[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]











                   IRAN'S POWER PROJECTION CAPABILITY

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON NATIONAL SECURITY

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 5, 2015

                               __________

                           Serial No. 114-83

                               __________

Printed for the use of the Committee on Oversight and Government Reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                    Sean McLaughlin, Staff Director
                 David Rapallo, Minority Staff Director
    Andrew R. Arthur, National Security Subcommittee Staff Director
                    Sharon Casey, Deputy Chief Clerk
                                 ------                                

                   Subcommittee on National Security

                    RON DESANTIS, Florida, Chairman
JOHN L. MICA, Florida                STEPHEN F. LYNCH, Massachusetts, 
JOHN J. DUNCAN, JR., Tennessee           Ranking Member
JODY B. HICE, Georgia                ROBIN KELLY, Illinois
STEVE RUSSELL, Oklahoma, Vice Chair  BRENDA L. LAWRENCE, Michigan
WILL HURD, Texas                     TED LIEU, California























                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on November 5, 2015.................................     1

                               WITNESSES

Mr. Thomas McInerney, Lieutenant General, USAF, Retired, Member 
  of the Iran Policy Committee
    Oral Statement...............................................     5
    Written Statement............................................     8
Mr. Jonathan Schanzer, Vice President for Research, Foundation 
  for Defense of Democracies
    Oral Statement...............................................    11
    Written Statement............................................    13
Mr. Steven Bucci, Director, Center for Foreign and National 
  Security Policy, The Heritage Foundation
    Oral Statement...............................................    22
    Written Statement............................................    24
Mr. Alireza Nader, Senior International Policy Analyst, Rand 
  Corporation
    Oral Statement...............................................    35
    Written Statement............................................    37

 
                   IRAN'S POWER PROJECTION CAPABILITY

                              ----------                              


                       Thursday, November 5, 2015

                   House of Representatives
                  Subcommittee on National Security
               Committee on Oversight and Government Reform
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 9:04 a.m., in 
Room 2154, Rayburn Office Building, Hon. Ron DeSantis [chairman 
of the subcommittee] presiding.
    Present: Representatives DeSantis, Russell, Hice, Hurd, 
Lynch, Kelly, and Lawrence.
    Also present: Representative Welch.
    Mr. DeSantis. The Subcommittee on National Security will 
come to order.
    Without objection, the chair is authorized to declare a 
recess at any time.
    This hearing will conduct oversight over the enhancement 
due to the Obama administration's nuclear deal of Iran's 
current capabilities to project power by reviewing Iran's own 
military arsenal, as well as its financing, training, and 
arming of proxy groups throughout the Middle East. The hearing 
will also examine how the U.S. should be prepared to defend its 
national security interests in the Middle East and at home 
against Iran's advancement in power projection as a result of 
sanctions relief.
    It has been reported that Iran's defense budget makes up 
one-third of its national $300 billion budget. If these 
estimates are accurate, an influx of $100 billion due to 
sanctions relief would increase Iran's single-year budget by a 
third, providing it with substantially increased financial 
resources to further its foreign policy agenda.
    It is well known that Iran projects power in the Middle 
East through the funding of foreign terrorist organizations, 
hostile governments, and political activist movements, and by 
arming militant groups and offering training facilities. Iran 
has long been a supporter of the Lebanese group Hezbollah, the, 
``vanguard of resistance to Israel.'' Hezbollah is perhaps 
Iran's most effective terrorist organization within the region 
and of course was responsible for killing more than 240 
Americans at the Marine Corps barracks in Beirut in 1983.
    With Iran's financial and military assistance, Hezbollah 
has become a prominent influence in Lebanese politics. The 
State Department estimates that Iran has given Hezbollah 
hundreds of millions of dollars and trained thousands of 
Hezbollah troops at Iranian training facilities.
    In 2014, the U.S. intelligence community Worldwide Threat 
Assessment argued that Hezbollah has, ``increased its global 
terrorist activity in recent years to a level that we have not 
seen since the 1990's.''
    Further Iranian funding of Hezbollah would be, of course, 
of serious concern to the U.S. and our allies.
    Hamas has also consistently received funds, weapons, and 
training from Iran. People talk about Iran being a Shiite 
power. They are absolutely willing to arm Sunni groups like 
Hamas. And then when you have decent Shiite governments like in 
Azerbaijan, Iran is opposed to that. Iran has frequently 
assisted Shiite militias and terrorists in Iraq, Bahrain, and 
Yemen. For these reasons, Iran has been designated by the State 
Department as a state sponsor of terrorism since 1984.
    Iran is maintaining and expanding an advanced ballistic and 
cruise missile program that poses a threat to U.S. forces, 
interests, and allies in the gulf region and beyond. The 
recently signed nuclear accord does not limit Iran's ability to 
continue to develop its ballistic and cruise missile programs. 
The potential influx of funding as a result of sanction relief 
may facilitate the advancement of Iran's ballistic and cruise 
missile programs which will result in Iran posing an even more 
lethal threat to the United States and our allied assets in the 
region.
    Our military leaders understand the threat posed by Iran. 
During his confirmation hearing in July for JCS Chairman, 
Marine Corps General Joe Dunford said, ``my expectation is that 
regardless of there being an agreement or not, Iran will 
continue to be a malign force and influence across the 
region.''
    Retired Marine Corps General Jim Jones further elaborated 
on this threat during testimony before the Senate Armed 
Services Committee hearing last month. He said, ``it is a 
regime that artfully dodges its commitments, generates 
international friction to exert greater domestic control on its 
citizens, constantly hardens its grip on the country. The 
mullahs' government seriously violates human rights, U.N. 
Security Council resolutions and international law. They reject 
the right of Israel to exist by opposing and actively 
undermining the Middle East peace process. And Tehran remains 
the chief antagonist of democracy and liberalization across the 
Middle East where a better future for millions of people 
struggles to emerge. Its goal is the consolidation of the 
revolution, which is martially enforced at home by the Islamic 
Revolutionary Guard Corps and prosecuted abroad by the Quds 
Force and Iran's many proxy groups.''
    And I think it is worth pointing out that under the 
agreement with the Obama administration, the international 
sanctions on the Quds Force are actually lifted.
    Sanctions relief will exacerbate Iran's ability to pursue a 
nefarious foreign policy agenda. Israeli officials have warned 
that Tehran will direct billions of dollars it will reap from 
the end of economic sanctions toward its anti-Israel proxies in 
the region. Iranian officials often call for Israel's 
destruction. Short of that, proxy forces like Hezbollah, Hamas, 
and Palestinian Islamic Jihad provide Tehran with a shield 
against a possible Israeli military strike on its nuclear 
program.
    And I would note today in the ``Wall Street Journal,'' we 
have on the front page Iranian hacking surges in the U.S. And 
so here you have an agreement. We claim that Iran is going to 
start to change its ways and they are not going to have a 
military use of nuclear energy, but yet how are they responding 
to that? They are hacking inside the United States.
    So Iran's foreign policy will remain at odds with U.S. 
interests. And so with this understanding, we must turn to the 
tasks of protecting U.S. national security issues and the job 
of standing by our closest allies in the region.
    And so we are delighted to have such a great group of 
witnesses here for our hearing, and I will recognize them in a 
minute. But before I do that, I would like to recognize the 
ranking member of the Subcommittee on National Security, Mr. 
Lynch, for his opening statement.
    Mr. Lynch. Thank you, Mr. Chairman. I want to thank you for 
holding this important hearing.
    I also want to thank our witnesses for helping the 
committee out with its work.
    There is no doubt that Iran is a destabilizing force in the 
Middle East, and I agree with the quote by General Dunford that 
they will continue to be so in the future.
    The United States first placed Iran on its terrorist list 
in 1984 due to its support of Lebanese Hezbollah. In its most 
recent country terrorism report, the State Department found 
that throughout 2014 Iran did continue to support terrorist 
groups, including Hezbollah, and providing financing, training, 
and arms to Iraqi Shia militias and even some Afghan fighters 
to bolster Bashar al-Assad in Syria.
    Iran has also detained American hikers and journalists, and 
most recently is reported to have arrested two American 
citizens on unspecified charges.
    It is clear that we cannot trust the Iranian regime, but 
that is precisely why the Obama administration has worked so 
hard to reduce their nuclear weapons capabilities. I believe 
that the Joint Comprehensive Plan of Action, also known as the 
Iran nuclear agreement, offers us the most viable path toward 
limiting Iran's nuclear program and preventing its future 
development of a nuclear weapon.
    In referencing the nuclear arms race between the United 
States and the Soviet Union in his 1960 inaugural address, 
President Kennedy remarked that, ``sincerity is always subject 
to proof'' The Iran nuclear agreement does not require us to 
simply rely on the sincerity of the Iranian leadership. Rather, 
it depends entirely on proof in the form of a robust nuclear 
inspections and verification regime conducted by IAEA, the 
International Atomic Energy Agency. To be clear, the lifting of 
nuclear-related United Nations and European Union sanctions 
will only occur after IAEA verification that Iran has complied 
with its end of the deal.
    Specifically, the IAEA must monitor and verify that Iran 
has met a variety of the stipulations required by the 
agreement. For instance, Iran must reduce its total uranium 
stockpiles by 97 percent, from 10,000 kilos to 300, 
immediately. It must also reduce the number of centrifuges from 
19,000 to about 6,000, which Iran has reportedly already begun 
to do so. The IAEA must also verify that Iran does not produce 
or retain any weapons-grade uranium, and the little low-
enriched uranium remaining is to be for commercial and 
scientific uses only.
    The IAEA must monitor and verify the dismantling of the 
heavy water reactor at Iran's water plant in Arak so that it 
will not longer be able to produce weapons-grade plutonium. 
These are just a few of the substantial physical and verifiable 
reductions that Iran must undertake.
    The Treasury Department estimates that upon implementation 
of the agreement, Iran will have access to between $100 billion 
and $125 billion in foreign exchange assets held in the U.S., 
EU, and mostly Asian banks, a lot of which is already 
obligated, including nearly $20 billion owed to China.
    In all, experts anticipate Iran to use the vast majority of 
these funds to pay down current debt obligations and domestic 
needs estimated to be over a half a trillion dollars. These 
needs include as much as $200 billion in necessary oil 
infrastructure investments and the purchase of commercial 
aircraft to replace a deteriorated domestic fleet.
    There is still the danger that Iran may direct a portion of 
repatriated funds to finance terrorist activity or further 
destabilize the Middle East. That is why it is critical that 
the agreement leaves in place our sanctions pertaining to 
terrorist financing, human rights, and weapons of mass 
destruction. As noted by the nonpartisan Congressional Research 
Service, the many U.S. sanctions that will remain include those 
specified by Executive Order 13224 issued by President Bush 
following the 9/11 terrorist attacks and authorizing the U.S. 
Government to block the assets of foreign entities and 
individuals to support terrorist organizations.
    Chief among them is the Islamic Revolutionary Guard Corps, 
which the State Department has deemed the regime's primary 
mechanism for cultivating and supporting terrorists abroad. 
Iran's designation as a state sponsor of terrorism will also 
stay in effect along with the array of sanctions that accompany 
it, from export controls and prohibitions on arms sales to 
withholding economic assistance.
    The nuclear agreement also includes a snapback mechanism to 
reimpose sanctions in the event that Iran cheats.
    Mr. Chairman, I look forward to discussing with today's 
witnesses how we might build upon the Iran nuclear agreement, 
the purpose of which is stated in the preface of the agreement 
that we can all support, and that is, quote--and I am quoting 
from the agreement--that under no circumstances will Iran ever 
seek, develop, or acquire any nuclear weapons.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. DeSantis. The gentleman yields back. Thank you.
    I will hold the record open for 5 legislative days for any 
members who would like to submit a written statement.
    We are going to recognize our panel of witnesses. We look 
like we are going to have votes called in about an hour, so my 
hope is, if you stay to the 5 minutes, we will then do our 
questioning and hopefully we can get everyone or definitely 
most people in because I would hate to have to recess and come 
back. I know you guys have a lot to do.
    So first, I am pleased to welcome Lieutenant General Thomas 
McInerney, United States Air Force, retired, member of the Iran 
Policy Committee; Dr. Jonathan Schanzer, Vice President for 
Research at the Foundation for Defense of Democracies; Dr. 
Steven Bucci, Director of the Center for Foreign and National 
Security Policy at the Heritage Foundation; and Mr. Alireza 
Nader, Senior International Policy Analyst at the RAND 
Corporation. Welcome to you all.
    Pursuant to committee rules, all witnesses will be sworn in 
before they testify. So if you would please stand and raise 
your right hands.
    [Witnesses sworn.]
    Mr. DeSantis. Witnesses, thank you. Please be seated.
    All witnesses answered in the affirmative.
    Your entire written statement will be made part of the 
record, so please limit your testimony to 5 minutes. Lieutenant 
General McInerney, you are now recognized for 5 minutes.

