for more information you can visit our web site, city cam.org or e-mail us any questions you you have to educate at c-span.org. to get started. we can't wait to see what you can do. >> coming up next on c-span2, senators debate the agenda for the senate's lame-duck session. then republican leadership talks to reporters. ranking member peter hoekstra on the classified documents published by wikileaks. and the house foreign affairs committee looks into the effectiveness of economic sanctions against iran.

>> 42 republican senators signed a letter pledging to block most bills until the senate extends expiring tax cuts and passes a bill to fund the federal government. on the senate floor, minority leader mitch mcconnell talked about their position. we will also hear from democratl debbie stabenow. this is 20ns minutes. i >> mr. president for the last vl two years democratic leaders in washington have spent virtually ll of their time kicking off ws items on the liberal wish list while they have had the chance. government-run healthgo care, te national energy tax, but govern, itnancial regulations, biggeric government, bigger deficits,govt union bailouts, government takeovers, and so here we are le just a few weeks left in thet. session, and they are still at it.ir ver last dimonth the american people issued their verdict on the democratic prior to use. democrats have responded by doublingli down.'t in t

for two years the legislated as if they weren't in the middle of the national jobsri crisis and e they are legislating as if they don't realize the government is about to run out ofey money and every taxpayer in america is g about to get slammed with a giant tax hike. with just a few weeks to go s, before the end of the session democrats continue to place their priorities over the priorities of the american people. peep the these are the things democrats have chosen to do instead of preventing a massive tax hike that economist tellis would stifle theep economy. wish republicans have pleaded with fos on democrats to put aside their wish list, to focus on the things americans want us to focus'v on. they have ignored us. t voters refudiated their agenda s at the polls. they have ignored them. they're time is running out and they arm ignoring that. the election was a month ago. so itus is time to get serious in prio time to focus on priorities.r rd dallied while ago i delivered a letter to senator reid signed by all 42 senate republicans. ainsp

it says that every republican will vote against proceeding tor any legislative matter until we have funded the government and protected every taxpayer from a tax hike.hat it basically, what it means his first things first. this with time running out in this session we need to focus on these critical priorities. as the letter s states, our creg constituents have repeatedlyentr asked us to focus on creating an environment for private sector m job growth. constitnts' it is time our constituents prties. priorities become the senate's priorities. at the moment, every taxpayer in the countryma stands to get a in massive tax increase and a cut in pay on december the 31st.peow we need to show the american people that we care more aboutee them and their ability to payspl their bills than we do about the special interest groups, united legislative christmas list. republicans are united in our opposition proceeding to any of these things until democrats make the priorities of the american people theiramer own. e

so mr. president with that i would like to ask unanimous consent that the letter to senator reid that i just poi. referenced appear in the record at this point.. stabenow: than >> without objection, so ordered. >> i suggest the absence of a mr. esident, >> mr. president, has become ofo the end of the year and the end of this session, i want to talkp about what is really happening here for the american people, for small businesses, what is happening here in terms of the senate, and what is really at to stake as become to the end of theth year for american familie, folks that are struggling everyn day, people trying to get intous the middle class, the small businesses trying to keep theirs heads above water as well as our manufactures ends along.and is and it is extremely concerning to mece that colleagues on thege other side of the aisle and they have shown it in a letter t

written,he they are willing toti risk everything in order to get a bonus round of tax cuts for millionaires and billionaires.o they are literally willing to stop everything, risk everything in the economy in order to get extra tax cut. i am not talking about, and the reason i say extra is because we have an agreement that 97% of the public, who earns less than $250,000 a year for their family, should we continuing to receive tax cuts permanently ans everyone who has income up to $250,000 by the day brill incomg is $1 billion or not they get a tax cut up to $250,000 of theirl

income, so the question that we will be answering this month is whether or not millionaires and billionaires get a bonus, get an extra tax cuts on top of that. r and, here is what is at risk. the republicans are willing to put at risk. heard it the same people mr. president, you you heard it as well as i did throughout the year, talkinn about the deeeficit and how wewn need to stop the exploding deficit and we need to bring deficits down. in order to get -- excuse me. in order to get a bonus tax cutw for billionilaires and billionaires they are willing to risk the federal deficit, anothr balloon it another 700 billionon dollars.. not pay for it. not paid for.ht now they are saying we have to pay for unemployment benefitsitb their job in this economy through no fault of their own, but 700 lien dollars?

the average tax cut, $100,0001 for somebody earning a millionhn dollars, $100,000 is more than the average person in michigans. makes. mr. president, my guess is that0 west virginia is the same. in order to keep $100,000 a year going in a bonus tax cut, for people earning $1 million, theye are willing to risk the federal deficit exploding. they are willing to risk jobs, because we have seen a policy it the last 10 years of basically a giving tax cuts to folks at ther top and everybody else waiting for them to trickle down and my folks are tired. folks i think colleagues on the other side of theof aisle just think ' haven't waited long enough for n it to trickle down to everybody else but the reality is that policy that they want to gets a bonuseopl tax cuts for pb

at thes. top is not created job. in fact my question is after 10o years of tax cuts for theorks wealthy, where are the jobs mr. president? my state has lost over 800,000 jobs during the period of this bonus tax cut policy for millionaires and billionaires. if it had worked, if we hadhigan created 800,000 jobs in 800,0s, michigan, residents losingun 800,000 jobs i would be on the floor of the united states senate fighting to continue thi. policy. this is not partisanship. this is about common sense and what works. we have had a policy in place that has not worked. so, why would we continue it? h they say well, we have torecess. continue this because we are in a recession. i mr. president, it was part of rs the reason we are in a recession in terms of the fact that it itt didn't invest in the right way.t now for want to take those

dollars and put them back intoeg creating -- clean energygs manufacturing and focusing on making things in america, wewe want to put this in the things we know are going to actually focus on jobs,ob good paying gor middle class jobs i am all for it. but $700 billion of a policy makes no sense. job that is my question, where other jobs?he show me the jobs and i will ben. the first person on the floork e voting yes to continue.ling but they are willing to risk th. deficit. they are willing to risk jobs. they are willing nowin a mr. president, as they are n willing in the letter they have now sent to the leader today, tr risk tax cuts to the middlend sl class emily's and small yw businesses. by saying you know what, we areh not going to have to do anything else until we continue the taxo, cuts for everybody in this country including millionaires and billionaires. they are not willing to work with us to make sure

middle-class families who are fs the folks that need to have money back in their pockets ando small businesses who need their permanent help and then we can work on ththe rest were peopler now we are going to hear a lot about small business and i find it quite surprising when colleagues have filibustered in the last two t years 16 differet tax cuts for small businesses. a small-business jobs bill to for small b eake capital available for smalh businesses, so they can keep their head above water, refinance, grow their business.y personally mr. president i'm no1 going to be lectured by peopleht who voted for 16 different tax cuts in the last two years for small businesses. usi small who are now using small b businesses to hide behind hereeh now, the folks that are hiding behind small businesses that they are holding up are there os

that they are fighting for.e har we are happy on our site. we take a backseat to no one on fighting for small business. c lowant to thank our chair, maryf lander, who was on the floor over and over and over again small business committee and aut wonderful group of colleagues who fight and fight and fight to make sure we put forward a billt bill -- it took way too long because of foot-dragging, sand s everyone trying to throw sand it the gears but we finally got it passed to increase capital and to add a tax cut in a busins small-business jobs bill of which only two republicancan colleagues had the courage to as step across the aisle and join us and we are very grateful that they were willing to d but the senate republican caucun is willing to put all of that in jeopardy, holdop hostage tax cus needed by people, working famile people, middle class families,

small businesses. a if they can't get a bonus tax cut for millionaires and they're billionaires. they are also willing frankly ty jeopardize social security and r medicare.. we have a debt commission coming up forg proposals that are veryh concerning and have toughward, e decisions about social security and medicare going forward because we have this deficit. a they are saying wait a minute, o first you have got to increase the deficit by $700 billion inie order to give millionaires and billionaires a tax cut. we don't care, we don't care ifs that impacts security andicare medicare and tough decisionss wo that have to be made. seniors who live on social security and medicare. car here now we don't care.- we have heard it over and over and over again, we'll don't care if doesn't matterdo if it is paid for. it doesn't matter if anything else getste done.

we are not going to take up thet we don't care about our about nl relationship with russia. we don't care about national security issues. we want a tax cut for our friends. minaires millionaires, billionairesebt. adding $700 billion to the debt so they are willing to risk it all, stop the tax cuts forbusinr middle-class families and small businesses in order to get that bonus tax cut. and finally, and most insulting to me of all mr. president is sa they can stand and say, we won't support helping people who are out of work in an economy is way beyond normal, an economy wherer there are five people looking for every one job. in my state, you are talking ben about folks who have never been an out of work before in theirtheyg

lives and their mortified andn o they are doing everything they they are trying desperately to keep their head above water. while their houses under water.v not being able to have the kidst continuing college this year.ndt folks that are just trying to make it and they are saying yous know what?we didn't we didn't create this economy. e we didn't cause the crisis on wall street. we didn't create all the rest of this.one nothi done nothing but play by theirhe rules their whole lives and now they are in a situation where they can't find a't job, you kn. i talked to a lot of folks 50, 55 years old, 60 years old,rked worked all their lives. we are coming up to the holidays now, and all they want is whatye we have always done in the past unployment with high unemployment, and that is allow them to receive unemployment benefits to get them through a tough time w temporarily, while we should be focusing on jobs because peoplee

want to work. to people don't want to get two or $300 unemployment.mp americansans know how to work ad they want to work and they are looking to us to create a climate, certainly in the worki marketplace working with sohey businesses so they can get a job. but here we have a situation where republicans in the houset turned down unemployment yesterday. senator jack reed came to the floor to ask unanimous consentnl and we will be asking again unanimous consent to be able to extend unemployment benefits, r the regular system,. i also believe we need to add additionally for people who have run out of their bn enefits, who have been -- need to be helpingi keep the regular system going so somebody who is beginning toeboy lose their job, who loses their

job t today is treated as fairln i the person who lost their job right now the whole system is ut in the air.ther si and what we hear on the other side is oh my goodness, we can't possibly spend unemployment benefits without quote paying for it, cutting someplace else,, and it is about for a year about $50 billion i'm not saying that it's a lot of money. i'm not saying it is not at how about, how about we help pay for it by not giving it on his tax l cut to millionaires in this country? $700 billion colleagues on the other side of the aisle do not d believe that should be paid fors somehow tax cuts for millionaires and billionaires rules than a tir little bit of help for somebody

fault of their own and tryinango keep their family together and d roof over their head. heck that is a heck of a choice in terms of value mr. president. i am amazed, but what we have here as we come to the end of the year is a situation where colleagues on the other side of thise aisle have indicated that. they are going to continue tobue block everything. filibusters are not new. throwing sand in the gears is dt new.very it is done every day for the two last two years but now they areg saying that in addition to t extending obviously getting thed budget done and we all agree all with that, we all agree with that but if we don't extend the tax cuts for everybody, and meaning millionaires and billionaires,goin then they are going to filibuster everything else. including unemployment benefitsj so let me just say in closinguae

that we are in a situation where right now today, we could give 97% of the public certainty going forward about tax cuts, small businesses, middle-classfi omilies by simply joining together on a proposal to p protect and extend permanently middle-class tax cuts for theasr vast majority of smallsinesses,d businesses and we certainly can come together in a way that does more for small business. our site is happy to do that, side that is voted 16 times for tax cuts for small businesses. but we believe that it isonomic economically and morally wrong to allow an average $100,000 in additional tax cuts, tax relieft

for millionaires nextax year whd somebody who has worked all their lives and lost their jobs through no fault of their ownher can't keep a roof over their o head. it is not right minister president. this is absolutely not right, and so, and by the way, let mete just reiterate one more time gog because we are going to hear a th is no lot about small businesses.thist it is not about small business.s thiswe is not about small-business. we ares willing to come together as we always have for small businesses. this is about a few people, and category isax asking, by the wat igr a tax cut. b we have a lot of folks whotory t understand we have the biggest deficit in the history of the country who are blessed through their own hard work or through their circumstances to be very dll-off who are saying i want

to do my part. i'm willing to do my part. ask me to do my part. i will.ing f they are not even asking forg to this. they are not asking to hurt people who are out of work in order for them to get another taxer cut. but unfortunately on the other side of the aisle, our willing colleagues are willing to risk social security, medicare, taxss cuts for the middle class andsed small businesses and help forhoa people who are out ofre work inx order to give a bonus tax cuts for a privileged few people.t we and that is not what we are about. abo that is not what we are about or what we are going to fight for. mr. president, i would like at this point, because it is

understand what families are in going through right now in this holiday season, that someone whe is losing their job today shoulr be treated as fairly in our country is someone who lost their job a few days ago. commit i would ask unanimous consent that the finance committee be discharged from a 3981, built tf provide for temporary extension of unemployment insurancethe sen provisions and if the senatel bd consideration that the bill bane read three times come past and y motion to reconsider be laid onl relating to appear at the appropriate time in theas record as if read. >> is there objection? >> mr. president?asso: thankou, >> the senator from wyoming. >> mr. president ritter being the right to object and i willd check. sen i understand that senator brown of massachusetts objected to this request yesterday and heset offered a fully offsetn his alternative. therefore on his behalf i do ind object and ask consent his

proposal be inserted into the record. >> objection is heard. t >> mr. president. >> is there objection? >> i will nodet object.e the rht object and will not but it is af sad day for millions of families in this country, and a message t that we should all be embarrassed to have sensed that millionaires and billionaires te should read the ones that are ss being fought for on the floor of the united states senate and millions of people who are out of work don't count. and i regret that. >> later, republican congressional leaders met with newly elected republican governors. we will hear from senator mitch mcconnell, house speaker elect john banner and new governors from south carolina, oklahoma and ohio.

