House International Relations Committee Hearing: U.S. Nonproliferation Policy

June 19, 1996

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REP. GILMAN: The committee will come to order. Good morning. Five years ago, when the Iron Curtain fell and the Cold War seemed to end, one of the many causes for rejoicing was that our children and grandchildren need not live with the constant fear of nuclear war or of the devastation by biological or chemical weapons.

Today, however, we find that these dangers have not just endured, they have multiplied. We may have squandered the wonderful opportunity that we had back in 1991. If it is not too late to recapture this opportunity, our arms control establishment must follow a few simple rules.

First, we must not spend so much time fighting the last war that would forget to prepare for the next. Since 1991, we have paid many millions of dollars to persuade and assist the Newly Independent States of the Soviet Union to dismantle nuclear weapons.

Even as this was happening. The world's number one proliferater, the People's Republic of China, was transferred technology to North Korea. The free world now finds it prudent to take a multibillion dollar nuclear reactor for the promise that North Korea's destructive nuclear technology will never be used.

Meanwhile, there's evidence that North Korea is transferring anti-ballistic missiles to world regimes of the Middle East. We know that China has transferred nuclear technology to Iran and to Pakistan.

Representatives of an arms controlled -- arms company, I should say, run by the Chinese Government even attempted to sell machine guns and antiaircraft weapons to criminal gangs here in the United States.

Second, we must not be so eager to make a next deal that we ignore violations of existing agreements. The Clinton Administration's shocking decision not to impose sanctions against the government of China despite evidence that Chinese Government officials knew about and orchestrated transfer of ring magnets to Pakistan would surely encounter similar deals in the future.

On the question of arms proliferation, silence is consent. Each display of weakness serves to embolden the proliferaters and to zap even further the resolve of those who would make the word a safer place.

Just let me say, parenthetically, yesterday we held approximately a four-hour hearing with human rights organizations in my subcommittee on international operations and human rights about MFN and human rights violations in China.

And we heard from various human rights organizations, Human Rights Watch, Amnesty International, and even Harry Wu. And their collective voice yesterday was one that we had squandered an opportunity after the executive order had been set by the administration saying that substantial, significant progress had to be made in human rights for MFN to be conveyed for another year when there was significant regression that executive order was split and ripped asunder.

That kind of message not only affects China, but it affects every other dictator and every other rogue regime and the same, I would submit respectfully is happening in the area of non-proliferation.

Finally, we must not subordinate non-proliferation to less important concerns. The administration's decision not to impose sanctions on China conveys the strong impression that the administration is more afraid of political pressure from multinational corporations than of allowing weapons of mass destruction to fall into the wrong hands.

If these priorities are not reversed, in a few years we may be a position of buying nuclear reactors for Iran and Iraq in the hope of persuading them not to use their bombs.

I look forward to hearing from Assistant Secretary Davis to explain some of the thinking behind these and other administration arms proliferation decisions during the last three years.

And I look forward to hearing from our other witnesses on how we can reverse the current downward spiral, with regard to these issues. Let me just say that Chairman Gilman will be here shortly. He has been delayed and will be arriving shortly.

By I do want to make a note -- and this was after a consultation with Undersecretary Davis -- that Secretary Davis is concerned that she may have difficulty satisfactorily answering in public some of our questions today and I recognize her concerns.

But I would like to state in open session every member should feel that they are not constrained in any way from posing questions but should the questions move into a territory that requires a closed session, we will do just that.

I would like to ask the distinguished gentleman from Indiana, Mr. Hamilton, for any opening statements.



A Representative from Indiana and
Ranking Member, House International Relations Committee


REP. LEE H HAMILTON (D-IN): Well thank you very much, Mr. Chairman. I want to say to you and Chairman Gilman how much I appreciate your calling this hearing. I think it is an important one and the committee does need to focus on the non-proliferation efforts that are going on.

In your statement, of course, you identified a number of the challenges that are before us and they are many and formidable. And non-proliferation, this is surely one of the most difficult areas of diplomacy and of our foreign policy.

I do think it is important to recognize that there have been a number of successful efforts by this administration on non- proliferation. They include the permanent extension of the Nuclear Non-Proliferation Treaty, the dismantlement and removal of all nuclear weapons from the Ukraine, Kazakhstan, Belarus.

And those three states joining in the NPT as non-weapons states, the dismantlement of Russian nuclear missiles and launchers under START I Treaty, I think, is ahead of schedule. The North Korea Nuclear Framework Agreement, which I'm sure we'll be getting into here in the course of the hearing, I think has been quite successful so far in heading off threat posed by the North Korean Nuclear Weapon Program.

But you are quite right, Mr. Chairman, in pointing out a number of very significant challenges that lie ahead of us. And we look forward very much to hearing from Secretary Davis, with respect to those. We welcome her.

REP. : The Chair recognizes Mr. Menendez.

REP. ROBERT MENENDEZ (D-NJ): Thank you, Mr. Chairman. Mr. Chairman, I want to commend Chairman Gilman for holding and calling these hearings on one of the most critical issues, I think, that exists in the post-Cold War world.

I have been following developments regarding nuclear weapons and missiles proliferation closely and two events stand out in my mind in the export of nuclear weapons equipment by China to Pakistan and development of Chinese M-11 Ballistic Missiles in Pakistan.

In February, I wrote to the Chairman requesting that a hearing be held concerning reports from the intelligence community about the People's Republic of China transferring nuclear weapons, related equipment to Pakistan.

Intelligence agencies, specifically, I think the CIA had published reports that determine that China has been exporting nuclear weapons equipment and M-11 Ballistic Missiles to Pakistan.

These transfers threaten regional stability in South Asia. Recently, there have been reports that Pakistan has deployed these missiles.

Throughout the 1980s, Pakistan assured the United States that it was not engaged in nuclear weapons development while it received military and economic assistance.

These assurances proved hollow when President Bush was unable to certify that Pakistan was not developing a nuclear device.

Mr. Chairman, nuclear non-proliferation has been a hallmark of US foreign policy. My personal belief, it was wrong for the Congress to grant the President authority to transfer 368 million (dollars) in sophisticated weapons to Pakistan.

The country engaged in nuclear proliferation activities. We've got to take steps to end the proliferation of nuclear weapons in South Asia, and the US must send clear signals to countries engaging in such activities.

There's ample evidence to suggest that there's a pattern of Pakistan acquiring not only sensitive nuclear weapons related equipment, but also M-11 Ballistic Missiles capable of delivering a nuclear device from China.

These actions are serious violations of American law. And the United States has still not received assurances from either China or Pakistan that there will be no future activity of this type.

Last month, Beijing did not pledge to end sales of nuclear- related equipment to non-nuclear countries after the US chose not impose sanctions on China for exporting nuclear-related technology to Pakistan.

China and Pakistan have continuously violated US non- proliferation laws, and deployment of Chinese M-11 Ballistic Missiles in Pakistan would open a new chapter in Pakistan's proliferation activities.

Mr. Chairman, it's time for the United States to develop a policy that shows that our commitment to non-proliferation is clear, and we've got to be the world leader in these efforts. We should not stand by as egregious violations of US non-proliferation laws occur.

And I hope to hear some of the testimony that will assuage me and, I think, other members who are concerned about this that that's not the way we're headed.

REP. : Thank you very much, Mr. Menendez. Dr. Davis, welcome to this subcommittee -- to the full committee. Lynn Davis is the undersecretary of state for Arms Control and International Security Affairs having joined in the Clinton Administration in February of 1993.

Prior to taking up her duties at the Department of State, Dr. Davis was vice president of Rand in Santa Monica, California. Dr. Davis' previous government service includes four years in the Carter Administration as deputy assistant secretary of defense for policy plans.

She had previously served on the staffs of the Senate Select Committee on Intelligence and the National Security Council. Dr. Davis has taught national security policy at National War College and political science at Columbia University.

From 1985 to 1989, she served as director of studies of London's International Institute of Strategic Studies. Finally, Dr. Davis earned a BA at Duke University and PhD at Columbia University.

Her published works include, An Arms Control Strategy for the New Europe, Assuring Peace in a Changing World, Limited Nuclear Options, Deterrents, and New American Doctrine, and The Cold War Begins, Soviet-American Conflict over Eastern Europe. Dr. Davis, welcome to the committee.



Under Secretary of State,
Arms Control and International Security Affairs


MS. LYNN DAVIS: Thank you very much, Mr. Chairman. And I'm very pleased to appear before your committee to discuss the critical importance of preventing sub-proliferation of dangerous weapons.

The Clinton Administration has made non-proliferation one of its highest priorities and success is key to preserving the security of Americans in the post-Cold War world; a world that still holds real dangers, as you suggested, and one that presents us with many challenges ahead.

Mr. Chairman, given the sensitivity of the intelligence involved in defining and implementing our non-proliferation policies, I'm prepared to move to a closed session at any time that you may wish or return for further discussions with your committee in closed session.

But this hearing, Mr. Chairman, gives us the opportunity to describe the Clinton Administration's important accomplishments in preventing the proliferation of dangerous weapons and then address some of these challenges that lie ahead.

As for the accomplishments, the indefinite extension of the Non- Proliferation Treaty in 1995 without any conditions has established a permanent framework for our efforts to prevent the spread of nuclear weapons.

The United States-North Korean agreed framework has frozen the North Korean Nuclear Program. And implementation of this framework in the coming years will remove the nuclear threat posed by North Korea to regional and global stability. Through United States efforts, nuclear weapons have been removed from the territories of Ukraine and Kazakhstan. And the small number of remaining weapons in Belarus will be removed this year.

And each of these countries is now a non-nuclear party to the Non-Proliferation Treaty. Highly enriched uranium extracted from dismantled Russian nuclear weapons is being converted to commercial reactor fuel for delivery to the United States.

And in the coming year, we will be working with Russia and the other Newly Independent States to improve the security at more than 35 fissile material storage sites, roughly three-fourths of all such locations, and provide better accounting for the hundreds of tons of weapons usable nuclear materials.

United States leadership at the Moscow Summit this past April achieved a very strong endorsement of international efforts to strengthen the IAEA safeguards, the launching of a multilateral program to combat nuclear smuggling involving the G-7 countries, Russia and Ukraine.

The Moscow Nuclear Summit achieved the initiation of a systematic study of international cooperation to dispose safely of excess plutonium from dismantled weapons and Russian endorsement of the principle of safety first in the operation of nuclear power reactors.

The United States played the principal role in helping United Nations build a strong mechanism to monitor Iraq's capabilities to produce weapons of mass destruction and in maintaining support for continuing economic sanctions against Iraq pending Iraq's compliance with all its Security Council obligations.

Russia, Brazil, Argentina, South Africa, South Korea, and Ukraine are now committed to preventing the spread of missiles and missile- related technologies. And China is carrying out its 1994 commitment to a global ban on sales of MTCR class ground-to-ground missiles.

The United States obtained clarifications and assurances regarding China's nuclear non-proliferation policies, including a significant new public commitment not to provide assistance to unsafeguarded nuclear facilities.

And Russia is carrying out its agreement with the United States to close down its arm sales to Iran in the coming few years and in the future not to transfer arms or arms-related technology to Iran.

Let me now, though, turn briefly to the non-proliferation challenges ahead. We are giving our immediate attention to concluding a comprehensive test ban treaty. A comprehensive test ban treaty will be truly comprehensive, which will have the effect of constraining the development of nuclear weapons among nuclear aspirants and threshold states, as well as the development of new types of nuclear weapons by nuclear weapons states. Under a comprehensive test ban treaty, the United States will at the same time retain confidence in the safety and reliability of our nuclear stock pile.

The Clinton Administration also attaches high priority to strengthening the international norms against chemical and biological weapons and calls upon the Senate to ratify the chemical weapons convention.

We remain deeply concerned by Iran's pursuit of weapons of mass destruction, particularly nuclear weapons. Our policy seeks to end all nuclear cooperation with Iran and prevent transfers of any nuclear material, equipment, or technology to Iran.

We have been encouraged by Russian statements opposing Iran's acquisition of nuclear weapons. But our task remains to convince the Russians that any nuclear cooperation, even that which is permissible under Non-Proliferation Treaty and subject to IAEA safeguards serves that purpose including the provision of light water reactors, which we would oppose.

The President recently determined that continuing assistance to support democratic and economic reform in Russia is important to the United States and to our national security interests and, thus, invoked the waiver provision of the Foreign Operations Appropriations Act regarding nuclear cooperation with Iran.

The President's decision to take this step reflects the view that cutting off assistance to Russia at this juncture would not positively affect the dialog on limiting Russian nuclear cooperation with Iran and would undercut the reform process in Russia, a reform process that we remain deeply committed to supporting.

Last fall, China suspended its plans to sell Iran two small power reactors due to difficulties in site selection and financing. Its cooperation with Iran appears consistent with its NPT obligations and we have no reason to believe that China would knowingly assist Iran to acquire nuclear weapons.