                       WITNESS STATEMENTS

                 STATEMENT OF THOMAS McINERNEY

    Mr. McInerney. Chairman DeSantis, Ranking Member Lynch, 
members of the Subcommittee on National Security, thank you for 
the opportunity to give you my concerns on this important 
subject to our Nation's current and future national security in 
the Middle East.
    The Iran nuclear agreement or, as it is officially titled, 
The Joint Comprehensive Plan of Agreement, is the most 
dangerous nuclear agreement ever signed by an American 
President. Its impact on Iran's ability to dominate the Arabian 
peninsula and force project in the future is profound.
    I harken back to my days on active duty when I commanded a 
U.S. Air Force Europe task force to a CENTO exercise in Iran in 
1977, composed of 12 F-4's and six 111's flying out of Shiraz, 
Iran. The Shah of Iran was highly motivated in expanding 
stability in the region until the Carter administration threw 
him under the bus, as the current administration has done in 
Egypt, Libya, and Syria, as well as enabling the Iranians to 
make Iraq a proxy with our withdrawal in 2011.
    I say this for the following reasons.
    Having read the document in full, one can make a reasonable 
case that it limits Iranian nuclear weapons development over 
the short term with some reasonable oversight procedures. 
However, these are just words similar to what Neville 
Chamberlain produced in September 1938 and yet a year later, 
World War II started and 60 million lives were lost. My point 
is that words might be acceptable if we believe that Iran was a 
trustful partner in this agreement. Yet the mullahs have never 
observed an agreement in the past.
    This agreement should be a formal treaty in accordance with 
our Constitution.
    The Senate has not yet had a vote to approve it.
    There is no coupling with the agreement and Iran's proxy 
force projection of its radical Islamic terror activities 
globally.
    Iran has already made violations of the agreement even 
before it was approved. These violations include the visit of 
General Soleimani to Moscow where he met President Putin and 
leaders in violation of U.N. sanctions to discuss the sale of 
the S-300 SAM. They intentionally violate agreements and 
nothing happens.
    The Iranians launched a nuclear capable IRBM on 10 October 
2015 in violation of U.N. Security Council resolution 1929. No 
action has been taken against them.
    Now, several months after the agreement was reached in 
July, the Russians projected forces into Syria to keep Bashar 
al-Assad in power and attack the Free Syrian Army's forces 
supported by the U.S.-led coalition. The PRC is now supporting 
the Assad government. Is something wrong with this picture of 
Iranian bad behavior being supported by Russia and China after 
the agreement was signed?
    Israel who has the most to lose with this agreement is now 
facing a third intifada instigated by Iran.
    In the meantime, with a growing radical Islamic threat, 
this administration has been unilaterally disarming the U.S. 
military ever since they came into office starting in April 
2009 with the cancellation of the F-22, the next generation 
bomber, the missile defense system in Poland and the Czech 
Republic, and withdrawing prematurely from a stabilized Iraq, 
which has resulted in the creation of ISIS in 2009.
    The administration shifted U.S. policy shortly after the 
President's Cairo speech where he had Muslim Brotherhood 
members in the front row. President Mubarak was not invited, 
which resulted in the Muslim Brotherhood, a radical Islamic 
organization, taking over Egypt until the Egyptian people and 
General el-Sisi threw them out.
    It further created instability in the Middle East by 
attacking Libya to remove Colonel Qaddafi without congressional 
authorization. This resulted in the deaths of four Americans on 
11 September 2012 when the U.S. consulate was attacked. No 
American military response was forthcoming.
    Today a land and air bridge from Iran goes through Iraq 
that the Russians and Iranians are using to reinforce Syria in 
violation of the U.N. Security Council.
    This is the most dangerous situation ever in the Middle 
East. I am skeptical of the Iranians agreeing to follow this 
nuclear agreement. They will continue to force project forces 
throughout the region to spread radical Islam, which the 
administration calls violent extremism. I know not the ideology 
of violent extremism, but I do know the ideology of radical 
Islam, the Koran, Hadith and Sharia Law.
    In summary, I am very concerned we have signed an agreement 
that will rival Neville Chamberlain's failed agreement and 
encourage more Iranian force projection.
    Who could have predicted 7 years ago we would leave a 
vacuum for Russian reemergence into the region and Iran would 
be the de facto hegemon?
    Thank you for your time and God bless you all during these 
very difficult times for America.
    [Prepared statement of Mr. McInerney follows:]
    
    
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    Mr. DeSantis. Thank you, General.
    The chair now recognizes Mr. Schanzer for 5 minutes.

