[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



 
                     DISCUSSION DRAFT ON H.J. RES. ____,
        ``COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2023''

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

                          LEGISLATIVE HEARING

                               BEFORE THE

               SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                       Thursday, October 19, 2023
                               __________

                           Serial No. 118-71
                               __________

       Printed for the use of the Committee on Natural Resources
       

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]       


        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
          
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-882 PDF                WASHINGTON : 2024         

                     COMMITTEE ON NATURAL RESOURCES

                     BRUCE WESTERMAN, AR, Chairman
                    DOUG LAMBORN, CO, Vice Chairman
                  RAUL M. GRIJALVA, AZ, Ranking Member

Doug Lamborn, CO		Grace F. Napolitano, CA
Robert J. Wittman, VA		Gregorio Kilili Camacho Sablan, CNMI
Tom McClintock, CA		Jared Huffman, CA
Paul Gosar, AZ			Ruben Gallego, AZ
Garret Graves, LA		Joe Neguse, CO
Aumua Amata C. Radewagen, AS	Mike Levin, CA
Doug LaMalfa, CA		Katie Porter, CA
Daniel Webster, FL		Teresa Leger Fernandez, NM
Jenniffer Gonzalez-Colon, PR	Melanie A. Stansbury, NM
Russ Fulcher, ID		Mary Sattler Peltola, AK
Pete Stauber, MN		Alexandria Ocasio-Cortez, NY
John R. Curtis, UT		Kevin Mullin, CA
Tom Tiffany, WI			Val T. Hoyle, OR
Jerry Carl, AL			Sydney Kamlager-Dove, CA
Matt Rosendale, MT		Seth Magaziner, RI
Lauren Boebert, CO		Nydia M. Velazquez, NY
Cliff Bentz, OR			Ed Case, HI
Jen Kiggans, VA			Debbie Dingell, MI
Jim Moylan, GU			Susie Lee, NV
Wesley P. Hunt, TX
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY

                    Vivian Moeglein, Staff Director
                      Tom Connally, Chief Counsel
                 Lora Snyder, Democratic Staff Director
                   http://naturalresources.house.gov
                                 ------                                

               SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS

                     HARRIET M. HAGEMAN, WY, Chair

                JENNIFFER GONZALEZ-COLON, PR, Vice Chair

               TERESA LEGER FERNANDEZ, NM, Ranking Member

Aumua Amata C. Radewagen, AS         Gregorio Kilili Camacho Sablan, 
Doug LaMalfa, CA                         CNMI
Jenniffer Gonzalez-Colon, PR         Ruben Gallego, AZ
Jerry Carl, AL                       Nydia M. Velazquez, NY
Jim Moylan, GU                       Ed Case, HI
Bruce Westerman, AR, ex officio      Raul M. Grijalva, AZ, ex officio

                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, October 19, 2023.......................     1

Statement of Members:

    Hageman, Hon. Harriet M., a Representative in Congress from 
      the State of Wyoming.......................................     2
    Leger Fernandez, Hon. Teresa, a Representative in Congress 
      from the State of New Mexico...............................     3
    Westerman, Hon. Bruce, a Representative in Congress from the 
      State of Arkansas..........................................     5
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     6

Statement of Witnesses:

    Yun, Hon. Joseph Y., Special Presidential Envoy for Compact 
      Negotiations, United States of America, Washington, DC.....     7
        Prepared statement of....................................     8
        Questions submitted for the record.......................    10

    Cantor, Hon. Carmen, Assistant Secretary, Office of Insular 
      and International Affairs, U.S. Department of the Interior, 
      Washington, DC.............................................    11
        Prepared statement of....................................    12
        Questions submitted for the record.......................    14

Additional Materials Submitted for the Record:

    Submissions for the Record by Representative Moylan

        Governor of Guam, Letter to Committee on Discussion Draft    27
        Senator Frank Blas, Guam Legislature, Letter to Guam 
          Governor Guerrero......................................    28
        Impact of the Compacts of Free Association on Guam 
          FY2004-FY2020..........................................    30
        GAO-20-491 Compacts of Free Association, Appendix V, 
          Compact Impact Costs...................................    31

    Submissions for the Record by Representative Dunn

        President Panuelo, FSM, Letter to Prime Minister 
          Sogavare, Solomon Islands..............................    36
        President Panuelo, FSM, Letter to Pacific Island Leaders.    38
        Cleo Paskal, Notes and President Panuelo's Letter to FSM 
          Government Leaders.....................................    42
        ``Micronesia's President Writes Bombshell Letter on 
          China's `Political Warfare' '', by Cleo Paskal, March 
          10, 2023...............................................    51
                                     

 LEGISLATIVE HEARING ON DISCUSSION DRAFT ON H.J. RES. ____, TO 
 APPROVE THE 2023 AGREEMENT TO AMEND THE U.S.-FSM COMPACT, AND 
RELATED AGREEMENTS, BETWEEN THE GOVERNMENT OF THE UNITED STATES 
   OF AMERICA AND THE GOVERNMENT OF THE FEDERATED STATES OF 
MICRONESIA, [THE 2023 AGREEMENT TO AMEND THE U.S.-RMI COMPACT], 
 AND CERTAIN RELATED AGREEMENTS BETWEEN THE GOVERNMENT OF THE 
UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF 
 THE MARSHALL ISLANDS, AND THE 2023 U.S.-PALAU COMPACT REVIEW 
   AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF 
   AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF PALAU [AND 
CERTAIN RELATED AGREEMENTS], TO APPROPRIATE FUNDS TO CARRY OUT 
   THE AGREEMENTS, AND FOR OTHER PURPOSES, ``COMPACT OF FREE 
              ASSOCIATION AMENDMENTS ACT OF 2023''

                              ----------                              


                       Thursday, October 19, 2023

                     U.S. House of Representatives

               Subcommittee on Indian and Insular Affairs

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 3:04 p.m., in 
Room 1324, Longworth House Office Building, Hon. Harriet 
Hageman [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Hageman, Radewagen, LaMalfa, 
Gonzalez-Colon, Moylan, Westerman; Leger Fernandez, Sablan, 
Velazquez, Case, and Grijalva.
    Also present: Representative Dunn.

    Ms. Hageman. The Subcommittee on Indian and Insular Affairs 
will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the Subcommittee at any time.
    The Subcommittee is meeting today to hear testimony on a 
discussion draft of the ``Compact of Free Association 
Amendments Act of 2023.''
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and the Ranking Minority 
Member. I therefore ask unanimous consent that all other 
Members' opening statements be made part of the hearing record 
if they are submitted in accordance with Committee Rule 3(o).
    Without objection, it is so ordered.
    I ask unanimous consent that the gentleman from Florida, 
Mr. Dunn, be allowed to sit and participate in today's hearing.
    Without objection, it is so ordered.
    I will now recognize myself for an opening statement.

 STATEMENT OF THE HON. HARRIET M. HAGEMAN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF WYOMING

    Ms. Hageman. Today, the Subcommittee is meeting to consider 
a discussion draft of the Compact of Free Association Amendment 
Act of 2023. This legislation aims to renew the economic 
provisions of the Compact of Free Association between the 
United States and with the Republic of Palau, Republic of the 
Marshall Islands, and the Federated States of Micronesia, known 
collectively as the FAS. The bill would do this by approving 
the agreement signed between the United States and the three 
FAS countries, continuing the mutually beneficial relationship 
that the United States has with the FAS.
    First and foremost, I offer congratulations to Ambassador 
Yun and the U.S. COFA negotiation team on signing the 
agreements with the RMI earlier this week. That is fantastic 
news. Thank you for your hard work.
    Ambassador Yun. Thank you, ma'am.
    Ms. Hageman. Ambassador Yun, we know this was not an easy 
task, and that you have personally decided to extend your term 
as Special Envoy to ensure the completion of these agreements.
    Through the COFA agreements, the United States and the FAS 
have a special relationship that is unlike any other. In return 
for U.S. economic assistance and access to U.S. Federal 
programs, the United States has exclusive rights to build 
military bases and installations in the FAS, and has the right 
to strategically deny any foreign military from entering FAS 
waters, including our adversaries.
    These extraordinary defense and security rights are more 
important today than ever before. We are in perilous times in 
which the Chinese Communist Party seeks to displace U.S. 
leadership and to dominate the Indo-Pacific. The CCP fully 
understands the strategic importance of the FAS for the United 
States, and the CCP has waged information, political, and 
economic warfare against the FAS in an attempt to undermine 
U.S. interests.
    The Compact of Free Association Amendments Act of 2023 
would protect U.S. national security and interests by ensuring 
that the FAS remain economically resilient and can push back 
against PRC influence for the next 20 years. This legislation 
would help the United States maintain a position of strength 
for the decades to come.
    Beyond the security benefits, the United States has had a 
long history of partnership with the three FAS countries. I had 
the privilege of joining my colleagues on a CODEL to these 
countries, and have personally met with the FAS leaders and 
citizens. It was abundantly clear from these meetings that the 
people of the FAS are increasingly concerned about PRC 
influence, and want continued close partnership with the United 
States. It is our responsibility today to ensure we continue 
and strengthen this partnership for the years to come. This 
conversation and this discussion draft is a start.
    This bill touches virtually every committee in the House. 
This not only reflects the importance of the COFA agreements, 
but also the special nature of the United States' relationship 
with the FAS. As such, nearly every committee has equities in 
the discussion draft we are going to be reviewing today. We are 
actively working with relevant committees on several provisions 
within this discussion draft, and we are making sure with them 
that the items within their particular jurisdiction are not 
impacted.
    The House Natural Resources Committee has and continues to 
work in a bipartisan and bicameral manner with our House and 
Senate colleagues. In doing so, we are trying to be unified and 
show just how important these relationships are. It is 
imperative that we work together to preserve the important 
relationship that the United States has with the FAS, while 
protecting U.S. interests and countering Chinese Communist 
Party influence.
    I want to thank all our witnesses for appearing before the 
Subcommittee today, and I look forward to a robust discussion 
on this important issue.
    The Chair now recognizes the Ranking Minority Member for 
any statement.

STATEMENT OF THE HON. TERESA LEGER FERNANDEZ, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW MEXICO

    Ms. Leger Fernandez. Thank you so much, Madam Chair, and it 
is wonderful to be here to have the necessary hearing to move 
the Compact of Free Association Act of 2023 into law.
    It has been a long but instructive journey to get us to 
this point. It began with both a hearing in this Subcommittee, 
but also the formation of the bipartisan Indo-Pacific Task 
Force. And that journey took us 8,000 miles with the first-ever 
Congressional Delegation to visit all three of the Freely 
Associated States located in what I have now learned is indeed 
the ``blue continent'' of the Indo-Pacific.
    And I really want to thank and commend my friend, Chairman 
Westerman, for his skillful stewardship of both this issue and 
this journey. It was your foresight in planning and executing a 
CODEL that provided the invaluable opportunity for nine Members 
of Congress to travel to the islands, to travel to the nations 
to see for ourselves the true nature of our almost eight 
decades-long relationship.
    I often talk about the need to get dirt on my boots to 
truly understand an issue. I want to be at the place to see, to 
feel, to understand, to listen. And in this case we did that. 
We got sand in our toes. Our 10-day trip was not without 
challenges. But because of your commitment to visit all three 
Freely Associated States, we made it through last-minute 
schedule changes, things that we did not expect to have, but we 
made sure that we were flexible, and flexibility is indeed the 
key to victory. And we had that with regards to our ability to 
be in every single nation.
    And it was really key because we had the objective to meet 
with our friends and allies on the islands where they live, the 
islands that they cherish and protect. We saw amazing 
conservation efforts, as well as the security challenges posted 
by China and other nations who encroach on their territorial 
waters. I know that my colleagues and I on both sides of the 
aisle came away with a deeper appreciation of the relationship 
that has developed between us and the people of the Freely 
Associated States. We saw how their leaders and citizens share 
our values of democracy and freedom, values that protect us 
from the pressures from the People's Republic of China's 
efforts to drive a wedge between the United States and the 
Freely Associated States.
    We also witnessed the invaluable assistance of our 
different Federal agencies, such as the USDA, but also the U.S. 
Coast Guard, in providing help to the islands as they police 
their Exclusive Economic Zone waters against illegal, 
unreported, and unregulated fishing. With the help of the Coast 
Guard, the islands are able to monitor an area of the Pacific 
encompassing hundreds of miles, and rapidly respond to stop 
vessels illegally fishing in their waters. They need more help 
because it is a huge blue continent. But these efforts also 
assist the United States. Some of those Chinese trawlers are 
not just fishing for food, they are illegal fishing and also 
fishing for security information, and they pose a security 
threat.
    Finally, I want to commend you, Ambassador Yun, and your 
team for your determination to finish the job of getting all 
three FAS agreements signed and submitted to Congress before 
leaving for your next challenge. We expressed our concern to 
you when you announced that you would be leaving your post on 
September 30, before the Marshall Islands agreements were 
concluded, but you went above and beyond, and you finished the 
job.
    This picture, I love looking at it, the signing. It does 
indeed tell us 1,000 words about the more than 1,000 words that 
are in that agreement, and for that you deserve all of our 
thanks and appreciation. Now, it is Congress' turn to act and 
pass these agreements which are critical to the economies and 
security of both our nations. We must act without delay.
    In closing, I believe we must heed your words, Ambassador, 
to not ``take the goodwill generated from our historic bonds of 
friendship with these countries for granted at a time of 
increasing competition from the People's Republic of China and 
other countries to exert greater influence in the FAS and 
Pacific region more broadly.'' We heard over and over again 
from our allies stories of how China would exploit any delay in 
the United States' signing of the agreement. We have a 
bipartisan understanding that we will not give China an opening 
to gain influence or strategic advantage in this area. If that 
is the case, then we must recognize that these agreements are 
essential to our national security, and pass them.

    America is indeed a Pacific nation, and these investments 
are incredibly reasonable, given the importance of the Pacific 
and our existing assets in the area and the need to protect 
them.

    Thank you, and I look forward to hearing both of your 
testimonies.

    Ms. Hageman. Thank you. The Chair will now recognize 
Chairman Westerman for his opening statement.

  STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    Mr. Westerman. Thank you, Madam Chair, and thank you to the 
witnesses for being here today.
    I really want to start by thanking Ranking Member Grijalva. 
He and I attended a security briefing in the SCIF, and as we 
were leaving that, we decided right then and there that this 
was an issue of major importance, that we would tackle this in 
a bipartisan manner, and it has been nothing but a bipartisan 
effort.
    And Ms. Leger Fernandez, it was great to have you as co-
lead on the trip that we made. I agree with your assessment of 
that.
    I also want to thank the members of this Committee and our 
colleagues across the other committees of jurisdiction for 
their hard work and contributions to the development of the 
discussion draft of the Compact of Free Association Amendment 
Act of 2023.
    I especially, again, want to thank the members of the Indo-
Pacific Task Force, Chair Radewagen, and Co-Chair Sablan for 
all they have accomplished these past 5 months.
    We are at an important time in which we are renewing the 
Compact of Free Association with the three FAS nations: the 
Republic of Palau, the Federated States of Micronesia, and the 
Republic of Marshall Islands. The opportunity that we have here 
today is to be able to reflect on the strong relationships 
between the United States and the FAS nations. And I will say, 
at least from this Committee's standpoint, I believe that we 
have a very strong, united friendship and pathway forward with 
our good friends in the Indo-Pacific region.
    We have the opportunity to build on the success of our 
alliances and stand up together against the threats posed by 
the Chinese Communist Party. We also have the opportunity to 
preserve the interests of the American people and Pacific 
Islanders alike, including defending our shared values of 
freedom and democracy.
    This Congress, the House Committee on Natural Resources has 
prioritized the work of renewing the COFAs. The Committee has 
held four hearings examining the importance of the Pacific 
Islands and the COFA agreements. We also established the 
bipartisan Indo-Pacific Task Force, with a goal of preserving 
the important partnerships we have with these Pacific Island 
nations and countering the PRC influence.
    And also I want to take a moment to recognize my friend, 
Mr. Moylan, for his work on the Indo-Pacific Task Force, and on 
this issue, and for hosting us in Guam for our field hearing 
that we did there.
    In addition, as has been mentioned, we did do that historic 
bipartisan Congressional Delegation. We stopped in all three 
FAS areas. And on the trip we met and listened to the people 
and the leaders of the FAS. We saw firsthand the strength of 
the United States and the Freely Associated States' 
partnership, and the ways in which the PRC is attempting to 
spread its oppressive and malign influence. Leading the trip 
was an important reminder of the need to preserve our special 
relationships and to work with our partners to protect our 
mutual values of democracy, freedom, and self-determination.
    As Ms. Leger Fernandez mentioned, we traveled many miles, 
over 8,000 miles, and accomplished a great deal. And we have 
come to another milestone today. But the job still is yet to be 
finished. With the signing of the related agreements, it is now 
up to Congress to approve and enact the agreements.
    The discussion draft before us today would enact the 
recently-signed agreements and provide the citizens of the FAS 
with access to U.S. Federal programs and services. The draft 
legislation includes provisions to strengthen U.S. interagency 
coordination by establishing an interagency working group. This 
working group would ensure the relevant U.S. agencies, 
including the Departments of the Interior, State, and Defense 
are engaged in communication with each other on policy and 
recommendations related to the implementation of the COFAs.
    The bill also includes oversight and accountability 
measures to ensure that the COFA agreements are implemented in 
a responsible manner.
    The discussion draft impacts the jurisdiction of almost 
every committee in the House, and we have been working 
tirelessly with those outside committees to ensure the text 
contains sound policies that we can all support. While we have 
made tremendous progress with these outside committees, there 
are provisions that are still pending approval, and I am 
committed to continuing to work with outside committees to 
reach a resolution on the outstanding provisions.
    Today's hearing is an important step in our regular order 
process. Thank you again to the witnesses for being here. I 
look forward to hearing your testimony and to our discussion.
    And before I yield back, I want to especially commend 
Ambassador Yun for your work to reach agreements with the three 
FAS nations. And many people may not know, but I know you had 
intended to leave the State Department at the end of September, 
but remained on to secure an agreement with the Republic of 
Marshall Islands, which occurred just days ago. Congratulations 
on that. Thank you for all your efforts, service, and continued 
work to see these agreements approved.
    I yield back.
    Ms. Hageman. Thank you, Mr. Chairman. The Chair now 
recognizes the Ranking Member, Mr. Grijalva.

  STATEMENT OF THE HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Grijalva. Thank you, Madam Chair. I will just associate 
myself with the comments that the Chair and Ranking Member and 
Chair Westerman have made regarding the importance, the 
urgency, and the work that has gone into it, thanking the 
appropriate people in the task force and, of course, the 
Ambassador.
    I think the issues left before us, as the Chairman 
outlined, is expediting the other committees to finish their 
part of the work and expediting this whole process. I think we 
are in a really important phase.
    And to the task force and the Chair's congratulations, it 
is a good product. And thank you again, Mr. Ambassador.
    And maybe, if Westerman becomes Speaker, we can move this 
thing really quick onto the Floor.
    [Laughter.]
    Mr. Grijalva. I yield back.
    Ms. Hageman. Thank you. I will now introduce the witnesses: 
The Honorable Joseph Y. Yun, Special Presidential Envoy for 
Compact Negotiations, United States of America, Washington, DC; 
and The Honorable Carmen Cantor, Assistant Secretary, Office of 
Insular and International Affairs, U.S. Department of the 
Interior, Washington, DC.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the hearing record.
    To begin your testimony, please press the ``talk'' button 
on the microphone.
    We use timing lights. When you begin, the light will turn 
green. When you have 1 minute left, the light will turn yellow. 
At the end of the 5 minutes, the light will turn red, and I 
will ask you to please complete your statement.
    I will also allow all witnesses on the panel to testify 
before Member questioning.
    The Chair now recognizes Ambassador Joseph Yun for 5 
minutes.