>> good afternoon everyone. as leader of boehner's suggestion we had a group of newly elected republican governors along with governor barbour. [laughter] do you have anything else you would like to say? [laughter] let me start again. as leader of boehner suggested we just concluded a discussion with the newly elected republican governors of which there are quite a few. we are pleased to indicate and happy to have them here on the senate side, and we look forward to working with the governors. they are going to have a little more control in their states than we have here in washington and we are looking to them for the kind of innovative solutions that we might import to washington and try at the federal level and with that let me turn to my friend and colleague leader john boehner.

>> match, thank you. we have always said here in washington that the states are the laboratories of democracy and they really are. when you look at the kind of innovative programs that go on and you will see other states copied them but i think we can clearly learn here about how to help the states do what they have to do better. and clearly when you look at the number of federal programs that impact the state well we may spend some money there, we send tons of rules, regulations, paperwork, red tape and we want to establish a relationship with the governors where we can work together to provide the kind of flexibility that i think governors are looking for in order to meet the challenges that they have in their states. and with that let me turn to nikki haley the new governor of south carolina. >> thank you and i want to thank leaders mcconnell and boehner. it is a great day today in d.c. because what you see is a coalition of governors that have

gotten together with the leaders in d.c. and we are now going to start conversations of why we don't need and dated health care and what we have states can do as solutions instead. we are not going to just say no but we are going to tell her federal leaders what we can do instead so they can go back and fight for wednesday should have more rights than what they have no right now. it will give us flexibility on regulations. it will give us reforms on webby don't need unfunded mandates and i will now start to allow states to introduce solutions that will make a difference in our country so we appreciate the opportunity that they have given us to have this conversation and we look forward to this not being about talk that being about action. thank you. >> governor, former house members. >> thank you speaker elect and also leader mcconnell. appreciate the opportunity to be here today to be able to share some ideas from the governors elect with congress. on the campaign trail, people talk to me about three key issues. one is jobs, the economy, how we can get our economy back on

track bringing fiscal responsibility to spending and government itself and frankly standing up to washington when washington does things that will kill jobs and unfunded mandates on down to the states. what i hear back in my state of oklahoma is people are sitting on the sidelines because they are worried about the answer to me at the regulatory marketplace. they are worried about tax increases. they want more flexibility back in the government entities and how to end debate and bring this type of programming to state government itself and that is why having a dialogue between congress and the governors is going to be so essential so we can get our nations economy back on track and bring some fiscal responsibility back into government spending and also about the states to help bring solutions to problems facing our nation. i think we can do that whether it is health care reform, whether it is talking about energy policy or whether it is looking at federal regulations and how they have an impact upon our jobs and our economy so thank you so much mr. speaker and mr. leader for having us

here. >> let me introduce my friend and sidekick, and i won't say much more but the the new governor of the great state of ohio. >> thank you john and thanks for convening a meeting. i think part of the message is let our people go. you know, we have a situation where we have all the strings from washington. you have governors that know how to design solutions for specific problems. the problem is washington will not let our people go. we would like to sell things based on not a one-size-fits-all mentality, but let's not keep putting a size 10-foot in a size six shoe. we want flexibility. we will take that message to her democratic colleagues because we are all in it together. secondly, i sit at home and watch the news at night and can't believe how we dither about whether we are going to teach keep taxes low and provide certainty to companies so they can invest. the policies in washington are hurting our state's ability to create jobs.

and if they want to create jobs, make the tax cuts permanent and keep the risk-taking investment low. i don't understand what they don't get about this. they have tried all this government spending. it hasn't worked. companies want certainty. finally, the state level we have to get our books in order. we have to balance our books. on the '90s we were able to get to a balanced budget and pay down debt, but look where we are today. our children are being held hostage. if we have to be responsible and balance our books, they better get their books in order in washington. and i hope that the president, i understand they had a good meeting yesterday and i hope it will result in action that we are very determined about all of this and we will take the message to her democratic colleagues and bring it up here to capitol hill. >> we will take a couple of questions. [inaudible] >> we mated pretty clear that we

are going to get rid of waste and duplication in terms of how we run the congress. the global warming committee doesn't need to be a separate committee. we believe the science committee is more than capable of handling this issue and in the process we will save several million dollars. >> will the tax cut be a gauche asians than anyway any way? >> i don't know what my colleagues across the aisle didn't hear during the election. the american people spoke pretty loudly and they said stop the looming tax hikes and to cut spending. and well we had a good meeting at the white house yesterday about how to resolve the issue of stopping all of the tax hikes, house leaders are going to go down this path of gerrymandering the process so members only have one option and that is to vote on some tax relief to the american people. i think it is wrong. it does undercut the conversations we had just

yesterday, all of them continue to play political games. the american people said on election day, stop the games, stop the spending, stop the looming tax hikes. >> can i just add on that point? 42 republican senators which is all of them, and an indeterminate number but significant number of democrats don't think we ought to raise taxes on anybody so regardless of what the majority of forces house republicans to do, it is not going to go anywhere. we are going to extend the current tax rates. we are not going to raise taxes on anybody. the only thing we are discussing now is just how long that extension will be. the bipartisan vote tomorrow will be to oppose only providing some tax relief. [inaudible] >> i have seen a lot of ideas coming out of there, heard a lot

of noise and something mitch and i are going to talk about in about 30 seconds. >> do you have the votes to pass do you think that will happen? >> we will see. i have not seen the rules. i've just heard rumors about what they are threatening to do. thank you all. [inaudible conversations] [inaudible conversations] speta house intelligence committee held a closed hearing on the latest lassa by documents released by the web site leaky leaks. they contain confidential messages sent from u.s. diplomats abroad.

ranking member pete hoekstra of michigan and spoke with reporters following the hearing. this is 10 minutes. >> let me know when you are ready. let me just give you a few comments after the briefing that we have had on the leaky leaks material this morning. number one i think it is safe to say that again the administration and the executive branch confirms that the material that was leaked were censored and some -- foreign affairs foreign policies and i think we share the concern about the materials that are in the wikileaks database. the second thing is as i stated earlier, as i stated over the last week, the creation of this database in the first place was a huge mistake.

the proper protocols and procedures were not followed when this database was established. as a matter of fact i'm not even sure that the protocol existed as to how you create a database of this size and the scope and make sure that the proper protections were put in place so that the material only got to the people who really needed access for this information. this was an accident that was waiting to happen. in this case, we made these documents available to more than 500,000 people, 500,000 people should never have had access to the state department cables. the third thing that i would say is, i still don't sense and urgency to fix the problem. i think that there were still other government databases that are out there that have similar types of materials that may be

vulnerable to penetration or vulnerable to being downloaded by employees or by other individuals or organizations in a way that would damage american interests. sensitive material, sloppy, incompetent creation of a database and i think other vulnerabilities still exist and with that i will take any questions. >> after this briefing, where you more concerned or less concerned about the specific documents? did this bring up any more concerned for you? >> i remain as concerned as what i was a week ago, that thought all the material has been released through wikileaks. there may be other materials that are out there that are sensitive, and so yeah, i am very concerned. i'm concerned about the materials. i'm concerned about how this

database was established, how it was handled and then i continue to be concerned about the lack of access to the database. you know, the state department database was put into supernet. 500,000 people have access. i sent a letter to secretary clinton and dni clapper a week or two ago asking congress to take a look at these documents and so far the answer has been no. on a personal level i found it very interesting, on january 1 of this year, i went to yemen to be briefed on the situation in yemen. i was stonewalled by people in the intel community, and by the ambassador, saying congressman we have been informed by washington that we can't share this information with you. there is stuff that is out there that we'd know that you are asking about, but we have been

instructed by washington not to share that information with you. very interesting. two or three days later, there is now a cable that is sent from the ambassador outlining all of the things that they wouldn't cover with me, but a few days after i was in yemen, the stuff that they wouldn't share with me was on a file available to 500,000 people across the executive branch and only now have i seen the material that they wouldn't cover with me on january 1 of this year. >> do you think that this breach was the fault of the obama administration that they were lax in any way? >> no, i think this was a fundamental flaw in the creation of this database that started in the bush administration and has

continued through the obama administration. it was a failure of what i think cyberexperts would say we didn't even practice cyber101 security and how this database was set up, how it was managed and how people were provided access to it. >> what kind of change to you recommend in the international community? >> i think we are going to have to go back and take a look at the next congress is going to have to take a look at the whole issue of cyber. number one how do we secure our databases and make sure we get the right information to the right people and then we will have to take a look at whether there has to be new criminal procedures, laws developed so that when breaches like this to occur that the people that are responsible and the chain of events that gets this information public and widely

distributed, whether there needs to be more accountability and criminal liability for some of the people in that food chain. >> after this is done do you feel that our intelligence gathering in the world is irreparably harmed by this? >> i don't think it is irreparably harmed by it. i think that we will pay a price for it. we will pay a price in terms of our diplomatic efforts. we will pay a price for it in terms of some of our intelligence gathering and these types of links but i expect that over a period of time we will overcome those but assured is going to be a wife road ahead. >> can you give us an assessment of what happened during these meetings today? >> was a fairly open and frank discussion and dialogue, and i think on a bipartisan basis, people saw the problems and the issues that i've just described to you. >> what do you think should be done?

>> i mean, i am all about taking a look at what i have got accountability for. we on the intelligence committee you know, as congress have ability for oversight of the executive branch, i think in this case, this was an absolute failure, and the devastating failure of the executive ranch in managing and securing secret information. our focus needs to be on cleaning up that process so that we minimize the opportunity for this to happen again. i am disappointed, i am angered by what wikileaks did. there are going to be people in the judiciary committee that are going to take a look at exactly how we hold people like that accountable. >> can i ask you about s.t.a.r.t.? what is your sense? what are you hearing? >> well, we are hearing obviously the president

continues to put a tremendous amount of treasure on getting the senate to have a vote on s.t.a.r.t.. i hope that they don't. i think that this is a very very critical issue to american national security. there is no reason to rush s.t.a.r.t. through and a lame-duck session. this has to be a deliberative, thoughtful process. we have found over the last two years that whenever we rush, we get it wrong. we rushed on the stimulus package. it didn't work. we rushed on health care. it didn't work. the president now is trying to rush through s.t.a.r.t.. is kind of like step back, go through the deliberative process that the senate needs to go through on a national security issue and you know, but congress work its will in 2011, not in the waning and closing days in a rush of getting out of washington, both on s.t.a.r.t.. it is the wrong time in the wrong place to do it.

>> do you think it will pass? >> take a look at my colleagues over in the senate. they have got a better indication on that. hey, thank you very much.