                 STATEMENT OF JONATHAN SCHANZER

    Mr. Schanzer. Chairman DeSantis, Ranking Member Lynch, 
members of the subcommittee, on behalf of FDD and its Center on 
Sanctions and Illicit Finance, thank you for the opportunity to 
testify.
    Iran has long projected power through the financing of its 
proxies around the Middle East. This strategy figures 
prominently in Iran's plans for regional hegemony.
    The nuclear deal signed this summer will now provide Iran 
with an estimated $120 billion in sanctions relief and another 
$18 billion in annual oil sales. The White House insists Iran 
will invest this windfall in roads, schools, hospitals, and 
other neglected infrastructure, but this is wishful thinking 
given Iran's track record. Even if Iran earmarks only 10 
percent for its proxies, we are looking at more than $10 
billion in illicit finance.
    The beneficiaries of Iran's largesse will include terrorist 
groups, Hamas, Hezbollah, Palestinian Islamic Jihad, Kata'ib 
Hezbollah, and other violent factions in Iraq and al-Sabireen, 
a new Shiite group in Gaza.
    On top of that, we can expect continued assistance to the 
Assad regime in Syria which continues to drop barrel bombs on 
its own population. And let us not forget the Houthis who 
continue to play a destabilizing role in Yemen.
    Iran's sanctions relief will further benefit Iran's 
hardliners who bankroll those terror groups and rogue regimes. 
This includes the Islamic Revolutionary Guard Corps, IRGC, 
which will see many of its sanctioned entities de-listed in 
Europe. Sanctions relief will further benefit companies 
belonging to the Supreme Leader himself. I am referring here to 
Ali Khamenei's economic empire known as EIKO.
    Mr. Chairman, all this raises troubling questions about the 
U.S. Treasury's mission. It was a little more than a year ago 
when the New York Times' David Sanger wrote about the Treasury 
sanctions team is President Obama's favorite noncombatant 
command. The moniker was well deserved. The Office of Terrorism 
and Financial Intelligence played a crucial role, along with 
Congress in building the sanctions architecture that punished 
Iran for its nuclear mendacity, ballistic missile development, 
the funding of terror groups, human rights abuses, and the 
backing of rogue states.
    Above all else, Treasury's mandate was to protect the 
integrity of the U.S.-led financial sector, but that mandate is 
now in jeopardy. The banks, businesses, and persons said to be 
de-listed have not earned it. Iran has provided no evidence 
that they have ceased their illicit activities, and once they 
are de-listed, the terms of the Iran deal forbid them from 
being re-listed, even if they commit new financial crimes. And 
the $120 billion in sanctions relief will flow regardless of 
Iran's regional activity. In the end, Treasury's principles 
were compromised to secure President Obama a diplomatic 
victory, and it is doubtful that this will be a lasting one.
    For Treasury's mission to be taken seriously, it must now 
be able to resume its campaign against Iranian financial crimes 
and to punish Iran for violations of the nuclear deal. How it 
will do this, given the constraints of the Iran deal, is 
unclear.
    Mr. Chairman, the road ahead will be challenging, but I 
offer several recommendations here for the committee's 
consideration.
    Number one, Treasury needs to reaffirm its mission. 
Congress should request a road map from the Office of Terrorism 
and Financial Intelligence. Treasury must now articulate how it 
plans to continue to be an effective noncombatant command under 
these new challenging circumstances.
    Number two, change the way Treasury designates. Treasury 
usually targets illicit financial actors by designating them 
pursuant to one executive order, such as terrorism or human 
rights or proliferation. But in the case of Iran, illicit 
actors are often guilty of many financial crimes. Congress 
should demand that Treasury designate more entities under 
multiple executive orders simultaneously, making it harder for 
them to de-list.
    Number three, enforce what we have left. Congressional 
oversight over what relevant sanctions architecture remains is 
crucial to stemming the flow of Iranian illicit finance. The 
rigorous enforcement of existing executive orders and the 
creation of new ones, when appropriate, will be vital to 
curbing Iranian support for terrorism.
    Number four, enforce and expand designations of IRGC-
affiliated entities. Congress should direct Treasury to 
designate the IRGC in its entirety under Executive Order 13224 
for its role in financing, directing, and supporting 
international terrorism. It is currently designated for 
proliferation and human rights purposes, while only the Quds 
Force, an IRGC subsidiary, is designated for terrorism.
    And number five, lower the threshold for IRGC designations. 
Congress should consider making it easier to designate IRGC 
companies. The Financial Action Task Force suggests that the 
threshold could be 25 percent controlled and that could include 
both members of the board and stakeholders.
    Mr. Chairman, on behalf of FDD and its Center on Sanctions 
and Illicit Finance, thank you again for inviting me to 
testify. If I have missed anything that you wish to discuss, I 
am happy to answer your questions.
    [Prepared statement of Mr. Schanzer follows:]
    
    
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    Mr. DeSantis. Thank you.
    Dr. Bucci, you are now recognized for 5 minutes.

                   STATEMENT OF STEVEN BUCCI

    Mr. Bucci. Thank you, Mr. Chairman, Ranking Member, members 
of the subcommittee. I am Director of the Allison Center for 
Foreign and National Security Policy at The Heritage 
Foundation. The views I express in this testimony are my own 
and should not be construed as representing any official 
position of The Foundation.
    I retired from the Army as a special forces colonel, having 
served as a human intelligence collector for DIA and as the 
Commander of 3rd Battalion, 5th Special Forces Group in the 
CENTCOM AOR. I later served as the Deputy Assistant Secretary 
of Defense for Homeland Defense.
    My focus here will be the threat that we face from Iran in 
their efforts to project power and impose its extreme and 
abhorrent will on the world.
    The majority of my written testimony is taken from The 
Heritage Foundation's recently released 2016 Index of U.S. 
Military Strength.
    The immediate threat is the IRGC Quds Force terrorism. The 
IRGC is a very capable organization that matches its 
operational expertise in guerilla warfare, terror, and murder 
with an ideological purity that makes their only comparable 
analog the old Soviet Spetznaz. They have done operations 
around the Middle East and the world, including the attempted 
murder of the Saudi Ambassador here in Washington, D.C.
    Down the road, Iran will gain considerable capability in 
ballistic missiles. They will undoubtedly gain nuclear weapons 
eventually. They will definitely re-equip their conventional 
forces with the help of the Russians. The real key here, 
though, is the orders of magnitude greater and more dangerous 
terror events that the Quds Force can fund and execute given 
their share of the soon to be released $100 billion in new 
money. There is no sequestration pending for the IRGC. The 
windows of heaven or hell are about to open for them.
    Iran is an anti-Western revolutionary state that seeks to 
tilt the regional balance of power in its favor by driving out 
the Western presence, particularly the United States, 
undermining and overthrowing opposing governments, and 
establishing its hegemony over the region. It also seeks to 
radicalize Shia communities and advance their interests against 
Sunni rivals. Iran has a long record of sponsoring terrorist 
attacks against American allies and other interests. With 
regard to conventional capabilities, Iran's ground forces dwarf 
the relatively small armies of the other Gulf states.
    Importantly, Iran has adopted a strategy that emphasizes 
irregular warfare, asymmetric tactics, and the extensive use of 
proxy forces. The IRGC has supported and collaborated with a 
wide variety of radical Shia and Sunni militant groups, as well 
as Arab, Palestinian, Kurdish, and Afghan groups that do not 
even share its radical Islamist ideology. The Quds Force has 
trained and armed numerous proxies, particularly Lebanese 
Hezbollah, the Iraqi Shia militias, Palestinian groups such as 
Hamas and Islamic Jihad, and groups that have fought against 
the governments of Afghanistan, Bahrain, Egypt, Israel, Iraq, 
Jordan, Kuwait, Saudi Arabia, Turkey, and Yemen.
    Iran is the world's foremost sponsor of terrorism and has 
made extensive efforts to export its brand of radical Shia 
Islamist revolution.
    One cannot discuss Iran's abilities to project power 
without looking more closely at its main proxy. Hezbollah is a 
close ally of, frequent surrogate for, and terrorist 
subcontractor for Iran's revolutionary Islamist regime. Tehran 
provides the bulk of Hezbollah's foreign support, arms, 
training, logistical support, and money. Iran provides at least 
$100 million to possibly $200 million annually in financial 
support to Hezbollah. I expect this to grow substantially.
    Iran presents a significant threat to U.S. national 
security interests in the Middle East, to our key allies, and 
to our position as the balancer and influencer there. It has 
the ability to project power around the world and around the 
region, particularly in asymmetric forms. The recent collusion 
of Iran with Russia gives Iran additional abilities to move 
around the world and do significant mischief. As mentioned, 
there is no sequestration for the biggest purveyors of state-
sponsored terrorism in the world.
    With respect to the Secretary of State and his comments, 
you cannot logically separate Iran's terrorism from the JCPOA. 
It is a mistake to underestimate either the intentions or 
capabilities of Iran to do harm. Iran is not our partner, but 
they are a clear adversary.
    Thank you.
    [Prepared statement of Mr. Bucci follows:]
    
