SEN. SAM BROWNBACK (R-KS): The hearing will come to order. Welcome. Assistant Secretary Einhorn, welcome. Mr. Lauder, welcome. Delighted to have you here. It is a pleasure to have both of you here to testify in front of this joint hearing of the Near Eastern and South Asian Affairs and European Affairs Subcommittees.

We are here today to discuss Iran's continuing aggressive efforts to obtain weapons of mass destruction. Although the Clinton-Gore administration is in the midst of a charm offensive toward Iran, going so far as to grant a visa for the Iranian Foreign Minister to tour American college campuses last month, it is obvious to most of us that Iran remains a danger to the world and to its own people. For those of you looking for evidence, ten Jews are languishing in Iranian prisons as I speak on false charges, probably still praying that the world's greatest democracy cares enough to do something for them.

On March 14 of this year, President Clinton signed the Iran Nonproliferation Act of 2000. Now, I assume, perhaps incorrectly, that when a President signs a bill into law he intends to carry out the terms of that bill. Accordingly, Congress was to receive a report on foreign entities or persons that provide assistance to Iran's missile and nuclear, biological, and chemical weapons programs on June 12 of this year. That report never came.

A second report was due on September 14. It too never came. One reason why: The State Department did not even bother to ask the CIA for the relevant documents for the report until the third week of May, 3 weeks before the first report was due and a full 2.5 months after the President signed the bill into law.

But perhaps the administration's lack of urgency relates to improvements on the Iran proliferation front. Mr. Einhorn, has WMD proliferation to Iran ended, will be a key point and question that I will want to hear from you. All the evidence that I see suggests to the contrary. Transfers to Iran from the very countries with whom this act is concerned, Russia in particular, continue unabated.

Just last month, Tehran again test fired its Shahab-3 missile. That missile would be sitting in a box somewhere if it was not for the assistance of Russia to Iran.

To my mind, we are facing a major crisis in the coming years and responsibility can largely be laid at the feet of this administration. In 1993 the Clinton administration turned the Nation's Russian policy over to Vice President Al Gore, who set up a commission with Victor Chernomyrdin, then the Russian Vice Premier. This so-called GCC was supposedly the place where U.S. concerns over Russian proliferation were to be resolved.

Let us take, for example, the matter of Russia's massive arming of Iran with advanced conventional weaponry, which began in earnest in 1992. In June 1995, Vice President Al Gore negotiated a deal with the Russians supposedly to bring this trade to a halt. In exchange for Russia's pledge not to conclude any new contracts, the United States let Russia into the Wassenaar Arrangement, changed U.S. regulations to allow U.S. defense contractors and satellite companies to do business with Russian firms, and pledged to avoid any sanctions that would upset this relationship. In other words, because of this deal that was struck by Vice President Gore Russia is eligible for all sorts of defense cooperation. Indeed, according to recent State Department estimates, Russia has made $7.7 billion over the past few years just from launching U.S. satellites.

It really should not have come as any surprise to anyone that, despite the 1995 agreement, Russia continued to sell advanced conventional weapons to Iran. Indeed, the Director of the Central Intelligence Agency in their most recent proliferation report stated: "Russia, along with its sister republics in the FSU, also remains an important source of conventional weapons and spare parts for Iran."

Then of course there are the ineffectual efforts by this administration to terminate Russia's nuclear cooperation with Iran. Despite all sorts of pledges by Russia not to go beyond limited construction at the Bushehr facility, recent press accounts indicate that Russia is now engaging in the sale of sophisticated laser technology that will speed Iran's ability to enrich nuclear materials from weapons.

Russia is doing this despite its promise made under the Nonproliferation Treaty not to assist foreign nations in acquiring nuclear weapons. Russia is doing it despite all manner of pledges to Vice President Gore and despite the fact that it is receiving hundreds of millions of dollars of foreign aid from programs run by the Department of Energy and the Department of State.

We all remember the administration's efforts from 1998 to 1999 to prevent the Senate from approving the Iran Nonproliferation Act. Various officials assured Senators time and again that Russia had turned the corner or that President Yeltsin had issued a critical directive or that the Duma would soon consider changes to export laws to solve these proliferation problems.

But looking back over the past 8 years, the truth of the matter is that this administration has not solved the proliferation problem. The problem has grown decidedly worse, and the world is a far more dangerous place because of that. The next administration will inherit a diplomatic situation chockful of broken promises and a commercial situation where Russian companies are profiting not only from the multi-billion dollar trade with the United States, but are doing a healthy business with the Iranians on the side.

Mr. Einhorn, I look forward to hearing you tell me that I am wrong on these matters, that the Iranian proliferation problem has abated, and that the reason our reports are not here is that you have nothing to report. I look forward to that testimony and to hearing what is taking place with these reports and in this proliferation area.

We will first hear from Mr. Lauder and his testimony and then to Mr. Einhorn. First, though, I want to turn the microphone over to the co-chair of this hearing, Mr. Smith, who heads the Subcommittee on European Affairs.

 

OPENING STATEMENT OF

GORDON H. SMITH
A Senator from Oregon, and
Chairman of the Subcommittee on European Affairs

 

SEN. GORDON H. SMITH (R-OR):

Thank you, Senator Brownback, for taking the initiative to hold this hearing on Russia's role in Iran's weapons program. I am grateful we are conducting this hearing as a joint session of your subcommittee and my own.