Nonetheless, we will continue to oppose the Chinese Government's cooperation with Iran's Civil Nuclear Program emphasizing that such cooperation will help to build the nuclear infrastructure that could assist Iran's acquisition of nuclear weapons.

Ours is a long-term strategy, Mr. Chairman. Iran's financial difficulties will affect its ability to pay for nuclear facilities it hopes to acquire. And with time, we expect there to be more direct evidence of Iran's nuclear intentions.

Both of these factors work in our favor. But in the meantime, we will continue to press for the termination of all Russian and Chinese nuclear cooperation with Iran.

We also continue, Mr. Chairman, to have concerns, as have been raised by you and others, regarding Chinese missile cooperation with Pakistan and Iran, transfers by Chinese entities of dual-use chemicals and equipment that could be used in Iran's chemical program and China's transfers of conventional weapons to Iran.

We have raised our objections to each of these activities at the very highest levels of the Chinese Government and continue to work to keep these from happening in the future.

Finally, the challenge of enforcing Iraqi compliance with security council resolutions will continue to require our energetic diplomacy and support for UN operations.

The Iraqi Regime must not be allowed to interfere with the work of UNSCOM. UNSCOM must receive immediate and unrestricted access to Iraqi facilities.

Let me conclude, Mr. Chairman, by emphasizing again the critical priority that the Clinton Administration places in assuring security of Americans through the prevention of the proliferation of dangerous weapons.

We are committed to these non-proliferation goals; we are ready to work to accomplish those goals through a variety of different instruments and ways including most intensive diplomacy.

In this case, US leadership has been essential to our successes today, and we remain poised to continue that leadership as we face these remaining challenges. Thank you very much.

REP. : Thank you very much, Secretary Davis. Let me begin the first round of questioning and then yield to my colleagues.

Does the State Department have any evidence that China has transferred to Pakistan missiles capable of carrying a 500-kilogram warhead 300 kilometers specifically since October 4th of 1994 when China last agreed not to make such transfers? MS. DAVIS: Mr. Chairman, we, as you know, on the basis of the information available to us in 1993, imposed sanctions on China for missile-related items demonstrating our willingness and preparedness to impose sanctions when the evidence was presented to us.

Through negotiations with the Chinese during 1994, the Chinese made a commitment, as I said in my opening remarks, to a ban globally on the export of MTCR-class missiles around the world.

And in that connection, we lifted the sanctions that we had put in place in 1993. We believe that the Chinese are carrying out that commitment that they made in 1994 and so, in answer directly to your question, we have no information that suggests that they are not carrying out that commitment that they made in 1994.

We do have reports along the way as to various activities that might have occurred prior to that commitment and we look at those and take those reports very seriously.

But at this point, we have no information that would lead us to such a determination at this point in time.

REP. : According to a Washington Post article on March 8, 1996, US intelligence officials acknowledged that China had transferred "several virtually complete factories to Iran suited for making deadly poison gases."

And this act violates US law, as you know, as well as China's pledge to abide by a global treaty banning such assistance. What has been the administration's response to that transcript?

MS. DAVIS: Mr. Chairman, as I mentioned to you, we can go into far greater detail in a closed session about the various reports that we have but the main point for this hearing is that when we received such reports, we look at those very seriously and look at each element of the laws that are applicable to these reports.

In this case, we are reviewing the reports because, as you know, we have concerns that Iran is seeking to acquire chemical weapons through various kinds of equipment and dual-use items.

We seek to block that from any country and when we receive those reports, we raise these at the very highest levels in various countries.

At this point, we don't have the kinds of information that would lead us to make that determination but we review these reports very carefully.

REP.: What would you expect the response to be? I mean, is any of this information credible about that transfer to Iran?

MS. DAVIS: Well, it places me in a somewhat difficult situation, not as your expert on all of the details of these reports. And, again, I would wish to offer to the committee the fullest briefings on this information.

What I can tell you is that such reports give us -- indicate to us what we believe to be the case and that is, Iran is seeking worldwide to acquire chemical weapons, the equipment and dual-use items that would go into that and makes even more important our efforts to keep that from happening.

REP. : US Admiral Radd (sp) of the 5th Fleet has said that the Chinese cruise missile sales to Iran is a threat to the American troops in the Gulf. What is the status of your determination on whether this transfer violates the Iran-Iraq Non-Proliferation Act and when will a determination be made?

MS. DAVIS: In my longer prepared testimony for your committee, I went into somewhat more detail about this evidence than I did in my opening remarks.

Let me refer you back to that by saying that we are addressing the transfer of Chinese built C-802 cruise missiles to Iran under the Iran-Iraq Arms Non-Proliferation Act.

The Act provides for the imposition of sanctions when a foreign person or country transfers goods or technology, so as to contribute knowingly and materially to the efforts by Iran or Iraq to acquire destabilizing numbers and types of certain advanced conventional weapons. We see evidence that these cruise missiles are there; they have been tested so our task now is to evaluate those reports of the character of those missiles, the numbers and kinds of equipment to see whether it fits within the elements of that law and make that determination under review, and we are working to complete that review.

REP. : Can you give us any expectation as to when that determination will be made?

MS. DAVIS: Mr. Chairman, one of the things in my life and in this position is not to make promises as to when it is that we are able to complete this. We are looking at it, and we will do it as quickly as we can.

REP. : You can understand our concern, especially when US lives are put in --

MS. DAVIS: Mr. Chairman, I share your concerns and, indeed, the fact of the transfer of hese cruise missiles is of very great concern to us.

As you also know, we have worked very hard with various countries to keep countries from selling arms to Iran. We believe the dangers of any sales of weapons to Iran is a danger to our own security.

We have been able to bring about common policies, with respect to trade to Iran among the 30 countries that are currently participating in a new regime covering conventional arms.

Most importantly, we were able to bring able an agreement with Russia to close down their arms sales to Iran. And all the other 30 countries in this new regime have common policies not to trade in weapons and weapons-related technologies to Iran.

So that is the good news. The bad news is that the Chinese are continuing such activities and we are working hard to keep that from happening in the future, as well.

REP. : Thank you very much, Ms. Secretary. Mr. Hamilton.

REP. HAMILTON: Secretary Davis, the conference on disarmament is scheduled to end June 28th. Will we have a Comprehensive Test Ban Treaty?

MS. DAVIS: Congressman Hamilton, we are working with every effort that we can to conclude that treaty by the 28th of June, as you suggest as our goal. We are close; we are meeting daily.

And I very much hope that that will be a report that we will have at that time.

REP. HAMILTON: Is the issue of entry into force the major obstacle, at this point?

MS. DAVIS: Well I'm not going to be able to go into all the details with you, at this point, of the negotiations so I would be happy to go through some of that in a more private setting.

What I can say is that we are down to some of the last hard issues. One of those is the entry into force issue; that is, what will be the requirements for treaty to enter into force.

But more importantly, we want to bring about a complete text and have this open for signing in September at the UN General Assembly. And I think we're on track to do that.

REP. HAMILTON: The reports are that the members of the UN Security Council, other than the United States, believe the treaty should enter into force only if India, Pakistan, and Israel sign and ratify.


Are we isolated on that point, or don't you want to comment on that?

MS. DAVIS: Our goal has been to bring about a global treaty that would have all the countries of the world participating. That is, a successful global convention is one in which all the countries around the world join with us. And that remains our goal, including the threshold states and, of course, the nuclear powers.

REP. HAMILTON: Let me just ask you a series of very brief questions about the North Korean Agreement to see if I understand the current status of it. The North Korean Nuclear Weapon Program today is frozen. Is that correct?

MS. DAVIS: That is correct.

REP. HAMILTON: The north has shut down its only operating reactor; is that correct?

MS. DAVIS: That's correct.

REP. HAMILTON: The north has halted construction on the two new reactors it was building; is that correct?

MS. DAVIS: That's correct.

REP. HAMILTON: Has the north sealed its reprocessing facility and stopped construction on a new processing line?


REP. HAMILTON: Has the north refrained from reprocessing its spent fuel rods?

MS. DAVIS: Yes. And this is certified by the fact that the IAEA is in North Korea watching over these activities.

REP. HAMILTON: And if it had gone ahead with the reprocessing, that would have given them enough plutonium for several nuclear weapons, would it not?

MS. DAVIS: That's correct.

REP. HAMILTON: So, in effect, what North Korea has done is to give up plutonium sufficient for several bombs; right? MS. DAVIS: That's correct.

REP. HAMILTON: Has the north lived up to its obligations under the NPT by agreeing not to reprocess its spent fuel and not to shut down its -- the reprocessing facility?

MS. DAVIS: An additional requirement that the North Koreans have undertaken beyond that would be required under the Non-Proliferation Treaty as part of the overall framework that --

REP. HAMILTON: It's actually gone beyond the treaty, at this point?

MS. DAVIS: That's correct.

REP. HAMILTON: Have they admitted, IAEA inspectors, into their nuclear facilities; have they?

MS. DAVIS: The IAEA is there watching over their activities so that we have confidence in the statements that I've just made to you.

REP. HAMILTON: And the inspectors have been given access to carry out their responsibilities?

MS. DAVIS: That's correct.

REP. HAMILTON: And has the IAEA been permitted to apply safeguards even on some of the nuclear facilities not covered under the framework agreement?

MS. DAVIS: We can get you the full details of that, but what the IAEA has been asked to do and been able to give confidence back to us about is that the commitments that the North Koreans have made, with respect to the freezing of their programs, are the commitments that are being carried out.

REP. HAMILTON: All right. And has the north admitted US technicians into its nuclear facilities?

MS. DAVIS: We have been there helping and containing and -- the spent fuel that has come out of this reactor, so the answer is yes.

REP. HAMILTON: Now what has the United States done or, I should say, provided to North Korea in exchange for these benefits? How much should these benefits cost us?

MS. DAVIS: Well, as you know, we have made a commitment of some few millions of dollars, and I can get you that precise figure in order to help provide alternative heavy oil to the North Koreans for their -- for going the nuclear energy out of their nuclear reactors and have also spent some few millions of dollars in the administrative costs for the organization that's been set up now to carry through this overall framework, the CATO (sp) Organization. REP. HAMILTON: If I may submit some questions to you, I have time for one other question. One of the arguments we hear frequently on the ABM Treaty is that it's a Cold War relic; it should be scrapped.

Could you just state for us, fairly succinctly, what you think the relevance of the ABM Treaty is today and whether the doctrine of nuclear deterrence is still relevant and why?

MS. DAVIS: The Clinton Administration feels very strongly that the ABM Treaty is important to overall stability and to security of the American people because it provides the framework in which we and Russia are moving to take the very significant reductions in strategic nuclear arms.

The START II Treaty will require both countries to reduce by more than two-thirds their overall nuclear arsenals. So it provides the framework, the confidence that we can make the significant reductions within an overall state of security, nuclear deterrence, and stability.

I might also go on to say, though, that we believe equally firmly that to protect American security, that we must go ahead with the deployment of theater missile defenses. We don't believe that there's any contradiction between that, indeed.

We agreed with the Russians that both of us believe that moving ahead with our programs covering theater missile defenses are consistent with the ABM Treaty in maintaining that treaty.

REP. : Before we suspend for a brief recess because there are two back-to-back votes occurring on the floor, just I would ask for a point of clarification to a question from my colleague from Indiana, with regards to North Korea.

The Congressional Research Service in a report dated June 18th of '96 written by five specialists, including Robert Shuey (sp), points out that the International Atomic Energy Agency has sought to inspect fuel rods prior to encasing in order to obtain evidence regarding the amount of plutonium that North Korea might have obtained from require fuel rod removals from the reactor.

North Korea, the report goes on to say, has barred the IAEA from making such an inspection.

MS. DAVIS: To that question, specifically, we have been asking for some information that we have not received but that goes to the issues of what happened in the past.

And if you'll recall, in the agreed framework that was agreed between the United States and North Korea, one of the tasks still ahead is to discover all that we need to understand about past North Korean activities and the framework will not be completely implemented nor will the light water reactors provided under this agreement be put in place until we have a full understanding of that history.

So we would agree with you that, still ahead, is finding out to the satisfaction of the IAEA precisely what happened in the past.

REP. : But, again, it's very clear that they are barring. I mean, there's not a sense of openness or transparency. The IAEA is being barred from there information. But you're suggesting that that's part of the agreement that we signed onto?

MS. DAVIS: Part of the agreement is that we will find answers to those questions and that the IAEA will be the instrument that find those answers to, and we will not be satisfied that we have implemented this agreement until we have the full answers.

We're sorry that this hasn't happened. We've asked the IA to continue to push, but the main point here is that the framework is on track in its implementation. But it won't be finally implemented until we have a full knowledge of the history.

