>> that will help us get through this. >> i think that's true. one of the things that happened with the president's speech in 2009 when he said he's going to start bringing troops out this july, which he has since made the decision on doing that and met that commitment, is it really did energize the afghans. it sent a very strong message that this is not open-ended. you are going to have to get up and take care of yourself which is what everybody believed anyway. so there is, i've talked about the risk associated with this in one way, but there's another side of this, that there's a potential upside where they know how serious we are. they've made a lot of progress. they're going to have to continue to improve.

from the president down to the, down to the local villages that we've talked about s. they've made a lot of improvements. >> madam secretary, admiral, if you have any closing comments, we'll be happy to hear them now. i want to thank you again for staying past your stop time. >> i would just like to say thank you for hosting us today. i think this dialogue is incredibly important to continue this throughout the mission. i also want to thank this committee and the members here for supporting the members of our armed forces in their incredibly courageous work, but also supporting this mission which i believe is in the vital interests of the united states for us to succeed. thank you. >> committee's been incredible for years and years and years supporting our men and women and families, and words don't capture what you've done and the impact of it. and, certainly, as someone in my position i just, i can't tell

you how much we appreciate all that you do. and we will need that continued support in the future. >> well, admiral, we appreciate all of those war fighters and their families and all of those who support them. especially you right now. thank you. we're adjourned. [inaudible conversations] [inaudible conversations] >> live now to capitol hill where state and treasury department officials will testify this morning about the impact that u.s. economic sanctions are having on

venezuela. they'll discuss further steps that may be taken against venezuela including the possibility of designating it a state sponsor of terrorism. this is live coverage on c-span2. >> foreign affairs subcommittee on western hemisphere and the foreign affairs subcommittee on the middle east and south asia. we are joined today by chairman connie mack of florida and chairman steve chabot of ohio. i'd also like to welcome ranking member ackerman of new york, mr. cyrus of new jersey will be sitting in for the ranking member engel today. i thank you for being here. we are examining the administration's policies through the use of sanctions. for the past decade, the united states has focused much of its attention on the middle east. since the 9/11 attacks, americans have invested over a trillion dollars fighting the wars in iraq and afghanistan. since 2001, 6072 americans have died in operations enduring

freedom, iraqi freedom and new dawn. another 44,266 have been injured. in afghanistan alone these numbers have risen dramatically since our current president took office in 2009. wednesday evening president obama announced the intent to withdraw 33,000 troops from afghanistan by the fall of 2012. this will leave approximately 67,000 troops behind which is twice as many as when president obama entered office. while i support withdrawal, it must be prudent because it is the right thing to do based on facts and not because it is convenient. while we combat terrorism in the middle east, we must not neglect threats we face in our own hemisphere. in recent years venezuela has grown significantly hostile regimes, partners with countries such as iran, syria, north korea and cuba. each of these countries have been designated a state sponsor

of terrorism by the united states government. senior officials have also provided material support to hezbollah. they've also maintained ties with the revolutionary armed forces of colombia, eln and eta. president hugh -- hugo chavez has called sanctions against iran ill illegitimate and that the venezuelan government will, quote, back iran under any circumstances and without conditions, end quote. there's little question that venezuela's behavior is sanction bl. the question before us is how is the u.s. government -- how the u.s. government should respond to these activities in the future, what options are available, should we continue to impose anemic sanctions that are cosmetic or should we impose sanctions that truly impact venezuela's ability to impact the united states of america? i want to express my deep frustration with the administration. time and again this

administration has frustrated the work of the subcommittee. instead it insults this body by sending only witnesses it believes are quote-unquote appropriate. it does not -- it does so without any regard to the judgment prerogative of elected representatives. this congress and especially the oversight and government reform committee has a constitutional obligation to oversee the management, efficiency and operations of the executive branch. this duty is without question and without exception. at the same time, this administration has a responsibility to provide information the american people seek through their representatives. this critical check and balance is designed to insure the federal government adheres to the will of the people. when the executive branch does not respond appropriately to congressional inquiries, it breaches the duty of the american people. this is the third time congress has attempted to hold this hearing. in the first two the administration claimed it had too little time to prepare.