I would like to also welcome Bob Einhorn and John Lauder, to welcome you both. These gentlemen are the point men of our Government's efforts to curb the proliferation of destructive weapons technologies. In addition to Assistant Secretary Einhorn and Mr. Lauder's testimonies, I want to thank the American Jewish Committee for its vigilance on this issue. The AJC has provided the Foreign Relations Committee with copies of the June 2000 report "Iran and Weapons of Mass Destruction." I would like to ask that this report in its entirety be submitted for the record and thank the American Jewish Committee for its efforts.

BROWNBACK: Without objection.

SMITH: There are few issues of more pressing concern than the Government of Iran's vehement anti-Western policy. Its support for international terrorist organizations and its sustained efforts to develop and deploy weapons of even greater reach and destructiveness is unbelievable. But I do not believe that this is the wish of the Iranian people, whose rich history at one time included a close and warm relationship with America.

I am hopeful that the recent profound and far-reaching changes that we have been witnessing in Iran will open the barriers the Iranian Government imposed upon that partnership that once existed between our countries. However, despite our hope that Iran's internal dynamics will yield a change in our two countries' relationships, we cannot yet be confident that these dynamics will generate a significant change in Iran's conduct abroad in the foreseeable future.

The unfortunate reality today is that Tehran adamantly opposes the U.S.-led Middle East peace process and toward that end provides material and financial support to Hezbollah, Hamas, the Palestinian Islamic Jihad, and other violent, radical Islamic groups. For these and other activities, Iran has been identified by the Department of State as the most active state sponsor of terrorism.

The urgency of the threat posed by Iran's foreign policy has been increased exponentially by Tehran's efforts to develop and deploy missiles of increasing range and accuracy and its efforts to complement that offensive capacity with the full spectrum of chemical, biological, and nuclear weapons. Just this last summer, Iran successfully tested the 800-mile Shahab- 3 missile, the same missile that paraded through Tehran not too long ago on a carrier emblazoned with the inscription "Israel should be wiped off the map"--a phrase that underscores Iran's destabilizing role in that part of the world.

But these programs could soon directly affect our own security. Iran is in the latter stages of developing a 1,200- mile range Shahab-4 missile and other ICBM's of potentially even greater range. This past March, CIA Director George Tenet testified that in the next few years Iran's ICBM's will probably be able to reach the United States.

As the title of this hearing suggests, the progress Iran has made in developing its military capabilities has not been without outside support. Far from it, the fact is that the Iranian military has benefited greatly from foreign suppliers, and among these Russia has been second to none. Russian equipment, training, technology, and know-how permeate the entire Iranian military. The Iranian army is equipped with modern Russian tanks and Russian air defense systems. The Iranian navy deploys a Russian diesel submarine. In January Iran began to mass produce the Russian-developed Konkurs anti- tank missile.

Experts predict that Russia will provide Iran some $4 billion in military equipment in the coming years. Equally disturbing has been the assistance Russia has provided Iran's missile programs. According to the administration's latest unclassified report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions--this report is dated the 1st of July through the 31st of December 1999: "Russian entities during the 6 months of 1999 have provided substantial missile-related technology, training, and expertise to Iran that almost certainly will continue to accelerate Iranian efforts to develop new ballistic missile systems."

On top of helping Iran obtain advanced conventional weaponry, Russia has been a significant source of assistance to Russia's WMD program. The symbol of that cooperation are the power plants at Bushehr, where Russia is building two nuclear reactors, and Moscow seeks to expand that cooperation. Moscow and Tehran are considering the construction of three more facilities that are potentially capable of producing weapons- grade plutonium.

More recently, the press reported that Moscow agreed to send tritium gas to the Nuclear Research Center in Tehran. Tritium gas is primarily used to enhance the explosive power of nuclear warheads. Now there are indications that Russia is pursuing the sale of laser-enriched technology to Iran which could be used to make higher grades of nuclear material.

Let us not forget the fact that Iran will spend close to $1 billion on the Bushehr nuclear power plant, an expenditure by a country that both faces financial difficulty, yet is awash in oil. Clearly, Russia cannot be blind to the fact that Bushehr is not tied to Iran's energy needs, but is instead a cornerstone to its efforts to develop, manufacture, and deploy nuclear weapons.

This sustained and lethal relationship between Russia and Iran has not gone unnoticed in Congress. Curbing this relationship has been a longstanding bipartisan foreign policy priority on the Hill. In the 105th Congress we passed the Iran Missile Proliferation Sanctions Act that would have denied U.S. Government assistance to those who assist Iran's ballistic missile program. Unfortunately, this bill, sponsored by Senators Lott and Lieberman, was vetoed by the Clinton-Gore administration.

Congress did pass and the President did sign the Iran Nonproliferation Act last March. It authorizes, as opposed to mandating, the President to impose such sanctions against those sharing these technologies with Iran. The point of these two bills, which passed with overwhelming margins, is clear: Curbing Russia's support of Iran's weapons programs should be a top priority of U.S. policy. The Kremlin's refusal to curb this relationship should prompt a substantive change in how the United States engages Russia.

To date the administration has treated this Iranian-Russian technology cooperation not as a policy priority, but as a nuisance to its own strategy of engaging the Government of the Russian Federation. As a result, the administration's response to Russia's cooperation with Iran has been more symbolic than substantive, a fact clearly evident to the Kremlin.

As I mentioned, the administration reported that during the first half of 1999 Russia was a major supplier of missile technology to Iran. There is ample evidence today that this cooperation continues, and Russia recently agreed to provide Iran technologies and materials that Tehran can use to further its development of nuclear weapons.