REP. : How important is a -- how important is it to the administration that the IAEA get access?

MS. DAVIS: We have to understand that history; that is part of the agreement.

REP. : So this is a non-negotiable; something that's we're --

MS. DAVIS: Something that we're going -- we have to understand the history and the means by which we find the history, we've asked the IAEA to take the lead in doing. We need to understand the history before we have finally implemented the agreement.

REP. : Okay. The committee will take a very brief recess and then resume its sitting.

(A brief recess was taken.)

REP. : The committee will resume its sitting. Secretary Davis, let me begin with a series of questions. What methods do you believe we sent the Chinese when the administration decided not to impose sanctions for their transfer of ring magnets to Pakistan?

MS. DAVIS: Mr. Chairman, the decision, with respect to Chinese sales of ring magnets to Pakistan, begins with the commitment that the Chinese made with respect to their future non-proliferation behavior.

And they made a public commitment that they would not provide assistance to unsafeguarded facilities. They further, through the course of our understandings and discussions with the Chinese, understand that by that this would mean that they would be precluded from any future transfers of ring magnets to unsafeguarded facilities.

So through very intensive negotiations, the Chinese made this public and new commitment, which clarifies the commitments that they had taken earlier, under the Non-Proliferation Treaty.

It was on the basic of this new public commitment that the United States did not impose these sanctions. But, Mr. Chairman, the important point here is that we received this commitment that what had happened in the past would not happen again.

We will monitor that commitment; we will always have the option in the future if they did not carry out this commitment to move towards a sanctions decision and to impose sanctions if it violated our laws.

But the important point here is that they have made this public commitment, public statement based on understandings and exchange of statements between our two countries.

REP. : Pardon me for pressing this, but the Chinese have broken commitment after commitment after commitment. They have done it in the area of human rights. They have done it with impunity. They have done it with the memorandum of understanding dealing the use of gulag labor.

And we've had, in my subcommittee, two hearings focusing first on survivors of the Laogai, where many of the materials are made for export.

They come up with an agreement in the 11th hour. We agree to it; it looks good on paper but it isn't worth the paper that it's printed on.

They, again, have broken their promises on human rights. They have already announced, vis-a-vis Hong Kong, that the fully elected legislature is null and void. It is a thing of the past, a relic on the day that they take over. They've already told the members of the judiciary, which many felt would survive, that the rule of law had a chance of surviving after the PRC, after Beijing takes over. And, yet, they have been told, "Your allegiance is to Beijing or else you're out, or you're going to find yourself being a paper clip pusher."

There's no power left. These people are losing it. Now we see a situation where the horror stories are real in the area of non- proliferation or proliferation to ring magnets and a host of other breeches of internationally recognized treaties, as well as our US law.

And we're taking a promise for the future. It's like a criminal committing an act over and over again and then saying to the judge, "I won't do it again," and he gets not just a suspended sentence, he gets a -- he walks free completely.

And that's what I think we're doing with the Chinese. I find it unbelievable that we will accept their word when their word has not been worth much in the past. And I know in the world of diplomacy you're supposed to be nice and we're suppose to clink glasses and exchange diplomatic toasts, but this is a dictatorship that tortures its people.

Yesterday, we went through four hours of hearings listening to the main stream human rights organizations, like Amnesty International, detail the nauseating detail exactly how cruel this dictatorship is.

And now they are, as we have learned -- and I don't think there's any doubt as to the facts that they are arming rogue regimes; they are arming the Pakistan Government with the capability of -- that will help them or enhance their weapons of mass destruction and that we're saying we take your promise now.

When I heard the State Department's statements, relevant to this breakthrough that we've gotten assurances, all I thought, their record has been a disaster. Why would any reasonable person, man or woman, believe the Chinese now?

MS. DAVIS: Mr. Chairman, let me focus on the areas where I am most expert and where your question is most directed without commenting on the other areas where you are far more expert than I am.

But with respect to Chinese non-proliferation behavior, let me make two very important points. The first is that we have worked hard to come to a commitment, a public commitment, on the part of the Chinese, with respect to their trade in missiles; ground-to-ground missiles with the capabilities covered by the MTCR.

We worked hard to achieve that commitment made by the Chinese in 1994. And, as I've earlier stated, we believe the Chinese are carrying out this public commitment. We have concerns about other Chinese behavior that I went through in the course of my presentation, have raised these concerns at the very highest levels with the Chinese and are working to change that behavior in the future.

With respect to the ring magnet issue, we worked again through a very intensive diplomacy by raising the prospect that there could be costs to the Chinese if they were not prepared to change their behavior, and they've made this public commitment.

At least on one occasion before, they've carried out this public commitment and we would look to the Chinese to carry out this new public commitment, with respect to not providing assistance to safeguarded nuclear facilities.

As I said earlier, we monitor this closely. We have also agreed with the Chinese to begin export control discussions to insure that they have the means to implement this public commitment that they've made.

We have some reports that they are beginning to tighten up these controls but there's still work to be done before we would have confidence that they would be able to assure us in the future.

Nevertheless, this public statement represents, as Secretary Christopher has said, a significant step forward in trying to bring about the kind of nuclear non-proliferation behavior that is consistent with our understanding of what is required of those who are parties to the NPT (ph) consistent with the behavior that we undertake as parties to the NPT (ph) and one that we would very much hope the Chinese to carry out in the future.

REP. : Secretary Davis -- and then I'll be yielding to the distinguished chairman from New York, Mr. Gilman. In the statement of May 11th of 1996, the Chinese official news agency made the statement that China strictly observes its obligations under the treaty -- talking about the non-proliferation nuclear weapons -- and is against proliferation of nuclear weapons.

China pursues the policy of not endorsing, encouraging, or engaging in the proliferation of nuclear weapons, and on and on. I mean, on face value, that's untrue. They have not done that in the past and perhaps you can enlighten us otherwise.

So they are saying they have not done it. And then they say, "China will not provide assistance to unsafeguarded nuclear facilities." Where, specifically, does it say they will not transfer ring magnets?

MS. DAVIS: Two point, coming back, I had the statement that the Chinese made at the time of this agreement and as you read through this language, it's -- it talks to the commitment that the Chinese have made, which is that they will not provide assistance to unsafeguarded nuclear facilities, will not; that's a future commitment.

As I've already said to you, we believe that the Chinese did transfer these ring magnets to Pakistan in the past and that that, in our understanding, is not consistent with their obligations as a party to the Non-Proliferation Treaty.

We came to the judgment that the senior officials in the Chinese Government did not themselves know about this particular transfer and, therefore, under the law this transfer was not willfully an act by the Chinese Government.

Nevertheless, the point here is that they made this future commitment. Through the discussions with the Chinese, we have also come to a clear understanding that this policy now of not providing assistance to unsafeguarded facilities will preclude them from any future transfers of ring magnets to unsafeguarded facilities.

This is part of the understandings upon which the public exchange of statements was made. So the point here is that we have been able to clarify and gain assurances about future Chinese behavior; behavior that in the past was of concern for us for the reasons that you've described and behavior that we would not wish to see happen again.

REP. : And Nicholas Burns on May 10th said that, "They have confirmed our understanding that China's policy will preclude future transfers of ring magnets to unsafeguarded facilities."

They didn't say it. We haven't seen them say it. They didn't say it on May 11th and my understanding is that they have not said it and I'd love to see -- and even if they said it, at least to this particular member, you know acquiescing to this type of diplomatic fiction is unbelievably naive, in my view.

And it also puts our children and regional and world peace, I think, at great risk.

MS. DAVIS: Let's test that, Mr. Chairman. This is a public commitment. We will monitor it very closely. We will come up and discuss the --

REP. : Have they kept their previous commitments?

MS. DAVIS: I've described to you that they've kept their previous commitment, with respect to the transfers of missiles, ground-to-ground missiles, of MTCR class that they made with the United States in October of 1994.


They have kept that commitment to the best of our understanding at this present time.

REP. GILMAN: Madam Secretary, I regret that I had to be at a couple of other hearings while this was going on. But I want to welcome you in our discussion on US non-proliferation policy.

And as I've stated on other occasions, no more critical threat facing our nation than the proliferation of weapons of mass destruction and conventional arms.

Whether it's to continue transfer by China, the simmering situation in North Korea, the threat of nuclear leakage from Russia, or the troubling levels of worldwide conventional arms transfer, it's absolutely fundamental that we get this policy right.

And, frankly, I'm somewhat distressed by the administration's policy up till now. I don't see any evidence that fighting proliferation in nuclear chemical and biological weapons and their delivery systems is among our highest national security priorities.

You and I know that fighting proliferations isn't about getting meaningless pledges from governments that don't have a good track record of adhering to earlier pledges.

And fighting proliferation is not about ignoring overwhelming evidence of illegal transfers. Fighting proliferation isn't about continuing to provide subsidies to known proliferaters.

And fighting proliferation is most certainly not about lowering our standards to allow some nations to become members of non- proliferation regimes.

Fighting proliferation is about changing to behavior of bad actors. It's about making clear the repercussions to other governments of what will happen if transfers do occur, including holding out the imposition of sanctions.

Sanctions, of course, are not the end-all, do-all cure for proliferation and we recognize that. But if our non-proliferation policy is to have any credibility, then the add min station must take more seriously our non-proliferation laws. And right now, our administration is not adhering to that principle and is somewhat making a mockery of those laws. And our invitation letter to the administration for our hearing, I asked them to address how our non-proliferation laws, including sanction regimes, could be made more effective.

It's my view that the laws need rewriting. In all too many cases, I believe, that the attorneys and the policy-makers at the State Department have erected hurdles, although not intended by the original authors of legislation in the use to prevent the imposition of sanctions.

Partially, there is a difference in philosophy between the two branches of government. The State Department believes that if it has to resort to imposing sanctions, then its policy has failed.

In one sense, that's true because the imposition of sanctions occurs after a transfer has taken place. But in another sense, this could not be more wrong because a repeated record of failing to impose sanctions leaves a legacy of impotence, and it sends exactly the wrong message.

It sends a message that in this administration's foreign policy priorities fighting proliferation doesn't rank at, or even near, the top. It sends the message that no one is paying any penalties for proliferating.

If sanctions make diplomat's life difficult, you just can't have that kind of carrots in your bag. Certainly, the message we sent to the Chinese is a result of the recent decision by the administration to forego imposing sanctions on China for transferring the ring magnets to Pakistan.

Let's examine what the administration received from the Chinese in return for not imposing sanctions. Basically, we received two pledges. First, the pledge the Chinese would not provide assistance to unsafeguarded nuclear facilities.

And secondly, a pledge that they would agree on ongoing consultations with us, with regard to establishing effective nuclear export controls.

Please bear in mind that we're talking about pledges from a government that has made a number of pledges to us over the years on proliferation matters. And most of those pledges have had to be, and I quote "clarified" because the Chinese seem to have a different idea than we do of what honoring obligations and commitments mean.

With that said, it's the first pledge that really troubles us for, in effect, we agreed to waive sanctions in return for a pledge that the Chinese already made four years ago when they joined the Nuclear Non-Proliferation Treaty. And under that treaty, it's the obligation of any party to forego exports to unsafeguarded nuclear facilities. Even more telling, that pledge fell significantly short of the international standard, the standard to which members of the Nuclear Suppliers Group adhere, which is not to provide significant nuclear assistance to any nation that refuses to accept safeguards on all of its nuclear facilities.

Pakistan, of course, refuses to accept full safeguards, therefore, China can still honor its pledge to us and continue to transfer ring magnets to Pakistan as long as it is to a safeguarded facility.

All that -- conclusions about what programs those ring magnets will likely end up benefiting. The Chinese should be held to the very same standards as other major nuclear suppliers. Our nation should insist that any existing Chinese commitments on non-proliferation should no longer be shrouded in secrecy.

I don't want to be uniformly critical of the add min station, although it may sound like that, at this point. I do want to recognize the success that the administration has had in securing the withdrawal of both tactical and now strategic warheads in the Ukraine, from Belarus and Kazakhstan.

It's my understanding that the remaining 18 strategic warheads in Belarus will be withdrawn to Russia by the end of the year. That's a significant achievement for US foreign policy. And I commend you and your office for your work in that direction.

I know I've given a very lengthy opening statement, but I want Undersecretary Davis to understand just where we're coming from.

Now let me ask you just one or two questions; I'll turn to Mr. Berman. Does Pakistan have an operational M-11 HATF series or other ballistic missiles capable of carrying a 500-kilogram warhead 300 kilometers?

MS. DAVIS: Thank you, Mr. Chairman. I had a number of thoughts as I listened to your opening remarks and some of these I had already shared with your colleagues in the course of my opening remarks, as well as in answers to the questions, with respect to the issue, nuclear non-proliferation of the Chinese.