STATEMENT OF THE HON. JOSEPH Y. YUN, SPECIAL PRESIDENTIAL ENVOY 
FOR COMPACT NEGOTIATIONS, UNITED STATES OF AMERICA, WASHINGTON, 
                               DC

    Ambassador Yun. Thank you very much, Chairman Hageman, 
Ranking Member Fernandez, Chairman Westerman. Thank you for 
having me today.
    I am really grateful for the strong support shown by this 
Subcommittee. Your visit to FAS countries that you mentioned 
could not have come at a better time. It worked out ideally, 
and it really helped us to reach the end. It was instrumental, 
I would say, nine members going to FAS. I cannot recall a visit 
of that magnitude clearly showing the importance of FAS to our 
own security.
    The United States and FAS share deep ties forged in 
history. During World War II, the islands that encompass what 
are today the FAS saw some of the fiercest fighting in the 
Pacific theater. After the war the United Nations assigned the 
United States as the administering authority over the trust 
territories of what now is FSM, RMI, and Palau. And when they 
became their own sovereign nations, these three countries chose 
to maintain their close bonds with the United States through 
the compacts.
    From the World War II era through the Cold War and its end 
to the present day, while the security environment and threats 
have changed, what has not changed is the United States' 
commitment to the FAS, as demonstrated by the compacts. 
Underpinned by the compacts, our partnership with the FAS have 
formed a bedrock of U.S.-Pacific cooperation for nearly four 
decades. These agreements underscore both the enduring ties 
between our people and the vital U.S. national security 
interests at play in the Pacific.
    Collectively, these three countries form a strategic bridge 
stretching from Hawaii to the Philippines, an area that is 
geographically larger than the continental United States. Under 
the compacts, the United States has full authority and 
responsibility for defense and security matters in and relating 
to the Freely Associated States. This investment is key to 
maintaining the stability and prosperity of our closest Pacific 
Island neighbors and partners.
    To that end, I am proud of the work of our team to conclude 
negotiations and finalize agreements that would extend the 
compact-related U.S. economic assistance for the FAS for 
another 20 years. On May 22, Finance Minister Kaleb Udui of 
Palau and I signed the 2023 Palau Compact Review Agreement 
during the U.S. Pacific Islands Forum Leaders Dialogue in Port 
Moresby. And one day later, our charge d'affaires, Alissa 
Bibbs, signed three of the four compact-related agreements with 
FSM chief negotiator Leo Falcam in Micronesia. And a few weeks 
ago, I also signed the final agreement for Micronesia, which 
is, of course, the Federal Programs and Services Agreement.
    And earlier this week in Honolulu on October 16, I and RMI 
Foreign Minister Jack Adding signed three agreements: an 
agreement to amend our 2003 amended compact, a new trust fund 
agreement, and a new fiscal procedures agreement. Getting to 
this point, I believe, is an enduring demonstration of U.S. 
commitment to the RMI.
    And I would especially like to thank Congresswoman 
Radewagen for all her help during these negotiations. Thank 
you, ma'am.
    While these signings served as key milestones, the role of 
Congress in approving and providing authority and 
appropriations to implement these agreements is essential. To 
that end, we applaud Congress for signaling their support, 
especially this Committee's strong support for the FAS under 
the current continuing resolution.
    And we similarly welcome the work that is being done now to 
introduce the Compact of Free Association Amendment Act of 
2023. This legislation would allow the United States to 
maintain its status as the partner of choice among the FAS and 
in decades to come.
    I look forward to discussing all these items with you so 
that you can approve the new Act as soon as possible.
    Thank you, ma'am.

    [The prepared statement of Ambassador Yun follows:]
   Prepared Statement of Joseph Yun, Special Presidential Envoy for 
                          Compact Negotiations
     on Proposed Compact of Free Association Amendments Act of 2023

    Chairwoman Hageman, Ranking Member Leger Fernandez, distinguished 
members of the Subcommittee: thank you for this opportunity to testify 
before you today. I am grateful for the bipartisan approach of this 
subcommittee regarding the Compacts of Free Association (COFA) with the 
Freely Associated States (FAS)--the Federated States of Micronesia 
(FSM), the Republic of the Marshall Islands (RMI), and the Republic of 
Palau--and understand that leaders in both chambers of Congress plan to 
introduce COFA-related legislation.

    The United States and the FAS share deep ties forged in history. 
During World War II, the islands that encompass what are today the FAS 
saw some of the fiercest fighting in the Pacific Theater. After the 
war, the United Nations assigned the United States as the administering 
authority over the Trust Territory of the Pacific Islands, which 
included what would become the FSM, RMI, and Palau. And in becoming 
sovereign nations, these three countries chose to maintain their close 
bonds with the United States through the Compacts.

    From the post-WWII era, through the Cold War and its end, to the 
present day, the adversaries and threats associated with this region 
for the United States have changed. What's remained consistent is the 
U.S. commitment to the FAS, as demonstrated by the Compacts.

    Underpinned by the Compacts, our partnerships with the FAS have 
formed a bedrock of U.S.-Pacific cooperation for nearly four decades. 
These agreements underscore both the enduring ties between our people 
and the vital U.S. national security interests at play in the Pacific; 
collectively, these three countries form a strategic bridge stretching 
from Hawai'i to the Philippines, an area that is geographically larger 
than the continental United States. Under the Compacts, the United 
States has full authority and responsibility for defense and security 
matters in and relating to the FAS. This investment is key to 
maintaining the stability and prosperity of our closest Pacific Island 
neighbors and partners.

    The Compacts are at the core of the U.S. commitment to advancing a 
Pacific that is free and open. In its Pacific Partnership Strategy, the 
Biden Administration highlighted the importance of these agreements to 
broader U.S. engagement in the region, and why it has been critically 
important to successfully complete negotiations on the Compact-related 
agreements with the FSM, RMI, and Palau. To that end, I am proud of the 
tireless work of our team to conclude negotiations and finalize 
agreements that would extend Compact-related U.S. economic assistance 
for the FAS for another 20 years. On May 22, Finance Minister Kaleb 
Udui of Palau and I signed the 2023 Palau Compact Review Agreement 
during the U.S.-Pacific Islands Forum Leaders Dialogue in Port Moresby 
and, one day later, Charge d'affaires Alissa Bibbs signed three of the 
four Compact-related agreements with FSM Chief Negotiator Leo Falcam in 
Palikir. We signed the final agreement with FSM, the 2023 Federal 
Programs and Services Agreement, on September 28; our ability to work 
cooperatively on these agreements is a further reaffirmation of the 
close and continuing U.S.-Micronesia partnership. And earlier this week 
in Honolulu, the United States and the RMI signed three agreements: an 
agreement to amend our 2003 Amended Compact, a new Trust Fund 
Agreement, and a new Fiscal Procedures Agreement; getting to this point 
is a demonstration of the enduring U.S. commitment to the RMI. 
Negotiations continue with both the RMI and Palau on new Federal 
Programs and Services Agreements.

    While these signings served as key milestones, the role of Congress 
in, as applicable, approving and providing authority and appropriations 
to implement these well-negotiated and mutually supported Compact-
related agreements is essential. To that end, we applaud Congress for 
signaling their support for the FAS under the current Continuing 
Resolution, and similarly welcome the planned introduction of the 
Compact of Free Association Amendments Act of 2023. This legislation 
would allow the United States to maintain its status as the partner of 
choice among the FAS in the decades to come.

    At a time when the strategic competitors of the United States seek 
to portray us as an unreliable partner in the Pacific, our enduring 
partnerships with the FAS--underpinned by the Compacts--serve as a 
compelling, tangible counterpoint. But these historic bonds should not 
be taken for granted, something that our adversaries are well aware of. 
This investment is key to ensuring that the goodwill generated by 
decades of kinship between the United States and the FAS will continue 
to grow in the future.

    With that, I look forward to discussing this important legislation 
with you. Thank you.

                                 ______
                                 
  Questions Submitted for the Record to the Hon. Joseph Yun, Special 
              Presidential Envoy for Compact Negotiations

The Honorable Joseph Yun did not submit responses to the Committee by 
the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman

    Question 1. The most significant benefit of the COFA agreements for 
the U.S. is that the U.S. gains extraordinary and exclusive security 
rights from the FAS. However, these rights do not expire and so it is 
not immediately clear as to why U.S. economic assistance to the FAS is 
necessary.

    Can you explain to us how exactly U.S. economic assistance is 
critical to U.S. interests and ensures our ability to exercise our 
security rights?

    Question 2. Section 8(i) establishes a Unit for the FAS in the 
Bureau of East Asian and Pacific Affairs of the Department of State.

    What is the importance of establishing this Unit? How will it 
improve COFA implementation?

    2a) Do you believe this will help strengthen U.S. diplomatic 
presence in the FAS and address the concerns about the lack of 
engagement?

    Question 3. This discussion draft would require U.S. members of the 
FSM's and RMI's joint economic committees and the joint trust fund 
committees to have a strong background in finance and accounting. It 
also places five-year term limits on the U.S. members. There are 
similar provisions for U.S. members of Palau's Economic Advisory Group.

    How will this improve U.S. Government oversight on the 
implementation of the Compacts and help the FAS improve their economic 
growth and resiliency?

               Questions Submitted by Representative Dunn

    Question 1. There were three agreements signed on October 16th 
between US and Marshalls on the financial and services aspects of the 
Compacts of Free Association. In the ``Agreement Between the Government 
of the Republic of the Marshall Islands and the Government of the 
United States of America Regarding the Compact Trust Fund,'' Article 
17, Section 2(b) there is reference to: Such dividends shall be paid in 
equal amounts on a per capita basis to all Eligible Recipients on at 
least a quarterly basis.'' Does this mean there is the option for a 
universal basic income for Marshall Islanders, paid out of a trust fund 
largely funded up by the taxpayers of the United States? If so, what is 
the rationale? What is the size of the endowments? Who is responsible 
for directing the spending? How is it decided what the endowment money 
is spent on?

    Question 2. Does the U.S. have a political competition plan for the 
Pacific?

    Question 3. How do the agreements help the FAS fight corruption?

    In one recent case two people who came from China and took 
Marshallese citizenship under opaque circumstances were found guilty in 
the U.S. of bribing Marshallese officials. One was deported back to the 
Marshalls. Will the U.S. provide the case details necessary for the 
Marshall Islands Attorney General to decide if he wishes to prosecute 
them and the officials they bribed? Does the U.S. intend to deport the 
other guilty party back to Marshalls as well once his time is served in 
the U.S.? How does this help U.S. and Marshallese security?

                                 ______
                                 

    Ms. Hageman. Thank you, Mr. Ambassador. And the Chair now 
recognizes Assistant Secretary Carmen Cantor for 5 minutes.

   STATEMENT OF THE HON. CARMEN CANTOR, ASSISTANT SECRETARY, 
OFFICE OF INSULAR AND INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF 
                  THE INTERIOR, WASHINGTON, DC

    Ms. Cantor. Thank you, Chair, Ranking Member, Chairman 
Westerman, and distinguished members of the Subcommittee. The 
Department of the Interior welcomes the opportunity to join 
Congress today to continue our recognition of the importance of 
the Federated States of Micronesia (FSM), the Republic of the 
Marshall Islands (RMI), and the Republic of Palau, 
(collectively, the Freely Associated States, or FAS), to U.S. 
national interests in the Indo-Pacific. These jurisdictions 
have held this importance for more than 75 years.
    I am happy to be here and to support enactment of 
implementing legislation for the compact agreements recently 
reached with these important partners.
    Several months ago, the Administration submitted a 
legislative proposal, the Compact of Free Association 
Amendments Act of 2023, to the Congress. The proposal contains 
funding and related provisions necessary to implement 
agreements related to the Compact of Free Association that the 
United States negotiated with FSM and Palau.
    Moreover, earlier this week, the United States successfully 
concluded negotiations with RMI and signed agreements based on 
economic assistance levels already included in our legislative 
proposal.
    The proposal also includes important provisions that, while 
not related to the agreements themselves, are nonetheless 
essential to our relationships with these countries. Enactment 
of this legislative package will deepen our relationships with 
the FAS, and serve as a clear signal of the United States' 
commitment to achieving and maintaining a free and secure Indo-
Pacific region.
    As you may know, Interior carries out responsibilities to 
the U.S. territories of Guam, the Northern Mariana Islands, and 
American Samoa, as well as the Freely Associated States. These 
FAS communities serve in the U.S. military at among the highest 
rates per capita, and they live, work, and pay taxes throughout 
the United States. For the past 35 years, the compacts have 
been a foreign policy, national security, and people-to-people 
success story.
    As we continue to conclude this effort, I want to highlight 
in particular two provisions in the Administration's proposal 
that are also included in the current draft which address long-
standing challenges for FAS citizens.
    First, the proposal includes language that will restore 
eligibility for key Federal public benefit programs for FAS 
individuals while they are lawfully present in the United 
States: an important, long-term solution to the financial 
impacts of these communities on U.S. state and territorial 
governments. Restoring access to Federal public benefits will 
not only have a significant positive impact on these families, 
it also will allow the Federal Government to rightfully share 
in covering a significant portion of the financial burden 
currently placed on state and territorial governments for 
hosting these small but unique communities without a 
significant additional administrative burden.
    Further, the benefits and compensation from the Federal 
Government will follow the individuals from the FAS in 
whichever state or territory within the United States they 
choose to live.
    Second, the proposal also includes language that will 
provide U.S. military veterans residing in the FAS with 
improved access to the Department of Veteran Affairs benefits 
they have earned and rightfully deserve for their service. 
These brave FAS citizens who have chosen to return home after 
their service, face challenges to receiving their full 
benefits, including access to medical care, when residing in 
their Pacific Islands.
    These provisions will remove restrictions that currently 
impede the Secretary of Veterans Affairs from offering medical 
care to these veterans. Both of these provisions have 
bipartisan, bicameral counterparts in the current Congress.
    As I have noted in previous testimony, the United States 
and the three FAS agreed on packages that will provide 
approximately $6.5 billion in economic assistance to the FAS 
over the next 20 years.
    Under the leadership of the White House, led by Special 
Presidential Envoy Yun, my team and I have worked tirelessly 
with colleagues from across the U.S. Government and our 
counterparts in the FAS to negotiate the terms of these 
agreements, particularly the accountability and oversight 
provisions of the Fiscal Procedures Agreement with the FSM and 
the RMI; the Compact Trust Fund Agreements with the FSM and 
RMI; and the Compact Review Agreement with Palau. As a result 
of that work, the negotiated terms and procedures governing 
both financial assistance and the Compact Trust Fund maintain 
strong U.S. oversight over every taxpayer dollar being 
proposed. At the same time, we have carved out room to 
accommodate FSM, Palau, and RMI requests for more autonomy and 
flexibility.
    With the successful conclusion of most compact-related 
agreements behind us, Interior urges Congress to act swiftly to 
approve implementing legislation, and appropriate the funding 
necessary for these well-negotiated compact provisions. As I 
have said before, let us follow through on our work for both 
the American people and people in the FAS, and secure a 
bipartisan success that attests to the U.S. commitment to the 
Pacific, and to remaining the preferred partner for our friends 
and cousins in the Pacific Islands.
    Chair, Ranking Member, Chair, thank you so much. This 
concludes my statement, and I am happy to answer any questions 
you may have.

    [The prepared statement of Ms. Cantor follows:]
Prepared Statement of Carmen G. Cantor, Assistant Secretary for Insular 
                       and International Affairs
     on Proposed Compact of Free Association Amendments Act of 2023

    Chair Hageman, Ranking Member Leger Fernandez, and distinguished 
members of the Subcommittee the Department of the Interior (Department) 
welcomes the opportunity to join Congress today to continue our 
recognition of the importance of the Federated States of Micronesia 
(FSM), the Republic of the Marshall Islands (RMI), and the Republic of 
Palau (collectively, the freely associated states or FAS) to U.S. 
national interests in the Indo-Pacific; these jurisdictions have held 
this importance for more than 75 years. I am happy to be here and to 
support enactment of implementing legislation for the Compact 
agreements recently reached with these important partners.
    Several months ago, on June 16th, the Administration submitted a 
legislative proposal, the Compact of Free Association Amendments Act of 
2023, to the Congress. The proposal contains funding and related 
provisions necessary to implement agreements related to the Compacts of 
Free Association (COFAs) that the United States negotiated with FSM and 
Palau. Moreover, earlier this week, the United States successfully 
concluded negotiations with RMI and signed agreements based on economic 
assistance levels already included in our legislative proposal. The 
legislative proposal also includes important provisions that, while not 
related to the agreements themselves, are nonetheless essential to our 
relationships with these countries. Enactment of this legislative 
package would deepen our relationships with the FAS over the coming 
decades and serve as a clear signal of the United States' commitment to 
achieving and maintaining a free and secure Indo-Pacific region. The 
Administration's COFA proposal also includes $634 million over the next 
20 years to ensure the continued provision of US postal service to the 
FAS, which was a key FAS request during negotiations.
    The Department carries out responsibilities to the U.S. Territories 
of Guam, the Northern Mariana Islands, and American Samoa, as well as 
the strategically vital freely associated states. These FAS communities 
serve in the U.S. military at among the highest rates per capita, and 
they live, work, and pay taxes throughout the United States. For the 
past 35 years, the Compacts have been a foreign policy, national 
security, and people-to-people success story.
    As we continue to expeditiously conclude this effort, I want to 
highlight in particular two provisions in the Administration's proposal 
that are also included in the current draft of the Committee's 
legislation, which address long-standing challenges for FAS citizens. 
First, the proposal includes language that would restore eligibility 
for key Federal public benefit programs for FAS individuals while they 
are lawfully present in the United States--an important long-term 
solution to the financial impacts of these communities on U.S. state 
and territorial governments. Restoring access to federal public 
benefits would not only have a significant positive impact on these 
families; it also would allow the federal government to rightfully 
share in covering a significant portion of the financial burden 
currently place on state and territorial governments for hosting these 
small, but unique, communities without a significant additional 
administrative burden. Further, the benefits and compensation from the 
federal government would follow the individuals from the FAS in 
whichever state or territory within the United States they choose to 
live.
    Second, the proposal also includes language that would provide U.S. 
military veterans residing in the FAS with improved access to the 
Department of Veterans Affairs benefits they have earned and rightfully 
deserve for their service. As mentioned above, FAS citizens serve in 
the U.S. military at among the highest rates per capita. However, the 
brave FAS citizens who have chosen to return home after their service 
face disproportionate challenges to receiving their full benefits, 
including access to medical care, when residing in their Pacific 
islands. These provisions would remove various restrictions that 
currently impede the Secretary of Veterans Affairs from offering 
medical care to these veterans.

    Both of these provisions have bipartisan, bicameral counterparts in 
the current Congress.
    As I have noted in previous testimony, the United States and the 
three FAS agreed on packages that would provide approximately $6.5 
billion in economic assistance to the FAS over the next 20 years, which 
includes $3.3 billion in assistance to the FSM, $889 million in 
assistance to Palau, and just over $2.3 billion in assistance to the 
RMI.
    Under the leadership of the White House, led by Special 
Presidential Envoy Yun, my team and I have worked tirelessly with 
colleagues from across the United States Government and our 
counterparts in the FAS to negotiate the robust terms of these 
agreements, particularly the accountability and oversight provisions in 
the Fiscal Procedures Agreements with the FSM and the RMI; the Compact 
Trust Fund Agreements with the FSM and the RMI; and the Compact Review 
Agreement, including its appendices, with Palau.
    As a result of that work, the negotiated terms and procedures 
governing both financial assistance and the Compact trust funds 
maintain strong U.S. oversight over every taxpayer dollar being 
proposed. At the same time, we have carved out room to accommodate FSM, 
Palau, and RMI requests for more autonomy and flexibility in framing 
the annual budget proposals for the effective expenditure of economic 
assistance.
    With the successful conclusion of most Compact-related agreements 
with all three countries behind us, the Department of the Interior 
urges Congress to act swiftly to approve implementing legislation and 
appropriate the funding necessary for these well-negotiated Compact 
provisions. As I have said before, let us follow through on our work 
for both the American people and people in the FAS and secure a 
bipartisan success that attests to the United States' commitment to the 
Pacific and to remaining the preferred partner for our friends and 
cousins in the Pacific Islands.

    Chair Hageman, Ranking Member Leger Fernandez, this concludes my 
statement and I am happy to answer any questions that you may have.

                                 ______
                                 

Questions Submitted for the Record to the Hon. Carmen Cantor, Assistant 
Secretary for Insular and International Affairs, U.S. Department of the 
                                Interior

The Honorable Carmen Cantor did not submit responses to the Committee 
by the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman

    Question 1. How will the Department of the Interior work to improve 
coordination with the Department of State and the Department of Defense 
while making sure that the Department of the Interior's internal 
processes are not negatively impacted? 

    Question 2. This legislation would require the Secretary of the 
Interior to submit to Congress a report that includes a compilation of 
the COFA agreements within 180 days of enactment.