it is unacceptable that the administration requires more than two weeks to form formulata matter it deals with on a regular basis. it is equally unacceptable that the administration did not submit written testimony for today's hearing until late yesterday. the administration had over three weeks to prepare testimony for this hearing and have known for this topic, about this topic for nearly three months. it is unacceptable that the administration was so unable, was unable to adhere to our simple 8-hour -- 48-hour deadline by submitting testimony at the last possible minute. perhaps this committee should investigate the management of this policy in that regard. this subcommittee is ready to work with the departments in any way possible. we do appreciate you being here today, but understand the frustration of this committee in not being able to do its work because you're unable to do your work and giving us the documents that we deserve and need to have

so we can do our job. i would now like to reck these the distinguished ranking member of the national security subcommittee, the gentleman from massachusetts, mr. tyranny. tierney. >> thank you very much, mr. chairman, and thank the witnesses for being here today as well. we all are familiar with the 2010 comprehensive iran sanctions act, accountability and disinvestment act of 2010, and we also understand that the secretary has made a finding that gasoline sales have been made in contravention of that law. so the question really does come down, as the chairman said, you know, what are we going to do and what should we do. i think that we have to have a real clear understanding of the current sanctions regime which i hope you gentlemen will be able to share with us today, a full appreciation of how much we've discussed these diplomatic priorities for that region, what are our goals, how is it exactly that we think we're going to be able to accomplish them, and what will the current sanctions do to drive us toward those goals and what would additional sanctions do toward move anything that direction, and how

should they be structured. and we have to understand the impact of any ramping up of sanctions before we start move anything that direction. so i think it's a good time for that conversation, i think, hopefully, between the four of you you'll be able to give us that information in a form that will benefit us as we move forward, and with that, mr. chairman, i just ask unanimous consent that my formal remarks be place inside the record. >> without objection, so ordered. >> i now recognize the gentleman from florida, mr. mack, for his opening statement. >> thank you, mr. chairman. and i want to associate myself with your opening statement and also the statement of the ranking member. and before i begin into my formal, um, opening statement, i just want to say that the frustration runs deep, and i know you guys know this. we first asked for you to come in front of the subcommittee on the western hemisphere, and you refused. you put up road block after road block and just flat out refusal. and i hope this serves as a warning that next time we ask

you to come in front of this subcommittee, you will come. because either you're going to come there, you're going to come here, and if we have to use our subpoena power, we will do it. so let's not go through this circus another time, okay? today in light of the u.s. state department's recent actions in sanctioning, the purpose of this hearing is to review and better understand the role of the state department and treasury department in utilizing sanctions as an instrument of u.s. foreign policy. specifically, i'd like to concentrate on the sanctions available under u.s. law and discuss their potential application in cases where venezuela individuals, businesses and the government are able to be sanctioned. venezuela has become the wild west under thugocrat hugo chavez. this is true for the following reasons. first, there is rampant drug trafficking and corruption. second, terrorist organizations

like hezbollah and the farc are officially linked to government officials. and, third, venezuela is supporting iran, and iran's desire for a nuclear weapon. under hugo chavez, venezuela has become a hub in our region for money laundering and transshipment of illicit goods. the relationship between drug trafficking and terrorist organizations has become closely intertwined. if you'll notice up on the screen, we have the definition from the state department of what a state sponsor of terrorism is, and i'll let you read that on your own. it is widely acknowledged that terrorist groups have turned to drug trafficking as a source of revenue, and if we can put up the other side. so this slide represents in 2003 the drug trafficking flight patterns in latin america.

and then if you'll go to the next slide, this is what it looks like this 2007. unfortunately, we can't show the slides from today because those are still protected and classified. but the difference between 2003 and this map is in this 2005 hugo chavez kicked out our dea. as chavez has provised venezuela as a safe haven for these narco terrorists, the farc who largely operates in remote sections of colombia, have long received assistance, relief and material support from venezuelan authorities. and i think this is pretty well documented. when colombia took out reyes and they took the computers, interpol was able to review those hard drives and found significant cooperation with officials from vens venezuela, e

venezuela government and the farc. so, clearly, if we go back to the definition of state sponsor of terrorism, you can check that box off, that there is a close tie and relationship between terrorist organizations and the goth in venezuela. government in venezuela. i also want to talk a little bit more about the drug, in the drug trafficking. recently the arrest of a drug kingpin by the united states, mackled, was arrested. mackled was then sent to, extradited to colombia. mackled has said over and over again and also talked about payments to government officials in venezuela. so the drug trafficking organizations know that they have a friend in hugo chavez. we also, as i talked about, know that there is a relationship between the farc and hezbollah. and the treasury has sanctioned

members of the venezuela government for their relationship in venezuela. lastly, i want to talk about venezuela and iran. after many discussions and not until a hearing when i was able to supply the state department with specific evidence of the shipment and sale of gasoline, we finally sanctioned venezuela. unfortunately, those sanctions have no teeth. the things that you sanctioned we currently aren't engaged in with venezuela in the first place. so on one hand i'm thankful that we actually did put sanctions on venezuela, it's a good start, but this is a guy who supports terrorist organizations, drug kingpins, drug narcotrafficking and iran. hugo chavez should be and deserves to be labeled a state sponsor of terror, and our