>> i am pam ligouri education program specialist at c-span. each year we conduct our video documentary competition called studentcam. the competition ask students in grades six through 12 to speak critically about issues affecting our nation. this year's theme is washington d.c. through my lens. we chose this topic because we like it to explain how the federal government has affected an issue or event in your life or your community. select a topic that interests you. want to have a topic you can begin your research. the goal is for you to fully develop and researcher topic, provide different points of view and include c-span footage that supports your theme and a five

to eight minute documentary. for more information you can visit our web site studentcam.org or e-mail us any questions you have that educated at c-span.org. go get started. we can't wait to see what you can do. >> the house foreign affairs committee heard from two two state and treasury department officials today about the effectiveness of u.s. and united nations sanctions on iran. the obama administration widened they sanctions earlier this week in an effort to slow iran's nuclear program. the hearing comes a week before diplomats from iran, the u.s., china and several european nations meet in geneva to discuss the iranian nuclear program. this is to an after-hours. >> i will recognize myself in the ranking member for up to seven minutes, each for purposes of making an opening statement. i will then recognize the chairman, the ranking members of the middle east and south asia subcommittee and a terrorism

non-proliferation and trade subcommittee for three minutes each to make their opening statements. we have to than today's hearing by noon, so without objection all of the members may submit opening statements for the record. for a begin my statement i want to say a few words about steve solarz, one of our most distinguished former colleagues who passed away on monday after a long battle with cancer. steve had struggled for several years with this terrible illness, but was a typical discipline and good humor he maintained an active and productive schedule. he served in congress from 1975 to 1992. on this committee he was chairman of the africa subcommittee and later chairman of the asia subcommittee where his hearings and activism played a key role in ending the dictatorship of philippine president ferdinand marcos. steve was one of the most creative legislators i have ever worked with. time after time the committee would be debating an amendment to a bill that was resisted by

the committee leadership. arguments would be made on both sides and then solarz would seek recognition, offer the perfect synthesis between the two positions and get the unanimous backing of the committee for his compromise. he was a unique talent. after leaving congress steve continued his activism as the leader of the international crisis group. those of us who have the privilege of calling steve both a friend and colleague or a member for his sharp insights, good humor and willingness to push american foreign-policy beyond the boundaries of conventional thinking. we expressed to his wife anita and his family are deepest request -- regrets at this lost to them into our nation nation and i ask that we take a moment of silence while we remember steve.

now, my opening statement. iran's nuclear program is a fundamental threat to the united states, our friends and allies into the global consensus on halting and reversing the spread of nuclear weapons. as we meet this morning, iran's centrifuges continued to spin, making more and more enriched uranium that could ultimately be turned into fuel for nuclear weapons. this threat continues to grow with each passing day. this summer in response to that threat congress passed the most rigorous sanctions ever imposed on iran, the comprehensive -- [inaudible]

we passed the comprehensive iran sanctions accountability and divestment act or cisada. it was a powerful demonstration of the bipartisan commitment to a tough approach to halting iran's nuclear program. this act broadly expanded the applicability of the original iran sanctions act, including sanctioning third country companies and banks involved in activities such as sales of refined petroleum to iran, assistance to iran's domestic refining capacity and financial dealings with the iranian islamic revolutionary guard corps or irgc. the fundamental premise of our approach is that companies should choose u.s. market over the uranium market. it is a sound approach but by no

means a silver bullet for addressing iran's desire to acquire a nuclear weapons capability. our legislation even before the president signed into law on july 1, helped to galvanize international opinion regarding the iranian nuclear issue. the european union previously a key source of iranian commerce and investment, past -- [inaudible] [inaudible conversations] [inaudible]

pursued by the administration most major western japanese and south korean companies have ceased selling iran refined petroleum and investing in iran's energy sector and the doors of much of the financial shipping world have been close to iran. major oil companies such as royal shell, france, italy is by and by, norway's -- spain, and japan have all ended or in the process of bending their energy projects in iran and there are numerous reports of the sanctions have seriously hurt the iranian economy and deepen political fissures in the iranian leadership but is that in fact the case and if so, how much closer does it ring us to a real objective which is to -- in

odd. [inaudible conversations] >> i get 10 more seconds. the purpose of this hearing is to attempt to answer these questions. i would like to hear the witnesses candid assessment of the current sanctions regime. is it helping us to achieve our goal of an iran without nuclear arms? or sanctions having the desired impacts on iran's economy and are we getting closer to persuading iran to suspend its uranium enrichment program as repeatedly demanded by the international community.

in particular is international support for sanctions holding firm? how much backfilling is there by companies who governments have not impose national sanctions? at that last point, on that last point there seems to be no doubt that chinese companies are pursuing energy investments in selling iran refined petroleum. the chinese acknowledge, i would like to know why we haven't sanctioned any of the chinese companies engaged in clearly sanctionable actions. i'm concerned we will not be able to sustain a robust -- [inaudible] [inaudible]

based in switzerland but since it is an iranian state owned company that by definition will be barred from dealing with the u.s. market, that action doesn't seem to me to have much of a deterrent effect. i hope under secretary burns and protect her will address these issues. in addition i would welcome undersecretary byrne's use another e. each aspects of iranian nuclear issue such as the recent interruption in iran's enrichment activities and the general diminishing of its enrichment efficiency as reported by the iaea. how meaningful is that? should alter our previous calculations regarding iran's nuclear program? at the recent revelations regarding north north korea's apparently enhanced nuclear facilities affected those calculations? what can you tell us regarding upcoming negotiations in iran now scheduled to commence in a few days in geneva? lastly, this month marks the

one-year anniversary of the last major demonstrations by iran's reformist green movement, which mushroomed in the wake of the june 2002 -- 2009 hijacking of the presidential election by ahmadinejad. will where does the green movement stand today? what can we do to reaffirm our close support for the pro-democracy forces in iran? i would like to close by reaffirming my own strong support for our sanctioned efforts. it is her last best hope for resolving the iran nuclear nh peaceful manner. as they i've said the alternatis are military action and even worse acquiescence to a nuclear-armed iran. both of these alternatives are unpalatable. i also want to really commend the administration for placing such a high priority on the iranian nuclear issue and for the effectiveness of its policies thus far. thanks to this administration's artful diplomacy, we have far

more international support on this issue than most of us thought even remotely possible as little as six months ago. from the outset this administration has made iran a top rarity item in virtually every meeting with foreign leaders and the results show. the administration's successful jawboning of companies have also made a significant contribution to the effort to isolate iran economically. so, type days, five months of to the day since cisada became i look forward to your candid assessment of the effectiveness of our sanctions effort, how it can be approved as well as your assessment of the prospect we will succeed in our larger goal of preventing iran from achieving nuclear weapons status. [inaudible] >> just to recognize the ranking

members, iliana ros-lehtinen for opening remarks. >> thank you very much mr. chairman and i would like to start by recognizing some of my constituents who are in the audience. they are iranian americans who are staunchly opposed to the iranian regime. some of shed light on iran's nuclear programs and the unveiling of information on different iranian nuclear facilities. many have relatives and camp -- rob and i raced with assistant secretary of state feldman a few weeks ago the need for the administration to ensure that the iraqi government lives up to its human rights commitments and protects the resident -- residents. with respect to iran mr. chairman, as we all know the jena must have one vital objective and that is to stop the regime's pursuit of nuclear at other unconventional weapons and the missiles to deliver them, its sponsorship of

terrorism and other activities that threaten americans, our interests and our allies. however since the 1990s, the u.s. and international efforts to stop the growing iranian threat has been half-hearted at best with results to match. the problem is not that a tough approach has failed, but it has yet to be fully tried. the sanctions were not fully implemented or enforced, then the focus was not on measures the u.s. could easily take but instead on persuading the so-called international community to act collectively, collectively meaning a green to the lowest common denominator while continuing to cultivate ties with the regime in tehran. rush of coors has a long record of cooperation with iran on missiles and nuclear matters reticular leg its construction of the busheir reactor which is scheduled to come on line in january. to secure russian cooperation, the current and previous administrations have resorted to

a series of concessions to moscow. what did we buy at so great a price? tacit support for u.n. sanctions and assurances that russia will wrap up assessments in iran's energy sector and russia will not at this time proceed with its sale of advanced missiles to iran. of course despite all of their concessions, russia has indeed offered a nuclear cooperation agreement and advanced missile sales to the syrian regime. china is another key ally and protector of iran and has made it clear it will prevent significant, prevent significant pressure to be placed on tehran. chinese companies are eagerly expanding their trade with and investments in iran. many taking advantage of opportunities created i western and other companies which are curtailing or finally severing their ties. recently reports indicate that china is actively facilitating

north korea's providing iran with advanced missiles and ingredients for chemical weapons in violation of u.n. security council sanctions. but support for iran comes from other places as well. determined to demonstrate its growing distance from the u.s., turkey has publicly embraced tehran, increased its economic cooperation, signed a major gas pipeline deal and try to undermine u.s. efforts to stop the iranian threat, including voting against u.n. security council resolution 1929. turkey recently prevented nato from designating iran as a missile threat to be countered with a proposed antimissile shield despite tehran's expanding missile capabilities. are manias financial trade transport and energy cooperation with iran. unfortunately securing effective action by one administration after another has been an uphill

battle. for over 14 years since the passage of the iran sanctions act, only one determination of sanctionable activity has ever been made and the resulting penalties were immediately waved. efforts to strengthen existing laws were opposed by each administration, citing a reluctance to tie the president's hands or upset other countries who want to keep doing business with tehran. this past june after a long, hard-fought struggle, the comprehensive iran sanctions accountability and divestment act, cisada, was enacted. although weaker than some of us hope this law could represent a major step forward, especially through his energy refined petroleum and financial sanctions. this congressionally driven effort has led some countries, including the e.u., japan, australia and south korea to finally impose their own albeit more limited sanctions on

tehran. on the financial front, the actions taken by foreign governments to sever their ties with the iranian financial institutions and other iranian entities designated as involved in the iranian proliferation and sponsorship of terrorism is encouraging. undersecretary levey, let me again thank you and your team and treasury for your pivotal role in these developments and/or years of dedication and acting against the iranian regime and its enablers. thank you, sir. i am however concerned history may be repeating itself regarding the state department's implementation efforts. for example the law requires the administration to investigate upon receiving credible evidence suspected sanctionable foreign investment in iran's energy sector. ..

responsible for human rights abuses. we've wasted enough time 14 years. no more waivers, exceptions are excuses. we cannot live within it near a van. we must ensure that the tools we have are used to the maximum effectiveness and look for new means of compelling iran's iic fact dvd, are interested in in outlays. i'm not just referring to the

nuclear pursue, but also to a state sponsorship of terrorism. of particular concern is iran's support for hezbollah in lebanon, mr. chairman, which has threatened violence and is expected in operatives are invited for the assassination of former lebanese prime minister are really has a massive arsenal of about 50,000 rockets and participates in and has veto power over the current lebanese government. i would ask undersecretary burns, with the u.s. is doing, to address this situation before it comes a full-blown crisis and hezbollah takes over completely. thank you, mr. chairman. and i'll ask the administration also about the continued military assistance to the lebanese armed forces. thank you for a much, mr. chairman. and i think the witnesses. >> thank you. i'm pleased to recognize for three minutes, chairman of the middle east and south asia subcommittee, the gentleman from new york, mr. ackerman. >> thank you, mr. chairman.

the 112 congress and those in junior will be the same. how do we prevent iran from acquiring nuclear weapons. it is i believe the most critical national security question facing our nation today the successive failures the buyer nation will decide what kind of world or children area. i went straight to acquire nuclear weapons is near success, but not yet succeeded and it must not. the consequences of the successful effort by iran to acquire nuclear weapons and open defiance of numerous u.n. security council resolutions solemnly undertaken treaty obligations and it is suicidal reddick which changes the world and this must not happen. implementation the sanctions of iraq been surprisingly successful, but the combined effect of u.n. sanctions and new sanctions imposed new on the ayatollah regime. it must be comprehensive and here there are two points to make. first, the economic pain must be

severe as we can make it. stations must be applied without exception or distinction. the congress will accept nothing less. second, economic team is not enough. by luck of providence the mullahs regime face and international -- internal political crisis more severe than any since the creation of the islamic public. while it is to the green movement has been effective, suppressed by the tools of oppression and the legitimacy has permanently undercutting the eyes of the iranian people. elections whose results have to be forced on an unwilling populations throughout means of mass murder,, torture or sign of weakness and that weakness needs to be excessively exploited. i call upon the obama administration administration to simulate the reagan -- president reagan's which provided across-the-board pressure as combined economic political diplomatic culture and military pressure with arms control negotiations, we might call today engagement that advance

american interests. iranian regime is likewise right for comprehensive pressure, multilateral forms the multinational institutions need to be pushed to focus the deplorable human rights record. our broadcast into iran must be ramped up to iranian people know they are not alone. the president and secretary of state need to be consistently reminded of the impression the arabian people by the illegitimate iranian regime. the armed forces of the united states need to need to be deployed in with key partners to demonstrate our ability to respond overwhelmingly to aggression and provocation. those willing to take up arms against iran, iranian influence should have material support. the iranian of the illicit materials must be able to shadow the united states, pursuing them with vengeance. it is not too late to stop iran, to rollback the nuclear program, to meet the iranian people and taking back their country, but