    Can you commit to making sure that these reports are delivered to 
Congress in a timely manner and to the appropriate Congressional 
committees as Assistant Secretary?

    Question 3. Outward migration is a major problem for the FAS as 
many FAS citizens choose to move to the U.S. in search of better 
opportunities. This has negatively impacted the economies and workforce 
of these countries.

    How do the COFA agreements help to address this issue?

    Question 4. This legislation would extend eligibility to U.S. 
federal programs and services to Palau. Palau would get access to the 
same programs and services provided to the FSM and the RMI.

    Why do you believe this is necessary?

    4a) Would you say this reflects the growing strength of U.S.-Palau 
relations?

    Question 5. Under Section 10 (c) of the Compacts of Free 
Association Amendments Act of 2023, there would be a total of $11 
million going to judicial training during the Compact period.

    Can you please articulate the importance of judicial training in 
the FAS?

    5a) Can you provide some specific examples of how investing in 
Judicial Training helps strengthen FAS resiliency to PRC coercion and 
maligned activity?

    Question 6. This legislation would require the Secretary of the 
Interior to send to Congress reports conducted by the various joint 
economic committees, joint trust fund committees, and the Economic 
Advisory Group.

    Can you commit to making sure that these reports are delivered to 
Congress in a timely manner and to the appropriate Congressional 
committees as Assistant Secretary?

    Question 7. This discussion draft would require U.S. members of the 
FSM's and RMI's joint economic committees and the joint trust fund 
committees to have a strong background in finance and accounting. It 
also places five-year term limits on the U.S. members. There are 
similar provisions for U.S. members of Palau's Economic Advisory Group.

    How will this improve U.S. government oversight on the 
implementation of the Compacts and help the FAS improve their economic 
growth and resiliency?

                                 ______
                                 
    Ms. Hageman. Thank you very much. The Chair will now 
recognize the Members for 5 minutes for their questions, and I 
am going to start with Chairman Westerman.
    Mr. Westerman. Thank you, Chair Hageman. Again, thank you 
to the witnesses.
    Assistant Secretary Cantor, the discussion draft increases 
the role of the Department of State and Department of Defense 
in compact implementation and oversight. The intent behind this 
is to ensure greater engagement from these agencies and the 
U.S. Government in carrying out the COFA agreements.
    However, it does not mean that the Department of the 
Interior should see this as a reduction of their 
responsibilities. We expect the Department of the Interior to 
remain engaged on COFA implementation. Can you commit to us 
that the Department of the Interior will remain engaged on 
COFA, and not take a back seat during inter-agency 
coordination?
    Ms. Cantor. Yes, sir.
    Mr. Westerman. Is there any language in the draft that you 
think needs to be changed to make sure that the Department of 
the Interior is fully engaged, or are there any concerns where 
you see this may weaken your position in implementing the 
COFAs?
    Ms. Cantor. Sir, I don't believe so.
    Mr. Westerman. Have you looked at that? ``I don't believe 
so'' is not the reassuring answer that I wanted to hear.
    Ms. Cantor. I have no concerns whatsoever. Our team has 
been working very closely with Ambassador Yun and the State 
Department team to ensure that, specifically, the oversight and 
accountability provisions that we are responsible for 
administering the economic assistance, they are there. So, I 
have absolutely no concerns, sir.
    Mr. Westerman. Much better answer.
    [Laughter.]
    Mr. Westerman. The Compact of Free Association Amendments 
Act of 2023 would establish the interagency Group on Freely 
Associated States. The group would be co-chaired by the 
Secretary of State and the Secretary of the Interior. The group 
would be responsible for coordinating the development and 
implementation of executive branch policies relating to the 
FAS. It would also provide policy guidance, recommendations, 
and oversight to Federal agencies and departments on 
implementation of the compacts.
    And this is to both Ambassador Yun and the Assistant 
Secretary: Can you explain to us how this will improve the 
current process of compact implementation?
    Ambassador Yun. Chairman Westerman, I do think this group 
can be very, very important. But having worked in bureaucracy 
for a long time, it depends on a number of factors.
    I think the first factor is, let's be realistic. The 
Secretaries are not going to chair this. They will be there as 
designated persons. So, the designated persons must be of 
senior enough rank to do this. To do that, I do think that more 
emphasis is needed from the committees and from Congress that 
this interagency group must have senior personnel present. I 
think that is the key thing. So, I do think, ultimately, how 
much this group does will depend on the seniority of the actual 
group meeting.
    Maybe because I am so close to retirement, I am being too 
honest?
    [Laughter.]
    Mr. Westerman. How do the COFA agreements make sure that 
the economic assistance going to the FAS and their trust funds 
are well managed and spent in a responsible manner?
    Ambassador Yun. That crucially depends, again, on 
implementation and how the Trust Fund Committee itself works.
    The United States manages the Trust Fund Committee. So, 
again, this is largely up to the Interior Department and State 
Department to manage that process. The agreement states very 
clearly how much they can spend. We are not going to have the 
mistakes of the past, where management was given over. If you 
remember, the Bikini Trust fund now has become virtually 
nothing. So, we control how much is spent.
    We will also control through the Trust Fund Committee where 
it will be spent. So, it depends very much on implementation, 
and it depends very much on the smooth working of the Trust 
Committee between RMI or FAS countries and us. So, again, there 
is plenty of congressional oversight there.
    I think for those factors, it is all about implementation. 
And in the negotiations, what we have done our best is to leave 
the structure, control how much they spend, and we control at 
the end how they spend it. But the process is going to be done 
smooth, working between the Trust Committee members of FAS and 
U.S. Trust Committee members.
    Mr. Westerman. Thank you.
    I yield back.
    Ms. Hageman. Thank you. The Chair now recognizes Mr. 
Sablan.
    Mr. Sablan. Thank you very much. I am going to read my 
statement and submit my questions for the record. I wish I 
could stay, but I am not feeling well. But this is too 
important for me to walk away from.
    Ambassador Yun and Assistant Secretary Cantor, thank you 
for testifying today. I would like to also welcome many of 
those in the audience, the Ambassador from Palau, I hope I 
don't miss the Ambassador from RMI, the Republic of the 
Marshall Islands. It is very rare that we see Senate staffers 
here, but they are also very welcome to the House any time.
    [Laughter.]
    Mr. Sablan. Thank you, Ambassador, especially for your hard 
work, for the hard work of you and your teams in the successful 
negotiations with our three Pacific allies, our friends and 
neighbors, my brothers and sisters, the Freely Associated 
States. I know this was no easy task.
    I especially want to commend you, Ambassador Yun, for your 
expertise and professionalism since your appointment in March 
2022. I have heard nothing but good things about you from the 
Freely Associated State officials, and that you have always 
treated them with the utmost respect. The White House could not 
have selected a more capable person to lead these delicate 
negotiations.
    We all know how important renewing the compacts are to the 
United States. I applaud Chairman Westerman for leading a 
Congressional CODEL through Micronesia in August. Seven stops 
in 10 days, sir. At least you get to know what it takes me to 
go home and back every month.
    [Laughter.]
    Mr. Sablan. It is 2\1/2\ days for me.
    It provided many Members a clear picture of the need to 
preserve the compacts, support our allies, and maintain U.S. 
influence in the region. And I know for a fact that some of the 
Members in that trip actually came back having very positive 
thoughts about this thing.
    It was also good to see prorated funding and extensions of 
authorized Federal programs and services in the recently-
enacted continuing resolution, but time is again running out. 
We cannot keep operating like this. So, I look forward to 
working with my colleagues here in Congress and have the 
renewals of the Compact of Free Association enacted quickly and 
finally enacted into law. I wish I could promise you that we 
will do it this year. I hope so, but maybe when Mr. Westerman 
becomes Speaker we really can get this through, because he 
really does support this, this whole effort.
    Jim, thank you for your hospitality in Guam, as well. And 
in Micronesia all of us got gifts. Each individual Member got 
gifts. I tried to bribe one of my colleagues into buying a 
shell in Palau, but then no, I don't think so, because I 
wouldn't know if it was brown or green turtle.
    [Laughter.]
    Mr. Sablan. But really, thank you very much.
    I will submit my questions for the record.
    Ms. Leger Fernandez. Would the gentleman yield?
    Mr. Sablan. Yes.
    Ms. Leger Fernandez. Before your time is up, I just want to 
also make sure that we thank you while you are still here.
    As Co-Chair of the Indo-Pacific Task Force, we need to 
recognize the important work that the co-chairs did, and that 
our colleagues from the islands did. Thank you very much to our 
good friend. And we became even better friends, Madam Radewagen 
and Representatives Moylan and Sablan. The work you did in 
pulling us aside and making sure that we understood what was at 
stake and some of the nuances that we might not have known if 
you hadn't been there to educate us while we were on the plane, 
where we were taking those hours and hours. So, I want to thank 
you very much.
    Co-Chair Sablan, thank you very much. Co-Chair Radewagen 
and Mr. Moylan, thank you so very much.
    Mr. Sablan. Yes, thank you. I take my time back. Reclaiming 
my time, again I apologize that I need to leave. I really thank 
you.
    Ms. Hageman. Thank you. I now recognize myself for 5 
minutes of questioning.
    And this is to be directed to both of you and perhaps, Mr. 
Ambassador, you can answer first. In terms of accountability, 
do any of the FAS governments qualify as low-risk auditees?
    Ambassador Yun. We will get an answer to you on that, I am 
not sure myself at the moment, but we will look into it.
    Ms. Hageman. What about you, Ms. Cantor, do you know the 
answer to that question?
    Ms. Cantor. Ma'am, I don't know the answer, but we will get 
you an answer.
    Ms. Hageman. Wonderful, thank you. Do you know how the 
Administration intends to work to ensure that the FAS remain 
committed and held accountable to their requirements and 
deadlines?
    Again, Mr. Ambassador, do you know how they will ensure 
accountability?
    Ambassador Yun. There are many provisions. Accountability 
has been, in fact, our biggest effort, our No. 1 effort, to 
make it more efficient. So, on some things like reporting 
requirement we have reduced them to make sure they are on time.
    I think the item they complained about is there are too 
many reports and too frequent reports. So, on some reports from 
quarterly, we will go down to semi-annual. On other 
accountability issues, again, we will have regular audits. So, 
I do believe the standard of accountability has not suffered; 
we have made it more efficient.
    Ms. Hageman. Ms. Cantor, do you have anything to add to 
that?
    Ms. Cantor. Ma'am, other than what Ambassador Yun said, we 
really worked with these three countries to ensure that we were 
listening to them and we made the process more efficient. Like 
he said, less reporting, but more oversight and accountability 
provisions.
    Ms. Hageman. OK. The United States has previously 
established an intra-agency group on Freely Associated State 
affairs through an executive order in 1986. However, it appears 
that this group became defunct in the early 2000s.
    Ms. Cantor, can you commit to making sure that your office 
understands that if the interagency group on Freely Associated 
States is established under this legislation, that we would 
expect that the group would actually convene and carry out its 
responsibilities until Congress no longer deems it necessary?
    Ms. Cantor. Yes, I commit.
    Ms. Hageman. OK. Ambassador Yun, this discussion draft 
significantly increases the Department of State's equities in 
COFA implementation. Why do you believe this is necessary?
    Ambassador Yun. I do think there has been, over the past 
two decades, erosion of some diplomatic oversight and 
engagement with the Pacific. The Biden administration has tried 
to change that. The results are obvious. There have been two 
Pacific summits: one last year, one this year. In addition, we 
have opened a number of missions in the Pacific and, of course, 
the higher-level engagement in compact.
    I think for that momentum to be sustained, that political 
and diplomatic level, I certainly would see the language that 
you put in the compact amendment to create an office for FAS as 
entirely appropriate. There was an office of FAS some 40 years 
ago, but that disappeared after about 10 years or so. So, for 
you to have language there, I think, is a good step.
    Ms. Hageman. Mr. Ambassador, in your negotiations did the 
FAS raise any concerns about the Department of State's lack of 
engagement and U.S. diplomatic presence?
    Ambassador Yun. FAS have raised that on more than one 
occasion. I do think, with your support, and also with renewed 
interest for the Pacific, with the State Department certainly, 
I don't think Interior Department is, I mean certainly the 
implementation has been going well, but I think at a diplomatic 
level further attention is called for. Thank you.
    Ms. Hageman. OK. The funding going to the RMI has been 
divided up into several categories of funding. While several of 
these are a continuation from the 2003 compact with the RMI, 
there are several new categories such as Kwajalein Atoll Master 
Plan. Can you provide any detail on what these new categories 
are, and why they are necessary?
    Ambassador Yun. I think members of the Subcommittee who 
went to Ebeye would recognize very well the infrastructure 
update that is needed in Ebeye, which is just essentially a 
causeway away from Kwajalein. Most of the labor force who work 
in Kwajalein come from Ebeye, yet that area is tremendously 
overcrowded, lack of power facilities, lack of roadways, and so 
on. So, a big chunk of our money will go to updating, upgrading 
infrastructure around Kwajalein. That is a new element in our 
funding.
    The second new element I would say is the help we will give 
through the new trust fund. We call it extraordinary needs. 
Traditionally, compact has supported the following sectors: 
education, health, infrastructure, and environment. But there 
is a need. Because a lot of farms have been inundated with 
saltwater, a lot of other especially isolated islands, so we 
will be giving through the new trust fund these isolated areas, 
small islands that need more help.
    So, those two are, I would say, major new areas for RMI.
    Ms. Hageman. OK, thank you. The Chair now recognizes the 
Ranking Member.
    Ms. Leger Fernandez. Thank you so very much for your 
testimony and the questions that you have already answered 
today. You are giving us new insights.
    And in your testimony and in the agreements, we see that 
there are ways in which we are strengthening the relationship 
by opening up and making sure that those residents who are here 
are able to utilize the full Federal services. As an example, 
one of the items that the United States negotiated and accepted 
is the extension of the Head Start program to the FSM and RMI, 
as is the case with Palau. I am a proud Head Start baby myself, 
so I know the benefits that this program can bring to both 
families and communities.
    Using that as an example, can you talk about what it would 
mean if the extension of Head Start were excluded from the 
final bill?
    Ambassador Yun. Essentially, there are two groups of 
support we give them, taking education as an example. One 
assistance we give is education sector assistance. This will 
give the RMI government, for example, ability to pay teachers, 
build schools, provide books, and so on.
    The one that we provide directly, Head Start is an example, 
is for individuals. So, these are two different baskets of 
education programs.
    So, when we set up our own language, we made sure that you 
recognize these two different groups, that they are not double 
counting. One is for, essentially, education sector that would 
go to the government to build schools, pay teachers, and so on. 
The other is a program that they are eligible for. Head start 
is another one. I would say another one we saw is with 
individuals with disability.
    It is confusing when you get into these details, but we 
need to be careful we don't kind of open up or end one program 
while thinking that the other program covers it. I am happy to 
work with Members and staff to make sure we continue to provide 
for FAS what they desperately need. Education is key to these 
countries becoming self-sustaining.
    I emphasize that point because at the moment there seems to 
be some confusion in the language that was drafted for the 2023 
Act.
    Ms. Leger Fernandez. Thank you, Ambassador, and that is why 
I wanted to make sure we addressed that, so that there was an 
understanding of the importance of both aspects of that.
    In our visit, we met with a lot of the veterans, and the 
veterans were very key. And we know that when they serve, they 
are not serving in a capacity that is limited. They are as 
exposed to every danger as their colleagues who might come from 
New Mexico, or Colorado, or anywhere else. So, I think that the 
importance of making sure we are extending the veteran services 
to them where they live is important.
    I want to thank you for doing that. I don't know if you 
want to speak any more to that issue. I think you addressed it 
in your testimony. Or is there anything else?
    I did want to just ask, in general, because we are looking 
at these. We have all heard, I think, a general sense of 
support for what we are doing. What happens if we don't pass 
the compact amendments? Share with us the consequences if we 
fail to act.
    Ambassador Yun. I think the worst thing is the credibility 
of the United States would be very badly damaged. I do think 
that compact FAS are the foundational element of our relations 
with the Pacific. This is the northern half, the half that is 
closest to us. This is the second island chain for China. So, 
the message and the signals we are sending that we are there to 
compete with China, if we cannot secure this traditional, most 
foundational ally of the United States, I think our credibility 
would be very, very badly damaged.
    Ms. Leger Fernandez. Thank you. And I believe that when we 
were on the islands and saw their military importance in World 
War II, and recognizing that the threats and the security are 
different but at the same time not, and I think that that was 
one of the benefits of being there and having the meetings.
    With that, I yield back. Thank you, Madam Chair.
    Ms. Hageman. Thank you. The Chair now recognizes Mrs. 
Radewagen.
    Mrs. Radewagen. Talofa. Talofa lava. We are grateful to 
Chairman Westerman for stewardship of COFA renewal so far, and 
to you, Chairwoman Hageman, for bringing us together today in 
such a timely way, now that we have full COFA renewal agreement 
packages for all three Freely Associated States.
    During the final signing proceedings with the RMI in 
Honolulu, I was struck by Special Presidential Envoy Yun's 
remark that he never doubted RMI's commitment to strengthening 
the COFA alliance. Certainly, I would join Ambassador Yun's 
assessment as to all three COFA partner governments.
    But now, we did not get this done before expiration, so we 
are under continuing resolution provisional funding measures 
that do not strengthen the alliance in a sustainable way. 
Without undue delay, we can and should exercise oversight and 
move the agreements forward to passage by the earliest and most 
expeditious path. It is now that legislators and our 
governments need to show commitment to strengthening our 
alliances by approving COFA renewal agreements in an orderly 
but concerted effort.
    There is much in these agreements that is ambiguous, 
subject to further interpretation and discretion of the 
parties. Congress can and should prescribe boundaries on 
interpretation and discretion of the parties, as may be 
determined to best serve the national interests of both the 
United States and its partners. In that regard, there are a few 
questions I would like to ask for the record, and many others 
that I intend to submit in writing.
    Madam Secretary, as you know, along with these Compacts of 
Free Association, the Biden administration considers American 
Samoa to be a cornerstone of its U.S. national security policy 
for the Indo-Pacific. To that end, I was honored that Chairman 
Westerman appointed me Chairman of this Subcommittee's Indo-
Pacific Task Force, and that Chairman McCaul designated me Vice 
Chairman of his Foreign Affairs Subcommittee on the Indo-
Pacific.
    In furtherance of these designations, and in furtherance of 
my responsibility both to my constituency and to American 
Samoa's role in national security, I am working on legislative 
provisions to remove Congress from mandatory consideration of 
changes to our local constitution, since, if needed, Congress 
already has that power under the U.S. Constitution, and another 
measure to ease the path to U.S. citizenship for U.S. nationals 
who already owe permanent allegiance to the United States.
    Both matters may seem small and have no budgetary 
implications, but they have wide support of our local 
leadership and the people, and would send a strong, positive 
message to both Samoans and others in the region who very 
closely watch what the United States does in its territories 
and Freely Associated States.
    May I say that, subject to specific language, would the 
Administration support small, non-controversial changes, or at 
least in the case of citizenship?
    If you need OMB approval first, I hope you will give them a 
positive recommendation.
    Ms. Cantor. The question is about the citizenship or the 
constitutional amendments?
    Mrs. Radewagen. The question is about what I just asked 
you.
    Ms. Cantor. OK. If I understood it correctly, I want to re-
emphasize we do understand how important American Samoa is to 
our national security, as well. I have had the opportunity to 
visit and meet with you and Governor Lemanu.
    Regarding the constitutional amendments, you sent me a 
letter back in late 2020, which I responded to. And after I 
reviewed the bill with the attorneys at the Department of the 
Interior, we found that the text was in good order, that the 
text would accomplish the stated purpose for which it was 
proposed, which is the repeal of 48 U.S.C. 1662. We did not 
identify any deficiencies or anomalies in the bill language as 
you, the sponsor, had proposed. We will be happy to provide 
updated guidance and technical assistance, should you choose to 
offer a similar measure this Congress.
    Regarding citizenship, we want to thank you for raising 
this issue. We would be happy to review any draft legislation 
and provide technical assistance similar to what we provided on 
H.R. 9350 last Congress.
    Mrs. Radewagen. Thank you, Madam Secretary, my time is 
short.
    Part three of the RMI agreement, paragraph 4, states that 
amendments thereunder do not affect the agreement referred to 
in section 462(a) of the 2003 RMI COFA, which is more commonly 
referred to as section 177 Nuclear Testing Claims Settlement, 
and which causes me to ask if this provision recognizes that 
section 177 agreement remains fully in effect and under its 
article 13 does not expire or terminate except by agreement and 
approval of the RMI, and that the terms of the settlement can 
be amended by mutual agreement, that the United States has a 
legal duty to consult on the ongoing implementation of the 
agreement at any time requested, and that, in addition to any 
past or present measures under the settlement, it can be 
amended to provide additional programs and activities as may be 
mutually agreed, consistent with 177(b) of the compact.
    Ambassador Yun. Yes, Representative Radewagen. We 
completely believe section 177 remains in effect.
    Mrs. Radewagen. Thank you. I do have other questions. I am 
very out of time.
    Thank you, Chairwoman Hageman, I yield back. I will submit 
the rest of my questions for the record.
    Ms. Hageman. Thank you. The Chair now recognizes Mr. Case.
    Mr. Case. Thank you, Madam Chair.
    First of all, Ambassadors, your teams, our partners from 
our three compact countries here, incredible congratulations. 
Great job. Difficult, but productive and successful 
negotiations. And I was privileged, of course, to join you all 
in Honolulu just a few days ago, as a matter of fact, for the 
signatures on the RMI agreements. And the spirit there was 
indicated that friends work out their differences. So, this is 
a very good day.
    However, I hate to rain on the parade, because I have an 
issue that I have been talking about for 5 years that needs to 
be resolved, and that is the treatment of our compact residents 
in the United States. And, as you know, one of the rights under 
the compact agreements is that citizens of the compact 
countries can come to live and work in our country as if they 
are green card holders, functional green card holders. Yet, 
because of what is now termed an oversight, they are not 
eligible for the same Federal programs, or have not been. As a 
result, the responsibilities for addressing those residents' 
needs has fallen to the states.
    A GAO report in 2020 found that three jurisdictions: the 
CNMI, Guam, and Hawaii, have borne $3.2 billion of costs in the 
period 2004 to 2018 to take care, as they should, of our 
compact residents when the Federal Government did not. For 2017 
alone, that figure was $338 million. And that is simply 
unacceptable.
    We took care of part of this a few years ago by the Federal 
Government reclaiming its responsibility under Medicaid. But if 
you do the math on it, that leaves a bill of some $278 million 
to those jurisdictions that would be borne by those 
jurisdictions if we do not correct this now.
    And we know that this is going to continue as an issue, 
because we know that compact resident migration to the United 
States is not only going to increase, but the locations in 
which they live and work is going to increase. So, this burden 
is going to grow. And it is fundamentally unfair for the 
Federal Government to ask the states to take on this 
responsibility disproportionately.
    And this state, the state I represent, is not willing to do 
that anymore. We have been good partners on this for years and 
years, but it needs to be corrected now. And for me, this is a 
conditional issue. It is very, very regrettably, an issue on 
which my vote depends for the approval of these compacts. And I 
don't think this is much different from my colleagues in other 
like-minded states. I don't say that lightly.
    And, fortunately, I believe that the Administration 
understands this and has, in fact, in the submission of the 
compacts, in the budget sent to Congress earlier this year, 
included as a fundamental part of this the Compact Impact 
Fairness Act, which has been introduced on both sides of 
Congress and on both sides of the aisle to take care of this 
issue once and for all.
    So, that is a long way of asking a very direct question to 
Ms. Cantor: Does the Administration continue to regard the 
Compact Impact Fairness Act as an integral part of your 
submissions to Congress as part of approval of the compacts, as 
re-negotiated?
    Ms. Cantor. Yes. The answer is yes, sir.
    You introduced this legislation, and as you know, 50 
percent of all the COFA migrants are now in the mainland. And 
it is fair for all the states to be able to provide the 
services that they deserve.
    Mr. Case. And Ambassador Yun, this was obviously not a 
direct part, but we have talked about this at great length. Do 
you agree with that position?
    Ambassador Yun. I completely agree with that position. And 
also, thank you, Representative Case, for coming to the signing 
ceremony. It meant a great deal to us and to RMI. Thank you.
    Mr. Case. OK. Well, to my colleagues on the Committee, I 
appreciate this being in the discussion draft. This needs to be 
in the discussion draft as it comes out of this Committee. If 
it is, I will have absolutely no hesitation in supporting this 
all the way. But we need to see this one through, because this 
is important, this is a matter of fairness. This is part of our 
country's obligations in fulfillment of its treaty obligations. 
Thank you.
    Mr. LaMalfa [presiding]. Thank you, Mr. Case. I will now 
recognize Mrs. Gonzalez-Colon for 5 minutes.
    Mrs. Gonzalez-Colon. Thank you, Mr. Chair. I first want to 
recognize Mr. Ambassador and Secretary Cantor for being here, 
and the rest of the people who are our guests today in this 
hearing room, but I really believe that we need to recognize 
the leadership of Chairman Westerman, Congresswoman Radewagen, 
Congressman Moylan, and Congressman Sablan in the effort to 
make this happen.
    I really believe that this is a good resolution. This is 
actually a good policy for the United States in making a safe 
presence of the United States in the Pacific area.
    Having said that, I just have a few questions. They are not 
really questions. They are just yes-or-no answers.
    And I first want to recognize Ambassador for your 
leadership, as well, making this happen after 20 years. I think 
this is something both sides of the aisle should celebrate as 
we pass this resolution.
    I would like to begin with basic questions, just to help 
our constituents better understand our relationship with the 
Freely Associated States and the importance of today's topic. I 
had an opportunity to visit some of the islands of the Pacific 
in a former CODEL, and I know the hard work of members of this 
Committee in those islands, just the traveling time. It is 
something to admire.
    Ambassador Yun, in an April 2023 interview at the Hudson 
Institute, you explained that the Marshall Islands, Palau, and 
the Federated States of Micronesia have signed a Compact of 
Free Association and also enjoy today, in your words, complete 
independence. You also noted that the relations are handled 
through the Department of State because the Freely Associated 
States are foreign and completely sovereign countries.
    Just to confirm, the Freely Associated States are three 
independent nations, and they are each their own country, each 
a sovereign republic. Is that correct?
    Ambassador Yun. Correct.
    Mrs. Gonzalez-Colon. OK. Consistent with that status, are 
people born in the Freely Associated States of the United 
States U.S. citizens or nationals?
    Ambassador Yun. Neither, they are their own citizens.
    Mrs. Gonzalez-Colon. Under the terms of the Freely 
Associated agreements, compact citizens can migrate and work in 
the United States but they are not U.S. citizens or nationals.
    Ambassador Yun. Right.
    Mrs. Gonzalez-Colon. Correct. Can the Compacts of Free 
Association be terminated either by mutual agreement or 
unilaterally, in accordance with the compact terms?
    Ambassador Yun. Yes.
    Mrs. Gonzalez-Colon. Yes. In fact, I remember in March of 
last year, the Department of the Interior testified before the 
Senate, and I quote, ``under the compacts, both the United 
States and the FAS individually retain the right to full 
independence, and that includes an unencumbered ability to 
terminate the free association status defined by the compacts, 
and the termination may be done by mutual agreement or each 
nation may do so unilaterally or by mutual agreement.''
    So, if free association agreements are terminated, will 
Palau, the Marshall Islands, and the Micronesia remain 
independent sovereign nations? They do not go back to being a 
UN trust territory administered by the United States, correct?
    Ambassador Yun. Correct.
    Mrs. Gonzalez-Colon. OK. I want to say thank you. And the 
purpose behind these questions was just to highlight the 
reality that, at the end of the day, despite our compact 
agreement, the Freely Associated States are independent 
nations, that if we in the United States fail to remain engaged 
and do not renew our economic agreement with them, there will 
be nothing in the way to stop communist China from approaching 
and trying to increase its influence in these countries, as 
they have done that elsewhere in the Pacific region.
    And that is why today this draft bill to approve the 
recently-negotiated COFA economic agreements for the next 20 
years is so important. And that is the reason I do favor that 
agreement, and the importance of this Committee on having this 
hearing.
    Now, turning my questions to the draft legislation, 
Ambassador, what will be the impact of not authorizing the $634 
million funding for the U.S. Postal Service?
    Ambassador Yun. The U.S. Postal Service will be cut off. 
They don't have their own postal service.
    Mrs. Gonzalez-Colon. And has the USPS indicated that they 
will no longer provide postal service if those funds are not 
included in the legislation?
    Ambassador Yun. Yes.
    Mrs. Gonzalez-Colon. OK. Ambassador Yun, we know that 
completing negotiations with the RMI was not an easy task, 
particularly because of the nuclear settlement issue. We would 
like to commend you once again for this accomplishment. And my 
question would be, can you elaborate to us as how you got over 
that impasse with the RMI, and did the total funding change?
    Ambassador Yun. Well, as I mentioned previously, how we got 
over it is that we put in, essentially, that new trust fund 
could be used in small islands, including those islands that 
have been affected by nuclear tests. So, we did not limit it to 
those islands, but we put in specific language that it could be 
used on that.
    I would say that it was very much in United States' 
interest to preserve section 177, and we did that in the 
agreement. So, it really was a compromise that I think they 
were, in the end, happy to reach, as well.
    Mrs. Gonzalez-Colon. Thank you, Ambassador. My time 
expired, and I commend you for that leadership, as well.
    Ambassador Yun. Thank you, ma'am.
    Mrs. Gonzalez-Colon. I yield back.
    Mr. LaMalfa. Thank you. Let's now recognize Ranking Member 
Grijalva for 5 minutes.
    Mr. Grijalva. Thank you, Mr. Chairman.
    Ambassador, again thanks for your willingness to postpone 
your retirement to finish and try to complete the negotiations. 
Now, the ball is in our court. And, as such, the obvious is 
just to expedite the enacting of these agreements, No. 1.
    I think No. 2, and that goes to some of the other questions 
that have been asked, I think the agreements are a very 
important declaration of good faith. And I think they are also 
an important declaration of trust. But beyond what is in the 
agreement, from your perspective now that you are retiring and 
you don't care what you say, which is really a good thing, from 
your perspective through this process that you have been 
through, what else can we do as a country and as a Congress to 
ensure the success of the efforts of the negotiations and its 
implementation?
    And I appreciate the points that were already made about 
raising the status in the State Department of the 
responsibility for these agreements, and for the relationship 
with FAS and having an office with some level of status. I 
think it is important that the working group, like you said, be 
represented there with staff assigned that also have status and 
profile within the agency and within the Department, but more 
importantly, within the Administration, what else could be 
prescriptive, but also what else builds to that ensures the 
success of these agreements with the FAS States beyond what is 
there?
    It is about relationship to build it, strategic importance, 
we all hear that. But I think there is more to do in terms of 
building a relationship that has lasted this long and, quite 
frankly, many times with the United States taking it for 
granted. And now that the United States is in a position to 
need that relationship to be strong, positive, and trusting, as 
it has been in the past, what can we do to make sure that, 
beyond what is in the agreement or what is in the agreement 
that can be pursued?
    Ambassador Yun. Thank you very much. I do think your visit 
in August was tremendously important. And they want to see, 
essentially, our own Congress Representatives, as well as high-
level administration officials engaging. So, engagement is 
critically important.
    I do think with this new compact, especially, we are giving 
them adequate resources. So, resources is no longer a question. 
The issue they really want addressed and given some prominence 
is, of course, climate change because this area suffers from 
climate change like no other area. As I mentioned RMI, the 
highest point is 12 feet. I do understand that climate issues 
are very political in Congress, but I do think, ultimately, we 
have to help them through the crisis that is coming, which is 
climate. It is already there in some part.
    So, if I was to put in order: high-level engagement, 
because only through high-level engagement do they believe, and 
it is probably right, they are going to get more traction and 
attention from Washington; second, the issue most important to 
them is climate. So, we have to figure out how we can help them 
on the climate side.
    Thank you sir.
    Mr. Grijalva. Thank you.
    I yield back, Mr. Chairman.
    Mr. LaMalfa. Thank you, Mr. Grijalva. Let me now recognize 
Mr. Moylan for 5 minutes.
    Mr. Moylan. Thank you, Mr. Chairman, and I appreciate the 
Committee is holding this hearing today. I know that for many 
of my colleagues outside this Committee the word COFA is 
meaningless. But to my constituents it means everything. The 
Freely Associated States are our neighbors, and many of them 
make their first stop in the United States when they land in 
Guam.
    My constituents also know all too well that these 
agreements are essential to ensuring a free and open Pacific. 
My constituents also believe that the Compact Impact funding is 
critical to ensuring host regions can adequately address the 
needs of the migrant community.
    Mr. Chairman, I ask unanimous consent to insert into the 
record from the Acting Governor, Josh Tenorio, and Senate 
Minority Leader Frank Blas regarding the importance of the COFA 
agreements and the Compact Impact. A copy of a report from the 
Governor titled, ``Impact of the COFAs on Guam FY 2004 to FY 
2020,'' as well as pages out of the 2020 GAO report that 
enumerate the cost of hosting compact migrants between Fiscal 
Years 1986 and 2017.
    Mr. LaMalfa. Without objection.