government, the gentlemen in front of us, need to explain to us why he is not on the state sponsor of terrorism. and with that i yield back. >> thank you. the chair will now recognize the gentleman from new jersey, mr. sears. >> thank you, chairman chaffetz. no chavez, chaffetz. for holding this hearing. thank you to our witnesses for being here today. since we've been to power in 1998, chavez has cast revolution as that of the poor majority against the wealthy oligarch. he continues to impose a populist political model in venezuela upside mining democratic institutions and stifling the freedoms of the venezuelan people. however, the president's once stellar approval ratings have stumbled, and his body's majority is below a key threshold setting the stage for

a heightened tension with a freshly-emboldened opposition. the result of this election show the venezuelan people desperately want change and that chavez is losing his grip. as anti-chavez sentiment continues to grow, he has further intensified restriction on freedom of speech and press. the government has systematically undermined the journalists' freedom of expression, workers' freedom of association. completely disenfranchising all civic engagement within the country. officials' harassment and intimidation of the political opposition has grown including the persecution of elected state and local government officials and media outlets such as rc-tv international that have been critical of the government. internationally, chavez continues to cultivate relationships with countries that are state sponsors of terror like cuba, iran and syria. i cannot emphasize enough how

troubling the relationship between venezuela and iran is. with weekly flights that connect iran and syria with caracas, collaboration between these two countries has hit a new height. i have often discussed before the western hemisphere subcommittee by concerns about these flights, and i hope the representatives from the state department could elaborate on this topic as well as acknowledge the threat this poses both to the united states and the free nations. i commend the state department for its most recent sanctions on two companies in venezuela who have been connected to iran's proliferation activities. thus far, our strategy has been forceful and pragmatic. hastily attacking chavez could have a detrimental effect on progress that has been already made and further embolden his pop list agenda. we must continue to make smart decisions in regards to u.s. policy towards venezuela. to further disable chavez's

control and to encourage citizens to support democratic institutions and principles. recently, his influence seems to have peaked, but we must remain vigilant for he is likely to support like of-minded political allies and movements in neighboring countries. he comets to oppose nearly -- continues to oppose nearly every u.s. policy in the region including the expansion of free trade, counter-trucks and counterterrorism cooperation. venezuela continues to extend a lifeline to colombia narcotrafficking organization by providing significant support and safe haven along the border, and it remains one of the most preferred trafficking routes for the transit of cocaine out of south america. u.s. sanctions have successfully targeted and applied financial measures against narcotic traffickers and their organizations in venezuela helping to insure regional security. venezuela has proven that it cannot be trusted, and the united states should take the necessary measures to stifle its

powers and insure regional security, but we must do so in a tactful manner as not to further empower chavez. the national security threat posed by venezuela are complex. we must implement the appropriate measures to protect the people of venezuela and promote u.s. interests. i would like, again, thank our witnesses. i look forward to their testimony. thank you, chairman. >> thank you. we'll now recognize the chairman of the foreign affairs subcommittee on the middle east and south asia, the gentleman from ohio, mr. chabot. >> thank you, mr. chairman. and i want to thank my two fellow chairmen for putting together this important hearing. i know chairman mack and the western hemisphere staff have been trying to hold this hearing for some time and have met with considerable resistance from the administration, and i commend my colleague for his persistence. as chairman of the middle east and south asia subcommittee, i and the other folks on the committee frequently confront

the threats posed by iran and global terrorist networks more globally, especially of course in the middle east. the possibility, however, of an iranian/venezuelan alliance is particularly concerning. when not oppressing it own people, the tyrannical regime in tehran devotes a great deal of its energy to threatening american national security as well as the security of our allies in the region. the threat posed by iran takes on a new and more ominous geostrategic significance when coupled with the potential of an iranian base of operations in our own hemisphere. this prospect hearkens back to the days of a cold war when all of a sudden we were no longer separated from our enemies by oceans, but faced threats in our own backyard. although the nature of the threat may have changed, such a

situation is just as unacceptable today as it was decades ago. i hope that the witnesses today can shed light on the nature of this threat. more importantly, however, i hope they can outline a clear and cogent policy to address it. one of the most fundamental roles of government is to provide for the security of its citizens. we are having enough trouble combating iranian meddling and dismantling terrorist safe havens on the other side of the globe. the last thing we need is for threats from bad actors even closer to the american homeland. again, i want to thank my fellow chairmen and also the ranking members for holding this hearing today, and i yield back the balance of my time. >> thank you. we'll now recognize the gentleman from virginia, mr. connolly. >> thank you, mr. chairman. and thank the panelists for being here today. i listen with great interest to my friend from florida berate you for not being here

previously. i serve on both the oversight goth reform committee and the foreign affairs committee, and i must say i have not particularly been struck with the reluctance of the administration to acquiesce to hearing appearance requests, but perhaps in the subcommittee there was a problem. i don't know. in any event, we're glad you here. each sovereign nation has the right to develop interests beneficial, but not at the expense of its neighbors. as a result, the obama administration, for example, recently sanctioned venezuela's state-owned oil company pdvsa for its business with iran. several illegal activities in latin america are connected to the government of iran. example, iran-backed hezbollah has actually undertaken illicit activities in the area of argentine ya, brazil and parabay.

