interior, an arm of the Cuban military is the most responsible for the brutality against the Cuban people. So, how does permitting companies to partner directly with the Cuban military promote the Cuban people's independence from Cuban authorities, which is the stated policy goal of the President and that you have talked about as well? Secretary Lew. So, Congressman, I would have to go back and look into a specific license. I think that the general objective of opening ports, opening shipping, having air traffic and commerce within the confines of our law is about building more economic---- Mr. Diaz-Balart. Mr. Secretary--and again, I apologize for interrupting, but I get that. It sounds nice. But you are dealing directly with the Cuban military. How does doing business with the Cuban military--let's not talk about theories. It is not--what you talk about, what you say, what the President says. What you are doing is authorizing business directly with the Cuban military. Here is my question: how does doing business with the Cuban military help the Cuban people be independent of the Cuban military and its authorities? Secretary Lew. Well, I am not going to address the specific license---- Mr. Diaz-Balart. In general. How does doing business with the military help the Cuban people? Secretary Lew. If the transaction you are talking about is facilitating shipping in and out of Cuba, and one of the things we do is we ship agricultural products to Cuba, and hopefully we will be shipping things like communications equipment to Cuba. That helps the Cuban people, that is the kind of support for the Cuban people---- Mr. Diaz-Balart. Mr. Secretary, this is not the instance where you have permitted doing business directly with the Cuban military. And again, that goes against what the President has said, and it is just--it is again, how can you justify doing business with the Cuban military as a way to help the Cuban people? Secretary Lew. We have never said that Cuba's system is where it should be. The question is, how do you cause Cuba's system to change? We believe that by building more ties between the American people the Cuban people, between the U.S. economy and the Cuban economy we are more likely to change Cuba's system than a policy that has failed for 50 years---- Mr. Diaz-Balart. Oh, on that point, on that point. What Congress has codified into law in a very strong bipartisan way was basically asking for a number of things in return for a sanction relief, and you know what those are. Free all the political prisoners, some basic freedoms, freedom of press, independent labor unions, political parties, and then start the process towards elections. I am assuming that you support those concepts. Now, here is a question. That is what Congress insisted on, before sanctions were--there was sanctions relief. What has the administration gotten, because the administration didn't insist on any of those things as a condition. So, what, specifically, has the administration gotten for the sanctions relief that it has given to the Castro regime. Secretary Lew. I think--you know, we can go back and forth---- Mr. Diaz-Balart. No, I am just asking--I am actually asking for specifics. What have we gotten back? Secretary Lew. We are trying to change the relationship between the Cuban people and the American people. We are trying to set a foundation to be able to have change in Cuba---- Mr. Diaz-Balart. So, what are you asking back? What are you asking for? Secretary Lew. We are increasing the contact between the U.S.--the American people---- Mr. Diaz-Balart. What are you asking for, though? Are you asking for anything? Secretary Lew. There have been a number of reforms that the State Department has worked with Cuba on---- Mr. Diaz-Balart. Can you tell me what--just want are you asking for, Mr. Secretary? What are you asking for? Secretary Lew. So, the---- Mr. Diaz-Balart. Not on that theory, what are you asking for? Specifically, what are you insisting on as to--you know, we talked about, you just spent a lot of time talking about demanding things in return for sanctions relief of Iran. And we can argue whether it is enough. What are you asking for in return? Secretary Lew. I think--if you look at the Cuba policy, it is the exact opposite of Iran. We did not have the world with us, putting pressure on Cuba. We were the outliers, even in the Western hemisphere. There is not a country that I have talked to in the Western hemisphere---- Mr. Diaz-Balart. Mr. Secretary, for a long time, everybody did business with South Africa, and I think you would disagree that doing business with it was a good thing, whether you were an outlier or not. Secretary Lew. No, I am not--I am not going to defend policies in Cuba that need to change. The question is, how are we the most likely to---- Mr. Diaz-Balart. And what are you asking for? Okay, what are you asking for? Secretary Lew. Okay, so we believe that the process of increasing people-to-people contact---- Mr. Diaz-Balart. But Mr. Secretary, when you are dealing with the military, that is not people-to-people. Secretary Lew. But if we--if there is more information, more communication available, if there is more contact---- Mr. Diaz-Balart. With the military, with the military. Secretary Lew. But when we---- Mr. Diaz-Balart. With the oppression system. Secretary Lew. It is not---- Mr. Diaz-Balart. Mr. Secretary, I have just 90 seconds left. Mr. Secretary, just very quick---- Secretary Lew. It is not the military---- Mr. Diaz-Balart. You were appointed to the OMB--you were appointed to the OMB and also National Security Council during the Clinton administration. Were you involved in the negotiations with the North Korea deal--nuclear deal? Secretary Lew. Not directly. Mr. Diaz-Balart. Well, I just hope that you do a better job and this administration does a better job of that when you are dealing with North Korea. You have all of those promises that they were not going to have nuclear weapons. Ms. Granger. Your time is up, Mr. Diaz-Balart. Mr. Diaz-Balart. Thank you. Ms. Granger. Ms. Wasserman Schultz, please. Ms. Wasserman Schultz. Thank you, Madam Chair. I just want to return to the subject of multilateral development banks and other international financial institutions, and our private sector engagement and how we can best leverage it. We are going to be meeting soon, the subcommittee with Bill Gates, and you know, I know companies like Cargill and Coca- Cola are interested in increasing their engagement and getting involved in sustainable development. So, you can--can you talk about that a little--expand on that a little bit? Secretary Lew. Yes. I think that the future for successful international development is going to have to get well beyond the official development assistance pattern in order to have the kind of impact that we need. When we met in Addis Ababa at the Funding for Development Conference, it was very important that there were three prongs of the international commitment. It was to continue the Office of Technical Assistance (OTA), but it was to be supplemented with private economic activity and local government contribution. There need to be three legs on the stool to really build the kind of future that we need. I do not think we can remove the bilateral and multilateral development assistance, but it is not going to get all the way to where we need to go if you do not have an environment for private investment. So let me go back to why we pledge to double the Office of Technical Assistance. One of the things that we can do that has got the biggest bang for the buck is to help a lot of these countries put in place the kind of tax system they need, and business approval system they need to have transparent, honest systems which will attract the kinds of international investment that can really leverage the development process. When we made that pledge, it was the--the reaction was the most reaction I have ever gotten for that small of a commitment of dollars, because it is just considered to be many, many times more important than just direct dollar assistance. The Gates Foundation is a very large player, obviously. They have the ability, just as an individual party, to make commitments that equal major government contributions. We work closely with them on a number of initiatives and we reach out to the private sector, the not-for-profit sector as well as our multilateral and bilateral partners. I think the future is going to look very different than the past in terms of how all of those elements fit together. Ms. Wasserman Schultz. How would you assess the United States being in arrears on what we owe to this fund affecting our influence? Secretary Lew. I have had the misfortune and fortune of inheriting arrears on multiple occasions. I think it is a terrible thing. We have got to pay our bills. When you do not pay your bills, you do not have the same amount of influence as when you do pay your bills. So now we are okay at the IMF, we have got a whole bunch of others where we are behind. They are much smaller numbers, they are things we should be able to address, but, it was not good when we were in arrears at the U.N. in the 1990s, we cleared it out, we are back in arrears. We need to stay current with the commitments that we make. You know, getting back to the idea of what is the pathway to the future for the United States to sustain the kind of influence we developed in the post-World War II environment, part of it is keeping our commitments. Ms. Wasserman Schultz. So you are saying playing whack-a- mole when it comes to maintaining our pledges and keeping our commitments isn't really the best policy to expand our influence? Secretary Lew. No. I mean, there is a certain confidence that in the end will pay our bills, but I think we would gain stature if we did it in a more orderly way where it was not with the anxiety that we might not. Ms. Wasserman Schultz. Thank you. Ms. Granger. Mr. Fortenberry. Mr. Fortenberry. Mr. Secretary, I want to return to our earlier conversation about this idea of a values proposition and then making it real for the benefit of other peoples, creating an environment of stability, which is intimately tied to our national security as well as our humanitarian interest and economic well-being. Agriculture. I come from Nebraska. I am so excited, thrilled that agriculture has become cool. The whole idea of creating initiatives for sustainable agricultural development and properly ordered and inclusive market systems, I think, meets multiple goals of empowering-- taking on the structures of poverty, empowering those to provide for themselves, integrating again our own values and technical assistance with others in need, thereby strengthening underlying market-based systems which are consistent with human dignity, and then basically taking away the option for twisted forms of nationalism and ideology to take people in directions that are just harmful and destructive. So I present that to you because I think, again, looking at the 21st century architecture of how we evolve, properly evolve, development assistance and international frameworks for those three outcomes of security, economics, humanitarian values, that has to be core. Secretary Lew. I agree with that entirely. I mean, if you look at what a difference it makes in a remote area of Africa when a cell phone came in to the town and you could all of a sudden know what the price of a commodity was and you were not a victim of whoever was there offering you whatever they wanted to pay. That was a market; information created a market. You now have exchanges developing in countries where there is a formal market that empowers local producers, it