    [The information follows:]

                     OFFICE OF THE GOVERNOR OF GUAM

                                               October 18, 2023    

Hon. Harriet Hageman, Chair
Subcommittee on Indian and Insular Affairs
House Committee on Natural Resources
1324 Longworth House Office Building
Washington, DC 20515

Re: Testimony for the Draft House Joint Resolution on COFA Amendments 
        Act of 2023

    Dear Chair Hageman and Committee Members:

    I submit this testimony to comment on the discussion draft on the 
House Joint Resolution relative to the ``Compact of Free Association 
Amendments Act of 2023.'' While the Compacts of Free Association (COFA) 
have played a vital role in fostering a strong partnership between the 
United States and the Freely Associated States (FAS), Guam has concerns 
with specific proposals included in the draft Joint Resolution, namely 
the Compact Impact Fairness Act (CIFA). CIFA alone cannot adequately 
reduce the cost that COFA migrants have on our host communities. While 
participation in more federal programs reduces the strain on our local 
public service systems, this does not directly compensate host 
governments for the costs we incur in ensuring FAS migrants are 
welcomed into a safe society that can address their needs. There are 
several local services and projects that rely on Compact Impact funding 
that CIFA just cannot cover.
    Moreover, CIFA will create disparities in the provision of benefits 
for U.S. citizens residing in the U.S. Territories by denying 
eligibility from certain federal programs while extending eligibility 
to non-U.S. citizens from the FAS. This situation will adversely impact 
our community, creating inequities that are discriminatory, which 
should be deeply concerning for this Committee. It is imperative that 
Congress work to truly uphold the principles of fairness. Guam's 
governors, legislators, and congressional delegates, from both 
Republican and Democratic parties, have advocated for equitable 
treatment in federal programs for Guam's residents, including 
eligibility under the Supplemental Security Income program. Thus, on 
behalf of the people of Guam, I ask the Congress to amend the proposed 
COFAs to provide equitable access to critical federal programs for all 
U.S. citizens, regardless of their geographical location.
    Another concern that must be noted and addressed is the absence of 
an authorization in the current draft of the proposed COFAs for annual 
appropriations of $30 million and $6 million in discretionary funds for 
host communities, which were included in the prior 2003 COFA 
Agreements. While these negotiations are geared toward the FAS, it is 
vital that Congress and the Biden Administration work to ensure host 
states and territories are fairly compensated for the public services 
they provide for FAS migrants through Compact Impact funding.
    Historically, Guam received up to $16 million out of the annual $30 
million appropriation split amongst the affected jurisdictions for 
defraying costs incurred by increased demands placed on educational, 
public safety, and social infrastructure services from FAS citizens 
migrating to the island. In 2017, the last year for which the 
government of Guam submitted Compact Impact costs to the U.S. 
Department of Interior, the total costs for services to FAS citizens 
was $147 million.
    If Compact Impact funds were to be removed, Guam would be at the 
biggest disadvantage, being home to the largest per capita number of 
FAS migrants and receiving the greatest share of Compact Impact 
funding. While the $30 million in mandatory spending and $6 million in 
discretionary spending is nowhere near the real amount host states and 
territories spend on FAS migrants, it is a source of funding that host 
governments heavily rely on. Compact Impact funding is used in several 
programs that support our FAS brothers and sisters.
    Guam has been relying on nearly $6 million annually to pay for the 
financing and maintenance of several public schools constructed in 
villages with the highest populations of FAS migrants. If these funds 
were to be taken away, Guam may not be able to provide the quality and 
level of services we already provide to FAS migrants; any local service 
that relies on the Compact Impact funds would then become a burden to 
our local government. The federal Compact Impact money we receive is 
beneficial and makes a difference in how our local government operates. 
Without Compact Impact funding, I fear that Guam will not be able to 
provide the necessary resources to migrants they have relied on for a 
long time.
    As you can see, the amount received by Guam was severely deficient 
in helping our government cover Compact Impact costs. I must express my 
disappointment in the U.S. Department of Interior that it did not 
provide the funds for these needs in the executive budget. This is a 
departure from prior practice. I must now rely on the U.S. Congress to 
provide equity for the People of Guam. While we certainly welcome our 
regional brothers and sisters from the FAS, promises from the federal 
government to help host communities cover Compact Impact costs have 
gone unfulfilled.
    For the above reasons, I ask Congress to identify, authorize, and 
include a dedicated funding source for Compact Impact funding in the 
amended agreements to help reduce the financial burden on the 
government of Guam. I also ask Congress to support Congressman Moylan's 
amendment to H.R. 4821 to provide critical Compact Impact funding for 
Guam to cover costs for this fiscal year until a viable and acceptable 
solution is provided.

            Senseromente,

                                         Joshua F. Tenorio,
                                            Acting Governor of Guam

                                 ______
                                 

                         37th Guam Legislature

                  Office of Senator Frank F. Blas Jr.

                                                 April 24, 2023    

Honorable Lourdes A. Leon Guerrero
I Maga'Hagan Guahan
Office of the Governor
Ricardo J. Bordallo Governor's Complex
Adelup, Guam 96910

Re: Discontinuance of Compact Impact Funding

    Dear Governor Leon Guerrero,

    Buenas yan Hafa Adai! The Biden Administration has submitted their 
Fiscal Year 2024 Budget proposal to Congress that does not include 
Compact Impact funding for areas impacted like Guam and also 
discontinues the smaller discretionary supplement that had been 
available to us as well. The justification for the discontinuance was 
to work towards allowing Compact migrants to become eligible for key 
Federal social safety net programs while residing in the United States 
as a long-term solution to the financial impacts on state and 
territorial governments. This is a major blow for us.
    For many years, former Senator Carlotta Leon Guerrero and then I 
have been critical and worked many avenues to address the perennial 
shortage in the Federal Government's reimbursement of our Compact 
Impact expenditures. Now with the Biden Administration's proposal to 
completely eliminate any reimbursement and discretionary funding 
opportunity, this places the burden of the migrant services squarely 
and entirely on our laps. Although menial when compared to what are 
actual annual costs are, the $12 Million to $16 Million that Guam had 
gotten annually helped to defray the costs being incurred to provide 
health, educational, social, and public safety services to Compact 
migrants. Furthermore, a major portion of the annual reimbursement was 
pledged toward the payment of the leasebacks for Adacao Elementary 
School, Liguan Elementary School, Astumbo Middle School, and Okkodo 
High School.
    In a report published by the Department of Interior's Office of 
Insular Affairs entitled ``Budget Justifications and Performance 
Information Fiscal Year 2024 (https://www.doi.gov/sites/doi.gov/files/
fy2024-oia-greenbook.pdf-508.pdf), it provides that the Biden 
Administration's FY2024 request for Compact Impact Assistance and 
Compact Impact Discretionary Funding are both Zero. The FY2023 
appropriations were Thirty Million Dollars ($30,000,000) for the cost 
assistance and Six Million Dollars ($6,000,000) for the discretionary 
funding.
    I acknowledge that the monies received from the two programs are 
used at the discretion of the Governor. However, in years past, the 
money was allocated not just for the school lease payments, but also to 
pay for much needed programs and services that would have otherwise 
been funded by local money. Now with the absence of these funds, any 
obligations tied to them will be a burden on an already strained 
General Fund, of which has never received full relief and reimbursement 
for the actual impact costs.
    The loss of this funding comes at a very inopportune time as our 
island is struggling to recover from the devastating economic effects 
of the COVID-19 pandemic. Complicated even further by rising costs, 
increasing crime, a flailing healthcare system, and deteriorating 
conditions in our schools, the money could have helped in addressing 
these issues, most especially with the services provided to Compact 
migrants.
    While the Biden Administration has stated that re-implementation of 
the funding will be visited after the Compact negotiations are 
completed, it is discerning to see that President Biden has ignored the 
challenges that jurisdictions with significant migrant populations such 
as ours continue to have in fulfilling their promise of educational 
advancement, gainful employment, and necessary healthcare. The 
negotiation process should not have negated the reimbursement for or 
the financial assistance to continue to provide ``promised'' services 
to Compact migrants. While the funding was being provided to defray 
costs associated with the expiring agreement between the United States 
and the Freely Associated States, it is not an item included in their 
negotiations and should not be contingent on the agreement, unless it 
fails and results in the return of the migrants to their countries. 
Furthermore, the statement that the re-implementation will be visited 
provides no assurance that the funding will be reinstated or that it 
will even be considered. As such, it is apparent that any 
communications that your administration should have had with this 
President and his administration concerning this matter has either 
fallen on deaf ears or discounted as being relevant or important.
    Please appreciate the fact that I have gone to great lengths to 
temper my disappointment and ire in both the Biden administration's 
decision and your administration's acceptance of the decision to 
discontinue the funding. At a time when we are being depended upon to 
shoulder the brunt of the national defense interests in the Indo-
Pacific region and being ignored in our desire to improve our political 
relationship with the United States, this decision flies in the face of 
your assertion of an engaged and encouraging relationship with the 
President and his administration. I pray that the President's decision 
to cut this funding that we need is just as concerning and 
disappointing to you as it is to me. And if so, I pledge to work with 
you towards getting it restored as well with other matters that could 
adversely affect the welfare of our people.

