S. HRG. 106±225 HEARINGS ON THE NOMINATION OF HON. RICH- ARD C. HOLBROOKE TO SERVE AS U.S. AMBAS- SADOR TO THE UNITED NATIONS HEARINGS BEFORE THE COMMITTEE ON FOREIGN RELATIONS UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS FIRST SESSION JUNE 17, 22, AND 24, 1999 Printed for the use of the Committee on Foreign Relations ( Available via the World Wide Web: http://www.access.gpo.gov/congress/senate U.S. GOVERNMENT PRINTING OFFICE 57±735 CC WASHINGTON : 1999 COMMITTEE ON FOREIGN RELATIONS JESSE HELMS, North Carolina, Chairman RICHARD G. LUGAR, Indiana JOSEPH R. BIDEN, JR., Delaware PAUL COVERDELL, Georgia PAUL S. SARBANES, Maryland CHUCK HAGEL, Nebraska CHRISTOPHER J. DODD, Connecticut GORDON H. SMITH, Oregon JOHN F. KERRY, Massachusetts ROD GRAMS, Minnesota RUSSELL D. FEINGOLD, Wisconsin SAM BROWNBACK, Kansas PAUL D. WELLSTONE, Minnesota CRAIG THOMAS, Wyoming BARBARA BOXER, California JOHN ASHCROFT, Missouri ROBERT G. TORRICELLI, New Jersey BILL FRIST, Tennessee STEPHEN E. BIEGUN, Staff Director EDWIN K. HALL, Minority Staff Director (II) CONTENTS THURSDAY, JUNE 17, 1999 Page Biden, Joseph R., Jr., U.S. Senator from Delaware, opening statement ............ 4 Boxer, Barbara, U.S. Senator from California, prepared statement of ............... 34 Helms, Jesse, U.S. Senator from North Carolina, opening statement ................ 1 Holbrooke, Hon. Richard C., nominee to be U.S. Ambassador to the United Nations .................................................................................................................. 10 Prepared statement of ...................................................................................... 16 Moynihan, Daniel Patrick, U.S. Senator from New York, statement ................. 9 Warner, John W., U.S. Senator from Virginia, statement ................................... 7 TUESDAY, JUNE 22, 1999 Biden, Joseph R., Jr., U.S. Senator from Delaware, opening statement ............ 47 Helms, Jesse, U.S. Senator from North Carolina, opening statement ................ 45 Prepared statement of ...................................................................................... 46 Holbrooke, Hon. Richard C., nominee to be U.S. Ambassador to the United Nations .................................................................................................................. 59 Prepared statement of ...................................................................................... 60 Johnson, Harold J., Associate Director, International Relations and Trade Division, General Accounting Office, accompanied by Mr. Tetsuo Miyabara . 47 Prepared statement of ...................................................................................... 122 THURSDAY, JUNE 24, 1999 Ashcroft, John, U.S. Senator from Missouri, prepared statement of .................. 110 Biden, Joseph R., Jr., U.S. Senator from Delaware, opening statement ............ 86 Prepared statement of ...................................................................................... 87 Helms, Jesse, U.S. Senator from North Carolina, opening statement ................ 85 Holbrooke, Hon. Richard C., nominee to be U.S. Ambassador to the United Nations .................................................................................................................. 89 Prepared statement of ...................................................................................... 89 APPENDIX Responses of Harold J. Johnson, General Accounting Office, to additional questions submitted by Senator Rod Grams ...................................................... 119 Article submitted by Senator Boxer from the New York Times entitled, ``Deny Rape or Be Hated: Kosovo Victims' Choice'' ...................................................... 135 (III) THE NOMINATION OF HON. RICHARD C. HOLBROOKE TO SERVE AS U.S. AMBAS- SADOR TO THE UNITED NATIONS THURSDAY, JUNE 17, 1999 U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC. The committee met, pursuant to notice, at 10:15 a.m., in room SD±562, Dirksen Senate Office Building, Hon. Jesse Helms (chair- man of the committee) presiding. Present: Senators Helms, Lugar, Hagel, Smith, Grams, Frist, Biden, Sarbanes, Kerry, Feingold, Wellstone, Boxer and Torricelli. OPENING STATEMENT OF HON. JESSE HELMS, U.S. SENATOR FROM NORTH CAROLINA The CHAIRMAN. The committee will come to order to begin con- sideration of the nomination of Richard C. Holbrooke to serve as U.S. Ambassador to the United Nations and as a member ipso facto of the President's cabinet. Mr. Holbrooke's nomination was announced by the President on June 17, 1998, but it was not forwarded to the Foreign Relations Committee until February 10, 1999, almost 1 year later. The delay was caused by an 8-month-long criminal investigation of