we must engage in this great and necessary challenge with even greater effort and vigor than we have managed so far. time is running out. thank you, mr. chairman. >> time has run out. and the ranking member of the subcommittee middle east and south asia is here, so i'm going to recognize the chairman of the terrorism non-proliferation trade subcommittee of this committee. the gentleman from california, mr. sherman for three minutes. >> thank you for holding these hearings, mr. chairman. i believe it is the most important work for us to do. this month i think that we need to see even more enforcement of existing non-and the adoption of new statutes. i hope that later this month or early next year we consider the stop of the iran nuclear program act which would strengthen the sanctions still further. in addition i should note that our colleague, congressman

filner of california has a bill with over 106 cosponsors to take the pmo i offer the terrorism list and i hope that respect for our 106 plus colleagues that have cosponsored that bill would lead to a serious consideration of the bill any hearings on it. so if much legislating to do, just as our friends from the administration have much to do as well. major oil companies from the west for the most part 1 of death in oil sector for some refined petroleum. this is a success. it is a success that comes perhaps a dozen years too late. at this point, we have to not only prevent the investment in the energy your iran. we have to prevent iran from getting refined petroleum process. i have the executive ridge of government decided to follow the law when it was passed over a dozen years ago, we would be in

a much better position now. now the only way to stop iran's nuclear program is not only what is already being done, but the much, much more difficult job of preventing iran from getting refined petroleum. and i would point out that we are where we are, not because there's been a radical change, the policy has been sincerely and sanctions act was adopted to follow the law, only to the extent that its implementation does not offend any foreign government except that of iran. this is described by a ranking member, the lowest common denominator policy. the good news is the lowest common denominator is now a higher number than it used to be, especially for japan and western europe. and we have obtained a lot of cooperation and it is now a difficult for iran to find partners to invest in its oil

fields. we also want to give credit, however, to the wisdom of our allies, but especially to the corruption and ineptitude of those who are running iran, to make doing business with that country so difficult. as to stop iran nuclear program act, it would, for example, prevent our sanction the $5 billion euro sovereign bond issuance that iran is now engaged. they realize that they may not be able to get western investment in the oil fields, so they feel they'll borrow the money due to investment themselves. the way to stop that is your legislation, which i look forward to taking up expeditiously. i yield back. >> the time of the gentleman has expired. at the ranking member of the terrorism non-proliferation and trade subcommittee, gentleman from california, mr. royce. recognized for three minutes. [inaudible] >> i've got one.

hold on tight. [inaudible] mr. chairman, i want to thank you for holding this hearing because we face a crisis. and this has to sink in. here's the headline from the "washington post" recently. the obama administration has concluded that chinese firms are helping iran to improve its missile technology and develop nuclear weapons. that represents a crisis. when we've learned yesterday that china declined to act on

multiple, multiple u.s. requests that it stop shipments of ballistic missile components from north korea, that were going to beijing on korean airlines, north korean airlines on the arabian carriers as well. when we learned that our secretary of state has asked china to act on the fact that iran was trying to buy gyroscopes and carbon fiber ports ballistic missiles from chinese companies, when we find that chinese companies were supplying iran with precursors, for chemical weapons. when we find that iran gets posed its parts and its technology from china, we face a crisis. and i am appreciative of the

fact that mr. levy is here. because as he puts it in his testimony, foreign financial institutions have a choice. if you conduct certain business with iran, you risk losing access to the u.s. financial system. the message we need to convey, republicans and democrats alike, is this conduct on the part of china in terms of violating the sanctions and helping give iran the wherewithal to develop the missile technology and the nuclear weaponry has to stop immediately. and if it does not stop, there certainly is going to be legislation from this congress to bring it to a halt. the way to do it is to simply have an understanding that this is now the law on the books of the united states.

it needs to be followed by china and it needs to be followed now. thank you, mr. chairman. i yield back. >> time of the gentleman has expired and now i am quite pleased and honored to introduce our two witnesses, to people i think this are among the most exceptional public service we have working for the united states government. the first is master william burns. under secretary of state for political affairs. previously her ambassadors served as russia come assistant secretary of state for near eastern affairs and ambassador to jordan. a career foreign service officer, he has also served as executive secretary of the state department and a special assistant to secretaries of state christopher and albright. ambassador burns is a central player in the obama administration's iran policy team. in october 2009, he led the u.s.

negotiating team in the p5 plus one talks and iran with geneva, where he struck an agreement with the iranian negotiators that would have removed significant amounts of low enriched uranium from iran sacks. the agreement was widely held internationally at the time, both subsequently rejected by the leaders in iran. as i understand, he will once again be leaving the u.s. negotiating team at upcoming p5+1 talks with iran, scheduled to begin in a few days in geneva. stuart leavy as the undersecretary of treasury for terrorism and financial intelligence, a position he has held since 2004. in this position, he has played a central role in the efforts about the bush administration and obama administration to combat iran's illicit conduct in the international financial system. in fact, he is widely considered a key architect of those efforts. but that is why the obama

administration asked him to remain in this position. previously mr. levey served as the principal associate deputy attorney general in the united states permanent justice. and before that as an attorney in a private law firm. gentlemen, thank you for coming this morning. we look forward to hearing your testimony. if you decide to come you can summarize your entire statements about part of the records and under secretary burns, why not give the dog. >> thank you very much in good morning. chairman berman, congressman layton and members of the committee, thank you for the opportunity to appear before you again with my friend and colleague undersecretary levey. we meet today at a moment of great consequence and prolonged and complicated history of concerns of iran and its nuclear ambitions. in recent months working closely together, the administration, congress and international partners have put in place the strongest and most comprehensive set of sanctions that the

islamic republic of iran has ever faced. it is a set of measures that we are determined to implement fully and aggressively. it is a set of measures that is already producing tangible results in a set of measures that reinforces our collective resolve to hold iran to its international obligations. a great deal is at stake for all of us. a nuclear armed iran would severely threat to security and stability of a part of the world crucial to our interest into the health of the global economy. it would seriously undermined the credibility of the united nations and other international institutions and seriously weaken the nuclear non-proliferation regime that precisely the moment when we are seeking to strengthen it. these risks are only reinforced by the way directions of the iranian leadership, particularly its lone standing up for for for terrorist groups like hezbollah and hamas, its position to middle east peace, is repugnant

rhetoric about israel, the holocaust, 9/11 and so much else and its brutal repression of its own citizens. in the face of those challenges, american policy is straightforward. we must prevent iran from developing nuclear weapons. we must counter is destabilizing actions in the region and beyond. and we must continue to do all we can to advance our broader interest in democracy, human rights, peace and economic development across the middle east. president obama has made clear repeatedly that we will stand up for those rights they should be universal to all human beings and stand with those brave iranians who speak only to express themselves freely and peacefully. the simple truth is that a government that does not respect the rights of its own people will find it increasingly difficult to win the respect that it professes to speak in the international community. we have emphasized from the start that what is at issue between iran and the rest of the world is not its right to a peaceful nuclear program, but

rather its decades of failure to live up to the responsibilities that come with that price. if iran is sincere, it should not be hard to show the rest of the international community that its nuclear program is aimed at exclusively peaceful purposes. facts are stubborn things, however, and it is a telling fact that iran alone among signatories of the npt continues to fail year after year to convince the iaea and the united nations at its peaceful nuclear intentions. nearly two years ago, president obama began an unprecedented effort of engagement with iran. we did so without illusions about who we are dealing with, what the scope of our differences over the past 30 years. we sought to create early opportunities for iran to pursue a different path than to build confidence in its intentions. this was both a serious demonstration of our good faith and also an investment in partnership with the growing coalition of countries

profoundly concerned about iran's nuclear ambitions. when regrettably those early efforts made little headway, we and our partners were left with no choice but to respond to iran's intransigence by appointing another tool of diplomacy, political and economic pressure. the cornerstone of this campaign was u.n. security council resolution 1829, passed early last june. by far the toughest of the four chapter seven resolutions enacted in recent years, 1929 broke important new ground in curbing arms transfers to iran, targeting the central role of the higher gc and iran's liberation efforts, planning for the first time all green and activities related to ballistic missiles that could deliver a nuclear weapon, sharply limiting iran's ability to use the international financial system to find and nuclear proliferation and for the first time highlighting for formal between its sector and its nuclear ambitions.

russia's partnership was particularly crucial to passage of such an effective resolution, which led directly to it's enormously important inflation of the s. 300 surface air missile to iran. the significance of 1929 is only partly about its content. it is also about the message of international solidarity and apart from its carefully crafted knowledge has provided for subsequent steps. a week after the passage of 1929, the european union announced by far its most sweeping collections of its measures against iran, including a full prohibition of new investment in iran's energy sector, bans on the transfer of key technology in the strictest steps to date against iranian banks and correspondent banking relationships. canada, australia, norway, japan and south korea have followed the use example. new provisions in 1929 regarding cargo expections already been

applied, resulting, for example, in a recent seizure by nigeria of an illicit iranian arms shipment. none of this is exact a toll. we have worked with our partners in conversation after conversation and trip after trip around the world to produce an unprecedented package of measures and to ensure robust enforcement. central to our strategy up in the efforts made by the congress by all of you to sharpen american sanctions. when the president signed into law the father, they sent an unmistakable resolve and purpose to expand significantly the spoke of our domestic sanctions and maximizing the impact of new multilateral measures. we are enforcing the law vigorously and energetically. already, more foreign investment in iran has been curbed than at any time since congress enacted the original iran sanctions act nearly 15 years ago. late september, senator clinton

imposed sanctions for the first time in history of the ifa and a swiss-based iranian conference involved in hundreds of millions of dollars worth of deals in iran. deputy secretary steinberg announce that we've opened formal investigations into other firms. just as importantly, we've used a powerful instrument divided by cisada baby special role to persuade european and asian firms including shell, statoil, eni and inpex for iran and provide clear assurances that they would not undertake any activities in the future. according to label x-men fame a business such as 50 to $60 billion overall and potential energy investments along with the critical technologies and know-how that comes with them. faced with new international concerns and the choice between doing business with iran and doing business with america, more and more foreign companies are pulling out of the iranian market. major energy traders like vitol,

shell, reliance ipg, glencore, trafigura have stopped sales of refined petroleum products to iran. until last july, according to open source is, iran imported roughly 130 barrels per day of refined petroleum products. in october that figure had dropped by 85% to 19,000 barrels per day. large shipping companies like hong kong-based n. y k. or withdrawing completely from the iranian market. major firms like lloyd stopped insuring. daimler madrid if you have stopped exporting cars to iran. still we must address the impact of these in more detail in his own personal efforts with firms and governments around the world remain hugely important. the short answer is that the net result of all the measures we've applied in recent months is substantial. our more substantial than any previous set of steps.

