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105–365 Foreign Operations, Export Financing, and Related Programs Appropriations for Fiscal Year 1998

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105–365 Foreign Operations, Export Financing, and Related Programs Appropriations for Fiscal Year 1998 S. HRG. 105±365 FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS FOR FISCAL YEAR 1998 HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS FIRST SESSION ON H.R. 2159/S. 955 AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS FOR THE FISCAL YEAR END- ING SEPTEMBER 30, 1998, AND FOR OTHER PURPOSES Agency for International Development Department of Justice Department of State Department of the Treasury Nondepartmental witnesses Printed for the use of the Committee on Appropriations ( Available via the World Wide Web: http://www.access.gpo.gov/congress/senate U.S. GOVERNMENT PRINTING OFFICE 39±857 cc WASHINGTON : 1998 For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 ISBN 0±16±056220±1 COMMITTEE ON APPROPRIATIONS TED STEVENS, Alaska, Chairman THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont SLADE GORTON, Washington DALE BUMPERS, Arkansas MITCH MCCONNELL, Kentucky FRANK R. LAUTENBERG, New Jersey CONRAD BURNS, Montana TOM HARKIN, Iowa RICHARD C. SHELBY, Alabama BARBARA A. MIKULSKI, Maryland JUDD GREGG, New Hampshire HARRY REID, Nevada ROBERT F. BENNETT, Utah HERB KOHL, Wisconsin BEN NIGHTHORSE CAMPBELL, Colorado PATTY MURRAY, Washington LARRY CRAIG, Idaho BYRON DORGAN, North Dakota LAUCH FAIRCLOTH, North Carolina BARBARA BOXER, California KAY BAILEY HUTCHISON, Texas STEVEN J. CORTESE, Staff Director LISA SUTHERLAND, Deputy Staff Director JAMES H. ENGLISH, Minority Staff Director SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS MITCH McCONNELL, Kentucky, Chairman ARLEN SPECTER, Pennsylvania PATRICK J. LEAHY, Vermont JUDD GREGG, New Hampshire DANIEL K. INOUYE, Hawaii RICHARD C. SHELBY, Alabama FRANK R. LAUTENBERG, New Jersey ROBERT F. BENNETT, Utah TOM HARKIN, Iowa BEN NIGHTHORSE CAMPBELL, Colorado BARBARA A. MIKULSKI, Maryland TED STEVENS, Alaska PATTY MURRAY, Washington ROBERT C. BYRD, West Virginia (Ex officio) Professional Staff ROBIN CLEVELAND WILL SMITH TIM RIESER (Minority) (II) (II) CONTENTS THURSDAY, FEBRUARY 27, 1997 Page Agency for International Development .................................................................. 1 THURSDAY, MARCH 20, 1997 Department of Justice: Federal Bureau of Investigation ..................................... 55 Department of State: Bureau of International Narcotics and Law Enforcement Affairs .................................................................................................................... THURSDAY, APRIL 17, 1997 Agency for International Development .................................................................. 97 TUESDAY, MAY 6, 1997 Department of State ................................................................................................ 137 Agency for International Development .................................................................. 137 TUESDAY, MAY 20, 1997 Department of the Treasury ................................................................................... 185 TUESDAY, MAY 22, 1997 Department of State: Office of the Secretary ........................................................ 215 Nondepartmental witnesses .................................................................................... 265 (III) (III) FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIA- TIONS FOR FISCAL YEAR 1998 THURSDAY, FEBRUARY 27, 1997 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. The subcommittee met at 10:35 a.m., in room SD±138, Dirksen Senate Office Building, Hon. Mitch McConnell (chairman) presid- ing. Present: Senators McConnell, Bennett, Campbell, Leahy, and Lautenberg. AGENCY FOR INTERNATIONAL DEVELOPMENT STATEMENT OF HON. J. BRIAN ATWOOD, ADMINISTRATOR OPENING REMARKS OF SENATOR MITCH MC CONNELL Senator MCCONNELL. This hearing will come to order. Welcome, Mr. Atwood. It is good to see you again. Mr. ATWOOD. Thank you, Mr. Chairman. Senator MCCONNELL. I am pleased to have you open our fiscal year 1998 hearings on the administration's budget request. I am equally pleased with the fact that the President's request level fi- nally reflects a serious commitment to advancing our international interests. Before offering some thoughts on some specific concerns I have about the allocation of funds within the foreign operations account, let me point out a small irony. Last year, $12.3 billion was pro- vided for foreign operations. This year your budget submission of $13.3 billion reflects a $1 billion increase. I consider this $1 billion the amount that Senator