What has been the Iran response? It is true that the administration sanctioned the specific Russian institutes and companies known to have been the most immediate source of technology obtained by Iran, and it is true that this has denied these specific entities access to U.S. assistance and cooperation. However, at the same time, the administration expanded both the depth and breadth of U.S.-Russian cooperation involving sensitive missile and space technology. Over the last year it expanded U.S.-Russia space cooperation involving technology-sharing and assistance dollars.

There is great concern about the possibility of technology sharing in this area. It is a mistake for the administration to conclude that one can draw a clear line between the Russian Government and these Russian so-called entities that have been the direct source of dangerous technologies given to Iran. Such an inference reflects a naive understanding, I believe, of the economic and political power in Russia today.

As we approach an important Presidential election, now is the appropriate time to evaluate, refine, and if necessary restructure how our Government approaches the challenges and dangers consequent to Russia's role in Iran's missile and WMD programs. The track record clearly indicates that our current strategy has not sufficiently convinced the Government of the Russian Federation to curb the flow of its dangerous weapons and technologies to Iran and, for that matter, to other states whose policies jeopardize American national security interests.

Again I thank our witnesses, Bob and John, for appearing before us today. I am interested in your evaluation of what role Russia plays in Iran's weapons program, the role that it likely is to play in the foreseeable future, and what the United States can do to more effectively curb this lethal partnership. Thank you, Mr. Chairman.

BROWNBACK: Thank you, Mr. Smith. I have been told that there is objection to hearings going forward, that the Democrats have objected after 11:30. So at 11:30 we will need to turn the transcriber off, not transcribe, and we will take--we will go from a hearing to a public meeting, and we will have a videotape and be able to take the record from that. So I want to inform all present about that.

Mr. Lauder, thank you very much for joining us and I look forward to your testimony. The floor is yours.

 

STATEMENT OF

JOHN LAUDER
Special Assistant to the Director of Central Intelligence for Nonproliferation,
Central Intelligence Agency

 

LAUDER: Thank you, Mr. Chairman and Mr. Chairman, thank you for inviting us to testify on this important topic.

As you both noted in your opening statements, Iran has ambitious development programs for missiles and weapons of mass destruction. Iran is seeking technologies related to missiles, as well as technology related to nuclear, chemical, and biological weapons, from a number of foreign sources. The development of these weapons in Iran and the extent to which foreign assistance is advancing Iranian weapons programs are among our toughest intelligence challenges and among our highest priorities in the intelligence community.

In my testimony today I will provide a summary of Russian assistance to Iran's weapons of mass destruction programs and its ballistic missile delivery systems. The Iranians regard these programs and the assistance to them as among their highest state secrets and go to great lengths to hide them from us. As a result, our knowledge of these programs is based on extremely sensitive intelligence sources and methods, and this precludes me from providing many details in this open session. But I hope the summary itself will be of use to the committee, and we will continue to keep the committee informed of additional details in classified briefings.

I would like to begin with a few comments on Iran's nuclear power and nuclear weapons programs. The intelligence community judges that Iran is actively pursuing the acquisition of fissile material and the expertise and technology necessary to form that material into nuclear weapons. As part of this process, Iran is attempting to develop the capability to produce both plutonium and highly enriched uranium.

Iran is seeking nuclear-related equipment, material, and technical assistance from a variety of foreign sources, most notably in Russia. Tehran claims that it seeks foreign assistance to master nuclear technology for civilian research and nuclear energy programs. However, the expertise and technology gained, along with the contacts established, could be used to advance Iran's nuclear weapons effort.

Work continues on the construction of a 1,000-megawatt nuclear power reactor at Bushehr that will be subject to International Atomic Energy safeguards. This project will not directly support a weapons effort, but it affords Iran broad access to Russia's nuclear industry.

Russian entities are interacting with Iranian nuclear research centers on a wide variety of activities beyond the Bushehr project. Many of these projects, ostensibly for civilian nuclear uses, have direct application to the production of weapons-grade fissile material, and the United States has levied trade restrictions against two Russian entities for providing nuclear assistance to Iran.

I would like to touch briefly on assistance by Russian entities to Iran that could contribute to Tehran's chemical warfare program. Iran launched its offensive chemical warfare program or CW program in the early 1980's in response to Baghdad's use of CW during the Iran-Iraq War. We believe the program remains active despite Tehran's decision to ratify the Chemical Weapons Convention.

Iran has a large and growing CW production capacity and already has produced a number of CW agents, including nerve, blister, choking, and blood agents. We believe it possesses a stockpile of at least several thousand metric tons of weaponized and bulk agent. Tehran's goals for its CW program for the past decade have been to expand its production capability and stockpile, reach self-sufficiency by acquiring the means to manufacture chemical production equipment and precursors, and diversify its CW arsenal by producing more sophisticated and lethal agents and munitions.

Numerous Russian entities have been providing Iran with dual use industrial chemicals, equipment, and chemical production technology that could be diverted to Tehran's offensive CW program. In 1999, for example, Russian entities provided production technology, training, and expertise that Iran could use to create a more advanced and self-sufficient CW infrastructure.

Turning now to Iran's biotechnology programs. Iran is pursuing both civilian biotech activities and a biological warfare [BW] program. Assistance by Russian activities to the former, the biotech activities, could further Iran's pursuit of biotechnology for military applications. Iran's biological weapons program or warfare program was initiated in the 1980's during the Iran-Iraq War. The program is in the late stages of research and development, but we believe Iran already holds some stocks of biological agents and weapons.

Tehran probably has investigated both toxins and live organisms as BW agents and for BW dissemination could use many of the same delivery systems, such as artillery and aerial bombs, that it has in its CW inventory. Iran has the technical infrastructure to support a significant BW program. It conducts top-notch legitimate biomedical research at various institutes, which we suspect also provide support to the BW program.