            Respectfully,

                                        Frank F. Blas, Jr.,
                                                            Senator

                                 ______
                                 
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 

The full file can be viewed on the Committee Repository at:

https://docs.house.gov/meetings/II/II24/20231019/116439/HHRG-
118-II24-20231019-SD005.pdf

                                ------                                


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                              ------                                



    Mr. Moylan. Thank you, Mr. Chairman.
    As you read in these letters, every appendage of Guam's 
government is firmly in support of these COFA agreements and 
CIFA's provisions.
    And we also agree about the importance of Compact Impact, 
and ensuring that Guamanians can access SSI.
    Secretary Cantor, the Biden administration has styled 
itself as a champion for the little guy, and claims to be 
sincerely listening to the people of the territories. My 
question is, given that the Governor of Guam, the Guam 
legislature, both major political parties, and I have also made 
clear that we feel the continuation of Compact Impact Funds is 
necessary to offset the cost of hosting COFA migrants, why has 
the Biden administration decided to end this program?
    Ms. Cantor. Delegate Moylan, thank you so much for that 
question.
    The Compact Impact program was one that was approved 20 
years ago by the U.S. Congress, and it was scheduled to sunset 
in 2023. The Biden administration has decided that because we 
have compact migrants in almost every state in the nation, and 
like I mentioned before, 50 percent of them are in the 
mainland, it was more equitable to have a vehicle that can 
provide them the services and the benefits that they don't 
have.
    I realize that Guam, up until this past Fiscal Year, was 
receiving $15 million in Compact Impact assistance. Again, this 
was a decision that was made 20 years ago. And in previous 
conversations that we have had with you and with the Government 
of Guam, we have expressed our intention to work very closely 
with you if the Congress decides to come up with more money to 
address the Compact Impact issue in Guam and the other 
territories.
    But for now, CIFA is the vehicle that the Administration 
has decided to use.
    Mr. Moylan. Thank you, Assistant Secretary Cantor, and I 
have to disagree. Based on the reports that we submitted into 
the record, this is important. We did do a hard study, and I 
thank you very much for what you have done, but it needs to be 
included. I needed the Administration to back the territories 
and the host nations, but that is not coming from the 
Administration. But I understand your explanation.
    Ceasing the Compact Impact payments to Guam will be an 
offset including COFA migrants to various benefit programs 
under CIFA. But let me go into my next question.
    Secretary Cantor, in your testimony, you say that CIFA's 
benefits will follow COFA migrants in whichever state or 
territory they live in. The question is, how would you like me 
to explain to my constituents why non-citizens are receiving 
Federal benefit programs that they, as U.S. citizens, are 
unable to access?
    Ms. Cantor. Once again, thank you so much, Delegate Moylan, 
for that question.
    Yes, you are right. The new CIFA legislation will follow 
the migrants wherever they reside. It doesn't have an 
expiration date, and it will basically provide assistance to 
the state and territories that, to date, have stepped in to 
provide assistance in the absence of Federal aid.
    Like I mentioned before, not all COFA migrants are just in 
Guam, Hawaii, and CNMI. They are all over the United States.
    Mr. Moylan. Thank you, Secretary. I am sorry, we are almost 
out of time, and I just want to again stress that United States 
property where U.S. citizens live do not receive SSI. And I 
think that is very discouraging. And this has to change.
    I am out of time. Thank you, Mr. Chairman.
    Mr. LaMalfa. Thank you, Mr. Moylan. I will recognize myself 
for 5 minutes.
    Indeed, I am grateful for our witnesses being here today, 
for their time, and also the way this compact has come together 
for all those who had a hand in it. Indeed, it is extremely 
important that we keep our commitment to the Freely Associated 
States, and keep our word, but also how incredibly important 
the relationship with the Freely Associated States is for 
preventing undue influence from the Chinese Communist Party and 
others in that region. So, I am glad we can be successful in 
keeping this commitment.
    For Secretary Cantor, just briefly, I wanted to clarify for 
my own use the role the Department of the Interior versus how 
much did the Department of State and the Department of Defense 
have in crafting and working in this area. What is the split on 
that? Is it primarily Interior or is it State or Defense? Is it 
all pretty equal?
    Ms. Cantor. I don't know the percentages, but what we do at 
the Department of the Interior is implement in all the grant 
assistance, which is, as you know, millions of dollars. But we 
work very closely with the State Department and, of course, 
with the Department of Defense.
    Mr. LaMalfa. OK. So, is this encouraging more and more 
collaboration, better teamwork, so to speak, with all three 
agencies to be successful here?
    Ms. Cantor. Yes, sir.
    Mr. LaMalfa. So, it is a good team.
    Ms. Cantor. Yes, it is a team effort.
    Mr. LaMalfa. OK, I appreciate that.
    Mr. Moylan, I would yield my remaining time to you if you 
would like it.
    Mr. Moylan. Thank you, Mr. Chairman.
    Secretary Cantor, in your written testimony, you touched on 
expanded benefits for veterans in the FAS. Do you happen to 
know where these veterans often go for their medical care?
    Ms. Cantor. From my experience, when I was a U.S. 
Ambassador to the Federated States of Micronesia, I do know 
that many of these veterans will go to Hawaii most of the time. 
Some of them will go to Guam.
    Mr. Moylan. That is correct, Guam's CBOC and our Guam 
Memorial Hospital. And in that line, do you agree that building 
a larger VA presence on Guam would better serve veterans in the 
FAS, rather than asking them to wait in long lines on Guam or 
to fly the thousands of miles to Hawaii for adequate care?
    Ms. Cantor. Sir, I do agree that it is very challenging for 
the veterans to have to pay their own way to go to either 
Hawaii or Guam, or whatever jurisdiction they choose to receive 
their medical care in. This is why we are very happy to see 
that, if this legislation is enacted and implemented, it will 
provide the Secretary of Veteran Affairs with the flexibilities 
that he needs to provide the services that these individuals 
need, which is basically telehealth and pharmaceuticals.
    Mr. Moylan. OK. And Secretary Cantor, these agreements we 
are proposing here will cost $355 million a year in mandatory 
spending, and will require us to cut mandatory spending to fit 
these outlays in. Given how important both you and Ambassador 
Yun have said these agreements are to the Administration, why 
hasn't the Biden administration made any attempts at 
identifying mandatory spending that should be cut for these 
outlays?
    Ms. Cantor. Delegate, we have talked repeatedly about how 
important these agreements are to our national security, and we 
believe that because of that, it has to be mandatory spending. 
These countries are vital to our national security. And, 
therefore, it is important that we pass this legislation and 
continue this collaboration and partnership that we have with 
them.
    Mr. Moylan. Thank you. Also, Secretary Cantor, in a letter 
I submitted today from Guam Senator Frank Blas, he talks about 
how Compact Impact Funds are used to pay the leases on public 
schools in the villages with high populations of COFA migrants. 
If your plan is successful and the Compact Impact is 
eliminated, will the Department of the Interior commit to 
working with the Government of Guam to find alternate sources 
of Federal funding to keep these schools open?
    Ms. Cantor. Delegate, we are committed to work with the 
Government of Guam. We want to address these issues in a 
coordinated way.
    I don't know if you are aware that we have an interagency 
group that meets every year to address the issues of the 
territories, and this will be a good topic to bring up during 
that conversation.
    But, again, yes, we can talk about how we can do this 
together.
    Mr. Moylan. Thank you, Secretary Cantor.
    I yield back. Thank you, Mr. Chairman.
    Mr. LaMalfa. You are welcome. Let me recognize Mr. Dunn for 
5 minutes.
    Dr. Dunn. Thank you very much, Mr. Chairman. Thank you 
especially for allowing me the opportunity to waive on to this 
Committee today. This Subcommittee is conducting extremely 
important work, and I appreciate the opportunity to be part of 
this conversation.
    We are all here to discuss the Compacts of Free 
Association, also known as COFA. I am sure that we all agree on 
how essential these agreements are. Not only does COFA rightly 
honor the past sacrifices made by Americans and Pacific 
Islanders as they fought together for freedom in World War II, 
it also ensures our shared goal of a free Indo-Pacific in the 
future. Renewing the agreements reaffirms our commitments to 
our allies and deters future aggression. We share bonds of 
blood, family, and values, and the compacts should reinforce 
that.
    I had the privilege of serving in the Pacific Islands as an 
Army surgeon. I provided care in many of these nations. Meeting 
people under those circumstances you get to know them, and they 
are a very, very good bunch of people. I enjoyed them 
immensely.
    As a member of the Select Committee on the Chinese 
Communist Party, I am especially concerned with the CCP's 
continuing advancement in the region and what it means for the 
people of the region and for the United States security, 
security of the entire Indo-Pacific.
    I am aware this Committee recently traveled to U.S. Pacific 
territories and also the Freely Associated States, and I am 
sure you saw the CCP is launching a new kind of attack there, 
and that is sort of a political warfare, if you will. The 
effects on the ground are very real, include economic and 
political dependency, as well as social undermining and 
destruction.
    We saw in the South Pacific, where we were visiting, it was 
on full display, as well, I think in the Northern Pacific, 
including even the Freely Associated States. These islands are 
just as valuable strategically to China as they were to Japan 
in World War II.
    [Slide.]
    Dr. Dunn. There is a map on the screen I would like to 
refer you to. The red is the Exclusive Economic Zones of the 
Pacific Island nations; those are the ones that recognize 
Beijing. And the green ones are the ones that recognize Taiwan. 
You will notice that there is a great deal more red than green. 
There used to be far more green on that map. It serves as a 
function, because of our control over the Exclusive Economic 
Zones, as a control of travel across the South and Central 
Pacific.
    Think of it, if you will, as a fence. The CCP is working 
overtime to make sure the Pacific Island nations depend on 
them. And in Beijing, first comes the economic outreach, then 
the political influence, and finally control by Beijing. I 
think this map clearly illustrates how the CCP has infiltrated 
our friends, our allies in the Pacific, and that is a scary 
picture to me. It has been bothering me in my sleep for months.
    Two of the four countries that are still green on that map 
are COFA states. Both have elections coming up, and Beijing is 
working nonstop to affect those elections with bribes, economic 
leverage, and corruption. They want to get rid of the green 
states. The CCP counts on U.S. complacency. They want to use 
the COFA nations as an armed force outpost to project military 
defense of their empire and enlarge their empire, and indeed, 
their hegemony over the entire Pacific.
    China opposes alliances and treaties among the free nations 
of the world because it fears these alliances. It fears that 
our COFAs will be successful. And I hope that we will 
collectively analyze China's political warfare and their lack 
of respect for the rule of law, rule of human rights, and 
sovereign rights of nations. It is clear that their intentions 
are absolutely intentional, well-funded, and, sadly, they are 
becoming rather successful.

    President David Panuelo wrote multiple letters from the FSM 
laying out in detail the PRC's comprehensive, pernicious 
political warfare against his nation, and an article on them 
entitled, ``Micronesia's President Writes Bombshell Letters on 
China's Political Warfare.'' I would like to enter these into 
the record, if no objection.

    Mr. LaMalfa. Without objection.

    [The information follows:]

                             The President

                            Palikir, Pohnpei

                     Federated States of Micronesia

                                             March 30, 2022        

    Dear Prime Minister Manasseh Sogavare,

    Greetings from the Federated States of Micronesia! At the outset, I 
wish to emphasize my deepest respect to you, your office, and the 
People & Government of Solomon Islands, and on behalf of the People & 
Government of the Federated States of Micronesia, to express our 
collective well wishes for your People' s health and prosperity. Allow 
me to also emphasize at the outset that our Nation's broader foreign 
policy outlook--that we are a friend to all, and an enemy to none--is 
consistent with that of Solomon Islands.
    Mr. Prime Minister, I write to you today as a fellow Pacific 
Islander and friend, and to humbly offer our Government's perspective 
regarding a topic I'm sure you've been hearing ceaselessly about; that 
is, your Government's forthcoming security agreement with the People's 
Republic of China.
    The Federated States of Micronesia has grave security concerns 
about this proposed agreement because this agreement is entirely novel 
and unprecedented. Therefore, before you sign such an agreement, I 
would like to describe to you our own relationship with China, and what 
I fear the larger countries are privately preparing for.
    The Federated States of Micronesia has had diplomatic relations 
with the People's Republic of China since September 11th, 1989. We call 
our relationship the FSM-China Great Friendship. We have no loans with 
China, only grants; and the Chinese do not ask us to take loans. China 
always offers development assistance, but never insists on what 
development assistance might look like; when we ask for a ship, like 
the Hapilmohol-2, we get a ship, and when we ask for a Government 
Complex, like the Chuuk State Government's campus, we get a Government 
Complex. Needless to say, economic and technical cooperation with China 
has been beneficial for our country and our People, and I am sure 
Solomon Islands is benefiting from a similar experience. The People & 
Government of China are a friend to the People & Government of the 
Federated States of Micronesia.
    That said, you and I are both aware--and I think you'd agree that 
it can be plainly seen-that the U.S. and China are increasingly at odds 
with one another. This presents an issue--because the Federated States 
of Micronesia is a friend to the People & Government of China, but we 
are also a sincere friend, even an ally, of the People & Government of 
the United States of America.
    Our ideal scenario in the Federated States of Micronesia is that 
China and the U.S., as well as Australia, Japan, New Zealand, and so 
many others, become friends with one another. Wouldn't it be wonderful 
if they could look past their fears and grievances and embrace each 
other as friends? Wouldn't it be terrific if they could see that the 
troubles of our times, such as Climate Change, require all of them 
working in concert instead of against each other?
    That ideal scenario is my dream, and I share it through my 
addresses at the United Nations General Assembly and through media 
interviews, through Press Releases, and through casual conversation 
with the diplomatic corps based in our country. But a dreamer must also 
be practical, and in practice the countries we call friends are 
increasingly not acting very friendly with each other.
    My fear is that we--the Pacific Islands--would be at the epicenter 
of a future confrontation between these major powers. It's not an 
impossible fear; it has happened before. Both the Federated States of 
Micronesia and Solomon Islands were the battlegrounds during World War 
II. I am confident that neither of us wishes to see a conflict of that 
scope or scale ever again, and most particularly in our own backyards, 
and most especially as we can see--from Russia's invasion of Ukraine--
that the bigger countries will choose violence if they think it serves 
their interests, and without regard necessarily to our interests, such 
as our interest to not become collateral damage.
    I imagine the following hypothetical scenario. The Federated States 
of Micronesia is currently negotiating its Compact of Free Association 
with the United States of America; meanwhile, China and Solomon Islands 
establish a close security partnership. The security partnership is a 
resounding success; Solomon Islands is wealthier from China's business 
investments, such as in the extractive resources sector; and Solomon 
Islands is secured from internal and external threats. But China fears 
the U.S. fortress to its east, and Australia fears the Chinese fortress 
to its north. What happens next?
    I ask you, Prime Minister: is it within the realm of plausibility 
that, as more Pacific Islands seek security arrangements with larger 
countries, that we could see a sovereign and peaceful Pacific become 
fragmented, and become tools for these larger countries' spheres of 
power and influence? And is it plausible that, once the spheres have 
been carved out, that our concerns about Climate Change--today's 
problem--would manifest into all-too-real concerns about a war in our 
backyards, with our people, our islands, as the playground for children 
playing as adults? Isn't it plausible that our islands could become 
collateral damage once again, such as we saw occur in Guadalcanal in 
your country, and Chuuk in my country, during World War II?
    I would maintain that this possibility is all too plausible; and 
that compels me, despite my country's long friendship with China and 
our even longer enduring partnership with the United States, to appeal 
to you most respectfully to give your deepest consideration to the 
longer-range consequences for the entire Pacific Region, if not the 
entire world, that could well flow from a decision to host the 
establishment of a military presence by China in your country.
    If any part of what I have written has given you pause, however 
briefly, then please feel empowered to reach out to me, and to the 
Pacific Islands Forum at large. As much as your bilateral security 
arrangement may be strictly a matter between your country and the 
People's Republic of China, its existence would absolutely affect all 
countries who call the Blue Pacific their home. The Federated States of 
Micronesia cannot endorse or agree if your decision is to proceed with 
a security relationship with the People's Republic of China, because of 
its far-reaching and grave security implications for our harmonious and 
peaceful Blue Pacific Continent.
    Thank you, Prime Minister, for your kind attention to my lengthy 
letter. I say again for posterity that the People & Government of the 
Federated States of Micronesia extend to you peace, friendship, 
cooperation, and love in our common humanity, and pledge that it is our 
goal that our two countries shall always share this friendship with 
each other as fellow brothers and sisters of the Pacific.