Let me just come back, if I might, on the ring magnet you shall shoe for a couple of points and then we can -- and then, to your second question.

The important policy achievement through our discussions with the Chinese over their nuclear cooperation with Pakistan is now the public commitment not to provide nuclear assistance to unsafeguarded facilities and a clarification, through our discussions, that we understand that commitment in similar ways. And that it would preclude the transfer of ring magnets, as had occurred in the past, in the future. We will continue to monitor that commitment, but nothing in our agreement would prevent us from imposing sanctions in the future if there is misbehavior by the Chinese in the future.

And clearly in the future, there would be no issue as to whether senior officials knew or did not know about such transfers, because they have now been put on notice and on record about such transfer. So that is what has been achieved.

In the course of our deliberations that lead to this Chinese commitment, you will recall that we suspended the Ex-Im Bank loans for that time, which is what it is that would have been imposed had sanctions been imposed.

As Secretary Christopher has said, the threat of those sanctions clearly worked to help achieve this non-proliferation success. And the fact that sanctions continued to exist offers a deterrent to future Chinese misbehavior.

Those sanctions very much helped us achieve the result that we achieved which would not, of course, been achieved had we simply gone ahead with sanctions and had -- hadn't been able to bring about this commitment.

REP. GILMAN: And this -- Madam Secretary, how did the new commitment differ from the 1992 commitment?

MS. DAVIS: Well, in one respect the Chinese had in their commitments to the nonproliferation treaty given, you know, had taken upon themselves this obligation. But as you said and we said, they were carrying out that obligation in ways that caused us some real concerns including this matter of the transfer of the ring magnets. Now we have gotten a public commitment that clarifies the understanding of what their obligations are and also sets in process the discussions with respect to export controls that will help the Chinese ensure that they can implement this commitment. And we will --

REP. GILMAN: Madam --

MS. DAVIS: -- continue to monitor that commitment so that we will test the hypotheses as to whether or not this public commitment is carried forward or not. But now we have that commitment, and it's now something that we will be watching very carefully in the future.



REP. GILMAN: Madam Secretary, did the transfer of the ring magnets violate the 1992 commitment?

MS. DAVIS: In our view, they would -- our understanding of those commitments and the way we would act under our own commitments of the NPT, we would not be transferring ring magnets. And therefore, it would not be consistent with our understanding. We raised the concerns with the Chinese. We walked them through why it was that we would have these concerns, and they've now committed not to do this in the future. So that's a step. It's a step of a public commitment that's clarified how it is that they viewed the obligations that they took upon themselves in 1992.

REP. GILMAN: So, essentially, the new commitment is not in variance with the former '92 commitment; is that correct?

MS. DAVIS: But there are now assurances that they will carry it forward.

REP. GILMAN: Well, I hope, though, the assurances now would be better than the '92 assurances. Could you answer the question I asked about Pakistan having operational M-11s or other ballistic missiles capable of carrying a 500 kilogram warhead some 300 kilometers?

MS. DAVIS: As you know, Mr. Chairman, that this involves intelligence -- intelligence matters and conclusions that are made by our intelligence community, and I would welcome the opportunity in a closed session to discuss that with you.

REP. GILMAN: Would you be able to make a determination of that in the near future and advise our committee?

MS. DAVIS: What I'd like to do, Mr. Chairman, is offer to you a discussion in closed session about what it is that are the considerations that would go into such a judgment on the part of intelligence community and have the intelligence community lead that discussion.

REP. GILMAN: You're suggesting an executive session to do that?

MS. DAVIS: I'd be happy to do it in executive session. REP. GILMAN: We will then ask you to appear at a closed briefing at a later date, then, to --

MS. DAVIS: I'd be happy --

REP. GILMAN: -- provide that information.

MS. DAVIS: I'd be happy to do that.

REP. GILMAN: Has Pakistan equipped any military unit with these kind of missiles?

MS. DAVIS: Mr. Chairman, I think I'm going to ask to have a similar discussion about such evidence in a -- in an executive session. The important point here, though, is -- and this goes back to an earlier comment that you made with respect to a willingness to carry out the sanctions legislation. That is we review the evidence daily that comes in with respect to the behavior of countries around the world and how it is that they are carrying out the goals that are -- form the centerpiece of -- of this legislation. We are --


MS. DAVIS: -- prepared to -- to make those sanctions determinations. We have not been afraid to make those determinations in the past, and we will be prepared to go through with you the considerations that would lead such determinations. Important here, though, is that we hold to a very high standard of evidence when we make these determinations and come to these judgments consistent with the law for the obvious reasons that any mistake would have foreign policy implications and could effect our economic interests. The fact is, though, that we watch over this daily, and we are prepared to share with you and your staff this information that we have and the considerations that go into the decisions where we have imposed sanctions. There have been a number of cases where we have imposed sanctions and those where we still are reviewing the evidence because it hasn't met yet this very high standard.

REP. GILMAN: Have Chinese technicians helped Pakistan develop its series of ballistic missiles?

MS. DAVIS: Again, Mr. Chairman, I -- I would like to reserve that discussion for an executive session.

REP. GILMAN: When you get this kind of information, though, I would assume an a -- as you indicated -- on a daily basis, so that you can make a determination whether there's any proliferation or not. Do you not?

MS. DAVIS: We do. We receive this daily. The intelligence community then periodically will review the information collected for us and, and provide it in a -- in a more formal statement. But day- to-day, we -- we watch over this. And when the evidence is there that would require a sanctions determination consistent with the elements of the legislation, we would go forward. That legislation covers the whole range of weapons of mass destruction, of missiles. Sometimes that's reasonably complex as some of your colleagues have suggested, but the point here is that we have made the hard choices to take sanctions decisions. You know that because we brief your committee each time this happens, and that we are prepared to do that in the future.

REP. GILMAN: Have you received any information that would lead you to make a determination that China has breached its agreements in providing missile technology or missile preparation to Pakistan?

MS. DAVIS: If I had that evidence, I would make that decision. It would happen at that point in time.

REP. GILMAN: So you don't have that evidence at this point. Is that what you're telling me?

MS. DAVIS: At this moment in time.

REP. GILMAN: According to a Washington Post article of March 8, 1996, "Intelligent officials acknowledge that China has transferred several virtually complete factories to Iran suited for making deadly poison gases, an act that would violate US law as well as as China's pledge to abide by global treaty banning such assistance." Have you received information with regard to that, and if so, what have you done with regard to the -- your response to that transferring?

MS. DAVIS: Mr. Chairman, that had come up somewhat earlier in -- in my presentations, and let me say first that I would, again, wish to comment on the intelligence behind those reports in an executive session. But to then make the policy point that I had earlier made and that is that we have real concerns that Iran is seeking to acquire chemical weapons, the equipment, the items that would go into their ability to produce these within their own countries. We watch -- we pay special attention to that. Any reports that we have, we go through this process that I've just described to you to see whether there have been those violations but more importantly, whether we can find ways, if we get early enough reports, to work with the -- the country or the companies involved to keep it from happening because sometimes, you know, this is happening without the full knowledge of the -- the countries themselves.

So from the policy point of view, we have these concerns, and we would work very hard with the Chinese and others when we hear reports that this may be underway. We have raised these kinds of concerns with the most senior officials of the Chinese government.

REP. GILMAN: Do you know where we've taken up those concerns about the transfer of this kind of a chemical factory to Iran?


MS. DAVIS: Well, let me say we've taken up the -- the general point about our worries about Iran, and with respect to this particular evidence, I'd like to share that with you in an executive session.

REP. : Will the gentleman yield on that point?

REP. GILMAN: Yes, be pleased to yield the gentleman.

REP. : As much as you can tell us can hopefully -- it's more than just wait until a closed session, but what has been their response? Are they denying it that they have engaged in this kind of transfer? Are they saying that the information that we have including the -- the piece by Mr. Smith (sp), Jeffery Smith (sp) of the Washington post is in error?

MS. DAVIS: I defer to an executive session.

REP. GILMAN: Madam Secretary, your testimony indicates that our nation is in agreement with our G-7 partners at, and I quote, "Our policy remains to oppose all nuclear cooperation with Iran and prevent transfers of any nuclear material, equipment or technology to Iran." Then is it our policy to oppose any nuclear transfer, not just what's on the trigger list? Are you saying that all of our European allies have agreed to that kind of an understanding?

MS. DAVIS: Our G-7 partners and allies agree that there should be no nuclear cooperation in -- with Iran. That goes beyond the requirements that each of us has under the non -- the Nuclear Nonproliferation Treaty. So in answer to your question, there is a common view that any nuclear cooperation, even in civil nuclear programs with Iran, should not go forward.

REP. GILMAN: And are you closely examining the nuclear cooperation by Russia and China with Iran?

MS. DAVIS: Mr. Chairman, as I -- I made clear in my opening remarks, we continue to press both China and Russia to end all their nuclear cooperation with Iran even that -- that would be permitted under the nonproliferation treaty and even that permitted under the safeguard of facilities of Iran because we believe that any such cooperation, not necessarily simply the equipment, but also the expertise and the cooperation that goes with civil nuclear programs, can help Iran in what we believe is its clear goal and determination and that is to acquire nuclear weapons. And so we have worked very hard to convince the Russians and the Chinese that, for their own security as well as for all of our security, that they should forego any such cooperation. In each case, they have taken steps to limit it, but they have not gone the full distance. And we would wish that they terminate all their nuclear cooperation with Iran.

REP. GILMAN: Thank you, Madam Secretary. Mr. Berman.

REP. BERMAN: Well, thank you very much, Mr. Chairman. First, thank you for holding the -- this hearing. I think this is maybe the most important issue outside from how California's doing. (Laughter.) What we have to deal with in this Congress, it is instructive to note that at its peak at this hearing, we have about four or five members of this committee to participate. And so I think there's a lot of work to do inside the Congress as well as with the administration to move ahead in this area.

And I -- there's so many areas I would like to pursue, and I'm also aware that we have a panel of outside experts who I have heard from before and would want to get their thoughts on. And so I'll just have to limit myself a little bit to hope that in a subsequent executive session or -- or meeting we can pursue a few more of issues. I just want to take one thing from what the chairman was asking about. As I understand it, ring magnets are utilized for enriching uranium. There is no need for enriched uranium in a peaceful nuclear energy program. Is that a fair statement?

MS. DAVIS: Yes, sir.

REP. BERMAN: And therefore, an assurance not to provide ring magnets to an unsafeguarded facility seems -- is a -- is a funny way to make the assurance which is the reaffirmation of the commitment that was earlier made. In that sense there's no other reason to have ring magnets in a -- in -- in Pakistan other than in an unsafeguarded facility. I get worried that -- that this becomes a technical way of allowing the Chinese to claim they have met their commitments and complied with their assurances by providing something to a facility which was safeguarded and then, subsequently, diverted since it has no purpose in a safeguarded facility. Am I wrong about that?

MS. DAVIS: Well, first of all, you're correct to say that the commitment is not to provide assistance to unsafeguarded nuclear facilities, and as part of that commitment, we have an understanding with the Chinese that that would preclude the sale of ring magnets in the future of such facilities. That's what the agreement contains.

REP. BERMAN: Well --

MS. DAVIS: There's also, you know, the recognition that there -- there could be assistance nuclear facilities that are -- are safeguarded because that's provided under the NPT and -- and so forth, and so on. We, ourselves, don't provide assistance to a country that isn't full scope safeguards. And that's the next step that we would seek -- be seeking the Chinese, you know, to agree to. But this agreement itself, you know, focuses on the problem that we saw, and that was their assistance to unsafeguarded nuclear facilities which has gone on beyond the ring magnets, though the ring magnets have got the most attention.

REP. BERMAN: But, I mean, in the wonderful legal world of alternative and inconsistent pleadings, the Chinese say: One, we didn't know about it; two, we never knew it was going to that facility. And I'm just wondering, at the end of the day, whether they have worked themselves into a situation where they could send ring magnets to Pakistan claiming it was for a safeguarded facility or for a automobile factory or anything and then, essentially, allow the Pakistanis to do what they want for diversion of -- of this export to them. Have we gotten anything with this assurance?

MS. DAVIS: That would be inconsistent with their statement that they won't be providing assistance knowingly to an unsafeguarded facility.

REP. BERMAN: It won't be knowingly.

MS. DAVIS: Well --

REP. BERMAN: It will be -- it will be with your head in the sand. We'll get the -- we'll get the we can't sell to the facility. You have a legitimate buyer, we'll sell it to all legitimate buyers. Then we'll -- legitimate buyer -- buyer forward. My assumption is Pakistan can handle that action pretty easily, and -- or, most any other country could as well. And so, again, that's -- that is -- I think that is a legitimate point of concern. I don't know. And I do think moving to that next step of no transfers to any country of any nuclear technology where there are unsafeguarded facilities would be good. I mean --

MS. DAVIS: Which is what the --

REP. BERMAN: Let's get right down to the heart of it. Let's take our -- one of our closest allies in the world, Israel, a nonsigner of NPT. I'm unaware of any nuclear cooperation between the United States an Israel.