Iran is seeking expertise and technology from Russian entities that could advance Tehran's biological warfare effort. Russia has several government to government agreements with Iran in a variety of scientific and technical fields. Because of the dual use nature of much of this technology, Tehran can exploit these agreements to procure equipment and expertise that could be diverted to its BW effort.

Turning finally to missiles, Iran's ballistic missile program is one of the largest in the Middle East. Tehran already has deployed hundreds of short-range ballistic missiles covering most of Iraq and many strategic targets in the Persian Gulf. It is developing and may soon deploy the 1,300-kilometer range Shahab-3 medium range ballistic missile, which would allow Iran to reach Israel and most of Saudi Arabia and Turkey. Tehran probably has a small number of Shahab-3's available now for use in a conflict. It has announced that production and deployment has begun and it publicly displayed three Shahab-3's along with a mobile launcher and other ground support equipment.

Iran's public statements indicate that it plans to develop longer range delivery systems. Although Tehran stated that the Shahab-3 is Iran's last military missile, we are concerned that Iran will use future systems in a military role.

Iran's defense minister announced the development of the Shahab-4, originally calling it a more capable ballistic missile than the Shahab-3, but later characterizing it as a space launch vehicle with no military applications. Tehran has also mentioned plans for a Shahab-5, strongly suggesting that it intends to develop even longer-range ballistic missiles in the near future. And Iran has displayed a mockup satellite and space launch vehicle, an SLV, suggesting it plans to develop an SLV to deliver Iranian satellites to orbit. However, Iran could convert an SLV into a ballistic missile by developing a reentryvehicle.

In this context, cooperation between Tehran and Russian aerospace entities has been a matter of proliferation concerns since the mid-1990's. Iran is acquiring Russian technology which could significantly accelerate the pace of its ballistic missile development program. Assistance by Russian entities has helped Iran save years of development of Shahab-3, which was flight-tested in 1998 and twice again this year.

Russian assistance also is playing a crucial role in Iran's ability to develop more sophisticated and longer range missiles. Russian entities have helped the Iranian missile effort in areas such as training, testing, and components. These entities vary in size and cover a wide range of specialties. The scope of the assistance is illustrated by the variety of organizations that have been the subject of U.S. trade restrictions. Such restrictions have been levied against Russia's Government-owned space technology marketing agency, Glavkosmos, the aerospace materials research institute, NIIGrafit, the guidance technology developer, Polyus, and several smaller and less prominent entities. Further trade actions have been imposed against two major entities, the Moscow Aviation Institute, and the Baltic State Technical University.

Mr. Chairman, in the interest of time I have skipped over a few points in my statement, but I have submitted it for the record. I will attempt to answer the committee's questions within the constraints imposed on us by the need to protect sensitive sources and methods, and we would be delighted to present committee members with a more detailed assessment of these issues in a closed setting, and our intelligence reporting and analysis also provides the underpinnings for the policy effort to stop the flow of weapons-related technology to Iran that Assistant Secretary Einhorn will address in his testimony.

BROWNBACK: Thank you, Mr. Lauder. I appreciate that.

Mr. Einhorn, we look forward to your testimony. What Mr. Lauder put forward is a very troubling set of expansion of proliferation of weapons of mass destruction that has been in that relationship between Russia and Iran. I hope you will enlighten us to how that is not occurring or is not going to occur in the future.

 

STATEMENT OF

ROBERT J. EINHORN
Assistant Secretary of State for Nonproliferation
U.S. Department of State

 

EINHORN: Thank you, Mr. Chairman and Senator Smith for giving me the opportunity to appear before the subcommittees this morning. I have a prepared statement that overlaps substantially with Mr. Lauder's statement in describing Iran's weapons of mass destruction and ballistic missile programs. With your permission, I would like to submit that prepared statement for the record.

BROWNBACK: Absolutely.

EINHORN: I will proceed to summarize the administration's policy response to this problem, but if you compare the two statements you will see that we really do agree on all fundamentals as far as what Iran is up to in this field. In view of the serious risks to U.S. interests posed by Iran's WMD and----

BROWNBACK: Mr. Einhorn, if I could ask you to pull that microphone up a bit closer to you.

EINHORN: Sure.

BROWNBACK: It is pretty directional and a lot of people cannot hear you very well.

EINHORN: Sure.

BROWNBACK: Thank you.

EINHORN: In view of the serious risks to U.S. interests posed by Iran's WMD and missile programs, the administration has given a very high priority to impeding these programs, and we have sought to do so through a variety of means. We have strengthened the multilateral export control regimes, thereby denying Iran and other proliferators access to the world's best sources of sensitive technology and forcing them to resort to elaborate and uncertain procurement methods that can result in slowing the pace, driving up the costs, and reducing the quality of their acquisitions. With Iran actively looking for weak links in the chain of control, we have provided substantial assistance to countries that are potential targets of Iranian procurement efforts in order to help them bolster their national export control systems and their border security.

When we have received information about troublesome transactions involving Iran's weapons programs, we have been able on a number of occasions to intervene diplomatically and persuade the governments of supplying countries to take steps to halt a pending transfer.

To help secure sensitive materials and know-how at their source, we have provided large-scale support for Russia's efforts to protect, store, and account for its nuclear materials, and have funded civilian scientific work by over 20,000 former Soviet weapons specialists to reduce their incentives for assisting countries like Iran.