i'd also like to emphasize that we take very seriously cisada's provisions regarding human rights concerns in iran. earlier this fall redesignated a senior iranian officials for human rights abuses and we are working with treasury on other potential designations. one of the best ways in which we and others can support the cause of universal human rights in iran and the brave people who defend them is to hold accountable the people who deny them. i cannot honestly predict for you with any certainty how all these collective and individual measures will affect the choices that iran's leadership ranks. we will continue to sharpen those choices. we will show what is possible that iran meets its international obligations and here's to the same responsibilities that apply to other nations. we will intensify the cost of continued noncompliance and showing grant the pursuit of a nuclear weapons program will make it less secure, not more secure. and in the meantime we will

continue to reassure our friends and partners in the gulf of our long-term commitment to their security, a commitment clearly reflected in the visits to the region that both secretary clinton and secretary gates will be making in the next two weeks. let me conclude by emphasizing too simple but important realities. first iran is not 10 feet tall. its economy as badly mismanaged. iran's leaders have tried very hard to deflect or divert the international pressures all around them. it's often acknowledgment of their potential effect. second and just as significant, sanctions and pressure are not meant to themselves. their complement, not a substitute for the diplomatic solution to which we and our partners are still firmly committed. there is still time for diplomacy is iran is prepared to engage in serious discussions. there's still room for a renewed effort to break down this trust and begin a careful process of building confidence between iran and the international community. there is still an opportunity for an outcome, which ensures both iran's rights and the

fulfillment of his responsibilities. the p5+1 led by representative actionable approach next week's meeting with iran with serious purpose and a genuine readiness to engage constructively on international concerns about iran's nuclear program. the door is open to serious negotiations if iran is prepared to walk through it. thank you. >> thank you very much, secretary burns. secretary levey. >> thank you, mr. chairman. ranking member ros-lehtinen, thank you for inviting me here today to discuss the current status of the global effort to impose sanctions on iran. i appreciate the true partnership we've had with this committee over many years and i'm happy to be here at undersecretary burns who has been an excellent leader on this issue and many others. he has given an excellent overview of our overall iran policy. i can assure you that we share a sense of urgency well expressed

and we have the same priority placed on this challenge. i can report to you that we have made significant progress in implementing our strategy to impose sanctions on iran and the strategy is beginning to have the effect it was designed to have peer pressure in the choice iran's leaders between integration with the international community, living up to their international obligations and ever-increasing isolation, we are beginning to create the leverage we need for effective diplomacy. the strategy we designed it are now implementing that several critical elements. first, we recognize from the outset that no one measure would put enough pressure on iran and so we are imposing a variety of measures simultaneously. second, as bill pointed out, we take steps in advance to generate the support necessary for a broad coalition of governments in the earth to support its own sanctions. third, we focused our measures on iran's illicit conduct, such

as wmd proliferation and support for terrorism since that is proven to be an effective way to build broad coalition. and finally, we designed a strategy that uses iran's expected attempts to evade sanctions to our advantage by aggressively exposing iran's deceptive content and underscoring iran's riskiness of the commercial partner. it is difficult to overstate the importance of security council resolution 1929 and building our international coalition in implementing the strategy. in addition to the provisions that go much into the the resolution financial provisions are particularly powerful as they call upon member states to prevent the provision of financial services if there are reasonable grounds to believe the services could contribute for iran's nuclear missile program. and given the vast body of public information demonstrating the scope of iran's illicit conduct of deceptive practices is virtually impossible for banks and governments to assure themselves of transactions with iran could not contribute to

proliferation sensitive activities. indeed in the aftermath of the resolution's adoption, many of our partners as was mentioned by several of you at undersecretary burns have enacted robust sanctions programs. these sanctions, regimes both asset freezes and financial restrictions on a wide range of assets including the irgc and irisl, and they have enacted broad measures to protect their financial systems for my winning abuse such as reporting or preapproval requirements for transactions involving iran. also critical to our strategy is the passage and implementation of cisada's. as you know, financial provisions of cisada are quite powerful as they increased the star choice birds pointed out. it is a very dear connie and potential sanction. we have moved quickly to implement society. we publish required regulations promptly and we've traveled to

more than 24 countries since jan, both to educate governments in the private sector about cisada and also to share information about iran's illicit conduct. we have more than dozen countries to investigate what could be under the act. but we are seeing thus far is very dramatic. even banks that had previously been willing to do business with designated iranian banks are now reversing course and cutting ties with iran altogether. beyond this average, treasury has used its authority to designate a wide range of iranian actors melissa condit. as i mentioned earlier, we expected iran to try to evade and include action such as definitions to maintain the effects of sanctions. just since june, we have designated 53 z two individuals, 10 individuals or entities related to the irgc into iranian phone banks, host bank, homburg

pih. we have also identified 42 entities as being bad at the iranian government. the cumulative effect of sanctions has been to increasingly isolate iran from the international financial system. iran is effectively unable to access financial institutes and it increasingly difficult to conduct major transactions in dollars or euros. iran's reduced access has made it very difficult for iran to make payments on loans and maintain insurance coverage on irisl's ships and to continue cooperations. exuma to the seizures by irisl creditors. the chairman indicated in his opening statement with great regularity, major companies across the range of industries, finance, engineering, energy, manufacturing, automobile, insurance, accounting firms are all announcing that they are curtailing their business dealings with iran. there are clear signs that the

speed, scope and impact of sanctions have caught the iranian regime by surprise. in the face of pressure, the reigning government has increasingly returned to the irgc for key economic products. the trend meshes perfectly with her strategy as is hard to imagine a better sanctions target than the irgc. relying on the irgc is likely to exacerbate iran's isolation of companies around the world have begun to show my business with the irgc, given its support for terrorism and involvement in iran's proliferation activity and human rights activity. our efforts to consistently exposed iranian sanctions are also paying off. in september a high-ranking iranian government official underscored exactly the effect we try to create when he said quote, we have never had such intense sanctions and they're getting more intense every day. whenever we find a loophole, they block it, close quote. in order to maintain and you increase the impact we've create a company to remain vigilant and

intensify efforts. by doing so we can continue to create leverage data for diplomacy to be effective. i look for to continuing to work with this committee to achieve that goal. thank you. >> thank you drew much, secretary levey for the testimony and the overview. i got myself five minutes to begin the questioning. neither of you mentioned china in your testimony. our chinese companies involved iran's energy sec there -- and if so, why are we not sanctioning them? i understand the dilemma. what are the implications for relations with china if we were to sanction a state owned energy company? i also throughout the alternative proposition . what are the implications for our entire sanctions regime if we don't? power imports and our chinese companies to iran's energy sector and refined petroleum

products? and are there other countries or companies that are currently supporting iran's energy sector? >> mr. chairman, first, let me take very seriously just a few and congressman royce emphasized the iranian energy sector. we have at the very highest levels, including in president obama's most recent meeting emphasized the importance we attach to restraint on the part of china and its dealings in the iranian energy sector. we've seen reports and also the importance we attach to not only slowing down existing investments, not engage in a new one, but not battling behind companies that the large number of companies that are pulling out of the iranian energy sector. recent reports and spent and that trade repressed other open sources of slowdowns in chinese sec duties in the iranian energy

sector. it may be that the chinese are concluding that the iranians in so many other companies around the world are not reliable energy partners. they are clearly -- the chinese are clearly trying to diversify their energy partnerships around the world. it's also clear with regard to your question about refined petroleum products, that rising domestic demand in china is occupying a much greater proportion of the attention of chinese refined petroleum producers. so for all those reasons, we will continue to push very hard on this issue, which remains quite significant anything to our hopes to apply the sort of pressure that's going to be needed. >> thank you. i don't like raising points of revelations from wikileaks, i'm going to make an exception here because it concerns a matter of great -- potentially great significance and i think both the ranking member and mr. ruiz made references to this. do you wish to comment on "the new york times" claimed, based

in southern wiki leak documents that iran has acquired 19 medium-range nuclear-capable missiles from north korea? according to these articles, they can reach berlin or moscow. the article also says that possession of these missiles can facilitate iran's development of intercontinental ballistic missiles. and i should point out that that was treated skeptically today in today's "washington post," based on the post-interpretation of the same wikileaks documents. rather than take one or the other, what are your thoughts about -- >> just several quick comments. first and wikileaks in general, i think the reality is that the despicable breach of trust that we seem through the wikileaks disclosures has been substantial damage to our ability to carry out diplomatic efforts like the one that just described to you. confidentiality of conversations

that the core of what we do with diplomats, just as it is for journalists or doctors or lawyers or others. and it has done damage. secretary clinton is literally working night and a conversation with countless leaders around the world to try as best we can, not only to express regret but to work through these issues. we've also taken some quite stringent measures to ensure that the state department doesn't need other, is according to people who don't need to know. the first general point and wikileaks. i can't comment on the content of particular alleged cables that wikileaks has referred to. what i will however stress as a response to mr. royce's very serious reinforcement of concerns about any evidence that we come across the support for iran's illicit missile and nuclear activities, we take seriously every piece of information that we see.

we have on a number of occasions raised that information with the chinese government as well as with other governments. in some cases, we see them we see them act on it, but the record is the next one to be honest and were continuing to press those specific concerns that we have because i agree with you, that it is extremely important to fully implement the provisions, particularly resolution 1929, which adds significantly to the flat prohibition of any support, technical or otherwise for ballistic missile activity in iran is capable of delivering a nuclear weapon. so we'll continue to take this very seriously and follow up on it vigorously. >> my time has expired. the yield now five minutes to the ranking member. >> thank you, mr. chairman. thank you, gentlemen for your testimony. as he pointed out, secretary burns, the next round of the p5+1 negotiations with iran is sensibly scheduled to take place in just a few days in geneva.

however, in the lead out to these talks, iranian leaders have reiterated their commitment to continuing their uranium enrichment program, given the statements in the position of the iranian leadership, what does the administration expect to accomplish with his upcoming negotiations? and related to that, a previous negotiations were aimed at reaching an agreement that would require iran to suspend its uranium enrichment activity as mandated by the u.n. security council? so was a complete halt to enrichment prerequisite or is the administration willing to consider a partial halt? also, there are rumors of a new p5+1 offered to the iranians. does such an offer exist? and what type of incentives and disincentives are included in

the proposals? also, what is the administration's plan regarding the uranium that tehran has enriched to the 20% level? will we insist that iran surrender the entire amount or as a deal in the works allowing iran to keep some portion of what has already amassed? and how do you plan to deal with iran using the negotiation, this stalling procedure or the u.s. and other countries? and then lastly, i know the chairman has talked about the energy and refined petroleum that cavities with iran and china being a repeat offender, but we also have the iran north korea syria non-proliferation act and that is also a sanctionable procedure that we can use.

and i wanted to ask about the administration possibly taking action against russia in their entities implicated in the proliferation assistance to iran. i don't know for time for all of that. thank you, sir. >> thank you. and i'll try that they can very briefly to go through four or five points. first time in terms of our general approach, as i emphasized in my opening statement, the p5+1 will go into what we hope will be a serious round of discussions with the iranians prepared to engage seriously about a very profound concerns about iran's nuclear program. we will continue to emphasize the importance of taking tangible steps to address those concerns, tangible steps, which are necessary as a result of iranian noncompliance over many years and the mistrust that is created. we will be guided and the response of my second point, the p5+1 will be guided by a whole

series of security council resolutions and iaea resolutions, security council resolutions commotions of the mandate and provision you mentioned. third, we will certainly look for ways in which we could build confidence, fits the iranians could take that could be taken together to build confidence. last year, as you know, we made an attempt to the original tehran reactor proposal to do that. were still prepared to consider the p5+1 for the possibility of making use of that concept. the last june, we made clear to mr. amato, the director general of the iaea, that we, the russians and the french, are partners in the so-called vienna group on the trr issue had several concerns that would have to be addressed if the trr is to be a real confidence building measure because circumstances have changed since this was originally proposed last october. >> thank you.

you talk about the steps. are they tangible steps? and is there a deadline? are we really providing these deadlines for them to make good on what they supposedly offer or just keep stalin and stalinism in one club? >> know, first in terms of tangible steps, you mentioned the issue of enrichment almost 20%. that's one of the concerns we made clear. they mean, that is something i would have have to be addressed. >> terms of later. i want to ask about the russian entities. any movement and sanction those? >> on inks, which is the question i was asked, we have produced -- the state department has finished its draft of the report for 2008. we're trying quickly to catch up. we provided the 2007 report i think a few months ago and that is in circulation interagency right now. so we take very seriously the

importance of following through on inks and hope that report early to next year. >> thank you very much. sorry ran out of. thank you, mr. chairman. >> the time of the gentlelady has expired. chairman of the middle east and south asia subcommittee. >> thank you. first of all, it seems that the evil twins of iran and north korea had been separated at birth and are now reunited and found each other and have certain things in common and certain things that are different, with iran insisting that its nuclear program is for energy only and the north koreans protesting very, very about late that it is absolutely for nuclear weapon, demonstrating that at every moment that they can.