MS. DAVIS: What you're attesting is -- as current US policy -- is current US policy and that we are trying to move the Chinese to that same -- to that same policy. It is a goal.


REP. BERMAN: Well, keep trying. Try harder. I mean, what I say, I say it seriously because I don't know -- I don't quite know what we've gotten so far from the specifics. I hope very much we've gotten something from the general context and -- and meetings on these and other issues that have been dividing us and that there is, in fact, a -- a new day, unlike the earlier new days, but --

MS. DAVIS: A significant step because just now remember that they will not be providing assistance to unsafeguard nuclear facilities in Pakistan or anywhere else and that this would preclude the kinds of cooperation that the Chinese have undertaken in the past. That's an important step.

REP. BERMAN: But the Chinese say, all right, in that the -- I never heard the Chinese say, we transferred ring magnets to an unsafeguarded facility, and we won't do that anymore.

MS. DAVIS: No, but --

REP. BERMAN: They say that we didn't know about it, or it was transferred to a legitimate purchaser for a -- a different unspecified legitimate purpose, and if it was diverted, it was without our knowledge.

MS. DAVIS: An we're saying that this happened in the past. That's the United States' view and that this commitment that they're making would preclude it from happening in the future and that we will monitor it. We'll help them put in the export control systems that make it possible and hold open to possibility of imposing sanctions if there is misbehavior.

REP. BERMAN: All right. Let me shift to a -- a different subject, comprehensive test ban treaty negotiations. It is our desire, as I understand it from what you said earlier, that all countries sign the comprehensive test ban treaty. Is it our position that no treaty should go into effect until all countries have signed it?

MS. DAVIS: Our position as to what will be required for entry into force is still under negotiation in Geneva, and what is --

REP. BERMAN: Our position is under negotiation? No. No.

MS. DAVIS: No. That issue of how it will come out is under negotiate. And I'm not free, right now, to tell you precisely our negotiating position.

REP. BERMAN: Let's talk about -- instead of saying as far as I can recall in -- in recent months in the last year, in the last year- and-a-half, to two countries that I know have tested are -- are members of the -- the declared nuclear powers, are China and France. I'm unaware of any even allegations of testing by India, Pakistan or Israel. Is that --

MS. DAVIS: Right.

REP. BERMAN: I think, and I hear that -- that notwithstanding the fact the everyone sounds like they're committed to a comprehensive test ban, in fact, there are members of the declared nuclear powers group, the -- the five, unlike the United States, that don't really want a comprehensive complete zero tolerance test ban and that this position will be utilized by them to avoid any treaty from going into effect, thereby serving not, in particular, the interests of the United States or of the advocates of the comprehensive test ban or even of Israel, India and Pakistan, but rather, those members of the big five or whatever we call them that -- that don't really want a comprehensive test ban. What's your reaction to that paranoia?

MS. DAVIS: (Laughter.) I wouldn't call it paranoia. I would suggest that we now have the commitment of four of the five nuclear powers made clear in Moscow in April, that is the United States, the United Kingdom, France and Russia, to a truly comprehensive zero yield test ban and language in the treaty -- the scope language in the treaty that commits those four countries to this. Most recently, the Chinese have also accepted the scope language in connection with an understanding that they are proposing with respect to peaceful nuclear explosives. And we are very close, then, to having the Chinese as well accept this language which commits the parties to this treaty to a truly comprehensive test ban zero yield. So there are still outstanding issues, but that one, in my view a very difficult one in the course of negotiations, is close to resolution.

REP. BERMAN: But I could see a wily negotiator totally and publicly committed to a zero tolerance comprehensive test ban treaty and then create the conditions whereby that doesn't come into effect. And I'm just -- I don't think that probably the -- it would probably be good for you not to answer that question, but -- but --

MS. DAVIS: We're looking for a treaty that the words mean what they mean, and that is it's truly comprehensive.

REP. BERMAN: No, I -- No. The words will mean what they mean, but the conditions by which it goes into effect are such that it doesn't go into effect.

MS. DAVIS: The important point here, I think, for the momentum we have and our goal to open the treaty for signing and (the vote of the ?) United Nation's general assembly is now the Chinese commitment to a moratorium on their testing from September. So that sets the stage for -- for this, and the negotiators are working very hard to produce the text that will make that possible.

REP. BERMAN: All right. My final -- I have a lot more questions. I want to ask you this.

I do want to hear the next two witnesses, and you've been here a long time, but my final question relates to the -- have we -- first of all, as I understand it, Israel has never stated any opposition to signing the Comprehensive Test Ban Treaty. Are you aware of that?

MS. DAVIS: They are participating in the discussions and are committed, as the others are, to a successful conclusion. So each country is still working through the details, but we are all committed to trying to make that happen.

REP. BERMAN: Have you detected any change in India's position as a result of the most recent government, or have they not had time to formulate a new position --

MS. DAVIS: It's too soon. It's too soon to be able to say.

REP. BERMAN: What's Pakistan's stated position?

MS. DAVIS: Everyone is looking for a Comprehensive Test Ban Treaty. Each country is --

REP. BERMAN: Well --

MS. DAVIS: -- proposing different parts of that that still have to be brought together. My strong view is that we will have a good treaty, and we will have a treaty that can win support from the vast majority of countries currently negotiating.

REP. BERMAN: These may be unfair questions to ask you in a public hearing to discuss a -- a negotiations going on now, so I'll just leave you with my thoughts on what some people's agendas might be. And you can do with them what you wish. Thank you, Mr. Chairman, of the --

REP. GILMAN: Thank you very much, Mr. Berman. I'd just like to ask a -- a couple of concluding questions. Madam Secretary, is the administration considering, in any way, offering China the opportunity to join the MTCR as a member country? What are the benefits, and what are the risks of bringing China into the MTCR? And if China became an MTCR adherent, either by entering full partnership or by signing a memorandum of understanding with the United States, would China be subject to sanctions under the Arms Export Control Act or the Export Administration Act? MS. DAVIS: Mr. Chairman, we have been working with the Chinese as have the other parties of the MTCR to find a way that China would join and accept the responsibilities and obligations of the MTCR regime, its guidelines and the controls that are associated with that.

So our goal is clearly to bring China into that regime. As I say, it's not simply the goal of the United States, but that of the other parties; indeed, other parties have made trips and have had discussions with the Chinese to help encourage them towards that goal. There's still, in the Chinese mind, some way to go and they have raised some issues and are currently discussing this.

So I think it's premature to say that we're close to success in that regard, but in our mind and in the view of the other parties that China as a missile producer, major producer of missiles, is exactly the kind of country that we would wish to have in the regime and one in which we would want to work hard to bring this about.

Indeed, we've had some expert discussions with the Chinese to make that possible.

REP. SMITH: Are there any discussions planned in the near future between now and January?

MS. DAVIS: There are none regularly scheduled at this point, but again, on our overall nonproliferation agenda, this has a high priority and something that in earlier times has been something committed to by the leaders of both of our countries. I think the important part here is to take note once again that the Chinese, through our discussions, made a commitment not to transfer globally MTCR class missiles, ground-to-ground missiles, globally. This goes beyond the formal requirements that are levied on parties to the MTCR; that is, this is a global ban and something that they committed to in 1994 and are carrying out through this time in 1996.

So that's a very important step towards our overall goals of preventing the proliferation of dangerous weapons, missiles around the world, and I would hope that this committee would understand the important step that this is and the fact that the Chinese have been carrying it out.

REP. SMITH: Would the administration support an exemption? As you know, the sanctions would be precluded if they were to become full members or even, I understand, if they became partners under a memorandum of understanding. We would be precluded from imposing sanctions if it was found that they had violated the proliferation aspects.

Would the administration support an exemption so that we could continue to have that tool available to us should they -- I mean, past is prologue and I think we're fools, frankly, if we continue to think that they give their word, we buy into their word, and then they violate with impunity that word somewhere down the line only to find that more people are put at risk and more countries in the case of weapons of mass destruction are at risk because we bought into what turns out to be a lie. I mean, their record has been an abomination as you know.

MS. DAVIS: The past is prologue and as you know, in the course of our discussions with Russia, Ukraine, Argentina, Brazil, South Africa, we have gone through a very deliberative process to bring them into acceptance of the responsibilities and guidelines of the MTCR, to put into place legally based export controls so that they can implement their responsibilities, and we have worked to understand their past behavior so that the historical record of their behavior was understood before we moved forward to take the step first to support them as MTCR members, and then secondly, to take this further step through our own -- through our own determination that they would no longer be adherent. There would be adherence for purposes of the law, no longer under the threat of sanctions.

So the past as prologue as to what it is this administration has required of countries before we would be at that very far stage. We are very far from that today. Indeed, we have, to even begin that process in a serious way. So I'm not going to suggest that this will be where we end up.

My hope, though, quite frankly, would be that the Chinese through such a process would be prepared to take on those commitments for the reasons that I just suggested. China is a major producer of missiles and you would agree that it is in the interests of Americans and our security that China be responsible within the framework of that regime in carrying out similar responsibilities.

REP. SMITH: With all due respect, with this administration, the threat of sanctions is a non-threat. I've led three human rights trips to the People's Republic of China --

REP. BERMAN: Would the gentleman yield?

REP. SMITH: In a moment. -- on three different occasions. I have met with almost all of the leading dissidents and as was stated so clearly yesterday at our hearing by Amnesty International and other organizations, this administration is seen as a paper tiger. Even the high drama that led up to the intellectual property rights version of sanctions, I didn't doubt, nor did many of my colleagues, that there would be some kind of soft landing at the end of the day because everyone would save face.

But when you come to these weapons of mass destruction and the proliferation issue, human rights obviously is extremely important and affects tens of millions of people living within the confines of the People's Republic of China. But here we're talking about a threat that's spread daily and we seem to be willing to buy into a diplomatic fiction over and over again. They have taken the measure of the man in the White House, in my view, and I've heard this from so many quarters, inside of China as well as outside and their sense is that he is a paper tiger.

MS. DAVIS: I think the facts don't sustain that, with all due respect. That we have taken the step of imposing sanctions on China for its missile activities prior to 1993. We took that important step. Subsequently, the Chinese made their commitment which they're carrying out.

At the time we began consideration of the ring magnet issue, we suspended all export/import loans which would have been what would have been required had we made that determination, and at the time in which we decided to not go ahead with sanctions, we had a firm commitment on the part of the Chinese with respect to a change in their behavior.

So I take exception to the fact that we're not prepared to impose sanctions and I would like to provide for the committee in detail the cases, the specifics of the cases in which this administration has carried out the legislation and imposed sanctions which cover nuclear weapons and equipment, chemicals, missiles, and conventional weapons.

REP. BERMAN: Would the chairman yield?

REP. SMITH: I'll be yielding in one second. I'll be happy to yield to my friend. Just let me point out that in the Washington Post, which has been a friend of this administration editorially, recently wrote, "The administration's China policy is on the edge of incoherence." There is testimony that I have now had the opportunity to read through that will be presented in the next panel that very, very strongly takes this administration to task on the proliferation issue, and I do hope members of the press will stay for that panel. I'll be happy to yield to my friend from California.

MS. DAVIS: Mr. Chairman, I appreciate the opportunity to try to correct the record. Thank you.

REP. BERMAN: Mr. Chairman, I'd just like to -- first of all, we're dealing with a very important issue. I very much think probably when we strip away some of the partisan rhetoric, I agree that this is a priority issue, that this is not just another issue that we should turn our backs on.

I think it is wrong to politicize the issue. To focus on this administration in the wake of the previous administration and their incredible gathering of commitments which were soon broken on missile proliferation as well as on nuclear proliferation, there's a tension between the executive branch and the congressional branch on some of these issues for all kinds of different reasons.

But I just think it's wrong to isolate out a particular -- the fact is, the administration did impose sanctions for violations of missile technology proliferation in '93, and boy, the howls from the US commercial interests when those sanctions were imposed were simply enormous. They were not imposed and suspended; they were imposed.

We could carefully track some of these different stories about which occurred prior to '94 and which occurred after '94. We can talk about Scowcroft and Eagleburger going over there and coming back and our meeting in closed sessions here where reports were given to us which then soon leaked into the newspapers of the assurances that were received from the Chinese and the story of what happened subsequently.

We can remind ourselves that after the Gulf War, Jim Baker coming to this hearing and talking about we now understand the dangers of the spread of not simply weapons of mass destruction, but advanced offensive conventional weapons and we're going to finally do something about it and what happened with P-5 and what an empty process that all became.