Impeding Iran's nonconventional procurement efforts has figured prominently in recent years in our bilateral relations with China, North Korea, and Russia. In 1997, China agreed to phaseout all of its nuclear cooperation with Iran, even cooperation carried out under International Atomic Energy Agency safeguards. We believe the Chinese have made good on this pledge.

In 1997, we imposed sanctions on seven Chinese entities for providing dual-use chemicals and chemical production equipment and production technology to Iran's chemical weapons program. Subsequently, Chinese authorities took steps to tighten their system of chemical controls, although enforcement remains uneven.

Our current efforts with China focus primarily on missile exports. We have held several rounds of talks this year aimed at encouraging Beijing to augment its missile-related export control system and prevent Chinese entities from transferring equipment and technology that contribute to Iranian missiles capable of delivering nuclear weapons. We have made progress, but more work remains.

Halting missile-related exports to Iran and other countries is a high priority of our engagement with North Korea. In our several rounds of missile talks with the North Koreans we have repeatedly sought to gain their agreement to ban all missile exports, and we will continue to do so. We have made clear that continued missile exports would subject them to additional economic sanctions, and that such sanctions would place a major obstacle in the way of economic normalization between the United States and the DPRK. We have imposed missile sanctions on North Korea six times.

Assistance by Russian entities to Iran's missile and nuclear programs has been a persistent problem in U.S.-Russian relations for over half a decade. Both the President and the Vice President, as well as other senior administration officials, have engaged on this issue on an almost continuous basis. Every Presidential summit meeting and every meeting of the U.S.-Russian Binational Commission has placed these nonproliferation concerns at the top of the agenda.

In our bilateral engagement we have made clear that stopping highly sensitive cooperation with Iran would expand opportunities for mutually beneficial and potentially lucrative cooperation between the two countries, including in the areas of commercial space and nuclear energy, but we have also stressed that failure to solve the problem would inevitably create obstacles to such cooperation.

So far, we have used the administration's Executive order authorities to impose penalties on 10 Russian entities for assisting Iran's missile and nuclear programs. Our intensive efforts with the Russians over the last few years have produced some significant positive steps.

Russia passed a new export control law in 1999 providing for the first time legal authority to control the export of any item that could contribute to a program of proliferation concern. It has reorganized export control responsibilities within the Government to make the bureaucracy more effective in implementing Russia's laws and policies.

At U.S. urging, it has instituted internal compliance programs in key Russian entities and so far over 500 firms manufacturing items of proliferation concern have received training in their export control obligations.

It has established seven export control working groups with the United States in such areas as law enforcement, and dual use licensing, to help strengthen the Russian export control system. It has carried out investigations of problem cases we have brought to Russia's attention, and in a number of those cases it has halted Russia's cooperation with Iran, enabling us last April to announce our intention to lift U.S. penalties against two of those entities.

While we have imposed penalties on organizations engaged in sensitive cooperation with Iran, we have also made important headway by holding out benefits for responsible behavior. In this connection, our Russian partners in the international space station and in the major U.S.-Russian commercial space launch joint venture understand the value of their cooperation with us, and are on guard to avoid the kinds of interactions with countries of concern that could put that cooperation in jeopardy.

It is clear that key players in the Russian Government such as the Russian Aviation and Space Agency and the new Department of Export Controls of the Ministry of Economic Development and Trade see an important stake in stopping assistance to Iran's nonconventional programs, and are working hard to get their arms around a very difficult problem.

However, enforcement of its export control laws and policies has been very uneven. While some Russian aerospace entities have severed their cooperation with Iran, other individuals and entities have been far too willing to take their place.

The situation is even worse in the nuclear area. Unlike in the aerospace field, where many of the entities assisting Iran have little relationship to the Russian Government, almost all nuclear cooperation with Iran is carried out by MINATOM, the Ministry of Atomic Energy, or one of its many subsidiaries and affiliates. We have made clear to the Russians that we will not go forward with collaboration on advanced nuclear power reactors or other new cooperation in the nuclear field until our concerns are resolved.

Clearly, many of the remaining problems involve shortcomings of the relatively new Russian system of export control. Even with greater resources and the best of intention, it would be hard for Moscow authorities to detect and stop all attempts to circumvent Russian controls, but equally clearly, part of the problem is a lack of determination.

We are convinced that if Russian leaders gave the matter sufficient priority, Iran's nuclear and missile procurement efforts in Russia could be stopped. We do not doubt that Russians, when they say their interests would be harmed at least as much as ours by Iran's acquisition of nuclear weapons deliverable by long-range nuclear--let me say that again.

We do not doubt the Russians when they say their interests would be harmed at least as much as ours by Iran's acquisition of these capabilities, but if the Russians believe that the nuclear and missile cooperation now underway will not actually contribute materially to and accelerate Iran's acquisition of such a capability, they are engaging in wishful or short- sighted thinking.

Recently, we have seen some encouraging signs. At their July meeting at the Okinawa G-8 summit President Putin assured President Clinton that he would take personal responsibility for ensuring that Russia's laws and commitments with respect to these nonproliferation issues are carried out faithfully. Subsequently, when provided with information that Russia's Yefremov Institute was providing Iran with laser isotope separation technology for enriching uranium, Russian authorities suspended the transaction pending a thorough investigation of its implications. We hope that this action will be a forerunner of concrete and decisive steps to halt assistance by Russian entities to missile and nuclear programs in Iran.

In conclusion, Mr. Chairman, impeding Iran's WMD and missile delivery systems will remain at the top of the U.S. national security agenda for sometime to come. We cannot predict the direction of political events in Tehran, but should Iranian authorities accept the U.S. offer of an official bilateral dialog, nonproliferation will be a key focus of the dialog.