    
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    Mr. DeSantis. Thank you.
    The chair now recognizes Mr. Nader for 5 minutes.

                   STATEMENT OF ALIREZA NADER

    Mr. Nader. Chairman DeSantis, Ranking Member Lynch, and 
members of the subcommittee, thank you for inviting me to 
appear before you today to speak about the impact of sanctions 
relief on the Iranian regime's policies at home and in the 
Middle East.
    The Joint Comprehensive Plan of Action between Iran and the 
P5 Plus 1 will no doubt provide Iran with significant sanctions 
relief and alleviate some of the stresses faced by the Iranian 
economy. But several factors will constrain the Iranian 
regime's ability to substantially grow the economy and use 
newly found resources to achieve its foreign policy objectives.
    First, sanctions relief will not be granted unless Iran 
sharply reduces its nuclear capabilities. This means that Iran 
will be unable to use its nuclear program to expand its 
regional influence. Iran will only be rewarded economically 
once it has met its obligations under the nuclear agreement.
    Second, while the United States will lift secondary 
sanctions against Iran, primary American sanctions targeting 
the Iranian regime's support for terrorism and its human rights 
abuses will remain, preventing Iran from gaining access to 
American capital, and most importantly, American technology and 
know-how.
    Although the nuclear agreement is expected to provide Iran 
with significant economic relief, the amounts involved are 
unlikely to greatly empower the Iranian regime at home or 
abroad. The regime is massively indebted due to its costly 
nuclear policies. It owes as much as $100 billion to Iranian 
banks and private firms. The Rouhani government was elected on 
a campaign to improve the economy, which will require Iran to 
spend at least $200 billion on its decrepit energy sector, in 
addition to tens of billions of dollars on domestic 
infrastructure, health care, and educational system. So while 
the lifting of U.S. secondary and European nuclear sanctions 
may enable Iran to increase its oil exports and give it access 
to $50 billion to $100 billion held in escrow accounts, much of 
this money will be used to pay debts and invest in the 
country's infrastructure and social services.
    In addition, because global oil prices are likely to remain 
low for the foreseeable future, oil exports will not enable 
Iran to get rich quickly. Iran faces stiff global competition, 
and its reentry into the global market is unlikely to pose 
serious competition to major oil producers such as Saudi 
Arabia.
    Even after the nuclear agreement, many foreign companies 
will be hesitant to trade with Iran due to remaining U.S. 
sanctions and, perhaps more importantly, due to the overall 
reputation of the Iranian regime. Iran is one of the most 
corrupt and least business-friendly countries in the world.
    The Iranian regime's asymmetric capabilities will remain 
the key challenge for U.S. interests, but increasing U.S. 
military leverage in Syria and Iraq and a political solution to 
the Syrian conflict decrease the regional instability, which 
the Iranian regime exploits. The United States should be 
willing to engage Iran diplomatically when it suits its own 
interests.
    Iran appears ascendant in Syria today, but it is more eager 
to end its involvement in the conflict than it may appear.
    I have four recommendations for the United States, 
especially Congress.
    Congress has a vital role to play in ensuring Iran's 
adherence to the nuclear agreement by engaging in vigorous 
oversight of the agreement's implementation. Congress should be 
ready to impose new sanctions against Iran if it is found to be 
violating the agreement. Moreover, Congress should remain fully 
informed of the status of the nuclear agreement by holding 
frequent hearings regarding its implementation.
    However, Congress should not pass new legislation on 
terrorism and human rights abuses, especially as the nuclear 
agreement is implemented. Such steps could be viewed by U.S. 
partners and the international community as an attempt to 
undermine the nuclear agreement, endangering international 
enforcement of sanctions against Iran.
    The nuclear agreement will not end the rivalry between the 
United States and the Islamic Republic. The Rouhani government 
is very limited in its ability or willingness to reform Iran. A 
U.S. focus on democracy promotion would, therefore, be 
beneficial.
    The United States should make it easier for Iranian 
students to study at American universities, allowing them to 
gain an even more positive view of the United States and its 
values. U.S. programs that aim to increase cultural and sports 
exchanges between Iran and the United States should be 
expanded.
    Finally, U.S. diplomacy with Iran can help resolve regional 
crises while strengthening positive views of America within 
Iran. Therefore, the United States should lift restrictions 
against diplomatic engagement with Iranian diplomats. U.S. 
diplomacy with Iran does not confer legitimacy on the Iranian 
regime. Such legitimacy can only be conferred by the Iranian 
people.
    Thank you for the opportunity to share my views with the 
subcommittee. I look forward to your questions.
    [Prepared statement of Mr. Nader follows:]
    