            Sincerely,

                                          David W. Panuelo,
                                                          President

                                 ______
                                 

                             The President

                            Palikir, Pohnpei

                     Federated States of Micronesia

                                               May 20, 2022        

        T.H. Lemanu Peleti Mauga      T.H. Scott John Morrison
        Governor, American Samoa      Prime Minister, Australia

        T.H. Mark Brown               T.H. Josaia Voreqe Bainimarama
        Prime Minister, Cook 
        Islands                       Republic of Fiji

        H.E. Winfred Edouard 
        Tereori Fritch                T.H. Lourdes Aflague Leon 
                                      Guerrero
        President, French Polynesia   Governor, U.S. Territory of Guam

        T.H. David Yutaka Ige         H.E. Taneti Maamau
        Governor, State of Hawai'i    President, Republic of Kiribati

        H.E. Lionel Rouwen Aingimea   H.E. Louis Mapou
        President, Republic of 
        Nauru                         President, New Caledonia

        T.H. Jacinda Ardern           T.H. Dalton Emani Tagelagi
        Prime Minister, New Zealand   Premier, Niue

        T.H. Ralph DLG Torres         H.E. Surangel S. Whipps Jr.
        Governor, CNMI                President, Republic of Palau

        T.H. James Marape             H.E. David Kabua
        Prime Minister, Papua New 
        Guinea                        President, Rep. of Marshall 
                                      Islands

        T.H. Afioga Fiame Naomi 
        Mata'afa                      T.H. Manasseh Damukana Sogavare
        Prime Minister, Samoa         Prime Minister, Solomon Islands

        T.H. Siaosi 'Ofakivahafolau 
        Savaleni                      T.H. Kausea Natano
        Prime Minister, Kingdom of 
        Tonga                         Prime Minister, Republic of 
                                      Tuvalu

        T.H. Bob Loughman Weibur      T.H. Henry Tuakeu Puna
        Prime Minister, Republic of 
        Vanuatu                       Sec-Gen, Pacific Islands Forum

    My dear Pacific Brothers & Sisters,

    I bring you warmest greetings from the Paradise in Our Backyards, 
the Federated States of Micronesia. At the outset, I wish to emphasize 
my deepest respect to you, your office, and to your Government and 
People. The People and Government of the Federated States of Micronesia 
collectively wish for your People's good health and prosperity, and 
extends to you all that which we seek: peace, friendship, cooperation, 
and love in our common humanity.
    My dear Pacific Brothers & Sisters I am writing to you today--the 
Head of Government of each member of the Pacific Islands Forum, the 
Micronesian Presidents Summit, and the Pacific Island Conference of 
Leaders--as there is a topic of truly regional importance I wish to 
bring to your attention. I respectfully and humbly solicit your kind 
attention to what I wish to share with you, which I believe is the 
single-most game-changing proposed agreement in the Pacific in any of 
our lifetimes.
    Before continuing further, I should begin by confirming why I feel 
obligated to write to you all on this topic and in this manner. The 
foreign policy of the Federated States of Micronesia is to be a friend 
to all, and an enemy to none. We believe that Climate Change represents 
the single-most existential security risk to our islands, and that 
geopolitics at large threaten to take away the focus from the greatest 
challenge of our times. Additionally, my country is the only sovereign 
Pacific Island Country in the world that has both a Great Friendship 
with the People's Republic of China as well as an Enduring Partnership, 
demonstrated by our Compact of Free Association with the United States 
of America. We have ceaselessly advocated for joint China-U.S. 
cooperation on tackling Climate Change; and we have ceaselessly 
advocated for joint China-U.S. promotion of peace and harmony in our 
Blue Pacific Continent. My country's unique context, I believe, compels 
me to speak. Where yesterday I condemned the former U.S. President for 
his January 6th, 2021, insurrection effort, today I feel obligated to 
warn you all of what I foresee coming from China tomorrow.
    On or around April 12th, 2022, I was informed by our Department of 
Foreign Affairs of a forthcoming meeting to be held on May 30th, 2022, 
between the People's Republic of China and the ten Pacific Island 
Countries it has diplomatic relations with, formally titled the 2nd 
PRC-PICS Foreign Ministers Meeting. It is noteworthy that, for many 
Pacific Island Countries, the Foreign Minister is also the Prime 
Minister. It is also noteworthy that the meeting would conclude with 
the Foreign Minister of China, the Honorable Wang Yi, visiting each 
country that has diplomatic relations with China. The meeting, to be 
jointly hosted by the Republic of Fiji, would conclude with the 
adoption of two documents, which I have appended to my letter for the 
benefit of Pacific Islands who do not have diplomatic relations with 
China, such as the Republic of Tuvalu and others.
    One of these documents, the China-Pacific Island Countries Common 
Development Vision, essentially amounts to a pre-written and pre-
determined Joint Communique or outcomes document of the meeting, and 
the other is a five-year plan for implementing the outcomes into 
action.
    The language of these documents is a sign that China has faithfully 
done its homework, as the choice of words are, on their face and at 
first glance, attractive to many of us--perhaps all of us. They speak 
of democracy and equity and freedom and justice, and compare and 
contrast these ideas with concepts that we, as Pacific Islands, would 
want to align ourselves with, such as sustainable development, tackling 
Climate Change, and economic growth. Where the problems arise are in 
the details, and the details suggest that China is seeking to do 
exactly what I warned of in my September 2020 address at the United 
Nations General Assembly: to acquire access and control of our region, 
with the result being the fracturing of regional peace, security, and 
stability, all while in the name of accomplishing precisely that task.

    Brothers and Sisters,
    If you have not already, it is worth reviewing the attached 
documents before reading the rest of my letter. Presuming that you are 
familiar with their contents, I shall summarize some of them.
    The China-Pacific Island Countries Common Development Vision seeks 
to fundamentally alter what used to be bilateral relations with China 
into multilateral relations, which it accomplishes by referring to all 
of the Pacific countries with diplomatic relations with China as ``one 
side'' while, in the same breath, describing how every country is 
equal, regardless of size.
    The Common Development Vision then seeks to ensure Chinese control 
of ``traditional and non-traditional security'' of our islands, 
including through law enforcement training, supplying, and joint 
enforcement efforts, which can be used for the protection of Chinese 
assets and citizens. It suggests ``cooperation on network governance 
and cybersecurity'' and ``equal emphasis on development and security,'' 
and that there shall be ``economic development and protection of 
national security and public interests.''
    The Common Development Vision seeks to ensure Chinese influence in 
Government through ``collaborative'' policy planning and political 
exchanges, including diplomatic training, in addition to an increase in 
Chinese media relationships in the Pacific, and the construction of 
Confucius Institutes. It describes Chinese-influenced policies and 
legislation with the explicit intention to align the Belt & Road 
Initiative (a Chinese strategy) with the 2050 Strategy for the Blue 
Pacific Continent (a Pacific strategy).
    The Common Development Vision seeks Chinese control and ownership 
of our communications infrastructure, as well as customs and quarantine 
infrastructure (hence the terms ``smart customs'' and ``smart 
quarantine'' in the text), for the purpose of biodata collection and 
mass surveillance of those residing in, entering, and leaving our 
islands, ostensibly to occur in part through cybersecurity partnership.
    The Common Development Vision seeks Chinese economic control of our 
collective fisheries and extractive resource sectors, including through 
free trade agreements, marine spatial planning, deep-sea mining, and 
extensive public and private sector loan-taking through the Belt & Road 
Initiative via the Asian Infrastructure Investment Bank. The Common 
Development Vision explicitly seeks to undermine the international 
rules-based order by developing a ``new form of international relations 
featuring mutual respect, equity, justice, and win-win cooperation,'' 
and China seeks to do this vis-a-vis ``upholding multilateralism and 
the purposes and principles of the UN Charter'' to its benefit.
    While some elements of the Common Development Vision are not 
necessarily malign in intent, concerns become heightened with the right 
information. As an example, China correctly describes upholding the 
United Nations Framework Convention on Climate Change as the ``primary 
channel for [Climate] negotiations,'' and to jointly promote the full 
and effective implementation of the Paris Agreement. Notably, however, 
China's Paris Agreement pledges do not describe when China expects to 
reach peak CO2 emissions, the level at which their emissions would 
peak, or how long they would plateau before starting to drop. China has 
committed to reaching carbon neutrality in 2060, which is beyond the 
actionable remaining lifetimes of most contemporary adults, including 
myself and each of us in receipt of this letter, and so a promise whose 
makers cannot be held to account for if it doesn't come to pass.

    My dear Pacific Brothers & Sisters,
    I asked every member of my Cabinet, as well as my Nation's 
diplomatic corps, what they thought of China's proposed agreement--
which, though not legally binding, is demonstrative of China's 
intention to shift Pacific allegiances in their direction.
    My Cabinet recommend to me ``serious caution'' regarding China 
developing a marine spatial plan on behalf of the Pacific, and that the 
``vision for a China-PICS free trade area is disingenuous.'' It is 
suggested that the ``FSM should maintain its own bilateral agenda for 
development and engagement with China,'' and that we should ``make sure 
nothing gives China the idea that they can do anything (marine 
research, security arrangement, business investment in the FSM) at 
their will and at any time.'' It is suggested to me that ``it is high 
time for the FSM to begin resisting'' the initiatives within these 
documents, which are ``in support of China's hidden agenda.'' It was 
noted that ``we should be cautious to let China get their feet too far 
into our Nation.''

    My dear Pacific Brothers & Sisters,
    Before I describe what I believe China's overall long-term agenda 
is, and how my country will respond to the proposed 2nd PRC-PICS 
Foreign Ministers Meeting and its outcome documents, I wish to offer a 
few points of information that I am aware of.
    I am aware that the bulk of Chinese research vessel activity in the 
FSM has followed our Nation's fiber optic cable infrastructures, just 
as I am aware that the proposed language in this agreement opens our 
countries up to having our phone calls and emails intercepted and 
overheard. I am aware of Chinese unilateral patrols in the Mekong River 
in Asia, just as I am aware of China's continued militarization of the 
South China Sea despite the arbitral tribunal under the UN Convention 
of the Law of the Sea concluding that China's rights over the maritime 
area has no lawful effect. I am aware that, in February, China's Consul 
General in Osaka said on Twitter, regarding Russia's invasion of 
Ukraine, that ``the biggest lesson of what has happened in Ukraine is 
that a weak country must obey a strong country. A challenge will lead 
to a disastrous result,'' just as I am aware that the proposed outcomes 
documents we've received describes that we ``recognize that all 
countries, regardless of their size, strength and wealth, are equals,'' 
even though what would otherwise be bilateral agreements are being 
unilaterally developed by China to become multilateral in their nature.

    My dear Pacific Brothers & Sisters,
    On the 100th birthday of the Chinese Communist Party (CCP) last 
year, China said ``Solving the Taiwan question and realizing the 
complete reunification of the motherland are the unswerving historical 
tasks of the CCP and the common aspiration of all Chinese People. All 
sons and daughters of China, including compatriots on both sides of the 
Taiwan Strait, must work together and move forward in solidarity, 
resolutely smashing any `Taiwan Independence' plots.''
    In the 19th Party Congress in 2017, China reaffirmed six of the 
nine principles that their country has held since the 16th Party 
Congress in 2002, with ``placing hopes on the Taiwan people as a force 
to help bring about unification'' exempted from those reaffirmed 
principles. In 2018, China said that Taiwan would face ``the punishment 
of history'' for any attempts at separatism. In 2019, China said ``We 
make no promise to renounce the use of force and reserve the option of 
taking all necessary means.''
    China has often publicly described its intention to ensure CCP 
control of what is otherwise a de facto independent Taiwan.

    My dear Pacific Brothers & Sisters,
    We are all acutely aware of the renewed and increasing intensity of 
competition for access and influence in our Pacific Region. These 
activities and efforts have resulted in varying levels of benefit for 
our communities, but they also potentially threaten to fracture long-
standing alliances within our Pacific Family, and could become 
counterproductive to our collective desire for regional solidarity, 
security, stability, and the hard-won efforts, often through sweat and 
blood, in achieving sovereignty for our respective island nations.
    What we are seeing with the proposed 2nd PRC-PICs Foreign Ministers 
Meeting and its accompanying outcome documents are an intent to shift 
those of us with diplomatic relations with China very close into 
Beijing's orbit, intrinsically tying the whole of our economies and 
societies to them. The practical impacts, however, of Chinese control 
over our communications infrastructure, our ocean territory and the 
resources within them, and our security space, aside from impacts on 
our sovereignty, is that it increases the chances of China getting into 
conflict with Australia, Japan, the United States, and New Zealand, on 
the day when Beijing decides to invade Taiwan.
    To be clear, that's China's long-term goal: to take Taiwan. 
Peacefully, if possible; through war, if necessary.
    It is here that I should re-emphasize that the Common Development 
Vision contains the line: ``Pacific Island Countries reaffirmed that 
they abide by the One-China principle and stressed the importance of 
upholding the principle of non-interference of internal affairs in 
international relations.'' Because China considers the otherwise de 
facto independent Taiwan a part of itself, then it follows that an 
invasion of Taiwan is not a matter of our concern.
    This is demonstrably false, however. Any war in the Indo-Pacific 
would be our concern, to include that a war for Taiwan is equivalent to 
a war between China and the United States. Whoever wins in such a 
conflict, we will once again be the collateral damage as we become 
stuck in the crossfire of the bigger countries who ought to be 
benevolent hegemons for our Pacific Region and for humanity as a whole. 
This very plausible, realistic, and terrifying scenario I describe is 
made all the more sobering as we continue to see the ongoing events in 
Ukraine, where an authoritarian government, Russia--which bestowed upon 
itself a mandate to take what it views to be its historical lands--
engages in a brutal and unjustified war against a country that has 
already achieved sovereignty, and practices democracy and the rule of 
law.

    My dear Pacific Brothers & Sisters,
    The Common Development Vision stemming from the 2nd PRC-PICs 
Foreign Ministers Meeting is a smokescreen for a larger agenda. Despite 
our ceaseless and accurate howls that Climate Change represents the 
single-most existential security threat to our islands, the Common 
Development Vision threatens to bring a new Cold War era at best, and a 
World War at worst.
    The Federated States of Micronesia will attend the 2nd PRC-PICs 
Foreign Ministers Meeting, and our country will reject the Common 
Development Vision and five-year plan on the premise that we believe 
the proposed agreement needlessly heightens geopolitical tensions, and 
that the agreement threatens regional stability and security, including 
both my country's Great Friendship with China and my country's Enduring 
Partnership with the United States. The only way for the Federated 
States of Micronesia to maintain our Great Friendship with China is if 
our relationship with them is exclusively focused on economic and 
technical cooperation. I intend to maintain our Great Friendship, while 
also remaining committed to a Free & Open Inda-Pacific, which I believe 
is essential for the Blue Pacific Continent's stability. Despite being 
offered attractive economic assistance from China now, including 
donations into our sovereign Trust Fund, our Pacific well-being, 
security, peace and harmony, and our values and principals and 
sovereignty, are treasures with greater value than any amount of silver 
and gold.
    Geopolitics like these are the kind of game where the only winning 
move is not to play. My hope, my dear Pacific Brothers & Sisters, is 
that by informing you of these developments, and of our country's 
intended course of action, we can collectively take the steps necessary 
to prevent any intensified conflict, and possible breakout of war, from 
ever happening in the first place.
    I conclude my lengthy letter by acknowledging that I am cognizant 
that some of our historical partners need to show up more often, with 
more sincerity, and, to quote another dear brother and Pacific leader, 
His Excellency Surangel S. Whipps Jr., ``to care about us for real and 
not for a day.'' I believe that Australia needs to take Climate Change 
more seriously and urgently. I believe that the United States should 
have a diplomatic presence in all sovereign Pacific Island Countries, 
and step-up its assistance to all islands, to include its own states 
and territories in the Pacific.

    However, it is my view that the shortcomings of our allies are not 
a justification for condemning the leaders who succeed us in having to 
accept a war that we failed to recognize was coming and failed to 
prevent from occurring. We can only reassert the rightful focus on 
Climate Change as our region's most existential security threat by 
taking every single possible action to promote peace and harmony across 
our Blue Pacific Continent.

    Thank you, my dear Pacific Brothers & Sisters, for your kind 
attention to my lengthy letter. I say again, with honesty and humility, 
and the hope that our islands remain friends to all and enemies to none 
forevermore, that the People & Government of the Federated States of 
Micronesia extend to you peace, friendship, cooperation, and love in 
our common humanity.

            Sincerely,

                                          David W. Panuelo,
                                                          President

                                 ______
                                 

Cleo Paskal

    President Panuelo gives extraordinary detail on PRC political 
warfare in FSM and the terms of the offer to switch from Beijing to 
Taipei. ``I am acutely aware that informing you all of this presents 
risks to my personal safety; the safety of my family; and the safety of 
the staff I rely on to support me in this work.''

    After the recent elections, President Panuelo has only two months 
left in the job. They will be crucial for the region, and beyond. Some 
excerpts from his letter.

    *****

    It is on this basis that Political Warfare and Grey Zone activity 
occur within our borders; China is seeking to ensure that, in the event 
of a war in our Blue Pacific Continent between themselves and Taiwan, 
that the FSM is, at best, aligned with the PRC (China) instead of the 
United States and, at worst, that the FSM chooses to ``abstain'' 
altogether.

    One of the reasons that China's Political Warfare is successful in 
so many arenas is that we are bribed to be complicit, and bribed to be 
silent. That's a heavy word, but it is an accurate description 
regardless. What else do you call it when an elected official is giving 
an envelope filled with money after meal at the PRC Embassy or after 
and inauguration? What else do you call it when a senior official is 
discreetly given a smartphone after visiting Beijing? . . . What else 
do you call it when an elected official receives a check for a public 
project that our National Treasury has no record of and no means of 
accounting for?

    [W]hen Vice President Palik visited Kosrae, he was received by our 
friends Da Yang Seafoods. Our friends at Da Yang have a private plane, 
and they arrived in Kosrae (along with several senior FSM government 
officials) on a private plane. Our friends told the Vice President that 
they can provide him private and personal transportation to anywhere he 
likes at any time, even Hawaii, for example; he only need ask.

    [I]t is not a coincidence that the common thread behind the Chuuk 
State succession movement, the Pohnpei Political Status Commission and, 
to a lesser extent, Yap independence movement, include money from the 
PRC and whispers of PRC support. (That doesn't mean that persons 
yearning for secession are beholden to China, of course--but, rather, 
that Chinese support has a habit of following those who would support 
such secession).

    At worst in the short-term, it means we sell our country and our 
sovereignty for temporary personal benefit. At worst in the long-term, 
it means we are, ourselves, active participants in allowing a possible 
war to occur in our region, and very likely our own islands and our 
neighbours on Guam and Hawaii, where we ourselves will be indirectly 
responsible for the Micronesian lives lost.

    In February 2023, I met with the Honourable Joseph Wu, Foreign 
Minister of Taiwan.

    [For what happened next, read the letter.]

                                 *****

                             The President

                            Palikir, Pohnpei

                     Federated States of Micronesia

                                                  March 9, 2023    

        T.H. Wesley W. Simina         T.H. Reed B. Oliver
        Speaker, FSM Congress         Governor, Pohnpei State 
                                      Government

        T.H. Marvin T. Yamaguchi      T.H. Alexander R. Narruhn
        Speaker, Pohnpei 
        Legislature                   Governor, Chuuk State Government

        T.H. Arno H. Kony             T.H. Lester Danny Mersai
        President, Chuuk House of 
        Senate                        Speaker, Chuuk House of 
                                      Representatives

        T.H. Charles Chieng           T.H. Nicholas Figirlaarwon
        Governor, Yap State 
        Government                    Speaker, Yap State Legislature

        T.H. Tulensa W. Palik         T.H. Semeon Phillip
        Governor, Kosrae State 
        Government                    Speaker, Kosrae State Legislature

    My Dearest Speaker Simina & Members of the 22nd FSM Congress, 
Governors of our FSM States, and Leadership of our FSM State 
Legislatures,