the group is also suspected in two bombings in buenos aires that killed a total of 115 people, the 1992 bombing of the israeli embassy. eight of the nine original arrest warrants issued for that bombing were for iranian government officials. though iran and venezuela have been linked since the founding of peck in 1960, the two countries recently strengthened that relationship. it's especially troubling because harmful activity had been taken under the guise of diplomatic relationships. one example is the absence of customs enforcement on weekly flights from caracas to tehran. it's unclear who or what's being transported, but reports indicated that the flights do carry weapons for terrorists. these developments are troubling enough. they're further complicated by iran's audacity in the nuclear arena, specifically its missile

tests and enrichment facilities. the nuclear issue does not exist in a vacuum. in 2009 venezuelan president hugo chavez expressed support for iran's nuclear energy development, and there have been mixed reports that signal possible iranian assistance to venezuela in its search for uranium goes sits. venezuela serves as a diplomatic conduit for iran playing an important part in cultivating a relationship between iran and bolivia and nicaragua. a cause for concern and illegal activities in both hemispheres that have been directly linked to the iranian government. and i welcome today's hearing to explore that further and to look at u.s. diplomatic options with regard to this troubling and growing relationship. with that, i yield back. thank you, mr. chairman. >> thank you. we'll now recognize the gentlewoman from ohio,

ms. smith. >> thank you, mr. chairman, for holding this very important hearing. it is, i don't think it should be any surprise to anyone that there is a special link between venezuela and iran, and perhaps it should be no surprise that hugo chavez is aggressively working to strengthen his country's ties with iran. um, if you look at just what has occurred in the last seven years, i think the documents, the facts speak for themselves. in 2006 venezuela integrated itself with iran by aligning with cuba and syria as the only countries to vote against the u.n. atomic energy agency resolution reporting iran to the security council for its failures to comply with u.n. sanctions to terminate its nuclear program. in april of 2008, iran and venezuela signed a pact of mutual military support. in april 2009 the two countries inked an agreement that would create a development bank whereby each country would

invest 100 million for bilateral economic development projects. in october 2010 the two countries signed 11 mutual cooperation agreements on such issues as trade, energy, shipping, finance and public housing. according to an article published in the newspaper in november 2010, one of the agreements signed between iran and vens whale la in october of 2010 would establish a military base on venezuelan soil to be jointly operated by both countries on which medium-range missiles would be placed. on may 13, 2011, it was further reported that chavez met with the commander of the iranian revolutionary guard's air force in february 2011 to discuss the final details of the construction of the missile base which is now being built only 75 miles from the venezuelan/colombian border. it is also believed that iran is

exploring the continued development of nuclear weapons. last year ria -- [inaudible] the russian international news agency, reported that russia which signed a keel with iran -- a deal with iran in 2007 to sell its five battalions of sophisticated air defense systems would abrogate the agreement due to the sanctions imposed against iran. it is believed that russia may now sell the systems to venezuela, how convenient, who in turn could sell them to iran. just recently, on may 24, 2011, the united states imposed sakss on the pdvsa for assisting iran in its production of petroleum production. they were sanctioned for selling 50 million worth of products to iran between december 2010 and

march 2011 in violation of the 1996 sanctions act. according to the state department's web site, the sanctions we've imposed on pvdsa prohibit the company from competing for u.s. government procurement contracts, from securing finance from export bank of the united states, and from obtaining u.s. import licenses. mr. chairman, i applaud the department of state for its decision to impose these sanctions. unfortunately, it is not enough. we need to do more. every venezuelan company doing business with iran should be investigated and a determination should be made as to whether it is in violations of the 1996 sanctions act. in those instances where venezuelan companies are in violation of the act, sanctions should be imposed immediately. we these to show chavez that we are serious and that there will be penalties to pay for assisting and accommodating the terrorist iranian regime of mahmoud ahmadinejad. thank you, and i yield back my

time. >> we'll now recognize the gentleman from american saw mow ya. >> thank you, mr. chairman. i do want to commend both of you gentlemen for calling this committee meeting this morning. i have listened in interest in be terms of providing sanctions to those countries that violate our laws as well as international laws. i think we've got sanctionitis. just about everything we do, we put sanctions, and i have my own serious questions about the consistency of how we apply our foreign policies when we apply sanctions against countries. i'm not suggesting that we don't put sanctions on venezuela, but there seems to be a whole bunch of contradictions here. we put sanctions, and yet i believe venezuela is one of our biggest suppliers of oil coming to our country, and i'm very curious from our witnesses if you can give us more information on citgo, i believe, currently one of the biggest oil distributers in the our country. as long as there are holes in if