also provides a level playing field for imports and local products to compete with each other on a fair basis. There is a long way to go, but technology both in terms of the marketplace and in terms of the food chain itself offer enormous potential. You know, one thing that I know is that it will not be a more secure world if we have, you know, more millions of starving people. Starving people tend to be, looking for relief wherever it can come from, and it is a source of instability for there to be a lack of adequate nutrition. Economically, you know, you look at where the growth of the future is, the growth in demand is in countries where the population is growing, and that is good for the United States because we are going to sell things to those countries as they break out of the subsistence levels into the middle class. As far as values go, it is not just rhetoric when we talk about a level playing field and transparency, it actually is a different way to lead your own life and the life of your country and the life of the world, and getting out of the shadows of corrupted systems makes the world a better place. I think we can promote that through these efforts. Mr. Fortenberry. Well, farm products and agricultural products is one of the things that we make on a very large scale, and continuing the export and the use of those products for our own diplomatic goal is very important. It can be augmented by these new development initiatives that point to sustainability and in what I call inclusive capitalism that, again, leads to these values outcomes. So that was a bit more of an editorial than---- Secretary Lew. In a lot these countries, if women could just get loans it would make a huge difference. Mr. Fortenberry. Mrs. Lowey has heard me tell the story before of how I was--had the privilege of going to Honduras, and a programs that related to Feed the Future and some of USAID's efforts, but nonetheless, it was targeted to the most violent area of Honduras, highest murder rate in the world, people living in what I call a kind of a benign poverty. There is not starvation or anything, but really no hope for anything more. Through the infusion of capital from a multinational corporation with the development assistance from an NGO shepherded by the United States government, you had women--that is women-owned bakery--empowerment, vision, hope, an idea of how to expand regionally all happening in the midst of this chaos and disorderly world where one woman had lost her husband 3 weeks earlier to the violence. So---- Ms. Granger. Your time has expired. Ms. Lee. Ms. Lee. Sure. First, I just have a comment of--and again, the disagreement is very clear on Cuba. But one thing I want to mention is that no country is perfect. Vietnam, China, the United States, we have many countries that have not accomplished what we think are universal standards of human rights. Our country, even in terms of mass incarceration of African-American men and political prisoners. And so I think what is important as it relates to Cuba is that we work towards a more perfect union here in our country, Cuba, wherever else. And people-to-people exchanges, lifting the embargo, lifting the travel ban moves us closer, moves the Cuban people closer to realizing a democratic society without the types of barriers that my colleagues have raised. But also we have to keep in mind we are still seeking liberty and justice for all in our own country. It is only through discussion, dialogue and diplomatic relations will that ever occur. I want to ask you with regard to the Office of Technical Assistance within your department. There have been prior efforts, including by the United Nations, to encourage donor nations to improve the coordination of their development assistance program. One of these include I think it is the 2014 Addis Ababa action agenda. One of the goals, of course, is capacity building for developing countries. And so I wanted to ask you what are some of the major constraints to improving the coordination of technical assistance programs in developing countries. Secretary Lew. I think that the provision of technical assistance is critical. One of the commitments that I made when I was at the conference in Addis Ababa was to double our OTA over a period of years. And the United Kingdom made a similar pledge. I think that there are multilateral institutions like the IMF, there are countries like the United States and the U.K., that have specific skills and ability to go into these countries and do this work. There is room for all of us, but there are a lot of countries where none of us are doing what we need to do. That is why we need--we need more resources. When I go around the world and I meet with the OTA folks that we have, it really is very impressive what a few people are doing in really hard places to build systems that will last forever after they leave if the people that they are training continue the work. That has to do with central bank policies. It has to do with tax systems. It has to do with land registration. It has to do with all kinds of things that are just part of being able to conduct business in a transparent way. I have seen more appreciation for the OTA advisers than I have in many cases for enormously larger sums of direct aid. It has been striking to me that countries we have given billions of dollars to have told me the most important thing you did was provide these three technical advisers. It just shows how--we--I do not think it is either-or. We need to do both. They were not saying they did not need the money. But the thing that they were just like over and over pointing to was the value added with the OTA. So that is something I think that we hopefully can work together to do more of. Ms. Granger. Thank you. Secretary Lew, thank you again for your time today. Members may submit any additional questions for the record. This Subcommittee on State, Foreign Operations and Related Programs stands adjourned. Secretary Lew. Thank you. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Wednesday, March 16, 2016. UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT WITNESS GAYLE SMITH, ADMINISTRATOR, UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT Opening Statement of Chairwoman Granger Ms. Granger [presiding]. The Subcommittee on State Foreign Operations, and Related Programs will come to order. I want to welcome the Administrator of the U.S. Agency for International Development. Administrator Smith, thank you for being here today for your first hearing before the subcommittee. We look forward to your testimony on the fiscal year 2017 budget request. USAID plays a key role in our nation's foreign policy, and the members of this subcommittee understand and support the good work of your agency from life-saving disaster assistance to global health and other development programs that provide clean water, agricultural assistance and education. The men and women of the USAID are the face of the generosity of the American people. I would like to take a moment to highlight the impressive work of USAID and other agencies in response to the Ebola epidemic. This time last year, we were fearing the worst, but the response was an unprecedented example of American leadership overseas. Now we see another public health threat on the horizon, the Zika virus, and we expect collaboration across the U.S. Government. We want to hear your thoughts today about what can be done to immediately address the Zika outbreak with the resources and authorities available. During the time I have chaired this subcommittee, I have been surprised by the length of time it takes for funds to be directed towards urgent needs. I also remain concerned about the size of USAID and how difficult it can be to partner with the agency. Administrator Smith, I appreciate the discussions we have had in your first few months on the job. I hope we can continue to work together and to find real solutions to some of these long-standing problems. The budget request includes approximately $11 billion that USAID manages directly. Additional funds are partially administered by the agency. Unfortunately, once again, the budget proposes to sacrifice congressional priorities for administration initiatives. For example, the request for climate change programs, including the Green Climate Fund, is proposed to be increased. Yet basic education programs and humanitarian assistance are proposed to be reduced. The request prioritizes malaria, but suggests that tuberculosis and nutrition programs can be cut. In addition, the administration has once again proposed to reduce two of this subcommittee's top priorities: biodiversity activities and programs to combat wildlife poaching and trafficking. The subcommittee will carefully consider how to allocate resources to address the greatest needs and meet our shared priorities. I want to close by thanking you, the men and women of USAID and your partners for the most important work you do every day to improve the lives of others and promote American interests. I will now turn to my Ranking Member, Mrs. Lowey, for her opening remarks. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Opening Statement of Mrs. Lowey Mrs. Lowey. And I thank you, Madam Chair. Administrator Smith, I welcome you again to the helm of USAID. I am pleased to have you here today. USAID continues to play an indispensable role in spear- heading global development efforts. I am sure we will see even greater achievements under your leadership. Given unprecedented levels of humanitarian needs around the world today, you face the unenviable task of guiding U.S. response efforts on nearly every continent. With this in mind, I have concerns regarding whether the Fiscal Year 2017 Budget Request will provide USAID the necessary resources to implement current programs and prepare for new or unanticipated challenges. First, I am pleased with the proposed increases for malaria and GAVI. However, I do not understand the cuts to nutrition and tuberculosis programs, when nearly 800 million people worldwide suffer from malnutrition, and T.B. claims more than 1.5 million lives per year. Second, with regard to Central America in last year's omnibus, this committee provided $750 million to address the root causes driving thousands of minors to flee. I look forward to hearing from you what progress the Northern Triangle countries have made on good governance, the rule of law, education, job creation, citizen security that would provide the basis for further federal investment. Third, the Zika virus has spread to more than 20 countries, yet many governments have responded to their citizens with antiquated messages to simply avoid pregnancy. This is absurd; ignoring the potential effects of Zika by putting our collective heads in the sand will only make the problem worse. Restricting access to family planning and reproductive health services would be a failure to support women abroad during a public health emergency. I hope we can work together without the partisan fights and divisive riders on this issue. Unlike the emergency funds to combat Ebola, which I recall only narrowly authorized the specific use in West Africa, funding for Zika must also come with as much flexibility as possible. Finally, Administrator Smith, I still do not understand the administration's continued refusal to prioritize education. In 2013, your predecessor said, in testimony to this committee, that education was a core development objective. Yet, given this year's low funding request, it appears to me that it is only a core development objective to Congress, not to the President or OMB. There are currently over 120 million children and adolescents out of school, and some 250 million primary school age children in school but not learning the basic skills they will need to participate in their communities and economies. According to USAID's own reporting, the world is in the midst of a global learning crisis. The United States has prioritized many admirable programs, from food security to electricity, health to economic empowerments. Yet, without universal literacy, these programs are out of reach for significant portions of poor communities. We simply will not achieve real, long-term success without education at the center of our efforts. In closing, I want to recognize the remarkable public servants throughout USAID who work night and day to better the lives of millions of people around the world. I thank them and you for your tireless efforts. I look forward to advancing our shared development goals. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. Thank you very much. Administrator Smith, you can see there are few members here. It is because they have already called votes, and they are waiting to vote. I ask that you proceed with your opening remarks. Members will be here today, so I would encourage you to summarize your remarks, so we have time for you to address questions. The yellow light on your timer will appear when you have 2 minutes left, and I will stay for your testimony, and then hope the rest will come. Thank you. Ms. Smith. I was complimenting you, and I didn't even have the mic on. [Laughter.] Ms. Granger. Oh, we listened to that part, anyway. Opening Statement of Ms. Smith Ms. Smith. No, I wanted to sincerely thank both of you. This is a great job; there is a lot of work we can do together, and there are some things about the Agency I think we all want to improve. It has been a pleasure working with both of you. The ability to come up and seek your guidance, and work through how we would make some of these improvements is a real pleasure to me. Let me quickly go through my remarks. As you know, and have asserted yourselves, for more than 50 years, USAID has led our nation's efforts to advance dignity and prosperity around the world, both as an expression of our values and to help build peaceful, open and flourishing partners. This request will help advance that important legacy, but our budget line items tell only part of the story. In recent years, with vital support from Congress, we acted to make our work more efficient, effective and impactful. First, recognizing that foreign assistance is just one valuable tool of many, we are making smarter investments with our assistance; leveraging private capital and funding from other donors to scale our impact; and supporting governments, small businesses and entrepreneurs to mobilize domestic resources for development. Second, recognizing that development is indeed a discipline, we are improving the way we do and measure our work. Since adopting a new evaluation policy in 2011, the Agency has averaged 200 external evaluations a year and our data show that more than 90 percent of these evaluations are being used to shape our policies, modify existing projects and inform future project design. Third, recognizing that we can achieve more when we join forces with others, we have partnered with other U.S. government agencies, American institutions of higher learning, NGOs and communities of faith. When we can achieve greater efficiency or impact, we align goals and strategies with governments and organizations all over the world. Engagement with the private sector is now fully embedded into the way we do business. Finally, recognizing that development solutions are manifold, we are pursuing integrated country strategies, helping to build local research capacity and harnessing science, technology and innovation to accelerate impact faster, cheaper and more sustainably. These and other steps are making us more accountable, stretching our dollars further and helping USAID live up to its important role as the U.S. lead development agency. For less than 1 percent of the federal budget, the President's request will keep us on this path, enabling us to meet new challenges, seize emerging opportunities, improve the way we do business and deliver transformational results on behalf of the American people. Specifically, the request of $22.7 billion will help advance progress in the four core pillars of our work. First, fostering and sustaining development progress. Second, preventing, mitigating and responding to global crises. Third, mitigating threats to national security and global stability. And fourth, leading in global development, accountability and transparency. In countries around the world, we work to foster and sustain development progress in a range of sectors. In global health, we will continue to save lives and build sustainable health systems. We will also continue to achieve transformational progress through the U.S. government's major development initiatives, including Feed the Future and Power Africa. And we will continue to promote quality education and increase access to safe water and sanitation. Finally, as we know progress is not sustainable without open and effective governance and a vibrant civil society, the request will enable us to expand our work in democracy, rights and governance. As a global leader in humanitarian response, the U.S. is there whenever a disaster hits. Our assistance saves lives and protects precious development gains, whether in Syria and South Sudan, or on any of the four continents affected by El Nino this year. The President's request provides the agility and flexibility that is so desperately needed to prevent, mitigate and respond to these global crises. We also work in places of strategic importance to U.S. foreign policy, to mitigate emerging threats and other global security challenges. This request supports these critical efforts from planting the seeds of dignity and opportunity that offer a counter- narrative to violent extremism to fostering goodwill towards the United States. We are addressing the root causes of insecurity and migration from Central America, strengthening our partners in Eastern Europe and Central Asia and investing in long-term progress in Afghanistan. Finally, this request will enable USAID to continue to lead. It includes support for the Global Development Lab to help us spur and integrate innovation across and beyond the Agency and for our Bureau of Policy Planning and Learning to help us continue to drive with evidence. It also supports our work to strengthen USAID as an institution and support the men and women of this Agency who serve their country bravely, and in some of the world's most challenging environments. It is my honor to serve the American people alongside the men and women of USAID, and I look forward to working closely with Congress to make USAID more agile, accountable, and impactful. Together we are building the Agency we need and the world deserves, and making investments in a better future that will pay dividends for years to come. Thank you for this opportunity and your support, and I welcome your questions. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Granger. The subcommittee stands in recess. [Recess.] Ms. Granger. The committee will come to order. We will have some members that are coming in. Unfortunately, because of our timeframe, we are all overlapping with each other's hearings. I am going to start with a question that I think is a very important budget issue. The Development Assistance account is USAID's main source of funds outside of global health, and it is also the account that has the slowest rate of spending in our entire bill. We recognize that long-term development takes time, but the data is troubling. The latest information shows more than $4 billion in unexpended balances and an additional $4 billion that has not been obligated. This is difficult to explain in a time of tight budgets. Administrator Smith, I know you want to work on this problem during your time at USAID. Can you tell the subcommittee how you plan to address this issue? Why is the USAID standard of an 18-month pipeline considered an acceptable amount of time to spend funding? Ms. Smith. Thank you for that. As we have discussed before, this is a priority for me. On the pipeline side, there has been a reduction from 18 to 16 months, which is progress. This is also something that has been bumped up to what is called the Administrator's Leadership Council, so that there is a tracking on a regular basis of where we are on the pipeline. Some of the reasons that we carry a pipeline are things beyond our control. There are some environments where it is harder and slower to obligate money than others, but there are some things we can fix on our side. There has been a lot of great work done on looking at our systems and our processes for how we can spend down more quickly. I think with the combination of tracking it--in what are quarterly meetings now at the leadership level of the Agency-- to see exactly where we are and what additional we need to do, I am confident we can make additional progress on this. The notion of a pipeline in health is one particular thing. You need to carry a pipeline for some specific reasons so that you don't get to the point that you have any risk that people will not receive the assistance or the medicines that they need. But in other cases, it is to have the assistance to plan and obligate even as we are learning what the impact is and seeing how we spend down the money in the field. So it is not unusual to carry a pipeline of some volume. I think what we want to do is two things--reduce the number of months of pipeline we carry and then, second, look at our systems and our processes, see what we can--and I have raised this with you before--systemically fix, even as we look at particular accounts to spend down. What do we need to do across the Agency to speed up the time? Ms. Granger. All right, thank you. The other question I have is the issue of staffing. You inherited an agency with more than 20 different hiring authorities. Included in the fiscal year 2017 budget request is a proposal to add one more for the global development lab, and included in the emergency supplemental request to combat Zika is another proposal for two additional hiring authorities. Why does USAID need these new hiring authorities? Ms. Smith. Madam Chair, you are absolutely right. We have a lot of authorities. I have learned about many of them in the last 3 months. A couple things on that: We need specific authorities because at certain times we need specific kinds of people for a time limited period to undertake a specific task. And that is something the Agency will always need. In the case of the Lab, this is a new entity, and we need to be able to bring on specific people. With Zika, as with Ebola, there is a temporary need. If I may, let me offer a reflection based on having worked at USAID before, served on a Congressional Commission to look at these kinds of things, and led the President's transition team in 2008 that looked across all of our agencies. I think one of the things that has happened, frankly, over 20 years, rather than us from administration to administration looking at what our development agency needs foundationally, in terms of staffing to support its work, and then what are the capabilities it needs to surge if there is an emergency or a special requirement, what has tended to happen is that as a need arises, there is a new authority, a new way to hire, so on and so forth. As you can imagine, it is not the most efficient thing internally, and I am sure it is of--well, I know from what you have said to me in the past it causes you to scratch