    
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    Mr. DeSantis. Thank you.
    The chair now recognizes himself for 5 minutes.
    Dr. Bucci, Mr. Nader stated in his written testimony that 
the amount of sanctions relief is, ``unlikely to greatly 
empower the Iranian regime at home or abroad.'' And he said 
that they will likely use it to pay down debts and follow 
through with President Rouhani's promises to invest in the 
country. Do you agree that that is how Iran is likely to spend 
the money it receives from sanctions relief?
    Mr. Bucci. With due respect to my colleague, Mr. Chairman, 
I think that is wildly optimistic. Clearly they will apply some 
of the money. That is a ton of money they are going to get 
suddenly injected into their economy. Some of it will go to pay 
some debts. Some of it will go to some infrastructure things. 
They have got a considerable domestic ferment there that they 
need to address. A regime that under the sanctions was spending 
as much money as they were spending on support of terrorism, to 
think they are not going to siphon off at least some of that 
money, maybe a big chunk of it, to upgrade that support of 
terrorism once they get this new money is delusional.
    Mr. DeSantis. And their proxies like Hezbollah have cheered 
the agreement. I do not think they would do that unless they 
saw benefits for them as a result of it.
    Dr. Schanzer, Mr. Nader agrees with--this is with respect 
to the increase in oil exports of $1 million per year. He 
agrees with that, but he argues that Iran will use this 
additional income to pay debts and invest in the country's 
infrastructure and social services.
    So what do you believe just based on the history of human 
rights abuses that we have seen under the Supreme Leader? We 
have seen the regime's conduct. That oil money--what is your 
best guess as to what is going to happen with that?
    Mr. Schanzer. Mr. Chairman, look, I would just say this as 
an overall observation that those who are proponents of the 
regime all of a sudden are also accountants and purport to know 
how Iran is going to spend its money. We have seen, during the 
time when Iran was building its nuclear weapons capability, 
that it was spending money, not paying down its debts, 
obviously. It was pursuing a reckless policy then. I do not 
expect it to change a policy of recklessness even though they 
have at least for now decided to curb their nuclear objective. 
So I would certainly expect to see oil funds, as well as the 
sanctions relief, flowing to groups like Hezbollah, Kata'ib 
Hezbollah in Iraq, a lot of the other groups there that are 
fighting on behalf of the Iranians. I would expect to see the 
IRGC getting huge amounts of this.
    But one other thing that is incredibly important to note is 
that the IRGC controls roughly a third of the Iranian economy. 
And so when you talk about money that is going to flow to 
hospitals and schools and roads, what you are doing is you are 
sinking money into companies controlled by the IRGC. So it is 
simply a pass-through to this radical organization which will 
then go and finance all these radical groups around the region.
    Mr. DeSantis. Thank you.
    Lieutenant General McInerney, as a result of this deal, you 
sketched out kind of Iran's malign influence. Does this deal 
make their project in, say, Yemen easier for them or more 
difficult for them?
    Mr. McInerney. It makes it much easier, Mr. Chairman.
    Mr. DeSantis. How about their project--I know that they 
have designs on Bahrain. Is this better for Iran and their 
designs on Bahrain, or does it make their life more difficult 
with respect to those ambitions?
    Mr. McInerney. Again, better for their designs on Bahrain.
    Mr. DeSantis. And we have talked about--and I think you 
have pointed this out in your testimony very well. You know, we 
talk about, hey, Iran--yes, they get this entire nuclear 
infrastructure. It is basically being kept in place. They got 
the heavy water reactor. But they have promised that there is 
not going to be any plutonium production. Yes, they have an 
underground facility at Arak, but they are going to--or in 
Fordow--excuse me. But they promise they are just going to do 
research there. So you have words on the paper. True. In your 
judgment, do you think it is likely that you will see the type 
of unfettered inspections that you need? I know in some of the 
military sites, they are essentially going to self-inspect. So 
are the words on the paper something that we would want to hang 
our hats on?
    Mr. McInerney. Mr. Chairman, they celebrated their 36th 
anniversary of seizing our embassy yesterday. I expect no 
changes in their conduct.
    Mr. DeSantis. Let me ask you this. I think Dr. Schanzer 
made some good recommendations about what Congress can do in 
terms of the financing. What would you say--two-thirds of the 
American people I have seen do not think this is a good idea. 
What should Congress do? This was never passed by Congress. It 
is essentially an executive-to-executive agreement that will 
expire with the new administration. But in the meantime, what 
would you recommend that Congress do to combat the threat?
    Mr. McInerney. I would increase the sanctions, as Dr. 
Schanzer mentioned. We have got to put bounds on that nation, 
and we are not. We are encouraging bad behavior.
    Mr. DeSantis. Dr. Bucci, what should we do? If we agree 
with your testimony, we think this is a problem, we think 
Iran--the net effect of this, Iran is stronger, more and more 
of a malign force than they have already been. It hurts our 
national security interest. But yet, we cannot really--I mean, 
we voted the agreement down, but it did not matter. It is going 
forward as an executive agreement.
    Mr. Bucci. Mr. Chairman, I think you ought to take whatever 
steps you think you can get away with to put the clamps back 
on, particularly the Quds Force people, General Soleimani. He 
is catting around the world going into Moscow to chat with 
Vladimir Putin, those kind of things that are now legitimate 
under this agreement. That is such a slap in the face of the 
people that have been killed by this man's troops and his 
plots. Those kind of sanctions, very specific, very directive, 
at least ought to be put back in place.
    Mr. DeSantis. And I would venture to guess that Soleimani, 
of any living person, probably has more American blood on his 
hands than anyone. I mean, Osama bin Laden has been killed. He 
killed at least hundreds of our troops in Iraq. I have heard as 
many as 1,500. General, do you think that sounds reasonable, a 
reasonable estimate?
    Mr. McInerney. Well, I have heard a number between 500 and 
1,500.
    Mr. DeSantis. You know, relieving international sanctions 
of somebody that is not just a malign influence but has 
actually killed a lot of Americans--and we have had people come 
to Congress who were wounded by these EFP's that Iran was 
providing these Shiite militias. And it is not a story I think 
that is as well known as the Sunni insurgency during that time 
period.
    The one thing I would also mention--and we are working on 
some legislation, but because this was not ratified as a treaty 
or even passed this Congress as statutory law, what the 
President has agreed to cannot supersede State sanctions. It is 
not the supreme law of the land. And so we have States--I am 
from Florida that has pretty tough sanctions in terms of the 
investments in Iran and what can be done with the pension 
funds. And we are going to be introducing some legislation 
hopefully soon that will allow really saving the State 
sanctions, making it clear and really encouraging States that 
they should do what is right for their folks. And so those 
States and those States that have acted are really an important 
part of this right now, more important than we probably 
thought.
    With that, I am out of time, and I will recognize the 
ranking member, Mr. Lynch, for 5 minutes.
    Mr. Lynch. Thank you, Mr. Chairman.
    America has always been somewhat forward-looking, and I 
think the examples in our history where we have had tremendous 
loss of life within our Nation--you know, wars against Germany, 
against Japan, against Vietnam. And now we have got trade 
agreements, and we are trying to move forward with those 
relationships.
    And I think that while there is need for great caution 
here, no question about it--I do not trust the Iranian regime--
I think there is an opportunity here that has been created not 
by just the United States but by P5 Plus 1. So we have got to 
consider the implications here. I think that the verification 
protocols have to be in place. They have to be robust.
    Mr. Nader, I want to ask you about the state of the Iranian 
economy and the impact of whatever money pours over--some say 
$100 billion. Some say $200 billion--into the Iranian economy.
    We have had a chance to talk to the IAEA inspectors who 
have been in Tehran and around the country. They tell me that 
they are afraid to fly commercially within Iran because our 
sanctions, together with the Europeans and others--we have 
blocked basic commercial airline parts as part of our sanctions 
so that the IAEA inspectors--the way they operate is they fly 
directly on Lufthansa mostly from Germany into Tehran. They 
will not fly around the country because they are deathly afraid 
of the safety conditions of the Iranian commercial airlines.
    They have also indicated that this petrol economy--and Iran 
is basically gas and oil. That is a huge part of their economy. 
That has been devastated by the sanctions, which was the whole 
idea to get them to the table.
    What do you think the impact of this money--have any of the 
financial sanctions been lifted so far? Has any of the money 
gone to it? So nothing yet. So we have got a parade of 
horribles that might happen, but nothing has gone.