between allowing these countries to do, to obtain whatever their needs are, the sanctions become somewhat useless. but i'm very, very curious and wanted to hear from our witnesses this morning in terms of how our whole fabric of applying sanctions have really been effective, or have they just been just another sanction and another thing? a classic contradiction, as you know, mr. chairman, as i indicated when something goes wrong we put sanctions against thailand, against fiji, all these, and at the same time we waive sanctions when musharraf by a military coun took over afghanistan. and that never happened. but i'm looking forward to our witnesses in terms of where exactly venezuela comes in as far as the whole host of sanctions that we've put against

this country. i will say, interestingly enough, the close ties of venezuela and iran has because of the nuclear issue, i believe what happened in japan recently has caused mr. chavez to have second thoughts about establishing a nuclear relationship with iran. but i do look forward to hearing from our witnesses this morning and thank you, mr. chairman. >> thank you. do any other members wish to make an opening statement? members may have seven days to submit opening statements for the record. we'll now recognize our panel. the honorable daniel benjamin is the coordinator for counterterror 'em at the state department. mr. thomas delare is the director for terrorism, finance and checks policy at the state department. mr. kevin whitaker is the acting deputy assistant secretary for western hemisphere affairs at the state department, and mr. adam szubin, i hope i said that properly, is the director of the office of foreign assets control at the treasury department.

pursuant to committee rules, all witnesses will be sworn in before they testify. please rise and raise your right hand. do you solemnly swear or affirm that the testimony you're about give will be the truth, the whole truth and nothing but the truth? let the record reflect that all witnesses answered in the affirmative. thank you. you may be seated. in order to allow time for discussion, please, limit your testimony to five minutes. your entire written statement will be made as part of the record. we'll now go ahead and recognize mr. benjamin. >> thank you very much, sir. distinguished members of the committees, thank you for the opportunity to appear before you today to discuss venezuela's sanction bl activities. i'm pleased to be here with my treasury colleague, adam szubin, and state department colleagues tom delare and kevin whitaker. mr. chairman, let me be clear from the outset. with respect to global efforts

to counterterrorism, developments in venezuela over the last decade have been deeply troubling. instead of meeting his international obligations, hugo chavez has chosen to develop close relationships with iran and syria. senior members of his government are directly implicated in providing support to u.s.-designatessed foreign terrorist organizations, particularly the farc and eln. the administration has significant concerns about connections between members of the venezuelan government and eta as well. all of these issues have been reported on this press. and as we have report inside the past, hezbollah has a presence in venezuela, and the department of treasury has done much to reveal these connections. i do, however, want to emphasize that the information available to us indicates that hezbollah activity in venezuela is limited to fund raising. we remain alert to indicationings of other activities, particularly operational activity, but to date there's no information to

support any such connection. venezuela must fulfill its obligations under 1373 and 1540 which forms part of the legal basis of international counterterrorism efforts. these resolutions adopted under chapter 7 of the u.n. charter require all states, including venezuela, to take a series of measures to combat terrorism and prevent weapons of mass destructions and their means of delivery from getting into the hands of terrorists. it is our view that venezuela has not done enough in this regard. the obama administration's pursuing of policy to press venezuela la to change its behavior. we are ratcheting up the pressure in a way that our analysis suggests will be most effective. we are increasing the cost on the chavez government for its actions including by publicly exposing our conclusions about that government's activities. we are carefully avoiding falling into the trap of providing chavez with an opening to increase his demagoguery and exploit nationalist sentiments

by falsely attempting to turn this into a bilateral issue with the united states rather than what it is; venezuela's failure to live up to its international obligations with respect to counterterrorism. we believe this approach combined with regional efforts to moderate venezuela's behavior is slowly but surely bringing positive change. imaginative and effective colombian diplomacy has taken advantage of this environment. since president santos took office a year ago, we've seen a marginal but significant improvement by venezuela. venezuela has arrested and deported to colombia members of the farc headquarters section in the farc's key european fundraiser. most recently venezuela arrested a member of the farc, general conrado based on a colombian arrest warrant. they have developed a channel of communication to discuss border security. chavez has also publicly moved away from the farc by calling for that organization to join a

political reconciliation process and by disavowing his unauthorized any discussions between venezuelan government officials and the farc about establishing bases in venezuela. our actions have been targeted, well justified and well understood in venezuela. for the last five years, pursuant to section 40a of the arms export and control act, venezuela has been listed as not fully cooperating with the united states efforts country, antiterrorism efforts country. because of its inadequate response to our counterterrorism efforts, licensing for export to venezuela, articles or services. this sanction is a useful tool for signaling that we are not satisfied with venezuela's counterterrorism cooperation, and it is used when a state may not meet the high threshold for designation as a state sponsor of terrorism. we have also 'em employed an array of sanctions against the