    At the outset, I bring you warmest greetings from your capital of 
this Paradise in Our Backyards, Palikir, the Federated States of 
Micronesia. I wish you all the greatest of health, and hope that my 
letter finds you well.
    Speaker Simina: as you know, prior to the election I spoke with you 
about preparing a letter to you in the interest of administrative 
transition. I write to you today to discuss a topic of significant 
importance to our country and under that framework of transition. Now 
that our elections have concluded, I have reflected that there will be 
a new administration to take the reins of leadership and continue the 
important work of taking actions today for our Nation's prosperity 
tomorrow. I have publicly committed toward a peaceful transition of 
power. That commitment remains firm and unshakeable, and I further 
commit through this letter a promise that, prior to the new 
administration taking power on May 11, 2023, I will write to you all on 
several matters of importance and within the purview of your Executive 
Branch.
    Many of these matters I will begin briefing you on will be domestic 
in nature, and will serve as briefings prior to our State & National 
Leadership Conference in April, 2023. By necessity, however, some of 
these matters will also be on foreign affairs and foreign policy--
inclusive, for example, of the FSM's current role as Chair of the 
Pacific Islands Conference of Leaders (which is comprised of twenty 
Pacific Island jurisdictions); as Chair of the Micronesian Presidents 
Summit (the political organ of all the five sovereign Micronesia 
Presidents); the status of the Micronesian Islands Forum (the political 
organ of four sovereign Micronesian countries, each FSM State, Guam, 
and the CNMI); the conclusion of negotiations on the Compact of Free 
Association; and more. It is on that latter-topic of our foreign 
affairs and foreign policy that I seek your kind attention today.
    Our foreign policy is often distilled into the following two 
points. The first--the FSM is a friend to all, and an enemy to none. 
The second--the FSM extends to all peoples and nations that which we 
seek: peace, friendship, cooperation, and love in our common humanity. 
Over the course of my administration, I have sought to uphold this 
foreign policy, which is elegant in its simplicity and inspirational in 
its decency.
    There is, however, a weakness--a vulnerability, if you will--in our 
foreign policy as described above, my dear Speaker and Leaders. Our 
foreign policy assumes that those we encounter have good intentions and 
mean us well, and that other countries are either friends we haven't 
yet met or friends we've established meaningful partnerships with. I 
should emphasize that, on the whole, this is the right attitude for us 
to take, as it is noble in heart. But it also presents an opening that, 
if not watched for, and if not managed, could allow the sovereignty 
that we jealously guard to chip away before our own eyes.
    I believe that our values are presently being used against us, as 
Micronesians, and against our national interest, by persons who would, 
and who do, seek to use us so as to achieve a larger objective of their 
own. The object of my letter, then, this briefing, is to describe what 
we are seeing and what we know; to show how what we know and what we 
are seeing is a problem for our country; and, then, to offer a proposal 
for our collective consideration.
    I would first like to begin by discussing what we are seeing in the 
context of our country, but to do so requires defining a couple of 
terms, as they are likely to be new to many of us. The terms are 
``Political Warfare'' and ``Grey Zone.''
    Political Warfare is the use of all means at a nation's command, 
short of war, to achieve its objectives. Political Warfare can include 
overt activity (e.g. political alliances, economic measures, public 
propaganda) and covert activity (e.g. secret support to friendly 
elements, bribery, psychological warfare, and blackmail), including 
cyber-attacks by taking advantage of any system vulnerabilities. Many 
of these activities operate in the ``Grey Zone.''
    Grey Zone activities are defined by being below the threshold for a 
nation to respond to with force, and are otherwise difficult to handle 
by ``normal'' means. Grey Zone activity is, collectively, a blurry set 
of activities that can be hard to distinguish from ``normal'' until it 
is too late, with an element of rule-breaking and with the aim of 
achieving a strategic objective. Grey Zone conflicts involve the 
purposeful pursuit of political objectives through carefully designed 
operations; a measured, possibly prolonged, movement toward these 
objectives (rather than seeking decisive results within a specific 
period); acting to remain below key escalatory thresholds so as to 
avoid war until the ``right time''; and the use of all the instruments 
of national power, particularly non-military and non-kinetic tools.
    Simply put, we are witnessing Political Warfare in our country. We 
are witnessing Grey Zone activity in our country. Over the course of my 
administration, the scope has increased, as has the depth, as has the 
gravity.
    I appreciate, my dear Speaker and Leaders, that these are 
astounding suggestions. They are precisely the sort of suggestions that 
require--demand, even--an explanation. I will now provide numerous 
examples of this but, before I do, it is worth taking this moment to 
emphasize an essential piece of information.
    It is a matter of intelligence, gleaned from the now public PRC 
whitepaper, that President Xi Jinping has instructed the People's 
Liberation Army to be prepared for an invasion of Taiwan by 2027. We do 
not know that the PRC will invade at that time, or any other time; but 
we do know that the PRC intends to be prepared for the invasion by that 
time. We further know that the FSM has a key role to play in either the 
prevention of such a conflict, or participation in allowing it to 
occur. It is on this basis that Political Warfare and Grey Zone 
activity occur within our borders; China is seeking to ensure that, in 
the event of a war in our Blue Pacific Continent between themselves and 
Taiwan, that the FSM is, at best, aligned with the PRC (China) instead 
of the United States, and, at worst, that the FSM chooses to 
``abstain'' altogether.
    Now that we have defined Political Warfare and Grey Zone activity, 
let's review examples of this as it occurs within the FSM.
    One example is with regards to the conduct of ``research vessel'' 
activity in our ocean territory and Exclusive Economic Zone. You may 
recall having heard about an alleged weather balloon over the United 
States of America earlier this year; while it is plausible the balloon 
did record some basic weather data, such as temperature and windspeed, 
it is known that the balloon was used for the conduct of espionage on 
U.S. territory, security installations, and assets. That same basic 
premise is what we have seen in the FSM, only on our seas instead of in 
our air, and with ships instead of balloons. The weather balloon in the 
United States was a disguise for espionage; research vessels in our 
ocean territory are likewise disguised to hide espionage. We are aware 
of PRC activity in our Exclusive Economic Zone whose purpose includes 
mapping our maritime territory for potential resources, and mapping our 
territory for submarine travel-paths. We are aware of PRC activity in 
our Exclusive Economic Zone whose purpose includes communicating with 
other PRC assets so as to help ensure that, in the event a missile--or 
group of missiles--ever needed to land a strike on the U.S. Territory 
of Guam that they would be successful in doing so. When we sent our own 
patrol boats to our own Exclusive Economic Zone to check on PRC 
research vessel activity, the PRC sent a warning for us to stay away.
    That is why I initiated a total moratorium on PRC research vessel 
activity in the FSM.
    One example is with regards to a proposed Memorandum of 
Understanding on ``Deepening the Blue Economy.'' Allegedly framed to 
support our mutual efforts in the work of Blue Prosperity Micronesia 
and the resulting Marine Spatial Plan for the FSM, the MOU as designed 
included a number of serious red flags. Amongst these red flags 
included that the FSM would open the door for the PRC to begin 
acquiring control over our Nation's fiber optic cables (i.e. our 
telecommunications infrastructure) as well as our ports. Both our fiber 
optic cables and our ports are strategic assets whose integrity is 
necessary for our continued sovereignty. To be clear: the entire reason 
the East Micronesia Cable Project, for example, is funded by the United 
States, Australia, and Japan, is because of the importance of secure 
telecommunications infrastructure free from potential compromise.
    I had advised our Cabinet that we would deny the Deepening the Blue 
Economy MOU in June 2022. The issue was brought up again by the PRC-
side, and in December 2022 I learned that we were mere hours from its 
signing. I put a halt to that MOU, and formalized, in writing, our 
permanent rejection of it. The evening that I relayed our rejection of 
the MOU, Ambassador Huang Zheng had his farewell dinner with Secretary 
Kandhi Elieisar. The Ambassador suggested to the Secretary that he 
ought to sign the MOU anyway, and that my knowing about it--in my 
capacity as Head of State and Head of Government--was not necessary. To 
say it again: the same Ambassador who relentlessly shouts that the PRC 
does not interfere in the governance of other countries was himself 
actively attempting to interfere in our country's governance, so as to 
accomplish his mandate beneficial to the PRC but not to the FSM. (It 
may not be surprising that the PRC Special Envoy, Qian Bo, pushed this 
MOU again during his recent visit to our country.)
    One example is with regards to the proposed replacement for 
Ambassador Huang, Mr. Wu Wei. Mr. Wu is the Deputy Director General for 
the Department of External Security Affairs at the Ministry of Foreign 
Affairs. While his curriculum vitae included this information, it 
failed to include any amplifying information--such as his duties in 
that capacity; his work experience in previous capacities; or his 
educational background, such as what university he went to and what he 
majored in. When pressed for such amplifying information, the PRC 
Embassy provided little, describing that Mr. Wu's focus was on 
terrorism. It was through our own investigatory work that we learned of 
Mr. Wu's work experience as it relates to the use of clandestine PRC 
police offices, i.e., secret police, seen in countries such as Canada 
and Australia.
    We understand that Mr. Wu would, upon his arrival, be given the 
mission of preparing the FSM to shift away from its partnerships with 
traditional allies such as the U.S., Japan, and Australia. We know that 
Mr. Wu would expand PRC security activity, awareness, and interest in 
the FSM. I know that one element of my duty as President is to protect 
our country, and so knowing that: our ultimate aim is, if possible, to 
prevent war; and, if impossible, to mitigate its impacts on our own 
country and on our own people. So, I declined the Ambassador-designate 
his position. I instructed the Department of Foreign Affairs to inform 
the PRC that we expect their Ambassador to focus on technical and 
economic cooperation, and no further than that. As of the time of this 
letter, the PRC has not responded--formally or informally--to that 
rejection, though they have spoken with some of our senior officials 
and elected leaders to note that they're simply awaiting the new 
President to take power so Mr. Wu can become the Ambassador of China to 
the FSM.
    A common theme that the next several examples include is that the 
word ``no'' is scarcely, if ever, taken as the final word. On 
approximately six occasions within six months, it has been brought to 
my attention that the PRC would like to utilize charter flights--
allegedly so as to bring in the necessary workers to complete various 
projects, such as the National Convention Center. On each occasion I 
have made it clear the answer is ``no''--it is essential, rather, that 
these workers arrive via international commercial carriers such as 
United Airlines. The response is often the same; getting to the FSM via 
United means that their workers require U.S. visas, and the paperwork 
to acquire them is allegedly laborious and time-consuming. Maybe that 
is true; but what is also true is that having persons arrive in our 
country via Guam or Hawaii gives each of us a layer of added 
protection. It is a matter of public information that the PRC has used 
prisoners and other forms of servant-labor in projects through 
ChinaAID; and it is further the case that the FSM is not equipped with 
the necessary detection and screening tools and capacity to discern if 
a particular incoming person is, say, truly an engineer, or someone 
else altogether.
    That itself isn't a small matter, either. You can imagine my 
surprise when I was followed this past July in Fiji during the Pacific 
Islands Forum by two Chinese men; my further surprise when it was 
determined that they worked for the Chinese Embassy in Suva; my even 
further surprise when it was discovered that one of them was a PLA 
intelligence officer; and my continued surprise when I learned that I 
had multiple Cabinet and staff who had met him before, and in the FSM. 
To be clear: I have had direct threats against my personal safety from 
PRC officials acting in an official capacity.
    Perhaps of even greater interest, when it comes to that question of 
who comes into our country and what do they want, is as it relates to 
China's new Special Envoy for the Pacific, Qian Bo. Ambassador Qian was 
formerly the Chinese Ambassador to Fiji--and by extension was the one 
responsible for authorizing the two Chinese to follow me in Suva, and 
to observe U.S. Vice President Kamala Harris' address at the Pacific 
Islands Forum despite their lack of accreditation to be in the room at 
the time. It is not a coincidence that China chose Ambassador Qian to 
be the Special Envoy, nor is it a coincidence that the FSM was the 
first country the Ambassador was chosen to visit. (Is it a coincidence 
that our own Executive Branch failed to provide me information in time 
so as to allow me to gestate on whether or not to approve the visit in 
the first place? We'll come back to this later in this briefing).
    Ambassador Qian also would have been present during the 2nd China-
PICS Political Dialogue. That itself is noteworthy insofar as that was 
the public meeting where the FSM Government found itself represented 
not by myself or a Cabinet member or even a member of our Foreign 
Service--indeed, not by anyone in our Government at all but, rather, a 
private citizen named Mr. Duhlen Soumwei. I said to the PRC that we 
would not have formal representation at the meeting, and the PRC went 
to the extent of taking one of our citizens and then publicly having 
that citizen formally represent us. To say it again: China has 
established a precedent of taking our private citizens in multilateral 
meetings to formally represent our country without our Government's 
awareness or approval thereof.
    If the above is shocking or concerning, bear with me as I provide 
another example. In October 2021 the FSM joined the first China-PICS 
Foreign Ministers Meeting. It was clear from the outset that something 
was awry; I noticed, for example, that the draft remarks for our 
Secretary's delivery included frequent requests and references to 
proposals that nobody in our country had discussed beforehand. For 
example, it was suggested that the Secretary request a Free Trade 
Agreement with China. A Free Trade Agreement, on its face, isn't 
necessarily a bad idea (nor a good idea); but it certainly wasn't 
something that we had discussed internally in any form or fashion. I 
instructed that our remarks focus on asking China to work with the 
United States in combatting Climate Change.
    Towards the conclusion of the first China-PICS Foreign Ministers 
Meeting, it became clear that the proposed Joint Communique was laced 
with several problematic layers of statements that we as, as nation, 
had not agreed to. For example, there were references toward 
establishing a multitude of offices that our Government wasn't aware 
of, some of which could seem benign or harmless (such as the Disaster-
Risk Reduction Cooperation Center, which opened this February 22, 
2023--and whose formal functions continue to elude me despite the FSM 
flag flying at the opening ceremonies). Regardless, the FSM requested 
that countries receive more time to review the Joint Communique before 
it went out. We were not alone in this, I should add--former Prime 
Minister Josaia Voreqe Bainimarama of Fiji said the same, as did 
Premier Dalton Tagelagi of Niue. Instead, however, our requests were 
unheeded, and China immediately published the Joint Communique 
inclusive of remarks, which were false, that the FSM and the other 
Pacific Island Countries had agreed to it, which, in our case, we 
hadn't; and that first China-PICS Foreign Ministers Meeting was of 
course later cited to be the foundation for the second China-PICS 
Foreign Ministers Meeting. That theme continues: the FSM says ``no'', 
and our sovereignty is disrespected with the PRC saying we have 
achieved a consensus when we have not.
    I should emphasize that instances of Political Warfare and Grey 
Zone activity in the FSM need not be focused strictly on the most 
exciting geopolitical affairs. Malign or harmful influence can also be, 
and often is, banal, i.e., boring and unexciting. While I would be 
foolish to not explicitly recall China's suggestions in February 2020 
that the novel coronavirus wasn't dangerous and so the FSM should open 
its borders to Chinese citizens and workers, including the frequent 
calls to my personal phone number from Ambassador Huang at the time, 
the example I wish to cite now is regarding COVID-19 vaccines.
    You will recall that it was January 31, 2020, when the FSM refused 
entry to any person coming from a country that had one or more positive 
cases of COVID-19 (then described as the novel coronavirus) and that, 
for practical purposes, we referenced Guam and Hawaii as being separate 
from the rest of the United States. We closed our borders because we 
had good intelligence indicating a temporary, yet striking, societal 
collapse, inclusive of massive amounts of human suffering. The panacea 
or cure we needed was the COVID-19 vaccine.
    The FSM received its first doses of COVID-19 vaccines in December 
2020 (even prior to the U.S. State of Hawaii, in fact), and we received 
more than enough vaccine for every person in the country. Scientific 
evidence suggested that the Moderna and Pfizer vaccines were superior 
to all others, followed by the Johnson & Johnson vaccine. The various 
Chinese vaccines e.g. Sinopharm and Sinovac were, by contrast, not 
particularly effective in comparison. Considering that our country 
already had arguably the healthiest supply of vaccines of any 
jurisdiction in the world; that the vaccines we possessed were the most 
effective available; and the danger that community spread still posed 
to our communities at the time; the FSM National Government chose to 
only allow our citizens to use those three vaccines. It was a medical 
decision, based on science and with the intent of protecting our 
population. That wasn't good enough for China.
    China was on a quest for countries around the world to approve its 
vaccines, even though they weren't particularly effective. In the FSM's 
context, we explicitly told them about a half a dozen times--or, at 
least, that would be how many times I instructed my Cabinet to relay 
such instructions--and, yet, the issue kept appearing in COVID-19 Task 
Force meetings.
    On October 14, 2021, I relayed the final instruction that the FSM 
will not accept the Chinese vaccines. ``Let's be clear,'' I said, 
``Foreign Affairs will prepare a letter to say `no' to the China 
vaccines. Our answer should be very clear that, while we appreciate the 
offer, the answer is no because we have more than enough vaccines.'' In 
November, 2021--after the Secretary of Health and the Secretary of 
Foreign Affairs and myself had changed cellphone numbers due to 
incessant calls from Ambassador Huang--the FSM signed an agreement that 
we accept the Chinese vaccines. We included various stipulations, such 
as that they were to be used only for citizens of China in the FSM; but 
that wasn't what China wanted. What China wanted was for the FSM to be 
on the list of countries they could publicly promote as having accepted 
their vaccines. China got exactly what it wanted.
    Another example is in December 2021. During approximately the same 
timeframe that the Western & Central Pacific Fisheries Commission (i.e. 
the Tuna Commission) was having its annual meetings, China invited 
Pacific Island Countries to join a virtual meeting to come up with an 
outcomes document called the Guangzhou Consensus. At the Tuna 
Commission meetings, China was noteworthy for being the principal actor 
in rejecting a consensus from being reached on a core issue: should 
vessels that engage in illegal fishing be forever identified as IUU 
vessels? China's suggestion was ``no''--no they shouldn't be. But one 
of the key outcomes of the Guangzhou Consensus (which itself was a 
successor to the first China-PICS Foreign Ministers Meeting whose 
outcome documents our country didn't approve before publication) is 
that China would work with the Tuna Commission to tackle IUU fishing. 
This is in addition, of course, to the ``establishment of an 
intergovernmental multilateral fisheries consultation mechanism as a 
supplement to the existing mechanism.''
    I can recall, at the time, the advice of our Cabinet. ``The 
agreement is sufficiently broad and vague,'' they said; ``the agreement 
is not legally binding,'' they said. But with China, to be broad and to 
be vague is a threat--not a success. And just because something is not 
technically legally binding doesn't mean you won't find yourself 
beholden to it. One must merely look at Djibouti, which thought itself 
the recipient of a new port that quickly became a PLA Navy base; 
Zambia, which has seen China take ownership of its public utility 
systems; Uganda, which has seen China take ownership of its only 
airport--for both commercial and military uses; Ethiopia, which has 
seen China take ownership of its mass transportation system; Sri Lanka, 
which has seen China take ownership of its key ports. If these 
locations seem so foreign to us, I'll remind you that they too began 
with documentation very similar to the Deepening the Blue Economy MOU I 
rejected in December 2022. We maintain our sovereignty, so far, out of 
vigilance--not for any other reason.
    That's one of the many reasons I rejected the Common Development 
Vision, which was the core outcomes document of the 2nd China-PICS 
Foreign Ministers Meeting. I have already written extensively on that 
document to our brothers and sisters in the Pacific Islands Forum. 
While I attach to this briefing a copy of that letter for your 
information, some of the core concepts included China wanting to 
possess ownership of our ocean resources, and to create a Marine 
Spatial Plan for its own uses such as for deep-sea mining; control of 
our fiber optic cables and other telecommunications infrastructure, 
which would allow them to read our emails and listen to our phone-
calls; to possess ownership of our immigration and border control 
processes, for the use of biodata collection and observation; and to 
create sweeping security agreements with our country and our region.
    All of this, taken together, is part of how China intends to form a 
``new type of international relations'' with itself as the hegemonic 
power and the current rules-based international order as a forgotten 
relic. That's a direct quote, I should emphasize--a ``new type of 
international relations''--and an explicit goal on behalf of China from 
the Common Development Vision.
    By this point, my dear Speaker and Leaders, I can only imagine that 
I have provided enough examples to demonstrate my core message for my 
first main idea: the FSM is an unwilling target of PRC-sponsored 
Political Warfare and Grey Zone activity.
    Those who desire more examples, and more detail, are invited to 
reach out to me; we will schedule a briefing. In my love and 
unquestionable patriotism for the Federated States of Micronesia, I 
have made it a point to ensure that no stone is unturned in ensuring 
that the Office of the President is provided with reliable and complete 
information, and that I receive information from as many credible 
sources as possible. That includes, my dear Speaker and Leaders, our 
Nation's own Information & Intelligence Service (IIS), which I created 
by Executive Order, and which I intend, and hence recommend, that we 
institutionalize beyond my administration through appropriate 
legislation. Awareness of this Service's existence is provided as 
information to other Leaders, and extensive discussion on how it can be 
useful for the next administration is, I hope, a topic of discussion 
between myself and the four At-Large Senators-Elect who are equally 
eligible to become the next President and Vice President.

    Now let us discuss more why Political Warfare is a problem for our 
country.