your head oftentimes. We would like to propose two things. One, these authorities would help us a great deal, but at the same time--and, again, can we look at, over time, what kind of hiring authorities this Agency needs to have a strong foundation, so that we have got the institutional knowledge and memory that we can carry forward, and the ability to flex when we need to flex? We are also looking at this internally in terms of how this affects our personnel system. And we have done an assessment and put together a strategy to start fixing it internally to make us more nimble. Ms. Granger. Good. Mrs. Lowey. Mrs. Lowey. I mentioned in my opening statement my disappointment that the administration continues to undercut basic education programs. USAID has made progress toward reducing the pipeline that accrued after reorienting to the new education strategy in 2011, and I am encouraged by the successful reading pilot programs that are going to scale in many countries and the heroic efforts to reach children in conflict zones. But this year's low funding request would undermine these efforts. I know we agree on how important basic education is to our success in every development goal and that we know how to get results. So I have to ask, number one, why does the administration continue to underinvest in this sector? Two, last year, First Lady Michelle Obama announced a new initiative, Let Girls Learn, to tackle adolescent girls' access to education. How were these efforts building on, but not diminishing, our work in basic education? And how does the administration plan to tackle such an important initiative with such an insufficient budget request? And lastly, can you share concrete results and progress with respect to USAID's bilateral education program? Ms. Smith. Thank you, Mrs. Lowey, for your championship not only of the work that we do, but for education. Our challenge on education is that we face multiple demands. Basic education; workforce education, given what we are seeing with jobs and the inability of people to find or create jobs; higher education, where there are places where we feel that our investments have enabled them to provide better training for citizens so that they are creating an able workforce; and the emergency education to which you refer, which unfortunately has proven increasingly necessary in places like South Sudan and Nigeria. We have also been able in education to do a couple of things that I think stretch our dollars further. One is public- private partnerships, which we do across the Agency now. The value of those in education--and all of these are basic education, so it is education across the board--from 2000 to 2014 is $957 million. The other thing--this is a place where I think the Agency with what we have learned with the shift to really focusing on the ability of kids to actually read after they go through basic education--is working with governments to affect their education policies and what they do across the board. So in some cases, we are affecting policy and national strategies even if we are only financing a piece. As I think you may know, so far in the 5-year strategy, we have reached 30 million children. And let me just give you a couple examples of places where I think in addition to the dollars that we invest kind of in a straight-line fashion we have been able to have impact beyond that. In Malawi, we have been able to support the national scale-up of a local language reading program that was proven to significantly increase student learning outcomes in the pilot phase. Now, by supporting the national scale-up, we are not financing the entire national scale-up. Other donors are doing some of that. The government is doing some of that. But we have been able to play a role in the pilot and translating the findings of that into government policy. In Jordan, the Ministry of Education, with our support, is now supporting nationwide adoption of these early grade reading and math policy standards curricula and assessment. So again, where we are able to provide kind of proof-of-concept of what works, we are finding that we are able to influence and work with governments to expand those efforts. May I---- Mrs. Lowey. Pardon me? Ms. Smith. I am sorry. I just wanted to answer on Let Girls Learn. On Let Girls Learn, there are a number of ways that I think the First Lady has envisioned, and we have seen success of getting support for that initiative. Already, there are partnerships with the government of the U.K. and their assistance agency, DFID, with Japan; and now with Canada. So part of what we are able to do is go to them, and encourage them to do more; and quite frankly, they are spending a lot of their resources. We have also been able to attract a great deal of interest on the public-private partnership front. We have found that there are a number of foundations and companies, propelled I think by their own interest, but also now by the Sustainable Development Goals, that really want to get behind this notion of supporting adolescent girls. Last, through the Challenge Fund, which is included in the budget, what that is set up to do is develop new ideas and ways of ensuring that girls stay in school, because as you know very well, one of the problems we have is retention. It is $35 million, but I think we will get ideas, recommendations and proposals on that that, again, the teams will be able to force multiply. Mrs. Lowey. Well, let me just say--because I think my time is up--we will be coming back--I am always delighted to hear about successes, but you know and I know that there are millions of girls who are not getting an education. Ms. Smith. Absolutely. Mrs. Lowey. In fact, I think we heard recently, as we follow, both the Chair and I, Jordan very carefully and the King comes and his deputies come on a regular basis. At one point, we were hearing they are building schools, which is all fine, but you can have girls learning in tents. So I am glad to hear about your successes. Please keep them coming. But I really don't think the explanation for decreasing money for girls' education, when there are so many millions of girls, as you know, who need an education, so let's continue to work together on that. Ms. Smith. Let's please do that. Thank you. Mrs. Lowey. Thank you. Ms. Granger. Mr. Fortenberry. Mr. Fortenberry. Thank you, Madam Chair. Good afternoon. Good to see you. Thank you for joining us. Ms. Smith. Good to see you. Mr. Fortenberry. Sorry I missed your earlier statement. I don't have the benefit of your testimony in that regard, though I would like to follow up on some of the earlier conversations that we have had regarding organizational structure of USAID. It is difficult to get the arms and mind around the multiple tasks that you are engaged in and whether or not this is the most effective model to meet these four principles that you have well laid out in your opening statement that--I agree with this--foreign assistance is a valuable tool, it has to be explained to the American people as to why it is valuable. It is intimately tied to our own national security, as well as our own humanitarian and values interest, and creating the conditions for international stability is beneficial not only to other peoples, but to us, as well. So there are intended multiple good outcomes here, but there also has to be a discipline. And joining forces with others leverages scarce dollars. In that regard, why don't you just walk through the basic--I think earlier you talked about four columns and what those represent, their missions, as well as the expenditures that go toward each column of activity so that we can refresh ourselves? Ms. Smith. Yes, and I will---- Mr. Fortenberry. I am going off memory from the earlier conversation. So you might not have had four columns. It might have been three---- Ms. Smith. No, I called them buckets. Mr. Fortenberry. Buckets, thank you. Ms. Smith. But I do have these--and I will confess that I pulled these buckets together as a way to, as you rightly say, get your arms around things and also some conversations with Ms. Granger about how this Agency carries out a huge number of tasks in the interest of our national security, as an expression of our values, and in response to emergencies. And so the first one where we are talking about fostering development progress, that is the one where I would define our primary purpose there is development where we have the conditions to get meaningful long-term gains. It is the steady hard work of putting investments in the bank that are going to yield returns over time. So in that category, I would put Feed the Future, for example. I would put our global health budget--those are, I think, $978 million and $2.9 billion, respectively. I would put the work we are doing on Power Africa, and some of our country programs. Now, it gets a little tricky whether you put democracy and governance there. I would argue that we should. It is a long-term investment over time. Then we get to preventing, mitigating, and responding to crises. That would carry our emergency assistance budgets, but also I think some very important work that we do on resilience, which is more of what the Agency is doing. It is very effective work at reducing the vulnerability of communities and countries to external shocks, which we know we are going to see more of over time, and a lot of the analytical work that we do and so on, on Ebola, all of those things fall in that category. The third are the times where as a matter of national security or foreign policy, USAID is called upon to bring the third ``D'' of defense, diplomacy and development to the table in the interests of policy and to pursue an important national security priority. Now, those are regions where it is difficult, Afghanistan, for example. Our people work extremely hard under really difficult circumstances, are given a challenging task in an environment where it is not near as easy as doing Feed the Future, quite frankly, where you have got better conditions. Mr. Fortenberry. Let me--because the time is short, and I am going to get cut off--let me--and maybe we will have a chance to come back to it--but let me introduce my perspective on one of your intense areas. Ms. Smith. Yes, please. Mr. Fortenberry. I am afraid our Chair is going to get tired of me saying this, but agriculture has become cool. And I am very happy about that, being from Nebraska. The whole idea of sustainable agricultural development as an augmenting of our traditional ag disposition or our traditional agriculture exports and programmatic systems is a key component of sustainable development. Ms. Smith. Absolutely. Mr. Fortenberry. It meets people where they are in the most nurturing of circumstances. If we are looking for the ability to meet national security goals in terms of giving people some opportunity to have continuity with their own subsistence and build out true market systems that are beneficial to persons not controlled by others, you take away the options for twisted ideology and wrongly directed nationalism to coopt perspectives. This is the right thing to do. We have got the technology. The populations are growing. It is consistent with, again, working toward the right market principles, and this helps create the conditions for international stability. You listed it first--and I don't know if you did that intentionally as it is in the top of your mind as the main development assistance priority, or it is certainly ranking, but I noted you said Feed the Future first. Ms. Smith. I have been involved with Feed the Future since its inception for all the reasons that you point to. To your earlier comment about the need to make