government. my colleagues from the department of treasury will explain the work we have done to target elements of the venezuelan government via the drug kingpin act. via executive order 214 and the divestment act of 2010. much more work remains to be done, and we will continue to closely monitor venezuela's actions. as you know, secretaries of state have used the state sponsor of terrorism action sparingly since its creation in 1979. in fact, it has been more than 18 years since this power has been invehicled, but this does not -- invokes, but this does not mean we are unwilling to use this authority. all options are on the table if circumstances warrant. we look forward to working with congress and with our partners in the region to further encourage venezuela to behave as a responsible international actor. thank you very much. >> thank you. it's my understanding that given that there are three witnesses from the state department, that there was going to be just one

single statement, or are we doing individual statements as well? did i have that right? >> no. my colleagues also have brief statements. >> oh, yes. whether delare. >> thank you, mr. chairman. i appreciate the opportunity to appear here today with my colleagues. the bureau of economic and business affairs at the state department, we have responsibility for the implementation of sanctions targeting iran's energy sector. naturally, we also have very serious concerns about venezuela's relationship with iran and syria. venezuela is iran's closest political ally in the western hemisphere, as we have heard morning. president chavez continues to bond with iran as a strategic ally. the highly-publicized bond has led to declarations about broad economic, military and political cooperation although the ec tent of actual -- extent of actual cooperation is not clear. under the comprehensive iran

sanctions and divestment act, the agency is primarily responsible for energy, shipping, transportation sectors and telecommunications technology, non-proliferation and human rights issues. the department of treasury has primary responsibility for implementing the financial sanctions contained in the bill. i know my colleague, adam szubin, will discuss treasury's role in detail. let me just add that we -- not only at state do we work extensively and collaboratively with treasury, we do the same with many other agencies in the government. on may 24th the secretary of state imposed sanctions on venezuela along with six other companies for their activities in support of iran's energy sector. we sanctioned the company because on at least two occasions the company provided

cargoeses of an additive used in gasoline. these shipments were valued at over $50 million, well above sanction bl thresholds established in issa. under the iran sanctions act or isa, the secretary has the authority to sanction on a case by case basis, something that many of you have alluded to this morning. it can range from prohibitions on certain types of u.s. government assistance to a complete blocking of all property transactions subject to u.s. jurisdiction. the secretary chose three sanctions that limit the company's activities in the united states but do not impact their subsidiaries or the export of crude oil from venezuela. it's important to note that this calibrated approach was chosen because it is our goal to persuade the company to make the right choice and stop shipments of refined petroleum to iran.

if company does not stop and we have seen no evidence of any further actions since the imposition of these sanctions, we have made it very clear in our conversations with them that we reserve the right to impose additional and more severe sanctions. in the case of this company, we do not know what the ultimate result of these important actions will be. we are confident, however, that we have their attention based on comments and venezuelan government officials. the department of state has a very good record of convincing companies to stop supporting iran's energy sector. last fall we secured the formal withdrawal from iran of five large multi-national energy companies; royal dutch shell, impeck, staff oil and total. they've all removed themselves from projects in the iran. these firms have since been joined by scores of other companies both in the energy

sector and in other sectors who have simply recognized that the risks of doing business with iran are just the too high. we will continue our dialogue with venezuela about this subject, and we will continue a very vigorous outreach process that we've engaged in to talk to the business community worldwide about the risks of doing business with iran. i should note that also on may 24th -- may 23rd, pardon, the state department imposed sanctions pursuant to the iran, north korea and syria non-proliferation act. this was against the mill stair industries -- military industries company providing companies that provide or transfer from war technology controlled by one of the four multilateral regimes, that is the australian group, the missile technology control regime, the nuclear suppliers group and the vasanar convention. these agreements regulate the

export of weapons of mass destruction and cruise and ballistic missile technology. let me conclude by stressing that we pay constant attention to the activities of venezuela with regard to iran. we work with all the relevant agencies in the u.s. government to utilize the tools that the congress has given us, and we will, i can assure you, react to concrete possibles of -- examples of sanction bl behavior. thank you very much. >> thank you. i want to go back to this point, though, for a moment here. the three representatives from the state department issued one statement. we asked that, congress asked that you submit these statements 48 hours in advance. you couldn't do that. and now you each have three statements. we're going to hear from you, we want the hear from you, that's why you're here. why couldn't you submit your statements in accordance with our rules? what was the hindrance? >> mr. chairman, i apologize for the lateness of the submission.