Leahy and I have appealed and pressed the administration to request for the past 3 years. I welcome the request and hope that we have really turned the page, ending a sad chapter of neglect of the foreign af- fairs account. Having acknowledged your commitment, I should recognize that some of my colleagues are already pointing out that this increase exceeds other subcommittee or function requests. In his opening hearing, Congressman Callahan expressed concern about being able to pass a bill that includes a 9-percent increase when other subcommittees are continuing to experience reductions. Frankly, 9 percent may not be enough to compensate for the near fatal assault this account has suffered over the past decade. (1) 2 In the last 10 years, with the end of the cold war, we have estab- lished assistance programs to help stabilize and strengthen more than two dozen new, emerging democracies. At the same time, the resources available for foreign operations and export promotion have declined nearly 40 percent, from $20.2 billion to $12.2 billion. Measured against foreign aid's peak level in 1985, our resources have dropped nearly 60 percent. Those numbers give the term ``def- icit'' new meaning. We are experiencing a critical deficiency in di- plomacy's funding. While I strongly support the overall request level, I am not as convinced that the administration has distributed funds to best serve our interests. You have repeatedly called attention to the problems AID has experienced because of deep reductions in devel- opment assistance. While the administration added $1 billion to the overall foreign operations request, child survival programs have actually been cut. Education, health care, agriculture, and other development assistance priorities have either been straight-lined or reduced in this budget. The increase is dedicated almost entirely to down payments on arrears at international financial institutions and a huge increase in aid to Russia. In contrast, a majority of other NIS states have been reduced or held at the fiscal year 1997 level. Last year, our report recommended we graduate Russia from most of our grant programs, sustaining modest but declining sup- port for a few projects which strengthen democracy and the private sector. This request continues to reflect a bias toward Moscow at the expense of our deep interests in the region and fails to recog- nize that we cannot buy our way out of the economic crisis which cripples opportunity in Russia. While I may not completely support the mix of funds, let me con- clude by emphasizing once again that I am committed to securing as strong an overall account as possible. I urge you and Secretary Albright to make as persuasive a case as you can to the Budget Committee very soon since their decisions will have a significant impact on the resources allocated to our subcommittee. With that, let me turn to my friend and colleague, Senator Leahy, for whatever opening observations he might wish to make. OPENING REMARKS OF SENATOR PATRICK LEAHY Senator LEAHY. Thank you, Mr. Chairman. I am glad that we are starting off this year with the AID Admin- istrator. You have been through some rather rough times in the past dozen years. The last 4 years have been no exception. There are two dozen field missions being closed, 200 of AID's staff, including some of the best, were laid off last year. There has been a sugges- tion that we merge AID into the State Department. We get a lot of requests from Senators who want us to fund various programs in AID and I sometimes wonder how they can find the time to ask us to fund these programs when they are so busy giving speeches about what a waste, foreign aid is. If they would spend a little bit less time talking more about where we will find the money to fund the programs they want, we might be better off. 3 I think it would also help if they would do as you have, which is make the case to the American people why a lot of this aid is in our national best interest. You have been an eloquent spokes- man on that, as have some others. I think we are going to have questions about AID's future. Is it going to be an autonomous agency or part of the State Department, whether it expresses national interests on its own or the State De- partment's political goals which may be more short-term. Mr. Atwood's persuasiveness is reflected in the President's re- quest for an increase in foreign operations, but with all of the pro- grams in the budget, AID has fared the worst. The State Depart- ment, the international financial institutions and the military as- sistance programs got the lion's share of the increase. That might not have been my choice. But at least it does not occur to
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