    And why is that? Why has no money gone to Iran yet?
    Mr. Nader. Well, first of all, Iran has not implemented the 
nuclear agreement. Once it implements the nuclear agreement and 
the IAEA verifies that Iran has taken these steps and they are 
verifiable, then Iran will meet with some sanctions relief.
    But I think it is important to recognize that a lot of U.S. 
sanctions are going to remain against Iran. You mentioned 
Iran's civilian airlines. They have been without modern 
technology and parts for decades. Iran's natural gas industry, 
which Iran has one of the biggest gas reserves in the world, 
cannot take advantage of the resources because of U.S. 
sanctions preceding the nuclear sanctions. So if you look at 
the long list of U.S. sanctions, a lot of sanctions, the 
primary sanctions will remain against Iran. A lot of companies 
will be hesitant to trade with Iran and deal with Iran.
    And when we look at Iran's conventional military 
capabilities, under the JCPOA Iran will face a 5-year embargo 
on its conventional arms imports. It will face an 8-year 
embargo on its missiles. Even after that, the U.S. primary 
sanctions are going to deter a lot of foreign countries from 
selling equipment to Iran. Even before the nuclear issue became 
such a problem, Iran was having a difficult time importing 
sophisticated weapons because the Europeans and even the 
Russians and Chinese were hesitant to deal with Iran. So I 
think there are going to be a lot of restraints on Iran, on its 
economy moving forward.
    And finally, I want to say that, yes, this regime will 
support terrorism. It will deny human rights to its people. But 
it is important that we have a nuclear agreement which takes 
the nuclear capability away from the Iranian regime. And I 
think this is why this agreement is important. It is a strong 
nonproliferation agreement that will ensure Iran does not have 
a nuclear weapons capability.
    Mr. Lynch. The latent capability of the Iranian regime 
really lies in oil and gas. There are some who say there is an 
oil glut now. That is why prices are down. But the natural gas 
piece there is a concern because there is a greater use around 
the world. You know, people are getting away from coal and oil 
to some respect, but natural gas--that could be a bonanza for 
Iran.
    How far behind are they? How long would it take--I know we 
have a lot of--there are already contracts in place with a lot 
of the European countries and the United States with Qatar, for 
example. They have already rebuilt their whole natural gas 
infrastructure, and they have not cornered the market, but they 
have got a huge advantage there. What would it require for Iran 
to sort of catch up? Because they are actually pre-LNG still 
back in Iran. They have not even come forward with that 
technology. So could you talk about how much time it might take 
them to catch up?
    Mr. Nader. Well, if you compare Iran to Qatar, it is years 
if not decades behind. And Iran and Qatar share a very large 
gas field, the South Pars gas field. And Qatar has really taken 
advantage of it because it is a close U.S. ally. It has access 
to liquefied natural gas technology through the United States, 
and Iran lacks that technology. And I doubt that it will be 
able to catch up anytime soon because of U.S. primary sanctions 
against Iran.
    And I think a lot of European companies and even Asian 
companies will be reluctant to help Iran develop its natural 
gas resources. So Iran is years if not decades behind in its 
natural gas. And in terms of its energy sector, when you 
compare it to Saudi Arabia, for example, or Russia, it is also 
years and decades behind.
    I talked to an economist who had worked on Iran's petroleum 
industry during the shah's reign. At that time it was 
relatively modern, and when he saw Iran's current status, he 
said it brought tears to his eyes as an engineer and scientist 
because how behind Iran had fallen because of the regime's 
policies, because of its nuclear policies, and its reputation 
overall.
    Mr. Lynch. Thank you.
    I thank the chairman for the indulgence. I appreciate that.
    Mr. DeSantis. No problem.
    The chair now recognizes the gentleman from Georgia, Mr. 
Hice, for 5 minutes.
    Mr. Hice. Thank you, Mr. Chairman.
    And thank you, each of our witnesses, for being here.
    It is my understanding from your testimony, what you have 
shared to this point--yes or no--would you agree that if the 
sanctions are lifted, that Iran will most likely, probably use 
a significant portion of that revenue to advance their military 
strategy?
    Mr. McInerney. I concur with that, sir.
    Mr. Schanzer. I do as well.
    Mr. Bucci. Absolutely, yes.
    Mr. Nader. Yes. I think it will use some of it.
    Mr. Hice. Okay. All right.
    Dr. Bucci, let me go with you. Any idea how many American 
lives have been lost since 2001 in Iraq and Afghanistan?
    Mr. Bucci. Total is up about 8,000 I think.
    Mr. Hice. Any idea of how many have been killed by 
specifically Iranian activity?
    Mr. Bucci. The number that gets batted around that the 
General mentioned, up around 1,500, is generally associated 
with the use of the Iranian-provided shaped penetrators, the 
sort of enhanced IED's that were provided to specifically the 
Shia militias. I think you need to go a little beyond that 
because it is not just the IED's that kill people. There were 
bullets that killed people. There were advanced sniper rifles 
that were given to those same Shia militias by Iran that also 
killed American service members. So I would guess it is more 
than the 1,500 that people generally quote.
    Mr. Hice. All right, sir. If you had to give one weapon, 
what is the key weapon that has been used against Americans?
    Mr. Bucci. The enhanced penetrator.
    Mr. Hice. Is that produced in Iran?
    Mr. Bucci. Absolutely.
    Mr. Hice. In an interview with a British paper, ``The 
Telegraph,'' there were a couple of British military officers 
who allegedly said that Iran had paid Taliban fighters $1,000 
each for each American soldier that they killed in Afghanistan. 
Is this accurate?
    Mr. Bucci. I have not seen proof of that, Congressman, but 
I have seen pretty good proof that the Iranians were paying the 
Taliban's salaries, in some cases over $500 a month, which is a 
pretty hefty salary in Afghanistan. So whether they were doing 
it as a direct bounty or just the general funding of their 
operations, it is still pretty significant.
    Mr. Hice. So they are funding the Taliban soldiers against 
us.
    In your experience, what is the greatest threat Iran poses 
to American ground forces?
    Mr. Bucci. The exportation of terrorism around the Middle 
East. None of our people are essentially safe anywhere in the 
Middle East that the Quds Force can reach them, and that is 
pretty much the entire region.
    Mr. Hice. Would you agree that regardless of an agreement 
being reached, that Iran is still going to be a significant 
threat to both American interests and our allies?
    Mr. Bucci. Not only is it my opinion that they will be so, 
Congressman, the Iranians have said they will be. They have 
said they will not back off on any of those type of operations 
or policies regardless of this agreement.
    Mr. Hice. Specifically, what kind of threat does Hezbollah 
pose to Israel?
    Mr. Bucci. They are the best supplied, the best equipped, 
the best organized. While they are tied up in Syria right now, 
that is frankly gaining them additional equipment and 
experience that they could then turn around and apply against 
Israel. So they are, by far, the biggest threat.
    Mr. Hice. And I would assume that same threat would carry 
over to America as well.
    Mr. Bucci. Oh, definitely.
    Mr. Hice. So what level of support has Iran contributed to 
the funding, training, support, so forth of Hezbollah?
    Mr. Bucci. Pretty much 100 percent of Hezbollah's support 
comes directly from Iran.
    Mr. Hice. So is it fair to say that at least in your 
opinion if the sanctions are lifted, Hezbollah is going to see 
a significant boost in its financial backing?
    Mr. Bucci. They will benefit. Hezbollah, Hamas, and other 
terrorist groups around the Middle East--they will all gain 
from this largesse of the Quds Force.
    Mr. Hice. Dr. Schanzer, you had mentioned a while ago--and 
I would like to get a little more information about EIKO. Can 
you give a little bit more information as to what that is?
    Mr. Schanzer. Absolutely. That is a $95 billion fund owned 
by the Supreme Leader, Ali Khamenei. It includes a big chunk of 
the Iranian stock market, I think 5 or 10 percent, on top of 
that, significant real estate holdings, international holdings 
as well. We had sanctions on it. It is set to be de-listed now 
as a result of this deal.
    Mr. Hice. Again, I want to thank you for being here, each 
of you.
    My time has expired. I appreciate it very much. Thank you, 
Mr. Chairman.
    Mr. DeSantis. I thank the gentleman.
    The chair now recognizes the gentlewoman from Michigan for 
5 minutes.
    Mrs. Lawrence. Thank you, Mr. Chair.
    Mr. Nader, is it true that while this agreement was 
announced in July, it was technically adopted on October 18th, 
2015?
    [Nonverbal response.]
    Mrs. Lawrence. So a couple questions.
    Iran is now expected to begin nuclear disarmament. Is that 
right?
    [Nonverbal response.]
    Mrs. Lawrence. So technically adopted October 18, 2015. So 
now the disarmament is expected to begin.
    And as I understand it, the next milestone would be 
implementation day. Is that correct?
    [Nonverbal response.]
    Mrs. Lawrence. Can you explain what implementation day is?
    Mr. Nader. Sure. Once the nuclear agreement was adopted, 
which you mentioned, Iran is expected to implement the 
agreement over the next few months. That entails Iran 
undertaking actions that block all the paths toward nuclear 