So I think we should be issue-specific and with less particular focus on who the bad guys were. The Chinese loved George Bush, we know that. It wasn't because he was tough with them. So when we talk about taking the measure -- and who the Chinese are taking the measure of, I'm not sure love in that case is necessarily a credit, from my point of view, and I just wanted to say all that.

REP. SMITH: I'll just say to my friend, there's no attempt to politicize here. This administration has been in office for three years and when the previous administration was in office, whether it be on Bosnia or other issues, I was an outspoken critic as were many members of my side of the aisle on the substance of the issues and that's what we're here debating.

You know, when we had a situation where in October of 1994 the sanctions were lifted, that sent the wrong message because again, a promise was made and promises made by the Chinese dictatorship in Beijing are very soon promises broken, and I think that kind of realism has to -- we have to come to grips with that and this administration seems not to be able to do that.


REP. BERMAN: If you'll just yield, I'd suggest, and I don't know if this is your subcommittee's jurisdiction or if it's full committee jurisdiction. I guess it's full committee jurisdiction now. There are some very fascinating and important questions. The failure of the countries that all got together on missile technology control and developed a regime to implement multilaterally meaningful sanctions, the failure on missile proliferation, the general failure to establish some focus on Iran -- we just had a debate about that yesterday on the House floor -- where is the -- (inaudible) -- successor agency and what's its status and what is happening multilaterally?

These are some things we should be having hearings on and getting on to real specifics. We know, I think we all know the defects of US and Western efforts to deal with Chinese proliferation questions and I think it's right to harp on it, but there are some other serious issues, too, particularly where are our friends who we allied with in the Cold War who we maintained the massive defense burden for, who we are positioned in the Persian Gulf to protect? Where are they on some of these issues as well? I think that's worth pursuing.

MS. DAVIS: Could I just correct your own record with respect to the 1994 Chinese agreement on missile transfers, which has been carried out by the Chinese, to our understanding, to this point? So the sanctions were removed at the time they made this commitment. We monitor this closely and I can tell you today that they are carrying out that commitment to not transfer globally ground-to-ground missiles with the characteristics covered by the MTCR.

This is not all that we would seek in the future, but at least for the record, that's what's happened.

REP. SMITH: Thank you, Secretary Davis, for your testimony and I'd like to ask the second panel to come forward. We do have some questions we'd like to submit for the record, if you would be kind enough to respond to those? And I do ask unanimous consent that a number of articles be made a part of the record. Without objection, it will be so ordered. And, Secretary Davis, we will look forward to a closed session if we work out a time and date of mutual agreement. Thank you.

Our second panel I would like to invite to the witness table, beginning with Henry Sokolski, who is the executive director of the Nonproliferation Policy Education Center, a Washington non-profit organization founded in 1994 to promote better understanding of strategic weapons proliferation issues for academics, policy-makers, and the media.

Mr. Sokolski teaches graduate school courses on proliferation at Boston University, its Institute of Law and Politics in Washington, and is currently completing a book on proliferation, "Armageddon Shadow," for the University of Kentucky press. From 1989 to 1993, Mr. Sokolski was a political appointee of the Bush administration and served as deputy for nonproliferation policy in the Office of Secretary of Defense. He has a very extensive background which I would ask be made a part of the record.

Michael Krepon is president of the Henry L. Stimson Center, a Washington-based think tank, specializing in arms control and international security problems. The Simpson Center's motto is "Pragmatic steps towards ideal objectives." Mr. Krepon's substantive areas of interest are nuclear arms control, disarmament, and missile defenses, chemical weapons, proliferation, South Asia, and the promotion of confidence-building measures in regions of tension.

During the Carter administration, Mr. Krepon worked for three years in the US Arms Control and Disarmament Agency directing defense policy and program and reviews. Prior to that, he worked for four years on Capitol Hill as legislative assistant to two Democratic members of Congress. He is the editor of -- author or editor of seven books and again, I would ask that his very extensive background be made a part of the record.

Mr. Kraemer is a former -- Mr. Sven Kraemer is a former senior United States government official and a nationally recognized expert on defense, arms control, and foreign policy. He's the president of Global Challenge 2000, which he founded in Washington, DC early in 1992 to provide independent assessments for key government policy- makers, the media, and the business community and private organizations.

His 25 years of service began in 1963 during the Kennedy administration with the secretary of defense and as a member of the civil service. During the Reagan administration, he served until late 1987 as National Security Council staff director on arms control and he participated in some 40 National Security Council meetings representing the NSC in that regard. And finally, he's worked for a number of members of Congress and I ask that he, too, his background be made a part of the record.

Mr. Sokolski, if you could begin?



Executive Director,
Nonproliferation Policy Education Center

MR. SOKOLSKI: Mr. Chairman, thank you very much for inviting me to testify here today. Looking at the clock and the chamber, I am going to take the draconian measure of reducing my statement by 50 percent. So instead of reading two pages, I will read one page. Try to keep it on point.

I had been asked by your staff to speak about what Chairman Gilman was speaking about in his statement which is general nonproliferation policy in the US and its relevance or applicability in the case of China and what could be done to enhance the effectiveness of that policy.

I suppose if there was an overview statement that I would make in answer to that tasking, it would be this. If you did nothing else but stop direct US government subsidies to known proliferators, particularly in China, and demanded that the law be followed, it would be a major change for the better.

Beyond that, it would be useful, and I think constructive, to try to focus congressional attention on what is being done on the US government, and there are some efforts, to not just manage or react to proliferation, but to anticipate it and try to diffuse it before it becomes a problem.

What I'd like to do now is talk about the case of China and how these general points I've just raised might apply in specific. In the case of China, one of the first things that would be needed, and I think from the comments on both sides of the aisle today, I sense that there is an eagerness to look into this, an enforcement of US nonproliferation laws.

I can tell here from this chart that you folks are very alert already to the need to focus US government's attention not just on the ring magnets, but on the missile transfers and chemical transfers and the variety of laws that have been violated or at least not implemented, and I want to be clear on that point. It is one thing to complain of the executive branch in that it has not chosen to implement the law the way you might want; that is to say, to sanction China.

It is another thing, however, entirely when the law requires the executive branch to at least give you briefings and notices of waiver, and it chooses not to. I think that is a problem because the way you folks in the Congress learn about much of what is sanctionable, unfortunately, is through the press. That is not the way it should be done.

It seems to me at a minimum, any executive, as I understand the current law, is required to at least give you notice that it intends to waive sanctionable activity. I think there is far too much reluctance, and I would agree with Congressman Berman, this is an executive problem. It's getting worse, though, Mr. Berman. I think it's not getting better, but I'm not sure it's because of partisan reasons. Yes, well, politics is a downhill proposition I'm told.

The scrutiny of what is sanctionable and what is done with that intelligence is ultimately something that is critically an oversight function of the Congress. If you do not do it, the law will not be upheld and the policy will deteriorate. And I'll be candid. I think you can do a lot better. That you're holding this hearing today is heartening because this is one of the most focused hearings I've been at. The questions have been uniformly good and better than I've seen previously.

In that regard, though, I think it's important to go down the list and also try to find out about the things that are not in the newspaper. I must tell you, the executive branch -- and I know this from my own duty in the defense department -- keeps a very careful record of all sanctionable intelligence and it tracks what happens to that. Someone who has the purse strings needs in camera to review that at least after the fact. That that has not happened is something which is regrettable and I can assure you, when you see this record, if you are depressed now, you haven't begun to be as depressed as you should be. But you need to do that.

Now, that leads to at least another simple thing. I think at a minimum, in the case of China and arguably in some of these other proliferation cases, it really is bad form to allow a continued direct US government subsidy to known proliferating entities in China. You know, sanctioning would be great, but at least don't subsidize them, I think is a good rule of thumb.

Now, this may sound kind of astounding or flip, but it's not. Right now, the Department of Energy funds Westinghouse to do a paper reactor research program called the AP-600. Right now, the Department of Energy has invited six nuclear engineers from the very entity identified for having sold the ring magnets to come and help work on this taxpayer-funded project.

To my knowledge, the invitation has not been suspended. It is still in force. I don't believe these folks have yet come; that might create a bit too much news. But it has not been suspended.

In addition, Undersecretary Davis talked about XM bank guarantees. Well, indeed, there are $800 million worth of them and what are they for? Well, once again, to complete reactor construction with the very same entity that sold the ring magnets. To my knowledge, those XM loan guarantees which are backed by US taxpayers, are not suspended. I don't know what their status is, but that would be worth finding out.

Also, and this one's a little tricky, because of the massive amount of computer decontrol, there is, I am sure, a fair number of very high end, US-specific, unique computers going to strategic weapons testing and development facilities in China. You might want to find out if that's true. I'm pretty confident it must be. REP. SMITH: High end? You mean high end lack of control.

MR. SOKOLSKI: What's that?

REP. SMITH: High end lack of controls is what you mean?

MR. SOKOLSKI: High end computers that are no longer controlled in the fashion they used to be. Now, they're supposed to, under the new procedures, keep track after the fact, after they've been shipped. It would be useful to know whether any of these things have ended up in places that would make a 60 Minutes program that you don't really want to have a hearing about if you could avoid it.

Finally, another thing to keep in mind -- and this is new. Someone pointed this out to my task force on Nonproliferation Policy Reform which Congressman Berman has graced the letterhead and I'm asking the chairman if I could place the executive summary of those recommendations in the record.

REP. SMITH: Without objection, they will be.

MR. SOKOLSKI: Thank you very much. One of the things that was discovered is that the Chinese government has floated bonds on the US bond market and the Securities and Exchange Commission, in a pro forma fashion, approved these. Now, it could be that they're rather benign and that they're for small companies, perhaps state- run, but they're benign.

On the other hand, it would pay to be very careful here. Do you want Americans who are planning their retirement to fund proliferating entities of the People's Liberation Army? I don't think so. By the way, this is a financial sanction and these are high tech targeted sanctions. They are not general trade sanctions and many of the criticisms directed against sanctioning or general trade sanctions do not apply to these.

Now, second of all, once you get beyond enforcing the laws and perhaps ending direct US subsidies to known proliferators, I think it would be useful, and this came out in your presentation, Mr. Chairman, that you need to place a moratorium on making proliferators members of nonproliferation regimes. In China's case, the US has clearly undermined the leverage it once had to sanction those helping China modernize its strategic rocket forces, Russia and the Ukraine, and over one of the most significant consumers of Chinese missile technology, Brazil.

The reason why is that the US made Ukraine an MTRC adherent for purposes of law and Russia and Brazil full members. As such, these nations cannot be sanctioned under US law. This recommends, and indeed the task force report recommends, two things: Changing US law to eliminate sanction exemptions for nonproliferation members and adherence, and making sure the executives do not try to fix Chinese proliferation problems by making China adhere, or for that matter, any other proliferator adherent.

This then brings me to the fourth in general prescription. I think it would be very useful for this committee and Congress in general to make an effort to see what it is the executive is doing to anticipate rather than to react to proliferation threats. Certainly congressional focus, and I'm sure the other two witnesses will focus on it quite a lot, has been on developing missile defenses and I think that focus is altogether sound.

But I think this focus needs to be complemented by at least as much discussion and debate over our nonproliferation policies which too frequently, I believe, accelerate or allow the very threats we must defend against to proceed. And China, frankly, may be an example. I think it is. Congress has been briefed, after all, by virtually every agency and official responsible for managing proliferation crises after they break out, but by virtually none of those responsible for anticipating and defusing these problems in advance.

The Central Intelligence Agency's Integrated Regional Threat Group within the Office of Weapons Technology Proliferation and the Defense Department's Office of Net Assessment are perhaps the only places that work on these kinds of anticipatory intelligence issues. Yet Congress, to my knowledge, has never asked them to testify. This, I think, sends a dead wrong message that reacting to proliferation after it's realized is more important to Congress than anticipating and defusing it and I know that's not your intent.

Finally, and this, I think, is perhaps the single most important thing in my testimony, and I think I'm right about that, but you will have to be the judge, it is desperately necessary that Congress begin to do much more routine budgetary oversight of our fight against proliferation. The number of officials, at least 600 as I was able to discern from discussion by the folks at the Office of Budget and Management or Management and Budget, in offices dedicated to finding proliferation full-time over 60, in fact, are growing so fast that the executives spend thousands, probably hundreds of thousands, annually simply to getting notional directory, which you can get, of who's who in nonproliferation.

Congress should ask the GAO to detail who's spending what and then routinely as the executive to explain what we're getting for our money. In specific, there are agencies dedicated to finding out what's sanctionable. I think they're doing a very good job, by the way. I don't fault them. It's the policy demand for this that's always difficult because the executive branch, by its very nature, does not like to act against foreign nations.

I think you'll do much better in teasing out what's going on if you can somehow get the appropriators eventually to hold the money on specific line items hostage to some explanation of what's being done with this good intelligence. That concludes my remarks.