We would seek in those discussions to persuade the Iranians that their legitimate security and other broad national interests would best be served by verifiably and reliably renouncing WMD and the long-range ballistic missiles that can carry them. In the meantime, we have no alternative but to continue an active strategy of seeking to thwart Iranian efforts to procure the materials and technologies they need for their nonconventional programs.

We will use a variety of means to pursue that strategy, including strengthening multilateral regimes, carrying out energetic diplomatic efforts with key supplier governments and, when warranted, utilizing our legal and other authorities to penalize those responsible for assisting nonconventional programs of states of proliferation concern.

By the standards one must judge nonproliferation efforts, our policies with respect to Iran have been effective. They have succeeded in slowing and complicating Iran's programs and driving up their costs. They have closed off many of the world's best sources of advanced technology to Iranian procurement efforts and have forced Iran to rely on technologies less sophisticated and reliable than would otherwise be the case and, critically, we have bought additional time.

Despite the gains Iran has made, we do not consider it inevitable that Iran will acquire nuclear weapons deliverable by long-range missiles, but avoiding that highly destabilizing outcome will require the continued leadership of the United States and the concerted efforts of the international community, including the cooperation of Russia, China, and North Korea. We will consult closely with the committee as our efforts proceed.

Thank you, Mr. Chairman.

BROWNBACK: Thank you, Mr. Einhorn, although I come to the exact opposite conclusion that you do, that our efforts have not been very successful at all in impeding their development of weapons of mass destruction and proliferation that have taken place in Iran, and particularly in regards to Russia and the Russian assistance that has been provided that we heard from Mr. Lauder's testimony what has occurred with Iran, so I think our standards of success and measurements of success are substantially different here.

Mr. Einhorn, the so-called Gore-McCain act calls for sanctions on anyone who assists Iran in acquiring destabilizing numbers and types of advanced conventional weapons. The Foreign Assistance Act of 1961 also calls for sanctions on countries that transfer weaponry to terrorist nations.

Now, since 1992, Russia has supplied a large number of conventional armaments to Iran. Why have neither of these sanction laws been applied to any aspect of this enormous volume of trade?

EINHORN: Mr. Chairman, we have, in fact, been very active in implementing both of the laws you mentioned, including the law that deals with provision of lethal military equipment to state sponsors of terrorism.

As the committee is aware, we have pursued these questions actively with the governments concerned, the supplier governments concerned, and in a number of cases imposed penalties on the entities responsible for these transactions, and in the process have been able to persuade supplier governments to adopt new controls that have limited further future shipments of this lethal military equipment, so we have taken advantage of the law and used it as a tool to try to reduce lethal military equipment sales to these state sponsors of terrorism.

BROWNBACK: Have you implemented that law on Russia?

EINHORN: We have, in fact, done so. As the committee is aware, I believe, we have invoked that law with respect to Russian transfers of conventional equipment to Syria and a number of the----

BROWNBACK: Have you done it toward Iran?

EINHORN: I will have to check the record on Iran, but there have been a number of cases, not necessarily involving Russia, in addition to the Syria case I mentioned before, where we have utilized the law to extract new commitments in the area of nonproliferation.

BROWNBACK: I believe the record will show that you have used it on Syria, but you have not used it on Iran.

Mr. Einhorn, if domestic United States law requires the imposition of sanctions, do you think that the executive branch can nevertheless avoid imposing sanctions if it has concluded an agreement with a foreign nation to do so?

EINHORN: Well, it depends on the particulars of the sanctions laws. The purpose of the sanction laws is a good purpose. It is to change behavior. It is to encourage governments such as Russia, such as North Korea, such as China, to practice responsible export behavior. We have utilized the law for that purpose.

Sometimes it has involved actually imposing the sanctions, but often the threat of the imposition of sanctions has been as effective or more effective than the actual imposition. We have used the leverage that the law has provided to encourage more responsible behavior, certainly in the case of China and in the case of Russia.

BROWNBACK: If domestic law required imposition of sanctions for an action, would it be appropriate for the executive branch to commit to a foreign nation to avoid such penalties even if the foreign nation made commitments of its own?

EINHORN: Well, let us take the Iran Nonproliferation Act, for example. Here, there are cases where, if an entity has provided reportable items to Iran, there is an obligation by the administration to report that fact to the Congress, but if it is determined that that transfer was made under the guidelines of multilateral export control regimes, duly authorized by a government that is a participant in those regimes, then that transfer is exempt from any penalties. That is an element of the Iran Nonproliferation Act. So there is a case where the administration is not compelled to impose sanctions under the law.

BROWNBACK: Well, I am not sure I have understood your answer completely, and I think it can come with a yes or no. Let me try this again. If domestic law required impositions of sanctions for an action, would it be appropriate-- appropriate--for the executive branch to commit to a foreign nation to avoid such penalties, even if the foreign nation made commitments of its own?

So in other words, we have a domestic law that requires the imposition of a sanction, and then the administration negotiates a separate agreement that they think, well, OK, maybe this is the way we want to go, regardless of what the law says. Would that be appropriate?

EINHORN: If the law requires the imposition of sanctions, then sanctions must be imposed, but if the law provides, for example, a waiver authority that suggests that the penalties may be waived if in the administration's judgment it can extract new commitments from a foreign government, then that is entirely permissible, and that in fact has been done on a number of occasions, but it would depend upon the law.

BROWNBACK: All right, but if it does not have the waiver authority, it would not be appropriate.

EINHORN: No, clearly, you know, one has to implement the law, whatever it says.

BROWNBACK: Is Russia abiding by its 1995 commitment not to transfer conventional arms to Iran?