the combination of the two of them joining in their mutual interest is very lethal. it seems to me that i'm on terrorists and terrorizing nations, it almost seems that possessing a nuclear program is a rite of passage to becoming a respected member of the international community and they are pursuing that at all costs. trying to evaluate the effectiveness of placing sanctions on iran, to drive it to the point where they become an economic basket case, such as north korea, where we really don't have to have too many economic sanctions because they are there already at the bottom of where they have to be, still not giving up their program. i think we should reflect a bit

on what happens when the iranians are driven to that economic low point, should the program of imposing strangling sanctions as the successes seem to indicate that we will have, whether or not that reduces the goal that we are looking for. some of the things we have seen in these leaks that appeared in the media, a lot of us are found to be true, those of us who have spoken personally to world leaders, especially in the middle east, will tell you how to impose tough sanctions. when you ask the question while they were, they say no. there is no way that they're going to work. i went point to remake the determination that the sanctions, no matter how successful a measurable aspects are not going to prevent the iranians, whose game is intended to just run the clock on this

until they have the weapons, that we have to find an exercise in alternative means? where's that point? >> mr. ackerman, i can't give you a precise point. i mean, all i can say is i think there is still time to continue the approach that we've used to tighten pressure, to try to make clear that there is an alternative pathway through which iran could have a peaceful nuclear program and enjoy the benefits of context with the international community. but it's going to have to take some very concrete steps to address international concerns about its nuclear program. i think there's still time for a serious diplomatic effort to produce that outcome. >> analysis in question of secretary levey. >> i just got a comment, mr. ackerman. having the distinction you draw between north korea and iran is

there a difference i think also the potential effectiveness of sanctions. and the basic point i think is that iran doesn't want to be isolated. and perhaps a is not so much the case of north korea. iran doesn't want to be isolated. they look out from where they are now and see lack of investment coming in. they see the inability to do business with major financial firms. they see the inability to do business with first-tier energy firms. they see it at that as on their oil and gas production in the medium-term, the inability to create jobs, et cetera. they don't want to be this sort of pariah. and as bill pointed out, there's no guarantee here at least gives us a reason for confidence. >> let's assume that you're widely successful and in the period of all give 90 days, you cut the gnp, their economy and everything else by 99% and they

have an atomic weapon. they have a nuclear weapon. where are we? >> i think the point -- >> i think your clock runs faster than theirs is the point i'm making. they think we have to have a plan b. because plan a by anybody's estimation, even if successful beyond our wildest dreams and a real quick timeframe is not going to change the dynamic. >> the time of the gentleman has expired. the gentleman from florida, mr. mac is recognized for five minutes. >> thank you, mr. chairman. and thank you to the ranking member as well and for the witnesses today for being here. i also -- someone earlier said they didn't hear you talk about china in your opening statements i also didn't hear you talk about venezuela in your opening

statements. and let me suggest that venezuela is in violation of the iran sanctions act. that being said, if both of you could answer why have we not sanctioned hugo chavez, that is question one. and i'll let you answer that will quicken them in couple of follow-ups. >> welfare, i'll start by saying we did sanction when venezuelan bank because of its connection to an iranian bank coming the export development bank iran, which wear dirty extinction. we will continue to monitor very carefully the venezuela and iran and relationship and particularly venezuelan relationship with u.n. security council resolutions and hold them to their international obligations. >> secretary levey. >> as bill pointed out, we have taken action and identify conduct in violation of conduct and will continue to do so. >> what information you have on the allegations of gasoline in

excess of 1 million u.s. dollars has been sent from venezuela to iran, utilizing china's national petroleum corporation in the national oil company clerks >> five to try to get you an answer on that, sir. i don't know. >> i have no further information >> okay. then, well, let me suggest that venezuela has violated the sanctions that by its shipments of gasoline to iran. next question, what is the status of the joint venezuela iranian international development bank and its u.s. alleged connections to iranian military entities and nuclear ambitions? >> i'll get back to with a more complete answer, but in general, i'll say we've been looking very

carefully banking ties between iran and venezuela. we have -- when we've identified sanctionable activity, we've taken action with a subsidiary of the development of iran, which we sanction. there is also a fair amount of bluster but we have also seen from venezuela, where the airplane up some of these guys and sometimes the establishment substance behind the bluster as they like us to believe. and we have to make sure that we cut through all that and act based on the evidence. will have to get to in a more detailed answer. >> let me suggest this. that's their problem. if they choose to bluster about it, we need to hold them accountable. i mean, i think as he listened to some of the other members, they're trying to run the clock out. and so let's take their word for it. if hugo chavez says that he is sending gasoline, take his word on it.

if it thinks iran violation with this iran sanctions act, take his word for it. now if you don't take his word for it, there's punny of evidence also to suggest that in both those cases, he is in violation. the problem i have is when you have and act like the iran sanctions act and you apply it to some and you don't apply it to others in your slow on the draw, others figured we'd take a minute. so if were going to be serious about the area and sanctions that, it starts with countries like venezuela. we need to hold hugo chavez accountable. i think that as you look through, you'll find even more connections that are in direct violation of the iran sanctions act. and me ask you this, secretary levey. will you set up a task force on

database involving developing iran's nuclear capacity and other corrupt activities? >> i guess the question would be more of a state department lead, but were happy to take a look at it in detail and take whatever action is appropriate. i want to assure you, there will be no hesitation to take action against venezuela or any other country, for that matter, if we identify sanctionable activities. no question about that. >> well, i'll suggest again that he is in violation. and so actions need to be taken. secretary burns. do not just reinforcing what stewart said, will take all the resources they need to get to the bottom of all the concerns that she greatly raised and where we come across evidence, will certainly hold the venezuelan government accountable. >> time of the gentleman has expired. the gentleman from california, chairman of the terrorism non-proliferation trade

subcommittee, mr. sherman, five minutes. >> the chaired several members have focused on china. china taxis in 100 ways, the economic security of americans, cooperates with them subsidizes word regimes. and this is best exemplified in the example from the reagan member of our subcommittee, where china facilitates the transfer of missile technology from north korea, which is subsidizes to iran, which it uses the threat of its u.n. veto to protect. and i don't blame so much beijing as they play washington. we have congress have a choice between two approaches. one is to continue to denounce china in this room and others in the hopes that her words will stink so badly that beijing will change its policies. and occasionally we grant to the administration the authority to

actually hit china a little bit, just does it thought i would allow you to sanction companies, but we know you want to attend a significant degree. one approach is to continue our current policy. the other is to take a radical approach, such as the bill i proposed, which within six months would end most favored nation status for china. given the power of wall street, i think it is clear that at least at the present were going to continue our present policy. as to plan b, saudi arabia told us what our plan b was. i'm hoping plan a works. secretary burns, i was struck by your opening comments in which he said that sanctions were a mere complement to negotiations. now one view is that iran really wanted to buy a moment with the united states.

another view is that iran wants nuclear weapons so badly that nothing but the prospect of the brutal murder of all regime leaders by their own people would cause them to a band and their nuclear program. assume -- they realize that maybe less optimistic than you. to send a second iran, are our sanction policies enough not to just encourage a coup by iran to join us in negotiations, are you building towards sanctions long enough to force a determined ledger and iran to choose between regime survival in the event of a nuclear program? >> mr. chairman, those moments are nothing i've ever associated with doing business with leadership. i think our approach is also pretty unsentimental. >> a little closer to the night.

sure you know what i said is that kumbaya moments are not what i do. we sharpen the choice is the leadership faces to try to ensure that it sees both the possibilities of addressing international concerns about its nuclear program, but also the costs. >> the question is, do you have a plan a double force this regime to force the program or do you only have a plan of sanctions that would encourage irrational regime to try to reduce the sanctions? >> as we've described to you, mr. sherman, what we have is an approach that is very unsentimental, which seeks to sharpen the choices for the leadership and imposes a stiffening set of costs. >> letting the fund. the idea of stiffening implies

that we have a lot of time at the executive branch complied with the law back in the mid-90s, we might have that time, but we don't. we've got to take action immediately bites the iranian economy. toward that the recently enacted law provides for sanctions for those who provide gasoline to iran. the standards are a million, 5 million the law. is the failure to launch formal investigations against and actually sanction firms due to a lack of will or just a believe that we don't know who it is that's providing this gasoline? do we not know which tankers are rising at a rate and ports? do we not know who owns those tankers, even if we don't know who owns the oil on them? do we not know from which refineries they arrive? what do we have intelligence?

why have you not sanctioned or even began formal investigations against any entity taking gasoline to iran? >> with regard to a gasoline refined petroleum product, i think it's pretty striking that just in the few months since cisada past there was a draft in the amount of petroleum product iran is importing. we always mention the number of companies which are pulled out of that business. so i think what we've seen is a quite significant move in the direction that we've all intended. >> secretary, thank you for your answer, but it wasn't my question. >> time of the gentleman has expired. >> thank you, mr. chairman. i want to thank all of the iranian americans that are here in the audience today, concerned about a mutual concern that we all have at camp ashraf and the delisting of the mek as a foreign terrorist organization. i know the state department and

foreign bears committee are supposed to work very closely together. my question from secretary burns, is why has the state department refused to brief the subcommittee chaired by mr. sherman on the delisting of the mek? ..

>> i would point out the state department refused to do a briefing at the ask of our subcommittee for a month, but did arrange for the cia that addressed some of the questions. >> that's my point. that briefing yesterday i attended was not by the state department, but by the cia. those two agencies are not the same. i'm just curious why the state department, it appears to me is so obs nant even after going to court and the court ruling against the state department ruling them to provide information about the nek in this lawsuit, information that is required to be delivered in january which is next month the way i figure it, and why secretary clinton in 2009 said that she would review the whole designation of the mek in the next two years, that has not been done. the two years is up in january. i want to know what information the state department has that is

so relentless on your part that they should remain on this list. do you know that information? >> we are reviewing in response to what the court said and to what secretary clinton said. one step in that review is to allow the mek to review the unclassified material that led to former secretary rice's decision in 2005. we will await their input and complete the review as we promised, and if there's other questions beyond the briefing cucted yesterday afternoon as i said, sir, i'd be glad to take those and get you further answers in the meantime. >> it appears to me just to be getting worse and not better. people are very concerned about their relatives that live there. what is some hard line new procedures that we are taking as the united states to ensure the safety of those people in camp

ashraf. >> as said, we take seriously the concerns raised about inadequate availability of medical treatment and other kinds of activities at camp ashraf and there's two individuals in particular and we made sure they had access to the threement they needed. -- treatment. we hold them to their obligation to make sure the basic human rights of the people there are protected, and we continue to do that. >> in other words, the opposition is we are just encouraging the iraqis to do the right thing. the hard lined evidence that we are encouraging in a diplomatic way that they protect the safety of the people in camp ashraf. >> we and the u.n. mission

continues to encyst the iraqi -- insist the iraqis meet their obligation saying they are not subject to forcible reab traition to a person who might prosecute them, they have access to the medical treatment they need, and we'll continue to push that hard. >> lastly, my own opinion is that the greatest hope for iran and the world is a change in regime in iran. it's not to go to some type of military conflict and hopefully the good folks in iran change their own rogue, unauthorized illegitimate government in my opinion. what are we doing for that if any? >> sir, as i said in my opening statement, the president and secretary took very seriously the importance of supporting human rights of iranians. we do that by applying this and

designating individual and senior irani officials who are guilty -- >> you're taking my time. i have that answer in writing. my question is what are we doing to promote the opposition in iran, not human rights, and i'd like to have an answer to that. >> if the administration would lay out a number of different things you are involved. thank you. the time has expired and the gentleman from florida is recognized for five minutes. yes, among my limitations of power is the ability to get your mic to work, and even the other ones are fast evaporating.

you want to come up? no. >> [inaudible] [inaudible] >> what? we're -- we're -- >> [inaudible] i think we should start it again in five minutes. >> thank you, mr. chairman, this is a nice place for a freshman to sit. i'd like to commend you for your leadership on these issues and thank you secretary burns for your testimony. on september 30th, deputy secretary steinberg announced

that state oil and eni and world dutch pledged to end investment in iran energy sector and as a result the personal rule provided for there was no investigation into their activity. the special rule provides that and as the notice stated that they are not longer engaging in or have taken steps towards stopping activity. my first question is to what extent do those four companies continue to operate in iran's energy sector? >> just to add, sir, there's a 5th company since then too which the special rule applied impacts, a japanese company. broadly, it's a demonstration that that instrument, an important one, is working to produce the outcome that we want. with regard to the companies you mentioned, i can try to get you a more detailed answer, but we've had detailed conversations

with nose companies. they are winding down quite rapidly, and they have given us clear assurances that not only are they winding down current operations, but they are not participating in any sanctional activity in the future. >> do we know how quickly? >> i can't give you the precise answer, but it's in the very near term, and in some cases already wrapped up, but i'll try to get you a clearer answer. >> if you could for each of those, and do you know though, is it, is it weeks, months? are they finishing existing contracts? >> no, it's, you know, i can't give you a precise answer. i promise i'll get you one, but it's in the very near future. these are companies that are pulling out of the iranian surgery sector and committed to not engaging in future activity. >> okay. i would -- so, i think in most cases we're

talking about weeks, i can't tell you if it stretched beyond that, but i'll get you an answer. >> i'd appreciate that. can you confirm that those companies that the ends of the september certified they were leaving will no longer be doing business in iran in the next several weeks and i'd appreciate that very much. that leads to the next question again with respect to what companies have said they are going to do and when they're going to do it and what constitutes credible evidence that the "boston globe" reported that the company promised the united states government they will end operations in iran on completion of existing contracts and sitings further that existing contracts worth $100 million will be in iran until 2013. according to that report, those contracts, they entered into 12

new contracted valued at more than $400 million even after telling american officials they were going to seize activities. do you have anything further on their efforts and when they are leaving iran? >> no, we remain concerned for them about the reasons you described, and we'll continue to press those concerns. i don't have anything to add on that point unless you do, sir. >> mr. secretary, then, does this report, and this is, i think, the main question i had today, does the report that cites internal documents of the company like this report that was published in the "boston globe" does this constitute credible evidence that has or will cause an investigation to be launched against them? >> you know, in trying to determine credible evidence, we go through all of those reports. we also talk to companies

themselves. we talk to governments, you know, of which those, you know, companies are hosted. we also obviously go through all the information in our intelligence community. i can't give you a simple answer on that except to say we exhaust all the information we have at our disposal. >> i understand. if you determine that these internal documents are valid and actually come from the company itself and the broader question then is if any one company identifies, self-identifies as a company that is doing business in iran, does that constitute credible evidence, and if it's not clear, shouldn't that constitute credible evidence? >> it certainly is a very important factor in coming to that judgment just as you said. i mean, i think just to take a step back for a second, you know, last summer asked the question about, you know, how many questions or how many instances are there where there may be sanctional activity?