REP. SMITH: Thank you very much for your testimony. Mr. Krepon.



President, Henry L. Stimson Center


MR. KREPON: Thank you, Mr. Chairman. With your permission, I'd like to insert my remarks and attachments into the record and I'll be very, very brief.

REP. SMITH: Without objection, your full statement and any attachments will be made a part of the record.

MR. KREPON: Thank you. We live in a world of paradoxes, so I'm going to give you some paradoxical advice in dealing with this very serious problem that you and your colleagues have identified. My advice would be to view the range of solutions available to you and to our country in its entirety. We do have a lot of tools to apply to this problem. That's point number one.

But then also disaggregate the threat. So look at the solutions as a whole and then disaggregate the threat. Let me explain what I mean. The solutions. We have a State Department, we have an intelligence community, we have an arms control agency, we have export controls, we have strong military forces. All of these solutions have their deficiencies, so we need all of them because the problem is so serious.

The very -- I look at the problem in terms of line of defense, lines of defense, and the front line of defense is early warning, being able to work collaboratively with other countries once we identify a problem, and all the rest of it. The Nunn/Lugar and soon to be Nunn/Lugar/Domenici problem -- excuse me -- solution, we don't spend a lot of money on it and it does some very useful things.

The Nunn/Lugar focus in parts in Nunn/Lugar as of this month, 3,373 warheads have been returned to Russia from other states of the former Soviet Union; 1,430 warheads have been removed from deployment in Russia; 800 launchers, bombers and ballistic missiles that carry nuclear warheads have been cut out, 800 of them.

Now, if we were to deploy a defense, a ballistic missile defense of our homeland sufficient in size to take out 800 of these launchers, we would be spending tens of billions of dollars and it would be a very ineffective defense because it's awfully hard to take out thousands of warheads that are coming at us. There is no solution to this problem. So view the problem as a whole. There are lots of possible solutions out there and we need as much creative help and resources as we can get to address the problem.

Now look at the threat and let's disaggregate it.

Almost every person who comes before this committee starts with the premise the sky is falling. I don't believe that's true. I believe that there are -- there's been a lot of progress in a lot of areas. Other parts of the problem are extremely serious and severe and they worry me.

The seepage of fissile material from the former Soviet Union is a hugely worrisome problem. Chemical weapons as a means of terror, we have seen our first precedent in that regard, the Tokyo subway system. There's a lesson there. Biological weapons can be used as a weapon of terror. These are the biggest parts of the problem and their means of delivery are not a ballistic missile that travels thousands and thousands of kilometers.

The essence of the problem, Mr. Chairman, is the truck bomb right now. It's not the ballistic missile that can land on our country. And if you look again and disaggregate the problems, you see that the ballistic missile threat to our country is the least of our problems. It's the most remote of the problems that we face. This isn't just me speaking. It's the CIA speaking, it's the intelligence community speaking. Not just now, but in the past.

It's BMDO speaking. It's the Department of Defense speaking and I hope you take their testimony. I've attached to my testimony a simple chart, and you'll find it's about two-thirds of the way into the testimony. This is a chart prepared by the Ballistic Missile Defense Organization for the undersecretary of defense. This is what it looks like.

And the vertical axis is the number of missiles that threaten our country or our forces or our friends and allies abroad. Now, that axis -- you don't have a number on it because this chart would be classified if it had a number on it. But let's assume that each one of these blocks constitutes 1,000 ballistic missiles. Okay?

So most of the missiles that you see that currently threaten our friends and allies are on the far left-hand corner of this chart. These are very, very short-range missiles. These are SCUD missiles. And this is where it looks to me like 90 percent or more of the threat lies. If you look at the rest of the chart, you see a very small number of missiles. If you add them all up, there may be 1,000 of these missiles, 1,000 of them. That's out into the future. That's out past the year 2010. This Congress could easily spend $40 to $60 billion over the next 15 years to address these 1,000 missiles. That's $40 million to $60 million per missile. That's according to CBO estimates. This is for future missile defenses. So the reason why I ask you to look at the range of solutions as a whole and to look at the threat in a disaggregated way is because you have two very important responsibilities. One is to defend our country and our allies and our friends abroad from weapons of mass destruction, but you also have the responsibility to protect the taxpayers' wallets.

And if you put $40 to $60 billion over the next 15 years to deal with 1,000 potentially hostile missiles that can threaten our friends and our allies, I think that's not a good allocation of resources. Now, we haven't even begun to talk about national missile defenses, I guess the threat which the intelligence community describes as remote and unlikely. Now, we could be spending tens of billions of dollars more on that particular problem.

We need effective defenses. They come in many, many forms, but the primary task of defenses, the real threat that's out there is to our friends, our allies, and our troops that are deployed overseas. That's the threat.

Lastly, Congressman Berman, you have followed the Test Ban Treaty negotiations for a very, very long time and I know you have a strong personal interest in the outcome. You deserve a better explanation of the state of play than you got from the previous witness.

Here's where we stand. The four nuclear weapons states who are partners to this treaty have said to us, "We're not going to join unless the three threshold states are also depositing their instruments of ratification." So there has to be our five nuclear weapons states plus the three. The US government's position has been that we have to have the five. We'd rather not extend it to the three threshold states, but if that's what the other four nuclear weapons states demand, so be it. We've tried to convince them otherwise; haven't had much success.

Most people who know something about India have come to the conclusion that it's very unlikely that the government of India will deposit its instrument of ratification. India has stayed outside of the nonproliferation treaty since 1963 -- excuse me -- 1968 when it was negotiated and 1970 when it first took effect. So that's 26 years.

We may well be looking at a treaty that is completed, but that remains forever in limbo or at least remains in limbo for a very, very long period of time. It's not clear to me whether or not the administration has gotten commitments from the other four, but they are prepared to attend a signing ceremony for the Test Ban Treaty in the absence of the threshold states.


As I understand international law, which is not very well, a treaty that has been completed but that remains unsigned and unratified does not provide a very firm set of constraints against the resumption of nuclear testing. So I am concerned about this situation. It's a very hard situation to turn around because it requires the president of the United States to pick up the phone and talk to his opposite numbers in the other nuclear weapons states.

In at least two of those nuclear weapons states, Russia and China, are not very eager to complete the negotiations or they say they are prepared to do so. Great Britain and France who are our friends and allies who we are helping out a great deal in this matter have not shown a whole lot of interest in helping us out on the entry into forced question. So we have a problem and I have grave misgivings about completing this treaty in such a way that it does not go into effect, but we do need to complete this treaty. Thank you, Mr. Chairman.

REP. SMITH: Thank you very much. Dr. Kraemer.



President, Global Challenge 2000

MR. KRAEMER: Mr. Chairman and distinguished member, and I really truly wish there were more here on this important issue, strategic threat to proliferation to the United States is mounting. It comes not only from a handful of infamous rogue regimes, it also comes from Russia and from China which its chief suppliers and are themselves rogues in supplying these rogues.

And sadly, it also comes from the neglectful policy of this administration, not only in not enforcing sanctions and laws, but also in providing the wherewithal, in some cases, of technology transfers to China in particular which goes on to third countries. It's not just that we're giving computers to China so that it can simulate nuclear tests, and we dare to call this counter- proliferation -- that was Mr. Perry's offer of October 1994 -- but China readily gives what they buy or steal from us, sometimes under taxpayer subsidies in some People's Liberation Army businesses that they do in their joint ventures, but they give this handily to others.

General Scowcroft said they'll sell it to anybody that gives them money, and I think part of that is a strategic purpose, especially with Iran and they have surrogate reasons for wanting to heighten the danger points in the Middle East. Perhaps they see Iran as going after Saudi Arabia, for example, and the oil resources.

So this problem is mounting. In the very few minutes that we have been given as critics of the administration, at least two of us, to make our presentations, I would like to summarize a very extensive statement that I'm providing for the record. I would also encourage you to have detailed hearings on some of the points that will be raised, and I wish that you would encourage the creation of a team being of independent experts to help keep all of us informed and honest and honorable in what is a major challenge to ourselves and to our children, and it is a challenge which is here now. It's a clear and present danger. It's not something 8 or 15 years away. The dictators with whom we deal in Russia, possibly in China now, and throughout the world that we are asking to sign on to agreements are different from the Democrats with whom we deal, and yet, our policy does not distinguish those at all. Our policy also does not distinguish, since we take promises for granted -- our policies do not distinguish between the indigenous developments that might threaten us early and the transfers of technology and weapons that could accelerate those developments.

In my prepared testimony, I walk the committee through the official estimates of the Bush administration and the initial estimates of the Clinton administration as to when the American homeland, not just key interests and forces overseas which are already threatened by shorter range missiles, might be threatened. The testimony of Dick Cheney, the secretary of defense, in the year before Mr. Clinton came to power suggested that the threat was there within this decade.

Jim Moseley (sp) and Mary Gershwin (sp), senior CIA officials, in 1993 had a threat picture which included accelerated risk of transfers of technology, which brought us right around the time of the turn of the century. All of this, as you know as well as anybody, was walked back in the last year into a rather fishy estimate. The fishy estimate is fishy because it excluded Russia and China as threats, which is an extraordinary jump since we don't know -- (audio break).

Mr. Clinton keeps saying that they're not targeted at us, but as he knows, it takes a matter of seconds to retarget them. So, of course, they are targetable at us. If Mayor Barry of Washington, DC told me as a citizen that the guns of Washington were not pointed at me or my children and I asked where the guns were and where the bullets were and he couldn't answer that, I would be thinking it would be a very foolish notion.

If I was told that the Nunn/Lugar monies and the implementation of the START Treaty had not actually dismantled any warheads and only very few missiles and yes, some old launchers, and that all of the missiles and warheads coming in from Ukraine and Belarus were only adding to the Russian inventory, then I would not say that that threat is reduced.

Also, if you exclude Hawaii and Alaska from the United States and if you exclude the transfers of technologies that can accelerate indigenous threats, then you are cheating on your estimates. So you need a different estimate.

Now, a particular problem has arisen with regard to China and that is part of the focus of your session today.

My prepared statement raises ten specific issues with regard to China which are troublesome and which, in the proliferation area as in the trade and human rights area, and I believe these are interrelated, requires that we not treat China either in terms of business as usual or as children whom we slap on the wrist and ask to make new promises, but we don't treat them as adults who should be, as a standard practice of a developing country, of a developed country work honorably with the international diplomacy and in their agreements.

That's also why the connection between the absence of democracy in China and their surprising, perhaps surprising breaking of promises abroad, is so direct and why you're so correct, Congressman Smith, in challenging and standing with the human rights reformers. If they had democracy, which is the best arms control there is -- it's probably the only effective arms control is democracy because people who are democrats don't suppress their people and use weapons against them. They don't cheat and break contracts. They have checks and balances. They have elections.

They are naturally peaceful towards the outside world. China is not a democracy. Its defense programs, its proliferation programs are not under democratic control. The Congress has no right to look at the budget there or the excesses or to imprison people who are breaking laws.

So first of all, it's not a democracy. Secondly, they have a very active proliferation program. Experts here have spelled that out. That includes especially Iran and Iraq and Libya and Algeria and Pakistan. And I would consider the Iranian infractions the most serious. Pakistanis perhaps, but the Iranians seem more wild and uncontrollable in how they might use the weapons, and they have in the past shown a particular hostility towards the United States.

There's also the question that the Chinese are a militarily building power. They're building strategic resources -- strategic weapons systems, new missiles and so on, with our technologies and with technologies they acquire from elsewhere, and they're building new conventional forces and highly mobile forces partly, they say, according to the document, for internal security, but also for external security.

They're building bases in the Burmese area. They've committed acts of war against Taiwan. They are already indicating what they will do in Hong Kong and what they will do in Macau. The weapons that they are acquiring from different sources are also weapon systems that they seem to be talking about in their neighborhood and possibly they would transmit some of those to others.

The Chinese record also is very bad in terms of compliance, as you say, with the international obligations that they, I believe, are assigned as part of the UN charter on human rights and on the political rights that should be given to their people. And insofar as we are serious on that issue, and I would conclude with that and leave more detailed discussion of specifics to my paper, when we exclude that, we are taking away the single greatest hope for reform and progress in China and for a peaceful collaborative world, and therefore, we are also taking away the pressure on proliferation in a very, very direct way.

Just a final note stimulated by my colleague's statement on missile defenses, right now, any Third World country with a short- range missile cannot out Washington with that missile by putting it on a boat in Chesapeake Bay, and we have no defense against that. We can have submarine threats, we can have craters.

The short-range missiles which General O'Neill of the BMDO in the past year said 8,000 are an immediate threat. We do need active missile defenses. Two-and-a-half million a year will provide the upper tier aegis which is mobile and provides, in fact, some strategic possibilities, also. To rely on a piece of paper for our defense, a broken treaty -- it's not even a legal treaty because there's no successor protocol to it, but it was broken by the Russians in 1983 -- is ridiculous.