as you can you can see from those who are present here, this is an issue that takes very intricate and complex coordination both within the department and across agencies. there was a great deal of work that needed to be done in preparation for this hearing. we wanted to have the best information available. we will certainly do our best to make sure that we meet your deadlines in the future. >> i would appreciate that. it is unacceptable to do this. you, obviously, prepared some opening remarks, yet you failed to submit them to this body, and we find that unacceptable. mr. whitaker, you're recognized for five minutes. >> thank you, chairman, ranking members, distinguished members, thank you for the opportunity to appear here today. let me make two points. first, the department shares your concerns about venezuela's relations with iran, its support of the farc, its failure to cooperate on counterterrorism. we have taken a series of steps over time using tools provided

by congress to address these female yours. we are constantly reviewing all the information to determine if substantial, targeted and iterative steps we have taken are appropriate and sufficient in light of the information available to us. taken collectively, these steps demonstrate our commitment to act responsively and consistently with legislation and policy to confront specific activities by venezuela and venezuelan persons. second, let me draw your anticipation to colombia's -- attention to colombia's rah port with venezuela. it has resulted in unusually productive and effective counterterrorism cooperation. bilateral cooperation on terrorism and security matters is increasing and being systematized yielding notable results. while we still have serious concerns about venezuela's

overall cooperation on counterterrorism matters, these are steps in the right direction. and demonstrate that counterterrorism efforts work beth when nations collaborate. what we seek from venezuela is its collaboration in confronting narcotics trafficking and terrorism. in the absence of such cooperation and when possessing evidence that venezuela or venezuelan entities are not meeting their international obligations or failing to comply with applicable u.s. laws, we have demonstrated our willingness to act. the department has strongly urged venezuela's leaders to pursue a path of cooperation and responsibility rather than further isolation, and we'll continue to do so. we continue to monitor venezuela as well as other countries for activities that indicate a pattern of support for acts of international terrorism. no option is ever off the table, and the department will continue to assess what additional actions may be warranted in the future. i'm happy to be here, and i look forward to your questions. >> thank you.

i will now recognize mr. szubin for five minutes. >> thank you, mr. chairman. chairman chaffetz, chairman mack, chairman chabot, ranking member tierney, congressman sears and distinguished members, thank you very much for the opportunity to appear before you to discuss venezuela's activities. i'm pleased to be testifying alongside my colleagues from the state department of. we at treasury have been intently focused on venezuela over the past few years. we have uncovered and acted against a range of actors operating out of venezuela including terrorists and those who have facilitated iran's pursuit of weapons of mass destruction. our concern regarding the activities of terrorist groups in venezuela is lock standing -- long standing, particularly links to the iranian-sponsored hezbollah. as but one example, i would draw the committee's attention to an action we took in 2008 targeting a hezbollah facilitator and venezuelan diplomat. he was an diplomat who served as

the charge of afares in da maas cat, syria, and he utilized his powers to provide financial support to hezbollah. among his activities were providing hezbollah doe donors with specific information on how to route their contributions such that they would go directly to hezbollah. he met with senior officials in lebanon to discuss operational issues and that be sill tate -- facilitated the travel of hezbollah members. at the same time we took action, we also exposed and sanctioned another hezbollah supporter and two travel agencies that he operated out of caracas. of course, venezuela has also been deepening its diplomatic ties with iran as the committee members have noted. the growing ties between venezuela and iran are very worrying, especially as they stand in such stark contrast to the global trend in which the world is trying to isolate iran

because of its pursuit of nuclear weapon and other destabilizing activities. in the 2008 the iranian government established the international development bank of caracas in venezuela. shortly after its opening, we moved to sanction this bank under our counterproliferation authorities due to the bank's relationship with the export development bank of iran. we will act firmly and quickly to deny a purchase to any attempted successor. we have also named under our sanctions authorities the iranian oil company and targeted its operations in venezuela in particular. finally, we have been extremely active in the field of combating narcotics trafficking and have sanctioned thousands of entities across latin america, including venezuela. among those, high-level foreign officials who are involved with the farc including the head of venezuela's military intelligence agency and their former interior minister. the threats posed by iran

terrorism and narcotics trafficking are complex, and we work closely with our interagency colleagues to bring all of our tools to bear against these threats, and our work can and must continue. i look forward to your questions. thank you. >> thank you. we appreciate that. we'll now, i'm now going to recognize the chairman of the foreign affairs subcommittee on the western hemisphere, mr. mack from florida, for five minutes. >> thank you, mr. chairman. and i want to thank all of you for your testimony here today, and i don't think we need to continue to harp on this, but, you know, we look forward to more open dialogue and cooperation from be all of you. um, so it sounds to me that we're in agreement that chavez is sponsoring terror i feel. terrorism, whether through narco trafficking, through his cooperation with iran, through

hezbollah, support of hezbollah and the farc and other terrorist organizations. so it sounds to me that there's agreement. i think where the problem lies is what do we do about it. so i first want to make point. make this point, and i'll say it again. we're happy that there were sanctions placed on cha rez. chavez. what we're not happy about is that the three sanctions that were placed on pate vase saw, the denial of import/export bank loans, credits, denial of licenses for the u.s. export of military and militarily useful technology and prohibits on u.s. government's procurement from entities, these are things that are already not happening. so we can also agree that these are toothless, is that right?