i mentioned in a hearing there was 7-10 in july. since then, we sanctioned one company, five through the use of the special rule have pulled out or are pulling out from the iran energy sector and launched investigations into several others. we are trying to follow through energy jetically -- energetically and thoroughly on these issues. >> the time expired. i'm going to interject here which is probably not the way to do it, but i'll take it as a privilege as the last hearing of my chairmanship, at least for awhile. [laughter] and just, the law provides for this credible evidence threshold and provides for 180-day investigation. i don't know if that is what mr.

deutch was getting at, but there's an investigation within that 180 and the threshold of credible evidence, and we shouldn't fall into the trap of needing enough evidence to make a final determination about a sanction in order to decide whether or not to launch an investigation, and with that, i think i've exhausted whatever privilege i gave myself, and i better go on to the next member. gentleman from california, mr. royce, recognized for 5 minutes. >> thank you, mr. chairman. the story i pointed out from the post actually predated wikileaks, the story on the obama administration concluding that iran was, was being helped by china in terms of the development of its nuclear weapons and its missile technology. it comes from a story last

month. our state department special advice sore for -- adviser for nonproliferation presented chinese officials with a significant list of companies and banks assisting iran with its missile and nuclear technology. i think what concerns us is the "wall street journal" said yesterday the procurement activities in china is growing. it's on the upswing, and we know that china looks the other way as weapons trade between north korea and the islamic republic of iran ends up entrenching both regimes, and that reality pours cold water on the latest u.n. sanctions revolution that the administration lodged this morning, a resolution that puts congressional sanctions on the back burner, and i can't help but feel a sense of lost time,

but as stewart levy pointed out, the new legislation includes potent new financial sanctions, and these are patterned after section 3.11 of the pay patriot act used on north korea which brings me to my question. i remember when that was imposed. the bank of delta asia, and it had a certain effect on the hard currency that ended up being constricted from the hanldz of the regime, -- hands of the regime, and i thought you might want to layout what the effect was on north korea at the time, and it worked probably because there was concern about reputational risk on the part of the banks that participated in that effort, but i'd also ask you is it possible that chinese banks today are

concerned about reputational risk and therefore could -- this could be just as effective. let's go through it if you would. >> well, thank you, mr. royce. you're referring to an action that we took under the patriot act back in 2005, i believe, to designate a bank in makow under the appropriation act under 311 and to summarize quickly, the overall effect is it led banks around the world to stop doing business with north korea because we had put into the public domain a catalog of the kind of activity that north korea engages in and the fear that banks had they would be swept up in that led the financial institutions to say this is not worth the risk to continue doing business with north korea. i think as i said, this was a

more contained target, if you will, and so we've applied some of the same prince. s in going after the iranian strategy in that there's a much broader integration into the financial system that we are already dealing with and just one action like that would not have the same dramatic effect, but we have drawn upon the same principle that rep pew table institutions don't want to do business if they fear they would be caught in illicit activity like iran's missile procurement and support for terrorism and so forth. that's the reason why we had the ability to have the affect we've had thus far in the banks, and we already had a significant effect, and fasada significantly increased it because it created a situation where any bank that continued to do business with the banks we pointed out is now

at risk of losing access to the u.s. financial system. it made, if you will, a multiplier effect on our designations, and it has had a dramatic effect thus far, and to come down to your final point which is, i think, that that effect even applies with respect to chinese banks. as many people have expressed, and as bill has said, we're quite concerned about the role of china in this whole strategy, and we're continuing to press it. we have one thing in our favor is that chinese financial institutions seek to have a global business model and a global footprint, and therefore they take these reputational concerns seriously and that gives us the ability to be somewhat persuasive with them. >> my only regret, mr. chairman, is those sanctions were ultimately lifted, and i think, you know, it's sanctions

enforcement, sanctions enforcement, the stakes are too high, it's the enforcement that gets the demonstrative effect. thank you. >> talk later. the gentleman from california, mr. costa. >> thank you for this hearing, but unfortunately, i don't think time is on our side. clearly as noded by the -- noted by the members here on the dias is china continues to be a problem with the sanctions and this must be enforced. i'd like to move this to a little westward on another country that i think is an important participant, a nato ally, turkey.

mr. secretary levy, how have the turkish banks responded to the new sanctions, and are turkish banks continuing to work with banks that the u.s. has sanctioned? >> with respect to turkey, i think on the one side there's a couple points worth making. turkey voted against the resolution as we know, but they implemented they will instate the resolution and also stated they'll leave to the private sector about what business the private sector will do, and i've been to turkey since this was passed and other treasury officials have also been there since it passed, and we engaged with the private sector there and the banks and private association and the government officials, and what we are

finding is that the private sector and the banks in turkey are reacting similarly because they are concerned about the potential of losing access to the u.s. financial system and they are concerned about their reputation. i can't give you more details about this in the open setting, but that's the general trend. >> to enforce sanctions, in in fact we find their banks continue to do business and would we impose the sanctions? >> yes. >> ambassador or secretary burns, i'd like to bring this back around. we zeused early -- discussed earlier russia's role in making the sanctions work. do you believe there's a correlation or connection with our efforts to secure the s.t.a.r.t. treaty that is pending over in the senate as to

how russia's behavior will be as we go forward on enforcing these sanctions? do you think there is, in your view, a direct correlation here? >> well, just two points, sir. first, i think russia's partnership in the diplomacy leading to resolution 1929 and its own decision to cancel the s-300 sale was crucial. without russia's partnership we wouldn't have resolution 1929, and without resolution 1929 it's unlikely we would have seen a significant set of measures from the eu and others. it was a shared concern about iran's nuclear ambitions is right at the core of our relationship with russia over the last couple years. certainly the s.t.a.r.t. agreement is in the interest of both of our countries. it's very much in the american national interest and as the president and secretary made clear, we hope very much that it

can be ratified this month because i think it is an important demonstration of a partnership with russia which is also producing important dividends with regard to our shared concerns about iran. >> i'd like to ask a final question and i noted it earlier. the revolution regard in iran, how effective -- affective are these sanctions in trying to impact their ability to continue to operate? have we made any determination? i mean, clearly they are in essence part of the government, but obviously, and i don't know whether secretary levy you feel best prepared to respond to this, but it seems to me that the revolutionary guard in iran is at the head of many of the problems we deal with here.

>> the short answer is that you're right that their involved with the problems, but the only good news i got is that is now something that is not just recognized by the united states, but by the international community, so one of the most significant pieces of 1929, which i think was widely underestimated when it was first passed, one of the significant pieces of 1929 is its designation of a number of irgc companies for sanctions in the resolution. that led to other countries, including the eu as an organization and similar action was taken by japan and south korea, and the overall effect has been to create a dynamic that has companies around the world saying they won't do business with the irgc, and if you add to that, the way the iran gets into secretive

conducts and you don't know who you are dealing with iran, and the likelihood you deal with the irgc, that gives you sanctions. i'll give you a good example of this -- >> well -- >> but i don't have to. >> well done. [laughter] >> thank you very much, mr. chairman, and let us note the good job that you've done in conducting being chairman of these hearings over the last two years, and it's been an honor to work with you knowing then and also considering the fact that we are demonstrating for the world that here in the united states of america people can disagree, but we have respect for one another, and we treat each other fairly in trying to decide policy, so thank you, mr. chairman, for your leadership over the years. i'd like to associate myself with the concerns of congress

poe in terms of the citizens of camp ashraf, and i think that it's disconcerning to understand that we have to play games with the government of iraq after we have invested such a massive amount of treasure and blood. we need to hear from iraq, from the government of iraq, a solid commitment that they will not betray the people of camp ashraf to the mullah dictatorship. that would be terrible, and we would lose leverage ect.. if you could pass that on, i would appreciate that. thank you, secretary burns, for your analysis there of the relationship we have with russia in dealing with iran. it's easy to see and put this in one dimension to understand

russia's built that nuclear power plant, and we also understand when they signed the contracts, they were in a horrible economic situation and felt they were being pushed to make such deals, and so you have testified today that we have cooperation from russia now in dealing with iran, but i think also this hearing has dmon -- demonstrated that our china policy has been a dismal, dismal failure, not only the chinese not cooperating, but we can see, not just iraq and iran and that area, but chinese, of course, provided the nuclear weapons for pakistan through korea, and they're using -- the chinese seem to use korea as a puppet, and the chinese, of course, have just been playing a very negative role in the world,

and my complement to the chairman also should suggest in his opening statement, he outlined the problem with china. if we're going to have a peaceful world, we have to start dealing with china in a more forceful way. one last note, and i'd like you to answer this, but i understand that oil now is being transferred, some of the sanctions you're talking about have been working, but oil is now being transferred in a large amount of oil from iraq, from the crude area of the iraq. is that true, and let me just know if it is, that we passed a resolution that i authored that would establish a counselor, and we passed that and that would not have passed if we knew the

curds were shaping large -- shipping large amounts of oil. what's going on with that? >> we heard reports of oil smuggling across the border of northwest iraq and there's a state department treasury team in baghdad recently to talk specifically about those concerns and emphasize the need for this practice to stop. i don't know if stuart wants to add to it, but we take it seriously. we followed up, and we continue to. >> is this oil smuggling or winking and nodding of the government oil smuggling? >> there's reports of smuggle that's worry worrisome and whatever the implications, it needs to stop. >> i have found it disconcerning i find out of wrongings of other

countries through these leaks of classified documents with wikileaks. we have to work on the fact that we as members of congress deserve to know if hostile countries know what's going on and our government is protesting something that's going on with the hostile government, meaning our government knows about it, the american people, and certainly congress should know about these things, and for example, there is a -- we know that at least one weapon systems from china has been shipped over where we protested it, and the american people don't know anything about it. thank you very much. >> the time of the gentleman expired. gentlelady from nevada, ms. burkely. 5 minutes. >> [inaudible]

[inaudible] i was the origin nailing koa upon -- original cosponsor, and i think they are working, but not as fast as we would like -- [inaudible] >> why don't you come up here? >> [inaudible] >> your mic's not working. >> [inaudible] >> and your papers. >> i hope you heard all the accolades. >> 30 seconds off for the accolades and we're go from there. [laughter] >> care i mentioned -- sorry i mentioned it. i had an exchange of ideas with a high-ranking turkish official yesterday and in the discussion he assured us, members of the

foreign affairs committee, that turkey was in fact doing everything they can to help implement the sanctions against iran and have a successful result from the implementation. that seemed to me a bit out of the sorts with the fact they voted against the sanctions, and it's my understanding that they've done gist about everything they cannot to -- that's my phone -- not to be helpful. my question to you -- [inaudible] >> i want to add to this. the turkish government made clear as they did to you they are determined to implement resolution 1929 and whatever the sanctions. whatever the vote, they are

obligated to do that, and we will work closely with them to ensure that. we have already seen evidence of some turkish companies as i mentioned earlier pulling out of the supply of refined petroleum products from iran. the truth is the total volume is not that great. i think 2% of turkish exports go to iran, and 2% of imports come from iran. the public statement that stuart said turkish firms have more at stake in business with the rest of the international community and the united states than iran right now. turkey made clear they share our profound concern of a nuclear iran. we had differences over this, i think, but they have allotted stake in this too and played a constructive role in iraq in helping iraqis produce a

government and they are mindful of the danger sometimes of iranian behavior in iraq, and so i think there's a partnership with turkey that is not perfect, but we need to continue to work at because it's significant for us in a lot of different ways. >> [inaudible] >> is there any loopholes in the law -- [inaudible] >> no, ma'am, we're just trying to make the best possible use of the instruments that have been provided, especially there and as we described today, that's what we're working very hard to do. >> as you work through this, and do what you're doing, is there something glaringly missing or a tool you find would be helpful.