the case to the American people that assistance works and development is a worthy enterprise, this is also an area where we have the evidence and facts to show that we are having real impact, so I think it is helpful in that regard, also. But I welcome your support for it and agree with you. Mr. Fortenberry. Thank you. Thank you, Madam Chair. Ms. Granger. Ms. Wasserman Schultz. Ms. Wasserman Schultz. Thank you, Madam Chair. Welcome. It is good to see you again. Ms. Smith. Thank you. Ms. Wasserman Schultz. I wanted to touch on nutrition and the Rio summit, as well as Zika and family planning. As far as the Rio summit, I would really like to know--because nutrition has become one of the really kind of wonderful bipartisan efforts that we have made here. Congressman Diaz-Balart and I have led a resolution pushing the U.S. to follow through with our commitments at the last nutrition for growth effort. We want to make sure that we are stepping up to the plate and maximizing our reach. So can you talk about our commitment and how we are going to make sure that we meet the kinds of commitments that we need to be able to make at the conference or at the summit, rather, and how we are planning to leverage the upcoming Nutrition for Growth to really be able to ensure that the global community strengthens its commitments for the lives of people, of children who are struggling from malnutrition and from stunting? Ms. Smith. Yes, and thanks for your interest in this. And I want to point out one thing on nutrition, which Mrs. Granger and Mrs. Lowey both raised in their opening comments, and concerns about the budget level. One of the challenges we have on nutrition--including going into things like the Rio summit--where what people look at as the measure of our commitment is a line item in a budget, is that what is carried in global health, which is where nutrition is counted, does not include the work we do on nutrition through Feed the Future, where we have seen reductions in stunting from between 9 percent to 33 percent in the areas where we work, or the work that Food for Peace does on resilience--where nutrition is one of the core activities that they undertake to, again, reduce the vulnerability of particularly the extremely poor. We have a great story to tell on nutrition and a lot of evidence to show that it works. Our thoughts in terms of going into Rio are that we need to do two things to leverage and mobilize the international community. One is lift up those partners who are doing more. There are a lot of developing countries that are putting their own resources into this and getting real results. We think that tells us a story and, quite frankly, compels some other donors that aren't stepping up. The second: this is an area where we have had huge interest from the private sector. Now, I have been enormously impressed by the degree to which every part of the Agency has factored public-private partnerships into the work that they do. I think we are at the stage now--and we are only in the preliminary discussion phase--with some of our partners with whom we may have seven or eight partnerships in different parts of the world--to talk about what we have called ``systemic partnerships'' where we look all across the value chain, even at a global level, to see what impact we have. I hope we can make progress on those soon, because I think those could point to much greater gains in nutrition. So I share that as a priority with you, and I think we will be able to both deliver in terms of our commitment, but also show enough results that we can persuade others to join us. Ms. Wasserman Schultz. Good. And on Zika, how is USAID working to improve access to family planning with UNFPA and other international partners in the Western Hemisphere? We talked about this yesterday with Secretary Lew--there are countries that severely limit access to family planning, deem women as falling pregnant, somehow, as if it happens by accident. Clearly, we have all seen the heartbreaking pictures of babies with microcephaly and we have really got to make sure that we not only provide assistance for those who are afflicted with Zika, but to make sure that women--in light of those nations' recommendations to their own people--that they avoid falling pregnant for 2 years, at the same time they are blocking access to family planning to be able to make sure that doesn't happen. Ms. Smith. Thank you for that. Our proposed approach on Zika--and we have moved out on some of it, but not as broadly as we hoped to--we are in dialogue with both the House and the Senate on our emergency request--I think we need to address that in three ways. One is through information, because I think when women have the information they need, the scientific information that they need, they can learn how to protect themselves. One of the things we are already moving out on is, how do we provide that public information? Again, we all know how powerful that is when women need to act. The second is on care and a focus specifically on women of child-bearing age. With respect to family planning, our approach in policy has been that it is voluntary. We provide the information and we hope to be able to do that again in this instance, should it be needed by women who are affected. Ms. Granger. Mr. Ruppersberger. Mr. Ruppersberger. Thank you, Madam Chair. The key is to have a good team, and I am sure you have that team with you. I want to talk about TB, tuberculosis. And just before I get into the questioning, it seems to me that there are three different types of strains, and the first is just regular TB. The second is drug-resistant, which they call multi-drug resistant TB. And the third which is extremely dangerous, and that is extensively drug-resistant TB. Now, according the World Health Organization, TB is now the leading global infection disease killer ahead of HIV-AIDS. The continued spread of drug-resistant TB is a threat to global health security, with 480,000 cases of multi-drug--that is the second--multi-drug-resistant TB reported in 2014 globally. Yet the World Health Organization estimated that less than 25 percent of people with a multi-drug-resistant globally are getting treated appropriately. Now, it is an increasing problem also for the U.S. In 2015, the U.S. had three cases of the extensively drug- resistant TB, which is the most dangerous. The most difficult and expensive strain to treat, and including--I am from Baltimore, Maryland--and including one case in a young child in my state who is being treated at Johns Hopkins right now and is very sick right now. Now, in December 2015, the President released the national action plan for combatting the drug-resistant TB. When it says national, that is really international and national, it is both here also. It is also a comprehensive plan for combatting this MDR TB in the U.S. and abroad and accelerating research and development. But the President's budget proposes to cut funding for the USAID TB program from $236 million in fiscal year 2016 to $191 million, a cut of 19 percent. Can you update the subcommittee on USAID's efforts to implement a national action plan and address what ramifications that this President's cut, if it is sustained, will have not only in the United States, but internationally? Did you get all that? Ms. Smith. I got all that. Mr. Ruppersberger. OK, good. Ms. Smith. Thank you for that. I was thinking to myself as you were speaking, we have done Ebola and Zika and now we have got extensively drug-resistant TB. The story just continues to get worse. A couple things on this. Our request on TB does not reflect what we do through PEPFAR, the President's Emergency Plan for AIDS Relief, and through the Global Fund for AIDS, TB and Malaria, to which we are the largest donor. So we have additional resources that go to TB, again, than are represented in the line item. The other thing--and particularly on the President's plan-- part of the reason that plan was put out there was a call to action, both domestically as you rightly point out, but also globally. This is an issue that has been raised in the G7, in the G20: that we are seeing the acceleration of this and the world is not responding. And just as the President led on the Global Health Security Agenda, he has been out there pressing on the rest of the world to do more. Now, in the case of TB, one of the issues we also face is a very high incidence in middle-income countries, so one of the things we are pressing for through the action plan and our own work is that those countries step up and put more---- Mr. Ruppersberger. What are some of those countries? Ms. Smith. South Africa, which has just in its own domestic budget rolled out increased funding for diagnostics and treatment; and Brazil, which has recently--and I would like to think this call to action had something to do with it--in addition to their own recognition of the problem--expanded its national TB control program. Russia is a country with a fairly high incidence. Mr. Ruppersberger. Even with all that vodka? Ms. Smith. It turns out vodka and TB just doesn't do it. Mr. Ruppersberger. It doesn't kill it? OK. Ms. Smith. We are unfortunately in a moment where we have to make some choices. This is one that we think if we marry it to, again, what we are doing through the Global Fund and PEPFAR and pressing on and working with middle-income countries to raise their contributions, we can still move the ball forward. Mr. Ruppersberger. It is important, I know, that we do our research, and I know there are funds that you have. But we deal a lot with medicine. I would think some of the research that you are doing to try to deal with some of these things, it should be akin to like a DARPA situation, almost out of the box research that might be needed to address some of these issues that are getting worse and worse. Ms. Smith. I think there is a lot more of that going on across the government as we see new diseases and higher prevalence, absolutely. Mr. Ruppersberger. Thank you. Ms. Smith. Thank you. Ms. Granger. We are going to have a second round. I would like to address the growth in funding by USAID and the Department of State to trust funds at the World Bank and other banks, and I am concerned about the lack of oversight of the taxpayer's dollars. We received a report from the Department of the Treasury that we requested on these trust funds, but it raised additional questions to me. First, how does USAID oversee this funding once it has been transferred to the World Bank or other banks? Second, are restrictions on U.S. foreign assistance adhered to if funds are provided to trust funds? And finally, there are examples of the trust funds languishing for years. Is there any mechanism for the United States to retrieve funds once they are provided? Ms. Smith. That is a really good question. And let me say a couple things. Trust funds are often very valuable in situations of post-conflict, for example, where you may have a weak government that, quite frankly, doesn't have the capacity to manage multiple donors. It often makes a great deal of sense to put our resources into a trust fund, and reduce the management burden that we impose. I have worked with and through a lot of trust funds over many years. And trust funds are as good as they are built and as good as the oversight is. There are some very good ones, but there have been some that have been terribly ineffective. What we generally do with trust funds is have a role in their creation, both through our role in the World Bank, where Treasury plays a key role. With the global food security fund at the World Bank, for example, we played a huge role in actually designing that from the