weaponization. That means severely restricting its uranium 
enrichment program, reducing its centrifuges that spin uranium 
by two-thirds, by reducing its stockpile of enriched uranium by 
97 percent, by reconfiguring the Arak facility that could 
produce plutonium for nuclear weapons. So that would block 
Iran's plutonium weapons production. And also Iran would accept 
very intrusive inspections into its nuclear facilities.
    From the bottom up, the IAEA and the United States will 
have a very good idea of what Iran is up to. So when Iran is 
building these centrifuges in its factories, we will know where 
it is building them and what they are doing with the 
centrifuges. So if they want to pursue a covert program and 
take these centrifuges, we will know what is going on. And 
these actions are expected to give us about a year warning if 
Iran decides to produce breakout, meaning that if Iran races 
toward a nuclear weapon, if it decides to violate the 
agreement, then we will know and we will have the ability to 
respond whether economically, diplomatically, and militarily.
    So in terms of implementation, once Iran implements the 
agreement, the nuclear program is going to be under very close 
monitoring and inspection. And that is what really the 
international community has asked Iran to do for the past 10 
years.
    Mrs. Lawrence. Thank you.
    I have heard estimates for the implementation day could be 
as soon as the end of the year or as far off as next spring. Is 
that correct?
    Mr. Nader. Yes. It could take a few months.
    Mrs. Lawrence. Now, the sanctions are not to be lifted 
until everything Iran has done has been physically verified as 
complete by the IAEA. Correct?
    Mr. Nader. Yes.
    Mrs. Lawrence. Now, I understand that the implementation 
day--only nuclear-related sanctions will be removed. You 
mentioned it, but could you just restate what are some of the 
other--because I understand the remaining conventional arms and 
ballistics sanctions are to be removed in phases. So could you 
please give us some information on that?
    Mr. Nader. Yes. According to JCPOA, Iran will still face a 
5-year embargo on the import of conventional weapons. So no 
country can sell conventional weapons to Iran for 5 years. If 
they do, they will be punished and sanctioned.
    For 8 years, no other country can help Iran develop its 
missile program. If any countries or companies help Iran with 
its missile program, they will be punished and sanctioned.
    And once the nuclear sanctions against Iran are eased, you 
still have a number of U.S. sanctions that date from 1979 to 
the Iran revolution. Whether you are looking at the freezing of 
Iranian assets, Iran Sanctions Act that dates from the 1990's, 
sanctions against the Revolutionary Guard and the Quds Force, 
those will remain. The American sanctions will remain against 
terrorism and human rights abuses.
    Although the European Union is expected to lift its nuclear 
sanctions against Iran, its human rights abuses sanctions will 
also still remain. And a lot of the European countries do care 
about human rights and look at human rights in terms of 
investing in Iran.
    Mrs. Lawrence. So in the last few minutes I have, I agree 
with the statements that have been provided by our 
distinguished panel. There are some bad guys in Iran. They are 
not a friend of the United States.
    This nuclear agreement is directed toward a verified system 
of stopping Iran from getting the nuclear weapons. And we have 
just begun this process so that we can examine and verify 
before any sanctions will be lifted. Is that correct?
    Mr. Nader. Yes, exactly.
    Mrs. Lawrence. Thank you. I yield my time.
    Mr. DeSantis. The gentlelady's time has expired.
    The chair now recognizes the vice chair of the committee, 
Mr. Russell from Oklahoma, for 5 minutes.
    Mr. Russell. Thank you, Mr. Chairman.
    And thank you, panel, for being here.
    Mr. Nader, you said both in your testimony and in answers 
to questions that no one that is on the terror and human rights 
lists will have sanctions lifted. Yet, I like General McInerney 
have read the entire agreement, have researched every single 
name on the sanctions list. I have personally discovered over 
50 individuals and entities that have violated terror and human 
rights. Yet, they are listed for sanctions relief. For example, 
General Soleimani, General Salami, General Hajizadeh, the Quds 
Force, the Islamic Revolutionary Guard Corps, the Islamic 
Republic of Iran's shipping lines, a known shipper of weapons 
all over the region for terror.
    So my question is, since the agreement clearly says that 
these sanctions will be lifted, how can you state that?
    Mr. Nader. Those are the nuclear secondary sanctions. So 
the secondary sanctions under the nuclear sanctions that the 
United States has passed compel other countries and companies 
to stop trading with Iran. And in order to achieve the nuclear 
agreement, those secondary sanctions will be eased.
    But when you look at U.S. primary sanctions--for example, 
Iran is designated as a supporter of terrorism by the United 
States. It was designated in 1984. That puts a lot of sanctions 
against Iran and deters foreign companies and countries from 
trading with Iran. And there are a number of other sanctions 
that precede the nuclear sanctions going back to 1979. There 
are many overlapping U.S. and international sanctions against 
Iran.
    Mr. Russell. Well, and that is the concern. And I would 
invite all of the panel and even, Mr. Chairman, our committee 
to look at paragraph 37 of annex 2 in the agreement because 
Iran has a much different view about these sanctions liftings, 
and they believe that these individuals will be wide open for 
business.
    And in that regard, Dr. Schanzer, the Islamic Republic and 
Guard Corps, the Quds Force, and others--it has a vast array of 
business that it conducts. Can you very succinctly describe 
what it is, that its legitimate business reach is? We think it 
is nefarious, but yet, on the other hand, we see that it is 
conducting itself normal and it will be able to conduct 
enterprise in your hometown.
    Mr. Schanzer. That is right. This was the point that I was 
trying to make earlier that the IRGC has deep penetration 
across just about every sector within Iran. This is 
construction. It is petrochemical. It is gas. Basically every 
major sector within Iran has IRGC companies that are set to 
benefit from this. This is one of the reasons why we have 
placed such a huge focus on targeting the IRGC itself, lowering 
the threshold for designating the IRGC businesses to make it 
harder for our money to flow there.
    But there is one other thing that I think is worth noting. 
We keep hearing that we have not lifted any sanctions yet. That 
is untrue.
    Mr. Russell. I agree.
    Mr. Schanzer. After the signing of the JPOA, the interim 
agreement, back in November of 2013, we began to provide Iran 
with $700 million per month. We lifted sanctions on gold, 
petrochemicals, auto, a range of other sectors, and that has 
allowed Iran to benefit from this deal even before we signed 
it. And so it is just simply not true to say that we have not 
provided them with sanctions relief to this point.
    Mr. Russell. I appreciate that.
    And, General McInerney, you will not remember me, but we 
served together when you were the Joint Task Force Alaska 
Commander and I was the aide to General Sam Ebbessen when 
General Tom Fields was there. And it is good to see you again 
after all these years.
    Mr. McInerney. You were dressed differently, sir.
    Mr. Russell. I was indeed, sir. Thank you for being here.
    Sir, can you speak to Iran's missile and cruise missile 
threats and the development of the underground silos and what 
the implication of that is?
    Mr. McInerney. Briefly, sir. They are missiles. The primary 
value is in the nuclear realm. So they are leading the problem 
in developing conventional. And we just noticed on the 10th of 
October, less than a month ago, that they launched an IRBM. And 
they are going to continue to progress. They are getting help 
from China, North Korea, and Russia.
    Now, their eventual goal is to put nuclear weapons on 
these. And we have seen the ability, when you then have that 
capability and then when you go to underground silos, as well 
as the Chinese have where they have roads underneath--you then 
have the ability for a nation like Iran to hold hostage Europe, 
the United States, other parts of the world. And that comes 
back to then when them are negotiating. When you are 
negotiating and you are looking at a person you are negotiating 
with and he does not have to say it, but you know he has 
nuclear weapons that he can put on your cities, that changes 
the tone of the negotiations. And that is the direction that 
they are going to. Will it happen next week? No, but that is 
their long-term objective. And if they are still in power in 36 
years from now, we are in trouble.
    Mr. Russell. I thank you for that, General.
    And, Mr. Chairman, my time has expired, but if we have a 
chance for a second round at the end, I would have some more 
questions. Thank you.
    Mr. DeSantis. We have still got over 10 minutes on the 
vote, 410 not voting. So I think we will be able to get through 
a couple more.
    So the chair now recognizes Ms. Kelly for 5 minutes.
    Ms. Kelly. I will keep it short. Thank you, Mr. Chair.
    Iran's neighbors such as Israel and Saudi Arabia are 
concerned that the deal is not sufficiently strong and does not 
prevent Iran from obtaining a nuclear weapon. This was a 
serious concern that warranted consideration prior to 
enactment. However, now with the deal in place, it is 
imperative that we move forward and work to ensure that 
compliance is strictly enforced and any and all sanctions be 