We need tough diplomacy, tough sanctions, arms control agreements with -- (inaudible) -- effective verification, and we need, in case deterrence fails and in cases of almost always happens with arms control agreements break down, we need preemptive capabilities and we need active defenses. We should accelerate them and I believe that would help reduce the incentives for proliferance to acquire strike systems that can launch a strike in a matter of seconds and minutes and knock out entire cities.

So if you want to speak about saving money, please save our cities. It's a lot less expensive to have a $40 million missile defense than to lose a city where -- (inaudible) -- not to mention the citizens in it. I thank you very much for this opportunity.

REP. SMITH: Dr. Kraemer, thank you very much for your very extensive testimony and I've read through your written remarks and they're very, very strong and very well documented. I'd like to ask you, you made the point, and all of you, if you would respond, you sat through Secretary Davis' testimony earlier if you had any comments on her presentation.


But you make the comment, Dr. Kraemer, that the dangerous and ridiculous lengths to which the Clinton administration has gone in its efforts to disguise the proliferation threat apparently so as to paint its counter-proliferation and arms control efforts at successes and to block US strategic defense programs.

And then you go through a whole series -- as a matter of fact, I'm going to ask, and I know the administration still has people in this room, to respond to your very serious charges because, I mean, we're talking about tens of millions of people regionally and around the globe being put at risk if they're playing games with these very important issues.

And again, and having gone through this yesterday and I appreciate your comments on the human rights issue because, you know, is it naivete on the part of the administration? Is it a matter of just whatever gets through the day so you have another day to barter and broker? Is it that there's a lack of concern about these issues, a lack of understanding? Why would they want to disguise the very serious and compelling threat, as one of our witnesses said, clear and present danger to the United States?

MR. KRAEMER: Well, let me just mention one recent example, the SS-18 ICBM issue. The administration last fall signed a space launcher sales agreement with Russia which permits Russia to its huge amendment to the START Treaties, permits Russia to sell stages of its intercontinental ballistic missiles anywhere in the world, stages. Of course, the stages are easily assembled.

That means the SS-18 can leave Ukraine or can leave Russia and be sold to Libya, to Cuba, to anybody, to China. The Chinese were caught trying to get it this February in Ukraine and again in May, probably at very high level collusion. These are not -- (inaudible) -- running around. The SS-18 technology going anywhere in the world gives an immediate ICBM capability, intercontinental capability, but that agreement was treated as a great achievement.

REP. SMITH: What are you saying? What agreement allowed --

MR. KRAEMER: The September 28th space launcher sales agreement signed with Russia. It's not been properly or, I think, at all reviewed by the Congress. It should be. It's one of many so- called successes. In this case, it's an amendment to a treaty that was treated by the administration not as an amendment, but as a sort of an executive --

REP. SMITH: Aren't there a whole bunch of things on a missile technology list on an annex that are prohibited? Why are you -- I mean, there's no Category 1 items in this area? You're saying those were all obvious --

MR. KRAEMER: We have many contradictions in the policy. You cannot find that agreement and pretend that you are against proliferation. There are other agreements. The Nuclear Nonproliferation Treaty should have been strengthened rather than extended unconditionally and indefinitely. It has no teeth.

Henry Sokolski is one of those that points out that half the clauses in the treaty promote the proliferation of peaceful -- yes, peaceful technologies in nuclear systems, but by chance, some of the peaceful things have dual purposes and they invite -- they raise the expectations of what can be shared and it is not an inconsiderable defense by India or by Pakistan or anybody else or by Iran or by Russia when it deals with them to say, "We are invoking actually. We're practicing the MPT when we share nuclear technology."

So that should have been tightened and corrected. Most of the agreements, especially also some of the newer legislation which the General Accounting Office has shown to be, the monies largely wasted and going to corrupt purposes, those things should be tightened so that the taxpayer gets his money's worth or when we talk arms control, we mean arms control, not an excuse for pieces of paper that we know anybody can sign, but not everybody will implement and they don't have any penalties to pay.

I invite you to read my testimony. I'd be glad to come up and spend more than the seven or ten minutes assigned to me on that subject because I believe it is extremely critical.

REP. SMITH: You know --

MR. SOKOLSKI: Mr. Chairman?

REP. SMITH: -- Dr. Kraemer, we will take you up on that. As a matter of fact, our subcommittee has jurisdiction over the Arms Control and Disarmament Agency and I think it might be very useful to have, you know, almost like Part 2. This is a full committee hearing because Mr. Berman and I were talking about it earlier. There has not been enough attention on the congressional side for many, many years given to these issues. So we'd like to do that.

MR. SOKOLSKI: Mr. Chairman, I would like to provide for the record the two-page text of the joint statement that Dr. Kraemer is talking about. What has happened here is an agreement that prohibits Russia from selling missile stages or complete missiles to any other country that can then turn them around to point at us. What this agreement does is it permits Russia to provide launch services to other states, but never, never to let go of missile stages or entire missiles and sell them to other states.

So if a country like say Brazil or another country wanted to use a Russian launcher to launch a satellite, that country, Brazil has two choices.

It could go to the Russian federal republic and provide the satellite to the space launch vehicle and it gets launched, or Russia could take the launch vehicle or any part of it, take it to Brazil, retain control over it at all times and launch the satellite there.

The latter has never occurred. While it may occur in the future, it hasn't happened. This is the nature of the agreement that was reached, and if you could read it, you will see that it is protective of our national security interests.

MR. KRAEMER: Mr. Chairman, if the guarantee of Russian control is firm, then it either means fuller basing of such systems by Russia, which is also dangerous. We would not want Russian space launch facilities necessarily in Cuba, for example, and if the -- but even if the control is assured at any given moment, what happens if there's a coup? What happens if those troops are surrounded? What happens if the so-called assurance of control is gone?

Anything that can launch a peaceful satellite into space can, of course, launch a warhead into space. So this is something that should have been examined. A piece of paper is one more piece of paper. It looks good in part. It has not been examined. In fact, it leaves us vulnerable and like the CFR Treaty where we just changed the Conventional Forces in Europe Treaty. We just made huge concessions to the Russians to the great consternation of our Turkish and Norwegian allies and of the Balts. This was defended as a great success because it got the Russian military off the hook. Why should we have gotten them off the hook?

REP. BERMAN: Mr. Chairman, we have such little time and this is not a conventional arms control hearing. It's a proliferation hearing. I'm just wondering if we can focus on proliferation issues?

REP. SMITH: Okay. We do have another two subcommittees waiting to use the room momentarily. I have several questions. I'll only ask one additional question and then yield to my friend from California. Earlier today, Secretary Davis suggested that the Chinese officials did not know about the transfer of poison gas factories to Iran, and we've heard those kinds of excuses given previously to other transfers, that somehow the Chinese hierarchy was not involved.

I'll never forget on one particular human rights trip that I had in the early 1990s, I met with Li Peng for one hour, along with Congressman Frank Wolf. We asked him about the Tiananmen Square students and activists. We asked about political prisoners. He denied that there were any political prisoners being held. We asked about the Gulag or Laogai, whether or not that existed in terms of exporting articles and that was not happening.

We asked him about coercion in population control which there's mountains of evidence of women being forced to abort, a crime against humanity according to the Nuremberg War Crimes Tribunal. He denied that that was happening at all. We asked him about religious persecution. He said that nobody was in prison because of their religious beliefs.

We pointed out the Tibetan Buddhists and we also pointed out the -- we pointed out a number of important issues. Everyone of them was denied categorically. The same is now happening in the area of proliferation. It doesn't take a rocket scientist to see that there's a pattern here.

How do you respond to Secretary Davis' testimony earlier today regarding these issues, that they just say, "We don't know"? Mr. Sokolski?

MR. SOKOLSKI: Yeah. This also goes to the previous question. I think what you're seeing in nonproliferation policy is either a progression or regression that has been going on for some time, it's just getting worse, and that is the focus on intent. Did they mean to do this? I'm reminded of the Federalist Papers' admonition that of man's intent, one can debate. But of what they do, there is little dispute.

And I think most of the nonproliferation regimes that have been effective have focused on limiting capabilities, and as you move towards saying, "Well, SLVs are okay because they're peaceful, the uses of rocket technology, and if they intend to do it peacefully, that's okay."

With the case of China, did they really know? Did they mean? At some point, the reason you have laws on the books is congressional reaction against this tendency of the executive to make allowances and to try to walk the problem back by getting a commitment on intent. That is the reason why we have the Nuclear Nonproliferation Act of 1978. That is the reason why you have the Missile Provisions of 1990. It has always been a reaction to some horror story or stories that you say enough.

So, I mean, you don't have to answer the specifics to know the general point. What Congress must do is notice when it's gone beyond enough and demand specific action.

MR. KRAEMER: Sir, just very briefly. The Defense Intelligence Agency, General Clapper, former director, and other officials there have testified that every single Chinese business, especially those involved in joint ventures, have the active participation of the People's Liberation Army. Not only that, but they're tied in with the leading parties and clans from Beijing.

The company that brought 2,000 AK-47 assault rifles into San Francisco offered Stinger missiles and grenades with an obvious intent to stir up in our inner cities some problems with links to the son-in- law of the premier.

If anybody in this room believes that any Chinese official would take the risk of incurring the wrath of the son-in-law of the premier or that any of the other companies involved in the ring magnets and so on, which were clearly run by party officials of the highest caliber in People's Liberation Army, then I think they're really fishing for straws. So the denial by the Chinese government is totally, totally refuted by the inter-connection between all of the senior larger companies and the senior officials.

REP. SMITH: Mr. Berman?

REP. BERMAN: Yes, Mr. Chairman. I'm in a bit of a pickle. Since I'm ranking member of the subcommittee which is shaking my chair, so I'll limit myself to one question. I'd like to -- Mr. Krepon said something that confirmed or reaffirmed something that was said in a discussion I went to earlier this week with Graham Allison (sp) and Richard Pearl (sp) that the threat of the stealing, sale, undercover of plutonium or enriched uranium to individuals who make -- who can make primitive nuclear devices and deliver them through back of trucks and suitcases, get them into the United States or into the territories of our allies and launch an explosion of devastating proportions is a significantly greater threat than whether or not Pakistan is developing a nuclear program or Argentina or Brazil are pursuing one or a long-range missile program, that that is a much bigger threat in terms of terrible things happening. I'm wondering, is that what you meant to say and what do the other witnesses think of that?

MR. KREPON: What I believe is that to make sure of the threat today is the truck bomb, and the spreading around of weapons-grade material or low-grade nuclear material, biological material, chemical material, that is a here and now problem. The acquisition of an intercontinental ballistic missile by a rogue state is a problem that may exist 15 years from now, but that's remote. That probability is remote.

So we have to get our priorities straight. We have to apply our resources where our priorities ought to be.

MR. SOKOLSKI: Congressman Berman, as much as I would sometimes agree that what goes on in Pakistan and India may not as central to some national security perspective that we may have at the present, it is really hard to know what the world will look like if nuclear weapons are used once. And I really don't know what would happen. It could be a great event in the sense that it's not that important and we all come to learn that we don't need these weapons and people shouldn't get them, or it could be something very, very dark and dangerous.

That said, in answer specifically to your question, I can think of one thing worse than leakage and that is re-militarization. The reason I think that is the Russians are worried about that. Now, they think we're going to re-militarize our stockpile.

One of the findings of the Task Force on Nonproliferation Policy Reform reflected analysis by the Rand Corporation that probably at least as important as preventing leakage, and in fact, the complement in health preventing leakage, is to get the stockpiles of the United States and Russia that are declared to be in surplus because of dismantlement out of those countries to some third neutral spot. Something to think about. The day after really is worse than losing a city.

MR. KRAEMER: I would rank the threats as Russian missiles because of instability in Russia, -- (inaudible) -- missiles off our coast knocking out our cities in a matter of minutes, and undetectable. You can always have some warning -- (inaudible) -- organizations that have trucks and they're moving them and the cadre that are involved, some intelligence hopefully will intercept, but if a ship gets through with a missile and launches it, we're gone, or threatens to. We have no defenses.

And thirdly, any war that breaks out in the Middle East that uses these weapons can go unconstrained and we were very lucky, extremely lucky in the Gulf War that the only missile that killed Americans killed only 28, wounded only 79. What if it had had a warhead of mass destruction in it? If one of those missiles dropped within a few hundred yards of a troop ship with 5,000 marines on it and it was right by an ammo dump, we could have lost 5,000 marines.

REP. SMITH: I want to thank our very distinguished panel for your testimony and appreciate your answers. I look forward to an additional session, I think, because this issue needs much more scrutiny than it's gotten. This hearing is adjourned.