get-go, including the governance structure. In other cases, our oversight is through Treasury and our role on the executive board, and on the ground. In countries where we use trust funds, our USAID missions and other donors regularly meet with and require evaluations from trust funds of resources. And, third, to your point about whether U.S. law applies, a couple of things. For example, on terrorist financing, World Bank Trust Funds are required through their connections to the United Nations to screen for terrorist financing, Specifically on health, when we provide contributions to a fund, our agreement letter includes provisions that they must honor that are in U.S. law. So I think we have a role often on the ground floor through the Bank, through regular monitoring in the field, and through stipulations we may put in our agreements, I think it is always important to take a look at how well a trust fund is working, and that is one of the things our teams do. We are looking now at how well things are going in Afghanistan, for example, because it can never hurt to kick the tires and make sure things are working really well. As to the matter of trust funds that may be dormant and still have resources available, I don't have a specific answer for you, but I would be happy to look into that and get you one. The World Bank maintains a donor balance account for trust fund contributors to allow for the return of unexpended trust fund principal and accrued interest. USAID is examining this donor balance account to determine which amounts will be returned to Treasury as miscellaneous receipts versus funds that may be eligible for reprogramming for other foreign assistance activities. Once we make this final determination, we will provide the World Bank with specific instructions on how to direct these funds to the appropriate account. Ms. Granger. Great, thank you. Mrs. Lowey. Mrs. Lowey. Thank you. You just touched on Afghanistan, so I would like to follow up, because so much of our efforts a few years ago was focused there, and many of us worry about what is happening now. And, in fact, at a hearing like this a few years ago, it would have been primarily about Afghanistan. But the world has shifted its attention. Unfortunately, there are so many trouble spots, and your important work is evident in every one of them. But I have been--and I continue to be--concerned about the women of Afghanistan following the U.S. military drawdown. I think we need to be more mindful of how fragile the gains of Afghan women are. In 2014, USAID launched PROMOTE, an initiative focused on the empowerment of Afghan women in several ways. If you could share with us the progress this program has seen so far, what benchmarks do you use to assess whether we are having an impact, what is the current status and near-term outlook for USAID's program in Afghanistan, and what are we retaining, what are we turning over to the Afghan government? And if we do turn it over, how successful have we been? And how does USAID combat fraud and abuse of U.S. taxpayers' dollars? You can take a deep breath. Ms. Smith. First, thank you for your attention to Afghanistan. I think you are right that there is a lot of competition in the world now. I think this may be the most difficult transition our teams have been asked to handle. The circumstances are really difficult. The security environment is tough. I think we have some good fortune in that we have a president in Ashraf Ghani who knows development well. I have known him for a long time and worked with him. But there is also some progress I think we don't want to lose sight of. School enrollment has gone from 1 million to 8 million. Sixty percent of the population now lives within 2 hours of a health facility. It doesn't sound like something that would perhaps satisfy you or me, but it is a very big change. When we started, 6 percent of Afghans had access to electricity. It is up to 28 percent. On the sustainability side--and that is what we are really focused on now--there is some progress. Domestic revenues are increasing about 25 percent a year. That is slow. It is not enough to get over the mountain, but we are certainly climbing up it. On the issue of women and girls--and you know that is a priority of the President himself--he has spoken as articulately about girls' education as almost anyone--we are seeing an uptick in enrollment in schools, and also in universities, where university enrollment is up to I think 175,000 or so, and I think some 35,000 of those are women. Again, it is not 50/50 yet, but that is tremendous progress for Afghanistan. On the program you mentioned, which is designed to ultimately reach 75,000 women, it is the largest gender program that we have in any country. Just a few results so far: We have provided 3,500 women with vocational training; trained over 2,000 midwives; facilitated almost $2 million in small private- sector loans, so that women can start and sustain their own businesses; and trained 25,000 female teachers to support basic education. So that is starting. We are working with the Ministry of Education to do that, because when you ask what are we handing over, what we are trying to do with our partners is exercise the muscles of governance to the point that they work well and the government is putting resources on the table. So we have seen some successes. If you look at the power utility, which at one point we were financing, the government has now taken that over. We are not financing it anymore. So there are things that we are handing over, and our hope is that we can sustain the gains, for example, in the social sectors, including for girls and women, and work with the Ministry of Education, and gradually more and more of that will be handed over to them. But I don't think the task is completed yet. We do a lot of evaluations in Afghanistan. We invite other evaluations--GAO, the inspector general, and others--we get a lot of recommendations which we are constantly working into the system. And part of that is in terms of waste, fraud and abuse from misuse of funds. I don't want to suggest that that is easy. And in an environment where our people can't move around freely, and often have to rely on third parties to monitor, it is a constant effort to reinvent how we track funds, what we learn, and what new systems we need to put in place. I can tell you, I have talked to the teams about this a lot. They spend a huge portion of their time constantly figuring out--again, in one of the hardest environments I think we face--how they can both get the results we need for sustainability in Afghanistan and take the recommendations that they themselves often solicit to make sure that we are protecting the resources we are given. Mrs. Lowey. Thank you. But I know how difficult it is. Ms. Smith. It is really hard. And I will tell you honestly, I think the men and--the biggest change I have seen in USAID--I was there during the Clinton administration--is the---- Mrs. Lowey. In Afghanistan, you mean? Ms. Smith. No, in USAID. Mrs. Lowey. Oh, USAID. Ms. Smith. Is the impact on the agency of the men and women who for 15 years have worked in environments like Afghanistan where it is uphill and slow, two steps forward, one step back, on and on. It is hard to spend money, hard to track money. It is really difficult. And the reason I mention the gains is, I think there are enough gains there that we need to keep going, and I think we can get to where we need to go. But you are right to point out that this can't fall off the radar and not get the attention it deserves. Mrs. Lowey. Well, let me thank you, because I know you have been involved here so very long. And when I meet these dedicated men and women, I really have just such enormous respect and working together with other groups like Mercy Corps that just get in there and putting their lives on the line in many respects---- Ms. Smith. Absolutely. Mrs. Lowey. It is extraordinary. But I just feel so passionately about the girls' education, and I know our chair does, in Afghanistan. And I do hope not only can we maintain what we have achieved---- Ms. Smith. Can we expand? Mrs. Lowey. But we can expand. So I look forward to continuing to hear about the progress. Ms. Smith. Absolutely. Thank you. Mrs. Lowey. Thank you. Ms. Granger. Mr. Fortenberry, do you have another question? Mr. Fortenberry. Thank you, Madam Chair. I only want to spend a minute on each one of these things. The first question is--and it is unfair to you--and then I will give you my answer--but if you were re-designing this agency, what would you do? Starting from scratch. Okay, I will propose my solution or my perspective. If you think about America and how America's economic progress really was launched, it is through the land grant university system and extension, whereby technical expertise was then spread out across the land, mainly during agrarian times. But that is really the source of it, a foundational source of America's sustainable economic well-being. Now, you don't have a corner on the market on development. Universities are in this business. Other areas of the Federal Government are. Charities. And all of that, that is good, that is fine. But it just seems to me that replicating the land grant system and then the cooperative extension service is a means to get to all of the various components of what we are trying to do here in a way that we already have knowledge about. Ms. Smith. You are speaking to an Ohioan, so I am for this. And I have spent a long time in this field, and the land grant universities are also something where I have seen a return everywhere I have traveled, because you meet people who have either been taught by, attended, met with, or benefited from the research from some of the land grant universities. One of the things that we have done over the last few years which is important in building on that same kind of approach of, how do you take the knowledge and expertise that we have and share it systematically through our institutions, whether land grant or others? Part of Feed the Future---- Mr. Fortenberry. Which provide a permanency of continuity. Ms. Smith. Yes. Mr. Fortenberry. And this is one of the difficulties of fragmentation of air-dropped aid, semi-permanent contracts that shift and change and-- Ms. Smith. Well, and also changes from administration to administration. One of the things that has been a pleasure to me is watching health from administration to administration on health. We have continued. It is my hope that from administration to administration we will continue on food security and agriculture. Early in the design of Feed the Future, one of the things we saw as critical was to establish relationships with U.S. academic institutions and other research facilities so we could build that kind of institutional partnership that would translate over time. That has been done. My predecessor put a great deal of time and energy into that. Those are relationships that in some cases had faltered and I think have been rebuilt. Those same kind of relationships are being built through the Lab. So this notion that we need to have long-term institutional relationships with institutes of higher learning is something I think that has been brought back through Feed the Future and through the Lab, and something, I agree with you, we should absolutely continue. Mr. Fortenberry. What is the best example--again, another hard question--where the agency has picked up the pieces from war, from external shock factors as you have said, has moved people with respect to local values and local norms into a more sustained position both in terms of eradicating poverty, structural poverty, putting