EINHORN: The commitment that Russia made at the time was not to engage in new conventional arms contracts with Iran. It agreed that it would complete shipments under existing contracts in a limited period of time.

We are having discussions with the Russian Government now about the length of time it would need to fulfill its existing contracts, but in terms of the specifics of current transactions, it would be very difficult to comment in detail in an open session like this.

BROWNBACK: So if I am understanding you, you are saying that it agreed to make shipments of weapons, and it is needing more than 5 years to get this done, and you are letting them go with that, saying OK, you can go ahead and keep shipping these because you are deeming these part of some agreement prior to 1995?

EINHORN: Mr. Chairman, I am not saying we are letting these go. What I am saying is that we have sought from the Russian Government information about the shipments they would like to continue to make under existing contracts, that they have not been able to make by the time specified in our understanding.

BROWNBACK: And you will not comment in open session as to whether there are additional sales that are taking place that were not committed to prior to 1995?

EINHORN: I think it is best to deal with that issue in closed session, and I would be happy to do that.

BROWNBACK: I hope you are pushing the Russians quite hard on the issue. Five years would seem to be a sufficient period of time for them to complete transactions. Now, I do not know the nature of which these you are commenting about.

And Mr. Einhorn, my whole problem here is, it seems as if from what Mr. Lauder described there is an aggressive development program continuing to take place in Iran with Russian-supplied technology, information, and then we also have conventional areas, and the administration is seemingly looking the other way in spite of a very clear desire by the Congress, laws that have been signed, reports that are required, for you to keep the Congress informed, that the Congress has stated this is not the will of the people, and that you have seemed to conclude your own sidebar agreements and the development continues to take place, with alarming speed and progress, alarming.

That is not a satisfactory situation, certainly from Congress' perspective and, more importantly, from the United States' overall security perspective, and in dealing with a country such as Iran. There are an alarming set of factors that are lining up here that lead to quite a troubling conclusion.

EINHORN: Mr. Chairman, I would agree with you that the situation with respect to Iranian procurement efforts in Russia is not satisfactory. The Russians know our frustration and disappointment about their response, but I would take issue with your characterization of the administration looking the other way. We have faced this issue quite squarely, and this has been a subject of continuing engagement between us and the Russians, and we have made some progress.

I have mentioned some of the elements of progress in my statement earlier. The Russians have come quite a distance in setting up an export control system. We have concrete evidence that entities that had been engaged in missile cooperation with Iran have stopped their cooperation. We see signs of improvement, but the record of enforcement is spotty, and it is uneven. It is not satisfactory as far as we are concerned, and we will continue to pursue it.

On the nuclear side, the situation is even worse, and we have to work at that in a very persistent way to make sure that Russian assistance to Iran's nuclear program is stopped, but in terms of the bottom line, I think it is important to step back and take a look at some of these Iranian programs.

Iran has been seeking nuclear weapons for quite a long time. They have worked at it very, very aggressively. We have succeeded, the United States has succeeded in dissuading all nuclear suppliers other than Russia from continuing to provide nuclear assistance to Iran, every one, and we have had important successes, whether it is with China, or Ukraine, or I can go on and on and on, but it is only Russia that is continuing to do that, and we have to work with Russia until they are prepared to stop all nuclear cooperation with Iran.

In the missile area also, we have been very aggressive in trying to clamp down. Using the missile technology control regime, it has forced Iran to turn to Korea, with less sophisticated technology than it could otherwise get.

What the Shahab-3 is, it is a No Dong, which has been improved with the addition of Russian technology, but this is not the missile that Iran would have today if it were not for U.S. efforts. Without U.S. efforts, Iran would be much further along in its nuclear weapons program. It might even have nuclear weapons today, and it would be much further along in its missile program. We would not be talking about basically an improved No Dong that could go medium ranges. We would be talking much more reliable and sophisticated missiles. U.S. efforts really have prevented those developments from occurring.

BROWNBACK: And without Russian assistance the Iranians would not be nearly as far along as where they are today, and those were things that are specifically the concern of laws that have been passed by the Congress and signed by the administration, and then the negotiations between Vice President Gore and Chernomyrdin.

I think this is not satisfactory, particularly as regards the topic of this hearing, Russian assistance to the Ukrainians, which is where we are having the most problem, and I think some of the least progress taking place.

Mr. Lauder, one final question and then I am going to turn the podium over to Mr. Smith. Some of the DCI's most recent section 721 report states that Russia, "remains an important source of conventional weapons and spare parts for Iran." That report covered activities through December 31, 1999. During this year, has Russia engaged in any conventional arms-related transfers to Iran?

LAUTER: Russian officials stated publicly earlier this year that Russia continues to transfer conventional arms to Iran under previously signed contracts, and that statement is consistent with our information.

BROWNBACK: Can you be any more specific of what transfers have taken place this year?

LAUTER: I do not think I have any detailed unclassified figures that I can give you right now on that. I would be happy to provide that later, certainly in a classified forum for the committee. I do not think I have any figures I can pass over today.

BROWNBACK: Senator Smith.

SMITH: John, I know that you have done some work on the Yugoslavian situation. I have just been handed a note that says the Serbian opposition has stormed the parliament building and reportedly has taken control of the state media. Fires are raging. Milosevic is nowhere to be seen, and general chaos is underway--unrelated subject.

Bob, you mention the sanctions that the U.S. Government has imposed on specific Russian companies and firms for sharing technology with Iran. Do you believe that these companies or entities acted independently, or without the knowledge or consent of the Russian Government in the first place?