implemented following noncompliance to ensure those fears 
remain unwarranted.
    Mr. Nader, what provisions of the deal hold Iran's feet to 
the fire to ensure its compliance?
    Mr. Nader. There are many provisions, from Iran having to 
verify--or the IAEA having to verify that Iran has complied 
with their program to the future restrictions in place against 
Iran for the next 15 years, which is the duration of the 
program. And then even after 15 years, there are components of 
the program that last for 20 to 25 years giving the United 
States insight into Iran's program and enable to reassure our 
allies the United States has provided them with the technology 
and weaponry to deter Iran's military capabilities. For 
example, the United States has helped Israel develop a very 
sophisticated antiballistic missile defense system. The same 
goes for Saudi Arabia and the GCC states. And while those 
allies have been concerned about Iran's nuclear activities and 
have been concerned about the negotiations, as they should be 
because Iran poses a threat to them, they have come to see that 
the nuclear agreement can be beneficial to their interests. 
Saudi Arabia and the GCC have approved of the program and are 
working very closely with the United States to strengthen their 
conventional military capabilities against Iran.
    Ms. Kelly. A shortcoming of the deal many point to is that 
provisions expire at all. However, to my knowledge, no arms 
treaty or agreement has ever been without expiration. But in 
fact, even the much hailed Nuclear Nonproliferation Treaty had 
an expiration date until it was renewed. Is that not correct?
    Mr. Nader. Yes. All nonproliferation treaties do have an 
expiration date.
    I think what is unique about JCPOA is it does last 15 
years, but even after 15 years, the IAEA has a very close 
inspections regime against Iran's nuclear program. Some of the 
measures last 20 and 25 years. From the time Iran mines uranium 
from the ground to the time it builds its centrifuges and takes 
them for enrichment, we will know what it is doing even after 
the agreement has expired.
    Ms. Kelly. Because these provisions do not extend into 
perpetuity, compliance with the agreement is even more 
dependent on Iran's domestic politics and leadership. Moving 
forward, what must Congress do to ensure future Iranian regimes 
continue to abide by the agreement and we do not have to keep 
going back to the negotiating table and face a threat of a 
nuclear Iran?
    Mr. Nader. I do not think the Iranian political system is 
going to change any time soon. Ayatollah Khamenei still rules 
Iran as long as he lives. The Revolutionary Guards are a 
powerful force.
    But there are millions of Iranians who want change in their 
country. We saw in 2009 millions of Iranians come into the 
street in support of democracy. And moving forward, I think 
there is a lot the United States can do to foster democracy in 
Iran whether it is increasing exchanges between Iranians and 
Americans. And I think that is very important actually because 
the Iranians get to come here, see what the United States is 
like, and not be subject to their government's propaganda. So 
strengthening civil society, public diplomacy, U.S. broadcasts 
to Iran can all be very helpful.
    Ms. Kelly. Thank you.
    I yield back the balance of my time.
    Mr. DeSantis. The gentlelady yields back.
    The chair asks unanimous consent to welcome Mr. Welch of 
Vermont, who is not on the subcommittee, but to allow him to 
participate in today's hearing. Without objection, so ordered.
    Mr. Welch, you are now recognized for 5 minutes.
    Mr. Welch. Thank you very much.
    I really appreciated the testimony and the points that you 
made.
    We had this fierce debate, obviously, about the nuclear 
deal. The majority of Congress was against it. The minority was 
for it. It has been implemented. I did support it but share a 
lot of the concerns that have been expressed.
    And in listening to the testimony and reading beforehand, 
there is an aspect of what you have said--and I will start with 
you, General McInerney--that, on the one hand, cautions us 
about the future, and we have got to take that seriously. But 
on the other hand, there is an aspect of it that I hear as a 
continuation of the fierce debate that we had about the deal 
itself. The deal is done. So that is not going to be undone 
realistically.
    So when you are talking about the sanctions relief, how is 
it that we would not comply on our part with the sanctions 
provisions that were part of the nuclear deal even as we are 
extremely wary and watchful about what Iran is doing to cause 
difficulties in an already difficult Middle East situation? In 
other words, what is the tool that we have? We have to comply 
with the agreement. Right?
    Mr. McInerney. This administration does, yes, sir.
    Mr. Welch. Would you just elaborate on that?
    Mr. McInerney. Well, this administration that signed it as 
an executive agreement is going to comply with relieving those 
sanctions when they meet their appropriate endpoints.
    We think that we should put as a Congress additional 
sanctions on certain elements like the Quds Force, IRGC, et 
cetera.
    Mr. Welch. Let me just understand this because I think it 
is important. A lot of people I think probably agree with you. 
But if the administration signed this agreement, what I am 
hearing you say is that the next administration is going to 
have its own option to review it and perhaps change it. Is that 
your suggestion?
    Mr. McInerney. Yes. As a matter of fact, some of the 
candidates have already announced that they will cancel it. And 
that is a clear option.
    My personal course of action on this altogether would have 
been never to have the JCPOA but we should have continued the 
sanctions, which were very effective, and we have to, in the 
long run, look for regime change. Remember the difference that 
this government is. It is a radical Islamic government. If you 
look at Saddam Hussein, he was a Baathist. If you look at 
Bashar al-Assad, he is a Baathist.
    Mr. Welch. Yes. I do not have that much time. So your view 
is that the stability that we need will come only through 
ultimately a regime change in Iran.
    Mr. McInerney. Correct.
    Mr. Welch. And, Dr. Schanzer, do you agree with that?
    Mr. Schanzer. I am not going to speculate as to whether the 
next President would cancel the deal, but what I can tell you 
is that there are measures that can be taken in the interim --
--
    Mr. Welch. I am wondering whether you agree with General 
McInerney that regime change is ultimately the option that is 
the only option that will really assure us that there will be 
stability with respect to Iran.
    Mr. Schanzer. Look, as long as this regime is in place, you 
will continue to see the sponsorship of terrorism in other 
proxies around the region. There is no question about it. We 
should be working toward regime change. 2009 was a huge missed 
opportunity.
    Mr. Welch. Dr. Bucci?
    Mr. Bucci. I would agree with that also, Congressman. This 
regime has stated publicly--they are actually quite honest 
about it--that they are not going to give up any of those 
things. They do not see that they have to with this deal, so 
they will not. And in fact, the deal will enable those efforts 
to be stronger and more widespread than they were before. So I 
think regime change is the only way it achieves stability in 
that country and in the region.
    Mr. Welch. There were a number of people who agreed with 
you on that. A number of people disagreed, myself among them, 
partly on practical grounds. Regime change did not work out so 
great in Iraq.
    But the original sanctions that we had did not stop the 
nuclear program. They froze the Iranian assets overseas, but 
the Iranians proceeded even further along the nuclear program, 
which means that there is a judgment all of us have to make as 
to the effect of our actions. And what we hope it will 
accomplish will not necessarily be the case.
    General McInerney?
    Mr. McInerney. We with those sanctions, sir, needed to 
continue our covert operations, which I will just say that if 
we were in a closed session, we could talk about it.
    Mr. Welch. My time is up. Mr. DeSantis, thank you very much 
for letting me participate.
    Mr. DeSantis. Absolutely.
    I am going to recognize the vice chair. He has got one more 
question. We are all pretty much out of time on the votes, and 
so we will do this question and then I think we will wrap up 
the hearing.
    Mr. Russell. Thank you for your indulgence, Mr. Chairman.
    Dr. Bucci, my last remaining question was for you. Could 
you speak to the recent activity of the Quds Force and its 
terrorist activity? And by recent, I mean within the last 2 to 
5 years.
    Mr. Bucci. Yes. They tried to kill the Saudi Ambassador 
here in Washington. I think that is within that time period. 
They hired one of the Shia militia groups in Iraq to rocket the 
*MEK camp that is there, people that were under our protection 
and the protection of the Iraqi Government. They are behind the 
cyber attacks that the chairman mentioned at the beginning of 
the hearing and the ones who did the attack on Saudi Aramco 
where they destroyed 30,000 computers in one day using a very 
heavy-handed piece of malware. They have done operations in 
Latin America, Africa, and they are behind the Houthis in 
Yemen. So they are pretty busy fellows and very, very 
effective.
    Mr. Russell. Thank you.
    And thank you, Mr. Chairman.
    Mr. DeSantis. Well, I would like to thank all of our 
witnesses for taking the time to appear before us today.
    If there is no further business, without objection, this 
subcommittee stands adjourned.
    [Whereupon, at 10:18 a.m., the subcommittee was adjourned.]

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