in place governance structures that are consistent with human dignity, and then, again, provide continuity for real hope and human flourishing in the future. Where is the best example? Ms. Smith. Colombia. Now, here is the challenge, though, with that being the best example. That has taken a long time, and we are about to embark on the next phase of the transition. And I think there have been a lot of places where we have seen significant gains over a year, 2 years, 4 years. You can look at a country, any number of them, including in sub-Saharan Africa, Central America, Latin America, where we say there is great progress. There has been a huge reduction in poverty, but do we have all the ingredients we need for that to be sustained? Oftentimes, the answer is no, because it takes a very long time. One of the things I would put on a white sheet of paper-- we can talk about that plain white sheet of paper sometime--is the ability to sustain the very long-term work it takes for these transitions. It is not a 2-year proposition. Mr. Fortenberry. It is a good answer. Let me add one more thing before my time is up. There is a very small program which you administer that goes through USDA called Farmer to Farmer. It was the brainchild of my predecessor. And what this does is it links farmers who are retired or who are in a phase of life where they have a little extra time with partner countries, communities in other areas where they can move their technical expertise, develop person-to-person contact. What a beautiful concept. And it has been very successful. However, I don't think it is branded very well. I mean, think of the impact that if this was more well- known and then became a model for Doctor to Doctor, Nurse to Nurse, Engineer to Engineer, Lawyer to Lawyer. It fits seamlessly into what we already do, but it humanizes and personalizes it for the American people. Most people can't join the Peace Corps. Most people are beyond military volunteer age. Most people are not going to join the foreign service or the foreign ag service or USAID and an NGO, but they want to do something that has meaning. And that is a little small program that is not branded very well that I think if further--I have talked to the secretary of ag about this--further integrated into the ag department in partnership with you, and then administered more closely by the government itself, it becomes a template for leveraging the vast expertise and goodwill of many Americans in achieving the goals of leveraging additional assistance in continuity over time that are available to us, if we just tap into the expertise. Ms. Smith. I like it. Mr. Fortenberry. I will include you. I am getting ready to write a letter to the secretary of ag on this, which he asked me to do. Maybe I can copy you. Ms. Smith. Please do, because I will meet with our Feed the Future team and also talk to the Secretary about it. Mr. Fortenberry. Okay, thank you. Ms. Smith. I appreciate that. Thank you. Ms. Granger. Mr. Serrano. Mr. Serrano. Thank you, Madam Chair. And thank you to you, Administrator, for being here with us today. I am going to ask a question that I have been asking for years. I have never gotten an answer. I am going to try it again. How do we get into a country that doesn't want us to be there? For example, Cuba. Did the Cuban government say it is okay for USAID to be here, involved in activities? Did Mr. Gross know what he was getting into, where at that time and for many years an unfriendly government, unfriendly--and I am a believer that we caused a lot of that unfriendliness--but nevertheless unfriendly. I mean, I sometimes can't tell the difference--and I will be as blunt as I can--between your agency and the CIA on that issue. Ms. Smith. Sir, I think the policy of the Agency--and I think it has been very much the policy of our government for decades--is that we strongly support civil society and the rights of people to organize and speak their views. Unfortunately, some governments don't support that. And we abide by U.S. law in our democracy and governance programs. We support civil society all over the world. We also abide by the Brownback amendment, for example, which is included in annual appropriations bills, which reads specifically that ``with respect to the provision of assistance for democracy programs in this Act, the organizations implementing such assistance, the specific nature of that assistance, and the participants in such programs shall not be subject to the prior approval of the government of any foreign country.'' We abide by that law, sir, and it is in annual appropriations. Mr. Serrano. Okay, so you do get into countries in a covert way? Ms. Smith. No, it is not covert. We support partners on the ground. There are civil society organizations all over the world, including in Cuba and individuals, and in the case of Cuba, we also have followed the law, as passed by this Congress, but there are civil society organizations all over the world that operate in their countries and oftentimes with U.S. support. It is not us going in and sneaking in. Mr. Serrano. But, I mean---- Ms. Smith. And I think if you look---- Mr. Serrano. I understand that. And I am not necessarily against that. But I have always been amazed, especially in Cuba, on how we pull that off. To be writing to a group and saying, ``You should be doing this,'' that is one thing. To be sending them text messages, if that is available, that is okay. Sending them videos, that is okay. But going in physically and establishing yourself there against the wishes of that government, how do we do that? The Cuban Government knew you were there all the time, right, USAID was there? Ms. Smith. Sir, respectfully--and we have discussed this before--past programming in Cuba, much of that was undertaken before I joined the Agency. I am more than happy to have teams come up and brief you on the very specifics of everything that has happened up to now. I can tell you that where we are now is that our programs have hit their expiration date. I have asked our teams to do a forward-looking portfolio review to see how we proceed, and we will continue to support, as the President has said, democracy, human rights, and governance in Cuba, despite the change in policy. It is still a priority for the United States. Mr. Serrano. And I think that is fine. You didn't answer my question, but I don't think you did it because you didn't want to. I don't think you know the answer to the question, and I don't think anybody really knows the answer to the question. The thing is that a lot of members of Congress--and this is not a knock on any of my colleagues--accept things as they are. ``Well, that is the way it is.'' I tend to at times ask, why is it that way? You know, how did we get into that country? I mean, I know invasions. I know how we got into Iraq. I know how the CIA gets into places. We all know that. But I can't for the life of me figure out how USAID gets into a place, works on the ground, and then is surprised when one of the members is arrested or something for being in a place they are not supposed to be in. Ms. Smith. Right, let me share with you--I can assure you, we do not invade anyone. New guidance was put in place at the Agency almost a year ago for how the Agency operates in environments where the space for civil society is closed because governments do not support the right of their citizens to engage in the way they feel they should be able to do so. And we work through partners in those cases. This is not USAID personnel on the ground. And I am speaking from my experience. I joined the Agency in December. And if you would like to go back into the past, I am more than happy. Again, I would like to bring a team of people to discuss it in detail. I was not present for all that. But I can tell you that we work with partners. They are aware of the laws. They are supposed to have--we require them to have risk analysis plans, risk mitigation plans, shutdown plans, should it become difficult for them to operate. We regularly review all of these programs. I have been able to attend one such review since I started, and all these things have been put in place to get to some of the concerns you point to, which is the well-being of partners. Ms. Granger. Thank you. Mr. Ruppersberger. Mr. Ruppersberger. Thank you. I am still fairly new on this committee, but one item that has intrigued me is the Global Development Lab. I think it is supposed to be--and I referred to it in my last questioning--kind of the DARPA of the development world. And I have worked with DARPA in my former committees and I find them to be probably one of the most outstanding organizations, because they think out of the box, they are willing to take risk, but the whole purpose is to have the ingenuity and the development to keep America ahead of our enemies or adversaries or whatever. DARPA has a 50-year track record of true innovation. The Internet, GPS, stealth tech, drones, their involvement has dramatically altered our military to an extent. Now, it is my understanding that the Global Development Lab is supposed to do the same. The lab is designed to be an outside-the-box innovative group dedicated to disruptive ideas and technologies to solve development challenges. Their mission, the key to this lab is disruption. It has to break down traditional ways of getting at problems, as to end up notions of protocol and how we deliver services, and it has to be allowed to think differently, act differently, in the end game to find breakthrough solutions. Now, I can say this. It is kind of tough to have an organization like that with a manager. A manager has to have accountability. But this is something that has worked in our military, and I would really like you to address what your opinion is, as the administrator for USAID, how you would manage that. I know that USAID has requested $170 million, which is a lot of money, for this line item. And I am asking, as the manager, how can you guarantee that this group will not just unconditionally take the traditional ways down the road and that you have the right people who are smart, that--you know, they are given the right and the ability to be a special group? It is kind of like the transition, when our younger generation would go to work with no coats and ties and had pool tables, but this is addressing those brilliant people that need to try to take this group to another level. Could you tell me what your opinion is and how you are going to manage it? Ms. Smith. Thank you for that. And I think the Lab is a really valuable addition to the Agency. And it has a lot of smart people in it, so I am very confident that we have intelligent, smart people running it. One of the other benefits, in terms of when you ask how do you manage it, is one of the things these people tend to do, and they do it of themselves, but they also help the rest of the Agency figure out how to do this, is that they measure things all the time. They pay attention to data. They pay attention to evidence. That is part of what drives their work. So in my work with them since I--actually since I have been nominated--and when I look at their plans for the coming year, they have set targets for themselves. And, again, they measure across the board to see if they are delivering. And I think there is a high probability that they will. I think the challenge in managing the Lab is twofold. On the one hand, I think it needs to have the space to innovate and be disruptive, as you rightly point out. But I think at the same time it needs to be sufficiently integrated that we are taking advantage of the innovations it brings to the table and figuring out how to both