EINHORN: Senator Smith, I think it varies from case to case. As I pointed out earlier, most of the nuclear assistance being provided by Russia to Iran is coming from subsidiaries, affiliates of the Ministry of Atomic Energy in Russia, so I think it would be hard to imagine that Russian Government officials, and officials in the nuclear establishment, were not at least knowledgeable of some of these interactions.

SMITH: If this is contrary to Russia's own national security interests, what was the motive? Was it hard currency?

EINHORN: That is an important component of it. What has happened, Senator, is that Russian entities are no longer receiving the kind of budgetary support from the central government that they used to, and as a result they are pretty hard up, and they are looking for ways of staying in business, and so some of them have very strong incentives to export equipment, know-how, and so forth, so I think economic explanations are a very important part of the problem.

Another explanation is that the Russian export control system is still in its early stage. It is not fully effective, especially at the enforcement end. It needs a lot more work before it can effectively police Russian nuclear and missile- related exports.

SMITH: You mentioned Mr. Putin's promises to President Clinton. Have you seen any results from those promises? Is, in fact, his administration doing a better job? Are they getting--do they have control of their government? Do they now have the cash? With higher oil prices he's consolidating his power and the ability to actually protect their own national interest.

EINHORN: Senator, I think it is probably too early to judge whether the Putin regime will be more effective in this area than its predecessors. There are some encouraging signs, his statement to President Clinton in Okinawa that he is going to take personal responsibility for these matters, also the decision by the Russian Government to suspend this contract Yefremov Institute and Iran on providing laser isotope separation technology to Iran. They say they will suspend that while they conduct a thorough investigation of the implications of that transfer.

SMITH: And the whole point of that is to enhance the yield of a nuclear bomb.

EINHORN: The laser isotope separation technology is a technique for enriching uranium to weapons grade. That is what we believe the equipment and technology was intended for.

SMITH: Is the administration going to certify to Congress that no entities subordinate to the Russian Space Agency are providing missile systems to Iran?

EINHORN: Under the Iran Nonproliferation Act, as you know, Senator, we will be providing a report to the Congress that provides information on entities that provide certain transfers to Iran. We regret that we are not in a position to provide the report at this stage. We have promised to work toward December 1 in order to get you that information.

But on the specific question you asked me, whether we feel we can certify that all of the subsidiaries of the Russian Space Agency have not engaged in missile-related cooperation with Iran, I doubt very much we are going to be able to make that assertion. In fact, I feel confident that we will have to report to you that a number of the entities subordinate to the Russian Aviation Space Agency have in fact provided support for Iran's missile program, and we will have to act, then, under the law.

SMITH: And the law requires that you then begin withholding funds for the purpose of constructing the international space station, does it not?

EINHORN: The law has provisions regarding extraordinary payments to the international space station project, that is true. There are certain special provisions affecting items such as support for crew safety, for example, which have to be dealt with, and we will meet the requirements of the law in dealing with that question.

SMITH: Clearly, the State of Israel has reason to be alarmed at missiles being paraded in the streets of Iran that say, "Israel should be wiped off the map." What other states in the Middle East are likely to bear the brunt of an Iranian missile?

EINHORN: Well, I think one has to look back at the Iran-Iraq war of the 1980's to recognize that the critical rivalry in that part of the world is between Iraq and Iran. I believe that is the main reason, I mean, the concern about a potential future threat from Iraq that motivates Iran to want to have missiles capable of delivering these WMD capabilities, but there are other countries in the region that are concerned about Iranian intentions.

There are countries on the southern shore of the Persian Gulf who are concerned about Iran's intentions and about Iran's acquisition of WMD and missiles, and we consult with them quite frequently, and there is concern in the gulf and, as you mentioned, you know, Israel is concerned as well about these developments.

SMITH: When you think back to the bloody and duration of the Iran-Iraq war, had these been available then they would likely have been used, would they not have? I mean, they used chemical weapons on each other.

EINHORN: Yes. I mean, missiles were used. Iraq had missiles at the time, and used them. Iraq used chemical weapons. There was some small response by Iran at the time, but Iran was not heavily into the chemical weapons business then, but I think that is right, if these capabilities had been further advanced at that time, there would have been a real threat that they would have been employed on a much larger scale.

BROWNBACK: Mr. Lauder, some have suggested that Iran is changing because of so-called moderates who are being elected to office. How are decisions made in Tehran regarding Iran's WMD program? Are they made by hardline clerics, or by elected government officials?

LAUTER: I think, Senator, when we look at the institutions in Iran that are most involved in the process of weapons of mass destruction and missiles, those are probably institutions that are more dominated by the conservatives. That said, we assess that Iranian political factions across the board are united largely in their support for Iran's weapons of mass destruction and ballistic missile programs. These programs seem to be viewed across the political spectrum as an integral part of Iranian national security, and part of Iran's right of self-defense.

BROWNBACK: So in your view has President Khatemi moderated his country's interests in obtaining these ballistic missiles, or is it really just generally felt by the Iranian people that they need these for their own defense?

LAUTER: I think in our sense, in looking at what has occurred and at President Khatemi's statements that he has not appeared to slow down the pace of the ballistic missile program. Since he has taken office we have actually witnessed those three tests of the Shahab-3 that we mentioned earlier, and he himself has been public in his praise of the accomplishment of the 1998 test.

BROWNBACK: Gentlemen, I believe that concludes the questions, and we thank you very much for your participation.

Should other colleagues have questions, we will leave the record open for a period of time, and we would appreciate response should questions be put to you. Again, we thank you, and all who have attended here today, and this public meeting is adjourned.