would you share that with congress so we can remedy that situation? i think this is important in the ramifications of the sanctions that are not working are catastrophic in my mind, and while i think nothing should be taken off the table, and i've been very vocal about that, the reality of not taking everything off the table is challenging, so these sanctions have to work because the alternatives are far more dire, so anything we can do to help you to make these work and bring the iranian economy to a sneeze, would be important. i thank you very much again for your service. >> time has expired and the gentleman from nebraska is recognized for 5 minutes. >> thank you, mr. chairman, and let me add my voice to those who thanked you for your leadership over the last few years. we are grateful for your service

and look forward to continuing to work with you. thank you for coming today and appreciate your hard work and the dual-track policy is very important. with that said, the iranian people have a deeply historic and deep cultural sensitivity to the fundamental notions of justice, and yet they are ruled by a religious group pressing its people and preventing iran from taking its place from the members who are responsible to the international community. we are awaken to the headline that iran has the bomb, and this is a game changer. if we look back at this, we see a pattern here where russia in previous engagement empowered this development, and china is clearly committing a sin of comission, and north korea has

an exchange program with the country, and the businesses are still involved there. having iran obtain nuclear webs in the -- weapons in the most volatile area of the world is leaving questions for saudi arabia, egyptians, and turks, and they spark a nuclear arms race again in this most difficult part of the world, and no one in the international community will be served if they use the bomb or give it to a proxy and it goes off in berlin, tel-aviv, or new york. i don't think we can get our mind around the horror that would ensue. again, i appreciate your hard work on this, but here we are as a committee in the united states congress holding hearing after hearing talking about the iran sanctions that is an important part of the dual-track strategy. is this going on in the eu?

is the russia doing the same thing? expand upon your discussions with the chinese. you had earlier said we emphasized restraintd with chie -- restraint with china, okay, thank you, but restrain. the nature of this dilemma and the probability of what's coming has to compel us all to act swiftly, and the burden of this should not just fall to this committee and you, but it has to be an international effort of the highest urgency, so again the question primarily being give me the disposition of your counterparts in russia and the european union and talk about china's engagement here. >> first, i absolutely agree with you. there's an enormous amount at stake here. what's striking about the last year is the growing realization on the part of many other partners around the world, in the eu, russia, parts of asia about what's at stake and the

dangers of a nuclear-armed iran, and what that led to is an unprecedented set of measures, not only resolution 1929 that provided the foundation for it, but an unprecedented look that they were reluctant to take before that japan, korea, norway, and other countries have taken and steps russia have taken that they were not prepared to take in the past like curves on transfers to iran and canceling of a major arms sale. all that reflects,ic -- i think, is a widening stake. we will continue to work with our partners to drive home to iran the choice it faces and the importance of it choosing a path to allow its people the connection to the rest of the world as you rightly said that i think they thirst for, and that we saw very vividly in the

writing and the other concerns that played out on iran's streets the summer before last. >> do we have the time in >> we feel a real sense of or urgency, and we need to see action as quickly as we possibly can, and that's why we're going to drive this as ennear jetically as we -- energetically as we can. >> who else is driving it outside the united states? >> i think in the european union you see a willingness to act and on the part of russia and major allies in asia and the partners in the gulf, so, i know, i think there's a greating recognition of what's at stake here, and we're going to do everything we can to build on that. >> all right. thank you. >> the time expired and the gentleman from georgia, mr. scott, five minutes. >> thank you very much, and welcome to the committee. so, it is without any question in both of your minds that iran

is after a nuclear weapon? >> i think we see increasing concerns leading people towards that conclusion. i mean, if irani wanted -- iran wanted to demonstrate its purpose, it would not be hard to do it. they could answer questions that were posed and the counsel proposed. >> so, without question, you will go on record saying they are after a nuclear weapon? that is your conclusion; is that correct? >> i think we have to as policymakers, we have to make that assumption because we have to pursue a policy that assumes that is what they are doing. >> okay. we talked about china, talked about russia, we talked about north korea, and all of this presents a very dangerous

geographical and geopolitical secretary clinton their yo of -- scenario on an ax us. -- axis. this brings us to another country that could hold a balance, and that's india. internal documents ya fascinate -- india fascinates me on their approach to this and it's important to examine india particularly in view of the fact that they now are from some information rejecting the sanctions, and that is particularly but cue lar in -- pee cool lar to the fact that a few years ago they supported the sanctions. they were put in power under the bush administration. tell me what is going on in india. >> well, sir, i mean, the indian government has made very clear its commitment to uphold the new

u.n. security counsel sanctions resolution 1929 in everything we see of its behavior suggests its serious about that commitment. for example, one indian company, reliance, that had a several petroleum products in iran, pulled out already and they condemned iranian behavior. in its last vote last november, it voted to condemn the iranis at a moment when the countries were on the other side of the vote, so the indians, i think, have made very clear their determination to do everything possible to ensure that iran does not develop a nuclear weapon. >> that's what bothers me. i have information here that says, for example, india's foreign secretary made india's

position explicit this month saying restrictions on investmentings in iran's energy sector could have a direct and adverse impact on indian companies and in fact they look forward to more investment by adm companies directly into that energy sector, and sort of goes on to say that the united states is thousands of miles away. they are next door and have a long centuries-old relationship. it seems to run counter to what your assessment just said. >> well, sir, two things briefly. first, the indians at the highest level have made clear their concern about a nuclear armed iran. second, you have to judge by the practice on the ground. reliance, one of the may juror indian -- major indian firms pulled out in business from iran and a gas

field indian company involved in the past there has also begun to pull out. i think the facts suggest a real concern on the part of india. >> do you think that the sanctions are going to work? there is some worry about that, and particularly as i mentioned earlier, north korea, china, and even russia would not be in this position with iran if it were not for russia in a plan that seems to might have been a convenient cover for them to pursue. i guess my point is i guess a military option on the table in your opinion and how reel realistic is that? >> first, i think it's significant that the last administration recognized this as well that russia is

significantly adjusted the terms of the project so it would not only supply the fuel for the reactor, but also takes back the spent fuel under safeguards to reenforce the point that iran doesn't need a domestic enrichment capability in order to have a peaceful nuclear program. that's the first point. the second point -- >> finish the answer to the last question, but the time expired. >> the president made clear we have not taken any options off the table, but what we are focused on now is making diplomacy and in dimensions, engagement, and negotiation, but also political and economic pressure work. >> time of the gentleman expired and the gentleman from illinois is recognized for five minutes. >> thank you. the -- [inaudible]

take a look at the iranian sanctions act passed in 1996, i believe, and then the latest act that we passed this spring all, of course, dealing with sanctions. can you, can you give an opinion or at least some thoughts on the best way to, as it were, toughen up these laws to give them real teeth to come up with the real results that we're looking for? >> i just start simply by saying i think what we have before us now in the laws passed by congress, signed by the president, but also in security counsel resolution steps that other countries have taken is a very broad array of

instruments. what we need to do now and as we described we've been doing very energetically in recent months is imply those and enforce those as vigorously as possible. i think we'll continue to have a significant impact if we continue to do that. >> i agree with that. the sanctions we have in iran are the toughest in the world, and we have made a very, very high priority to implement them. one thing that when we say that fasadas had a positive impact, to put that in context, the effect they have is on behavior of companies outside of the united states. it does have that impact, and if we go ahead and continue to implement that, i think it can have a great effect because now there is a broader recognition of how important this is going beyond the united states. we have a much broader set of governments that agree with us

in the fundamental principle that this is a very high priority. >> if these sanctions don't work, then the next step would be a blockade, and the next step would be some type, i hate to use the word, but military action. do other countries around the world realize to the extent that the united states does the importance of complying with these sanctions? >> i think, sir, as i mentioned before there's an increasing recognition of that. you see that in the behavior of many other countries, i won't say all of them, but many other countries in recent months in particular. i think there's the growing awareness of what is at stake here and the importance of trying to make this approach work. >> that's -- i agree 100% of what you are saying, but how do you increase the awareness and get the message across to other

countries in the world that this is probably the last best shot that we have dipmatically to do something? >> well, as i said, i mean, i think many other leaderships around the world have already come to that conclusion. they concluded because of iranian behavior itself, they concluded that because they also see the concerns of many others in that part of the world whether it's in the gulf or other parts of the middle east, and they understand the risk that a nuclear-armed iran would pose to a part of the world that's central to the global economy, so i think many other leaderships are coming to those same conclusions. >> mr. levy, did you want to comment on that? >> i agree entirely with what secretary burns said. >> okay. well, i appreciate your time on it. it's obviously an issue of most concern to our country and the stability of the whole area. thank you. i yield back. >> i thank the gentleman, and

recognize the representative from american somona. >> thank you for calling this important hearing. i want to commend secretary burns and secretary levy for not only testifying before the committee, but too often, i think we don't say enough on this side of town on how much we appreciate the services you provide not only to our present, but to our nation. the importance of what an implementation would be effective or not seems to be the question we're trying to determine here, and i'd like to share with you a -- [no audio] this was research by the

congressional research, and i want to share this with you and want your comment on it. "because so many economic powers imposed sanctions on iran, the angsts are by all account having an effect on iran's economy, however, data on iran's economy is sparse or incomplete, and it's hard to get a complete picture of sanctions on it. officials have spoken scene said it has this effect, and others say, however, there is not a con consensus that show sanctions are causing a shift in iran's commitment in the nuclear program. the key strategic objective of the whole idea of sanctions." would you care to comment on that? [laughter] >> [inaudible]

[inaudible] >> i think those mics -- >> well, i'm losing time, mr. chairman. >> yeah, we're told there's a rebooting process going on that will take a minute or so. >> oh, now i think we're back. >> okay.

>> so much for modern technology. please, proceed. >> so let me just start to answer your question about the impact of sanctions in iran. i think in terms of octoberive impact -- of impact on the iranian economy, i think they showed what's mismanagement of the economy. you can look at a number of indicatorring showing oil revenues for the government declined over the last three years. >> i don't mean to interrupt, but sir, how much is the estimate of the oil reserves iran has, and how much oil reserves does iraq have worldwide in terms of its capacity for whatever because it seems to me this is one of the fundamental reasons why we're in the middle east,s concern about whoever is going to take position of this oil supply, and

ironically, it was the chinese company that won the bidding. they didn't lift a finger. billions and billions of dollars that we expends, the chinese got the oil. i want to ask you, secretary, how much oil reserve does iran have in >> iran has considerable reserves on both oil and gas. i'll get you the specific figures and iraq does too in terms of oil reserves, so i don't know whether stuart wanted to add to the answer on the economic impact on iran. >> well, i know from the administration's point is you feel that sanctions is proving successful, but here's the problem that i have and has been raised by my friend from florida. china is in this mix in the most important way to the fact that it's in china's national interest to get as much energy resources as they can get, and i don't think iran is any exception in all the efforts

made worldwide, africa, wherever they get energy supplies, they will do this, and so is india. is it in china's national interest they get this oil from iran one way or another? >> sir, i think it's clearly in china's national interest to have stable reserves in the gulf, and if you have a nuclear iran or unstable believer in the gulf, you can easily put a jeopardy access to energy resources in a part of the world that is critical to the global economy and chinese economic growth, so i think that strategic concern focused attention in beijing. >> here's a question, and i have 6 second. very, very difficult -- >> he can answer though. >> it's difficult for us to tell the chinese what to do, and this is the biggest problem we're faced with thp thank you, mr. chairman.

>> that's an observation. the gentleman -- he's not here. the gentleman from florida, mr. kline is recognized for five minutes. >> thank you, mr. chairman, and the ranking member for the opportunity to serve on this committee and staff for being a great support of making us all look good, and who worked with me for the last four years is an unvaluable -- invaluable tool and those providing resources to the last administration to the current administration, so thank you for your work. a few thoughts. number one, there's a lot of talk about china which is support a consistent aggression across the board. i think we saw the sanctions were passed that word was already getting out and started seeing anticipated reaction by businesses around the world, but more particularly since the sanctions have passed, the

united nations and united states and other countries were starting to see more, and aggressively encourage you to as fast as possible continue that process. relating to chie know, there's -- china, there's other companies that specifically and very openly are doing things that would be considered sank sanctionable as i understand it. it's not a question, but a very strong statement that i would make and joined by most of the members on this committee, we need to go after them. i know there's a lot of delicate issues between the united states and china related to a variety of things, but if china supported this at the level and the importance of why a stable middle east and a nonnuclear iran is essential to their future and everyone else's future