integrate them into our programs and get them to scale, because the other advantage we have--we are the United States. So if the Lab comes up with a development solution--as they have in many cases--that if scaled could change the world, we have also got to do the work of figuring out how we use our convening power to force multiply in that way. So my view is, as a manager, I am going to judge them against the measurements they have put forward of their goals and objectives for the next year. They have done a fine job, I think, of striking the balance between space for innovation in a kind of unfettered way, as well as innovations that are directed towards our priorities. And then my goal--and, again, I am a short timer--is to see whether we can put in place some sort of process and if we can pull one or two of these innovations forward, and really look at how we use our role as the U.S. government to convene others and take some of these things to scale. Because I think that is the other piece of this. Mr. Ruppersberger. And everyone has to be held accountable, especially for the money that we are putting in. Ms. Smith. Absolutely. We do a great deal more evaluation than was done in the past across the Agency, so I think that helps us do that. I am a strong believer in accountability, but also transparently measuring our results, because that will tell us whether we are succeeding or not. Mr. Ruppersberger. Okay, great, thank you. Ms. Granger. Ms. Wasserman Schultz will have the last question. Ms. Wasserman Schultz. Thank you very much. Just briefly, I continue to be concerned, as many other members do, about Haiti and its continued struggle with being able to utilize, plan and execute projects that are funded by USAID's assistance. There was a GAO report on the $1.7 billion in USAID assistance that Haiti has received, and they clearly found a lack of planning for the sustainability of non-infrastructure projects. So can you talk about what USAID has done to address GAO's recommendations in its report and to try to focus on projects with long-term sustainability and what your view is on how Haiti is doing and how we can get them to do better? Ms. Smith. Sure. And with GAO and other reports, what the Agency does is track what the recommendations are and where we are with respect to implementing them. I don't have the specifics on exactly where we are against the number of recommendations they provided, but I can get that information to you. USAID closely tracks the status of the Agency's responses to GAO recommendations. We are addressing the three recommendations from the June 2015 GAO report on Haiti reconstruction. With regard to the first recommendation, in December 2014, USAID's Mission in Haiti began to incorporate sustainability analysis into the design phase of non-infrastructure activities, including for education and health (nutrition) sector activities and for a project to combat gender-based violence. The Mission has also made specific tools available on its internal website to assist with sustainability analysis. These tools include a checklist of sustainability considerations and a menu of illustrative questions, issues and examples to help design teams work through the sustainability objectives of projects. USAID expects to implement the second recommendation, providing guidance on the types of information that missions should include in Section 611(e) certifications, in the current fiscal year. The Agency is already taking actions to address Section 611(e) compliance, including having select operating units develop guidance for construction activity management, holding training on compliance with Section 611(e), and incorporating construction activity tracking in the Agency's Acquisition and Assistance Planning system. USAID is also taking action to address GAO's third recommendation. The Agency expects to complete guidance on construction activities and link the guidance to our Automated Directives System within the next six to 12 months. I would say a couple of things. I think the challenge of sustainability in Haiti is that Haiti still doesn't have some of the core capabilities that are needed to sustain the gains. And a lot of that rests with governance. And I don't mean a government that we may like or dislike; I mean a government that actually has the skills, inclination and steadfast commitment to governing and managing resources. That is, I think, one of the biggest challenges in Haiti, which was not aided by its history, and certainly was not aided by an earthquake that literally destroyed any physical semblance of government that existed. It is still an uphill battle to get the kind of sustained gains we need in Haiti, given the weakness in capacity across the entire government. So I think that has been a constraint. I have worked Haiti for a long time, and actively once the earthquake struck. I think that is still our long-term challenge. In sustainability, I will just mention two examples to you. We have done a lot of tree planting across Haiti and found very high returns so far in terms of the sustainability there, that those--I forget the--I can get you the exact percentage, but it is well over 75 percent, 80 percent of the 5 million some trees that we have planted with partners in Haiti are still growing; they are still being taken care of, and so they are still there. As part of a larger effort to stabilize watersheds, increase tree cover, and promote sustainable agricultural practices in disaster prone regions of the country, USAID has supported the planting of over 5 million seedlings (through the Feed the Future WINNER project) with a survival rate of about 70 percent throughout the country. But I was recently involved in a review of another project that we did with partners--the Inter-American Development Bank and Coca-Cola--on mangoes. Haiti produces, it turns out, very good mangoes. We found that through the course of that project we were able to increase incomes, and train producers in skills that enabled them to care for and produce better quality mangoes for export. What we agreed, though, in terms of sustainability, is we can't judge yet whether that is going to be sustainable. We are going to come back and look in a year and see whether it is sustainable, because, again, what is necessary to really sustain it, it has to be either communities and/or governments that will sustain it. So I think Haiti is still a challenge. I think it is one we need to have a commitment to working on. But I would have to say, in all honesty, this is still going to be very slow going. Ms. Granger. Thank you. Mrs. Lowey. Mrs. Lowey. As we close, I can't resist, and I want to thank my colleague, Ms. Wasserman Schultz, for bringing up this issue. We have had probably two of the best professionals--and there are many extraordinary professionals at AID--Beth Hogan and then Tom Adams, retired. And we have had in-depth briefings on Haiti. We don't have Boko Haram, thank goodness. We don't have other terrorist groups there. We have really good people who have endured a great deal. And it really is, for me, one of the most--I don't want to quite say depressing--but unhappy situation, because it seems to me we could do so much more. I will give you one suggestion. I tried to put in place what I have called the community of learning, getting people outside of Port-au-Prince, establishing a school. We have Paul Farmer, who is doing very good work on health care, putting in place some kinds of source of ways for them to learn a living. We just can't seem to do it. And we are upwards of $3 billion-- we have other private-sector money. So I just want to say, as someone who has worked on AID programs a long time, that many outstanding professionals, I would like to work with you in the short period of time--and I know when you say governance, we have governance problems everywhere. And I wonder what are the lessons learned? How do we improve the governance problem? I think, frankly, of course, you will always have people come and say, oh, we did this, we did that, but basically it has been a failure. We don't have governance, we don't have jobs, and the people keep smiling and singing. I really feel we have let them down, so I would like to work with you to see what we can do to really improve the situation. I know you don't have that much time. But I just have always felt that this was doable and somehow we just haven't done it. Ms. Smith. I would love to work with you on that. And thank you for your kind words about Tom and Beth. I have benefited enormously from Beth's knowledge and experience, including on this issue. I think in an interesting way--and you may be able to tell, I am the eternal optimist, glass-half-full kind of person. Mrs. Lowey. As are we. Ms. Smith. We may have a bit of an opportunity, quite frankly, in Haiti right now, by which I mean if you look at the sheer force of that earthquake, it literally broke Haiti in two. I still can't wrap my arms around, my head around what actually happened. Then there was a very big surge of activity around reconstruction. And this often happens. And during the big surge, things often get quite confusing. Everybody is there. Lots of donors. Peacekeeping force, lots of attention. It is now a slightly quieter period. I think we have some evidence and knowledge in the bank, both from Haiti, but also from other cases about what has worked and what hasn't. We have a lot of evidence of what didn't work, but I think we have some important evidence of things that have worked. So I think it may be possible in a slightly quieter way, if you will, to take some things that have worked, and figure out where we can build on them--your notion of communities of learning is quite interesting. So I would be delighted to work with you on this. Mrs. Lowey. Well, I thank you very much. I thank my colleague for bringing the issue up. I know you have in your district, as I have, many Haitians who would like to be helpful. I look forward to talking about successes a few months from now. Ms. Smith. I am game. Mrs. Lowey. Thank you, Madam Chair. Ms. Granger. Now, as we close, just a couple of things. One, Mrs. Wasserman Schultz raised Zika during the questions. You mentioned a few things USAID had been doing, but not how much funding that has actually been obligated. So can you follow up after this and just let us know that for this fiscal year? Ms. Smith. Yes. Ms. Granger. The second thing as we close, one issue I mentioned in my opening statement, we continue to hear from organizations with little experience competing with USAID about how difficult it can be to partner. There are many groups that are doing good work, have ideas they bring to the table. I know that we could all give you an example of someone we had heard from. So we need you to come up with ways to address this issue and report back to the subcommittee, if you will do that. Ms. Smith. I would be happy to. Ms. Granger. Good, thank you. Administrator Smith, thank you again for your time. Members may submit any additional questions for the record. The Subcommittee on State, Foreign Operations, and Related Programs stands adjourned. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] W I T N E S S E S ---------- Page Brownfield, Hon. William R. Hogan, Elizabeth................................................. 79 Kerry, Hon. John F............................................... 24 Lew, Hon. Jack................................................... 344 Palmieri, Francisco.............................................. 74 Postel, Hon. Eric G.............................................. 14 Smith, Gayle..................................................... 421 [all]