    One of the reasons that China's Political Warfare is successful in 
so many arenas is that we are bribed to be complicit, and bribed to be 
silent. That's a heavy word, but it is an accurate description 
regardless. What else do you call it when an elected official is given 
an envelope filled with money after a meal at the PRC Embassy or after 
an inauguration? What else do you call it when a senior official is 
discretely given a smartphone after visiting Beijing? What else do you 
call it when a senior official explicitly asks Chinese diplomats for 
televisions and other ``gifts''? What else do you call it when an 
elected official receives a container filled with plants and other 
items? What else do you call it when an elected official receives a 
check for a public project that our National Treasury has no record of 
and no means of accounting for?
    This isn't rare. This happens all the time, and to most of us--not 
just some of us. It is at this point that I relay, simply as a point of 
information, that 39 out of 50 Members of Parliament in Solomon Islands 
received payments from China prior to their vote on postponing 
elections that were otherwise scheduled for this year. Have you 
personally received a bribe from the PRC? If the answer is ``no'', you 
are in the minority. That is why I am submitting proposed legislation 
on money laundering, disclosure, and integrity requirements for 
Congress' review, and also why I encourage passage of many floating 
legislation including the Freedom of Information Act.
    You likely would ask for, and certainly deserve, a concise example 
of bribery--or attempted bribery. Shortly after Vice President Palik 
took office in his former capacity as a Senator, he was invited to the 
Chinese Embassy for a dinner with other Members of Congress. The Vice 
President was asked by Ambassador Huang if he could sit up front, with 
other Senators, and also to accept an envelope filled with money; Vice 
President Palik refused, telling the Ambassador to never offer him a 
bribe again, and upon doing so was advised by Ambassador Huang 
something close to the effect of ``You could be President someday'' as 
the rationale for the special treatment.
    This past October 2022, when Vice President Palik visited Kosrae, 
he was received by our friends at Da Yang Seafoods. Our friends at Da 
Yang have a private plane, and they arrived in Kosrae (along with 
several senior FSM Government officials) on that private plane. Our 
friends told the Vice President that they can provide him private and 
personal transportation to anywhere he likes at any time, even Hawaii, 
for example; he need only ask.
    In our context in the FSM, with the Vice President's story as the 
singular exception, I will refuse to name names, but it is not out of 
courtesy; it is to keep the emphasis on the problem, and what the 
problem is, and how the problem festers, instead of naming or shaming 
any particular person or group of people. Senior officials and elected 
officials across the whole of our National and State Governments 
receive offers of gifts as a means to curry favor. The practical impact 
of this is that some senior officials and elected officials take 
actions that are contrary to the FSM's national interest, but are 
consistent with the PRC's national interest.
    I want to be clear that I am professing to you--those who will 
succeed my administration, and likely continue to remain in political 
power at the National or State level--that if your administration is 
like mine, you will have Cabinet who record bilateral meetings and 
transmit those recordings to China. You will have Cabinet and/or senior 
officials tell the Chinese Ambassador ``I will help you if you help 
me'' behind your back. You will have Cabinet accept gifts, such as 
envelopes filled with money, and alcohol. You will have Cabinet attend 
meetings with foreign officials--sometimes officials from countries the 
FSM doesn't recognize, or doesn't recognize yet--without your 
knowledge. It isn't going to be just one of them, and what one will 
tell you in public versus what they will tell you in private--or behind 
your back--may prove to be very different things. It is here that I 
wish to emphasize that not all of the political appointees I have been 
recently removing from office have engaged in these activities.
    So, what does it really look like when so much of our Government's 
senior officials and elected officials choose to advance their own 
personal interests in lieu of the national interest? After all, it is 
not a coincidence that the common thread behind the Chuuk State 
secession movement, the Pohnpei Political Status Commission and, a to 
lesser extent, the Yap independence movement, include money from the 
PRC and whispers of PRC support. (That doesn't mean that persons 
yearning for secession are beholden to China, of course--but, rather, 
that Chinese support has a habit of following those who would support 
such secession).
    At best, it means I find out about a visit by the man (Ambassador 
Qian Bo) who would have instructed staff to follow me at the Pacific 
Islands Forum in Suva less than 48 hours before its occurrence, despite 
our Government having to know about it, and prepare for it, weeks 
prior, and only for the man to advocate for initiatives I've rejected 
(i.e. the Deepening the Blue Economy MOU) and to call such rejections a 
totally agreed-upon consensus (i.e. the 2nd China-PICS Foreign 
Ministers Meeting). At worst in the short-term, it means we sell our 
country and our sovereignty for temporary personal benefit. At worst in 
the long-term, it means we are, ourselves, active participants in 
allowing a possible war to occur in our region, and very likely our own 
islands and our neighbors on Guam and Hawaii, where we ourselves will 
be indirectly responsible for the Micronesian lives lost. After all, 
this isn't about the United States or Japan or Australia or any other 
country--but it must be about our own Micronesian citizens, and the 
fact that Guam by itself, and Hawaii by itself, each have Micronesian 
populations larger than Yap and Kosrae combined and, together, have a 
Micronesian population larger than Pohnpei. In other words: this is 
about upholding our duty to our FSM Constitution, to which we swear 
allegiance to, including our duty to protect the security and 
sovereignty of our own country and our own people.

    My dear Speaker & Leaders,

    Prior to giving my State of the Nation address, I can recall two of 
my Cabinet recommending that we don't explicitly point out our 
rejection of the Common Development Vision (though references to 
condemning Trump for his fascist insurrection, or severing relations 
with Russia for their invasion of Ukraine, were ``fine''). The reason 
they recommended against this was simple: ``We are asking for money 
from China.''
    I am tempted to say that if our national interest, if our 
sovereignty, and if our principles can be traded away for temporary 
amounts of silver and gold--then we have failed in our duty to our 
people. But it does raise a good point, an essential point in fact in 
our world of politics and governance: isn't money all that really 
matters?
    I don' t say this as a joke; I think it is a truth that I cannot 
ignore, that you cannot ignore, and that we collectively cannot ignore. 
Money is power. Money is freedom. Money is influence. (If money wasn't 
important to us, we wouldn't be seeing officials getting bribed in the 
first place.) I cannot think of any elected official, me included, who 
hasn't been perpetually concerned about money--including how our 
country can obtain it, and how our country can ensure it is used for 
our nation's benefit. I can scarcely think of elected officials who 
don't seek additional home ownership in places like Hawaii, Guam, and 
Portland, or operate multiple businesses; I am of course a businessman 
myself. Money matters, and if I am to make the argument that our 
country is the target of Political Warfare so as to prepare our country 
and region to align ourselves with China prior to their invasion of 
Taiwan, I must also make the argument that our country can obtain a 
better deal without China. (If an invasion of Taiwan seems unlikely, 
did we not feel the same about the invasion of Ukraine?--and in this 
case, we know about PRC's whitepaper to be ready to invade by 2027). I 
am clearly aware that I must make the argument not only in terms of 
preventing war and saving lives, but in terms of how we can fill the 
gap that would occur if we were to turn off the flow of money from 
China.
    And that--my dear Speaker and Leaders--is what I have done on our 
behalf, and for our collective discussion. In February 2023, I met with 
the Honorable Joseph Wu, Foreign Minister of Taiwan, to solicit from 
Taiwan what their potential assistance to the FSM could look like if we 
switched diplomatic relations to supporting them instead of China, and 
what benefits we can get if we don't switch relations formally but do 
explore initializing a Taipei Economic & Cultural Representative Office 
(TECRO).
    Let's begin with what we can do without diplomatic relations. This 
March, 2023, I've invited a team from the Taiwan International 
Development Cooperation Fund (ICDF) to conduct a technical mission in 
the FSM to determine, among other matters, how Taiwan can assist with 
agricultural programming, such as tackling food security issues and 
establishing food co-ops. We are exploring a Memorandum of 
Understanding between Taiwan and the FSM as it relates to medical 
referrals, wherein our citizens can receive a higher quality of care 
than other jurisdictions and for less cost. (This is the same setup 
that Palau and the Marshall Islands enjoy). We are also exploring job 
training and scholarships for our students, and also flights from 
Taiwan to Guam and the FSM. I relayed to Foreign Minister Wu that this 
is acceptable for the short and immediate term i.e. prior to the 
conclusion of my administration.
    Of course, at the top of any FSM official's agenda is the status of 
our sovereign FSM Trust Fund. I was transparent with Foreign Minister 
Wu; we project we need an injection of approximately $50,000,000 to 
meet our future needs. We can and will receive this, over a three-year 
period, if and when we establish diplomatic relations with Taiwan. 
Meanwhile, we would also receive an annual $15,000,000 assistance 
package which we could divide however we wish (meaning, by extension, 
we could also simply send this assistance directly to our FSM States 
like we do with assistance from the Compact of Free Association). This 
would have immediate and long-term impacts on State Governments' 
capacity to implement programming for their residents.
    Additionally, Taiwan assures me that they will simply ``pick-up'' 
any and all projects that China is currently undertaking. The National 
Convention Center in Palikir? Taiwan will finish it. The Kosrae State 
Government Complex and the Pohnpei State Government Complex? Taiwan 
will finish them (using Micronesian labor and Micronesian businesses, 
unlike China, inclusive of job training for our laborers). The gyms in 
Satowan and Udot? Taiwan will finish them--and so forth.
    All of this assistance, of course, would be on top of the greatly 
added layers of security and protection that come with our country 
distancing itself from the PRC, which has demonstrated a keen 
capability to undermine our sovereignty, rejects our values, and uses 
our elected and senior officials for their own purposes.
    To say it again, my Speaker and Leaders: We can play an essential 
role in preventing a war in our region; we can save the lives of our 
own Micronesian citizens; we can strengthen our sovereignty and 
independence; and we can do it while having our country at large 
benefit financially.

    My dear Speaker and Leaders,

    I love the Federated States of Micronesia, this nation, my nation, 
your nation, our nation, too much to not inform each of you about these 
important topics, and to warn you of the kinds of threats and 
opportunities that face us. I am acutely aware that informing you all 
of this presents risks to my personal safety; the safety of my family; 
and the safety of the staff I rely on to support me in this work. I 
inform you regardless of these risks, because the sovereignty of our 
nation, the prosperity of our nation, and the peace and stability of 
our nation, are more important. Indeed, they are the solemn duty of 
literally each and every single one of us who took the oath of office 
to protect our Constitution and our country.
    I appreciate that this first briefing is lengthy--but I trust that 
you've found its information essential, and its proposals worth our 
collective consideration. I look forward to our further discussions on 
this topic, and over the next two months I will prepare additional 
briefings for your digestion on other items of interest and importance 
to this beloved Paradise in Our Backyards, the Federated States of 
Micronesia.

    Thank you, and God Bless the Federated States of Micronesia.

            Sincerely,

                                          David W. Panuelo,
                                                          President

                                 ______
                                 

       Micronesia's President Writes Bombshell Letter on China's

                          `Political Warfare'

Outgoing President David Panuelo released a lengthy letter detailing 
Beijing's efforts to bribe and bully Micronesian leaders--and exploring 
the possibility of recognizing Taiwan instead.

By Cleo Paskal

March 10, 2023

                                 *****

David Panuelo, the president of the Federated States of Micronesia 
(FSM) has written a letter to FSM leaders providing extraordinary 
details on Beijing's political warfare and grey zone activity in the 
country--and outlining a potential agreement to switch FSM's diplomatic 
recognition from China to Taiwan.

Panuelo has a track record among world leaders of being exceptionally 
astute, open, and direct in his analysis of China's behavior and 
actions.

In the past year, he has written two other highly influential letters. 
On March 30, 2022, he wrote to Solomon Islands Prime Minister Manasseh 
Sogavare expressing concern over the China-Solomon Islands security 
deal. On May 20, 2022, he wrote another to Pacific Islands leaders 
about the implications of then-Chinese Foreign Minister Wang Yi's trip 
through the Pacific Islands, which may have swayed fellow Pacific 
Island leaders to reject the regional trade and security agreement Wang 
was pushing.

This latest letter is likely to be his most consequential of all. On 
March 7, FSM held elections and, as a result, Panuelo has just two 
months left in his term. For reasons he explains in his letter, he 
clearly intends to try to use the time to safeguard his nation from 
what he sees as threats emanating from Beijing.

He writes that a core threat to FSM is China's stated intention to 
invade Taiwan. ``The FSM has a key role to play in either the 
prevention of such a conflict, or participation in allowing it to 
occur,'' Panuelo explains. ``It is on this basis that Political Warfare 
and Grey Zone activity occur within our borders; China is seeking to 
ensure that, in the event of a war in our Blue Pacific Continent 
between themselves and Taiwan, that the FSM is, at best, aligned with 
the PRC (China) instead of the United States and, at worst, that the 
FSM chooses to `abstain' altogether.''

He then details some of the extensive political warfare conducted 
against FSM. Three examples:

     ``We understand that [China's choice for Ambassador to 
            FSM] Mr. Wu would, upon his arrival, be given the mission 
            of preparing the FSM to shift away from its partnerships 
            with traditional allies such as the U.S., Japan, and 
            Australia. We know that Mr. Wu would expand PRC security 
            activity, awareness, and interest in the FSM . . . I 
            declined the Ambassador-designate his position . . . 
            they're simply awaiting the new President to take power so 
            Mr. Wu can become the Ambassador of China to the FSM.''

     ``You can imagine my surprise when I was followed this 
            past July in Fiji during the Pacific Islands Forum by two 
            Chinese men; my further surprise when it was determined 
            that they worked for the Chinese Embassy in Suva; my even 
            further surprise when it was discovered that one of them 
            was a PLA intelligence officer; and my continued surprise 
            when I leaned that I had multiple Cabinet and staff who had 
            met him before, and in the FSM. To be clear: I have had 
            direct threats against my personal safety from PRC 
            officials acting in an official capacity.''

     ``[China's newly appointed Envoy for the Pacific Islands 
            Ambassador Qian Bo] would have been present during the 2nd 
            China-PICS Political Dialogue. That itself is noteworthy 
            insofar as that was the public meeting where the FSM 
            Government found itself represented not by myself or a 
            Cabinet member or even a member of our Foreign Service--
            indeed not by anyone in our Government at all but, rather, 
            a private citizen named Mr. Duhlen Soumwei. I said to the 
            PRC that we would not have formal representation at the 
            meeting, and the PRC went to the extent of taking one of 
            our citizens and then publicly having that citizen formally 
            represent us. To say it again: China has established a 
            precedent of taking our private citizens in multilateral 
            meetings to formally represent our country without our 
            Government's awareness or approval thereof.''

Panuelo also mentions that China had sent ocean vessels into the FSM's 
Exclusive Economic Zone ``whose purpose includes mapping our maritime 
territory for potential resources.'' He adds, ``When we sent our own 
patrol boats to our own Exclusive Economic Zone to check on PRC 
research vessel activity, the PRC sent a warning for us to stay away.''

Pandemic response was a particular focus for Beijing. On January 31, 
2020, FSM refused entry to any person coming from a country that had 
one or more positive cases of COVID-19. According to Panuelo, Beijing 
wasn't pleased and let him know it: he recalls ``China's suggestions in 
February 2020 that the novel coronavirus wasn't dangerous and so the 
FSM should open its borders to Chinese citizens and workers, including 
the frequent calls to my personal phone number from Ambassador Huang at 
the time.''

Another sensitive spot was Chinese vaccines: ``On October 14th, 2021, I 
relayed the final instruction that the FSM will not except the Chinese 
vaccines. `Let's be clear,' I said, `Foreign Affairs will prepare a 
letter to say ``no'' to the Chinese vaccines. Our answer should be very 
clear that, while we appreciate the offer, the answer is no because we 
have more than enough vaccines.''

However Panuelo was being undermined from within his own government: 
``In November, 2021--after the Secretary of Health and the Secretary of 
Foreign Affairs and myself had changed cellphone numbers due to 
incessant calls from Ambassador Huang--the FSM signed an agreement that 
we accept the Chinese vaccines. We included various stipulations, such 
as that they were to be used only for citizens of China in the FSM; but 
that wasn't what China wanted. What China wanted was for the FSM to be 
on the list of countries that they could publicly promote as having 
accepted their vaccines. China got exactly what it wanted.''

Overall, much of the activity he outlined fits into a ``theme'': ``the 
FSM says `no', and our sovereignty is disrespected, with the PRC saying 
we have achieved a consensus when we have not.''

Panuelo is clear as to why he thinks that was the case: ``One of the 
reasons that China's Political Warfare is successful in so many arenas 
is that we are bribed to be complicit, and bribed to be silent. That's 
a heavy word, but it is an accurate description regardless. What else 
do you call it when an elected official is given an envelope filled 
with money after meal at the PRC Embassy or after an inauguration? . . 
. What else do you call it when an elected official receives a check 
for a public project that our National Treasury has no record of and no 
means of accounting for?''

He offers specific examples, including: ``This past October 2022, when 
Vice President Palik visited Kosrae, he was received by our friends at 
Da Yang Seafoods. Our friends at Da Yang have a private plane, and they 
arrived in Kosrae (along with several senior FSM Government officials) 
on a private plane. Our friends told the Vice President that they can 
provide him private and personal transportation to anywhere he likes at 
any time, even Hawaii, for example; he only need ask.''

Panuelo continues: ``Senior officials and elected officials across the 
whole of our National and State Governments receive offers of gifts as 
a means to curry favor. The practical impact of this is that some 
senior officials and elected officials take actions that are contrary 
to the FSM`s national interest, but are consistent with the PRC`s 
national interests.''

He then described the outcomes of this corrosion of the body politic. 
``So, what does it really look like when so much of our Government's 
senior officials and elected officials choose to advance their own 
personal interest in lieu of the national interest? After all, it is 
not a coincidence that the common thread behind the Chuuk State 
succession movement, the Pohnpei Political Status Commission and, to a 
lesser extent, Yap independence movement, include money from the PRC 
and whispers of PRC support. (That doesn't mean that persons yearning 
for secession are beholden to China, of course--but, rather, that 
Chinese support has a habit of following those who would support such 
secession).''

The results, he writes, are potentially catastrophic: ``At worst in the 
short-term, it means we sell our country and our sovereignty for 
temporary personal benefit. At worst in the long-term, it means we are, 
ourselves, active participants in allowing a possible war to occur in 
our region, and very likely our own islands and our neighbors on Guam 
and Hawaii, where we ourselves will be indirectly responsible for the 
Micronesian lives lost.''

This has led him to actively look for alternatives: ``Money matters, 
and If I am to make the argument that our country is the target of 
Political Warfare so as to prepare our country and region to align 
ourselves with China prior to their invasion of Taiwan, I must also 
make the argument that our country can obtain a better deal without 
China . . .. I am clearly aware that I must make the argument not only 
in terms of preventing war and saving lives, but in terms of how we can 
fill the gap that would occur if we were to turn off the flow of money 
from China.''

In a move that will make him one of the world's biggest targets for 
Beijing, Panuelo explains that he sees Taiwan as this alternative. ``In 
February 2023, I met with the Honorable Joseph Wu, Foreign Minister of 
Taiwan, to solicit from Taiwan what their potential assistance to the 
FSM would look like if we switch diplomatic relations to supporting 
them instead of China, and what benefits we can get if we don't switch 
relations formally but do explore initializing a Taipei Economic & 
Cultural Representative Office (TECRO) . . .

``I was transparent with Foreign Minister Wu; we project we need an 
injection of approximately $50,000,000 to meet our future needs. We can 
and will receive this, over a three-year period, if and when we 
establish diplomatic relations with Taiwan. Meanwhile, we will also 
receive an annual $15,000,000 assistance package which we could divide 
however we wish (meaning, by extension, we could also simply send this 
assistance directly to our FSM States like we do with assistance from 
the Compact of Free Association).''

``Additionally, Taiwan assures me that they will simply `pick-up' any 
and all projects that China is currently undertaking . . . using 
Micronesian labor and Micronesian businesses, unlike China, inclusive 
of job training for laborers.''

On top of all the financial assistance, Panuelo sees the option of 
recognizing Taiwan as providing ``greatly added layers of security and 
protection that comes with our country distancing itself from the PRC, 
which has demonstrated a keen capacity to undermine our sovereignty, 
reject our values, and use our elected and senior officials for their 
purposes.''

Given the highly sensitive nature of the letter, toward the end he 
writes: ``I am acutely aware that informing you all of this presents 
risks to my personal safety; the safety of my family; and the safety of 
the staff I rely on to support me in this work. I inform you regardless 
of these risks, because the sovereignty of our nation, the prosperity 
of our nation, and the peace and stability of our nation, are more 
important. Indeed, they are the solemn duty of literally each and every 
single one of us who took the oath of office to protect our 
Constitution and our country.''

With his third letter, Panuelo is planting a flag in the sand--a brave 
attempt to reclaim FSM's sovereignty. What happens next may shape the 
future of China's engagement with the Pacific Islands--and the world.

                                 ______
                                 

    Dr. Dunn. Thank you. This was a cry for help. And because 
of the aggressive nature of this intervention in his nation, he 
is actually working to flip their recognition back to Taiwan 
from Beijing.

    I have other questions for the record, and I will extend 
those to you, Mr. Ambassador, if I may.

    But please know that there are those of us who understand 
how important your work is out there and how important these 
nations are to our alliance.

    With that, Mr. Chairman, I yield back.

    Mr. LaMalfa. Thank you again, Mr. Dunn.

    Witnesses, thank you again for your time and travel, and 
for your testimony and effort here today, as well as members of 
our Committee for their participation and their questions.
    If the members of the Committee have further questions for 
our witnesses, we will ask you to respond to those in writing. 
Under Committee Rule 3, members of the Committee must submit 
questions to the Committee Clerk by 5 p.m. on Tuesday, October 
24. The hearing record will be held open for 10 business days 
for those responses.
    Again, we appreciate it. If there is no further business, 
without objection, the Committee stands adjourned.

    [Whereupon, at 4:34 p.m., the Subcommittee was adjourned.]

                                 [all]