Mr. Holbrooke by the Department of Justice for alleged violations of U.S. ethics-in-government while he worked for Credit Suisse First Boston, and they always have initials after this, CSFB. In February, Mr. Holbrooke paid a $5,000 fine to the U.S. Gov- ernment to settle that case and it took the Department of Justice 8 months to settle the case against Mr. Holbrooke and this commit- tee obviously will be challenged to do so within the day's hearings alone. The Justice Department's task was to determine whether Mr. Holbrooke violated the law. The committee has a broader mandate. We are obliged to determine not only whether Mr. Holbrooke fol- lowed the law, but also whether he exercised good judgment of the kind reasonably expected of and by a member of the President's cabinet. U.S. ethics-in-government laws are based on a simple premise, that government service must not be a means to advance private interests. According to the executive branch's own Office of Govern- ment Ethics, such laws are designed to ensure that executive branch decisions are neither tainted by, nor appear to be tainted (1) 2 by, any question of conflict of interest on the part of the employees involved in the decisions of government. Now then, I can understand that some of these laws may be dif- ficult to interpret for the average government employee, but Mr. Holbrooke cannot scarcely be regarded as an average government employee. He had the entire Credit Suisse legal team at his dis- posal, not to mention the counsel of the State Department Legal Advisor's office to help him walk whatever ethical minefields may have existed, if any. But time and time again, Mr. Holbrooke chose either not to seek ethics advice or to ignore it when it was given. To most government employees, Mr. Holbrooke's life, when he left the State Department in February 1996 must have appeared ideal. He was paid an annual salary of at least $1.35 million by Credit Suisse First Boston while working long hours for the U.S. Government as a special government employee from 1996 to 1999. In addition to this impressive annual salary, he supplemented his income during those last 3 years with almost $900,000 by speaking with audiences and writing about the very issues that were part of his duties while he was special government employee to the U.S. Department of State. Now, the ethics laws of this government are very straightforward regarding what is expected of every senior government level em- ployee in these circumstances. First, after leaving government, every employeeÐMr. Holbrooke included in that, must observe a 1- year cooling off period. And he obliged to observe a 1-year cooling period under that law and that statute, but the law broadly forbids any business contacts with officials, for and including in Mr. Holbrooke's case, U.S. Ambassadors stationed all around this world. Second, senior government employees, including special govern- ment employees like Mr. Holbrooke, cannot earn outside income, making speeches or writing articles on issues directly related to their area of professional responsibility. And the law barring contacts with an official foreign agency is there for a very clear reason. It is intended to prohibit unfair or undue influence or even the appearance of undue influence by such officials over their former colleagues and subordinates. Now, when Mr. Holbrooke began traveling abroad for his new employer, Credit Suisse First Boston, he appears to have made no effort to observe the legally prescribed cooling off period. In fact, when Mr. Holbrooke called U.S. Ambassadors in Germany, they hosted receptions, they precipitated meetings and even accom- panied him to meet with the country's top government leaders. Mr. Holbrooke sought to justify these numerous meetings with foreign leaders in the company of senior U.S. officials by arguing that he was wearing, as he put it, his government hat as a special envoy for Bosnia. In other words, he would not say on behalf of the $1.35 million employer, CSFB. He was there on behalf of the U.S. Government simply to discuss U.S. foreign policy interests. So each meeting, he contends, was not covered by government ethics laws. But U.S. embassies did not see things quite so clearly. Indeed, some of them professed confusion over the nature of Mr. Holbrooke's professional role after he left the State Department. 3 And I suggest a simple way to determine which hat Mr. Holbrooke was wearing: Who paid the bill for his trip. In most cases, CSFB, not the State Department, picked up the tab. And Mr. Holbrooke says the CSFB had nothing to gain by these meetings, and of course, Richard Holbrooke had nothing to gain either. In which case, we must conclude the CSFB was simply being a good corporate citizen, underwriting Mr. Holbrooke's