>> chairman mack, i would respectfully disagree with that. final evaluation. i wouldn't say they're toothless because what we have done is warned the international business community that there is a danger of dealing with pate that vase saw. >> okay, just so i -- okay. so the designation of being sanctioned is important, but the actual sanctions that took place don't have any teeth? because these are things that we're currently not doing with venezuela. >> chairman, the fact is congress has given us a calibrated set of tools to use in instances like this. basically, implying that we have to make a very complicated calculation as to u.s. interests in each one of these incidences. now, we had to judge whether the sanctions would induce the company to stop it behavior -- >> i understand that. i'm sorry. i just -- but, so the fact that you made the sanctions is important here. what you sanctioned isn't

important because these things are currently not being done with venezuela in the first place. and that's my take, and i think that's most everybody else's take. we have other tools that are available -- >> we do. >> -- restriction of imports, um, also prohibiting the sanctioned entity from acquiring, holding and be trading any u.s.-based property, so there are other sanctions that we can use. but i want to get back, first of all, let me ask you this. who owns pay that vase saw? >> 100% owned by the venezuelan government, sir. >> so there's no mistake that this is, the actions of the company isn't by some company, it's by the government of venezuela? >> i think we can assume there's an intimate relationship there. >> i would assume that chavez has full control over the company. >> sir, we also make a calculation as to u.s. interests, and if 10% of u.s. oil imports are coming from

venezuela with three u.s. refineries dependent on citgo, 6,000 gas stations, 3,000 other employees, we have to weigh those factors as well. >> so i would suggest then -- sir, then i would suggest that the state department sign off on the keystone xl pipeline which will then be able to take over for any oil that we're getting from venezuela. it seems to me that if we're, if you or the state department or if you're going to continue to use, we have a strategic interest in their oil, and we have the ability to get oil from somewhere else, we ought to get it somewhere else, wouldn't you agree? >> >> i would say generally that's a fair point of view. >> so we can expect the state department to sign off on the keystone xl pipeline? >> i can only promise to take your views back, sir. >> i think they know my views. [laughter] so, again, the definition countries determined by the secretary of state to have repeatedly provided support for acts of international terrorism. that is the state department's

definition of a state sponsor of terror, correct? >> that is the basis for the designation, yes. >> but that is the definition, that's what's posted on the web site, that is what the state department -- so how is, how can you not designate chavez as a state sponsor of terror when we know the narco trafficking, the support of hezbollah, even if it's just fund raising? by the way, i thought that was kind of interesting. i don't remember who said it, only in be fund raising. but fund raising is the mechanism that allows hezbollah to work. so we know drugs, terrorist organizations, support of iran, all three of these things would be a determined by the secretary of state to repeatedly provide support for terrorist organizations. >> well, the statute, sir, allows the secretary discretion to decide when repeatedly is sufficient enough to merit the imposition of this, of this

designation. and as i said in my oral statement, sir, our approach is very much predicated on effectiveness and what it is that's going to get venezuela to stop behavior that we believe is unacceptable. that is why we have, that is why we have instituted a calibrated, iterative process in which we are escalating pressure as appropriate. without having follow on or side effects that we believe harm our own national security and harm the interests of those who we cooperate with very closely including to contain venezuela's behavior. >> thank you. the gentleman's time has expired. given the number of members on this panel, i've asked members to keep within the five minutes, but we will allow our witnesses to answer past that moment. we'll now recognize the ranking member of the committee, mr. tierney. >> thank you. obviously, when you talk about the sanctions, congress passed a bill that allowed the secretary

some discretion into how she applied those sanctions. am i right, ambassador? is. >> absolutely correct. >> all right. so the task for the secretary at that point in time is to calibrate, as you say, or to make a determination as to which sanctioning to implement -- sanctions to implement at any given time and try to get the response she wants from that while at the same time taking other considerations of what might happen to impact our allies and our own interests, is that right? >> correct. >> so i don't want to get into negotiating here in public with venezuela or anything. can i ask you to give us a broad range of all of the competing interests that we have there. when the balancing is going on, give us a range of what types of things we're balancing, cooperation with colombia in terms of drugs and borders, you know, other things like that. just give us some idea of all the different interests. >> okay. well, i will defer in a moment to my colleagues from the regional bureau, from western

hemispheric affairs. but certainly thediplomacy with colombia is important. colombia would be very, very sharply affected by such a designation. since colombia is at this time making significant progress in dealing with venezuela and in curtailing those activities that we find objectionable, it would seem to be counterproductive to do that at this time. additionally, there are such second and third order effects as catching the business dealings of lots of closely-allied cups up in the state sponsorship net, if you will, that if other countries that were doing business with venezuela suddenly found themselves to be in danger of being sanctioned, that would be problematic. i believe mr. delare has spoken to the issue of our energy concerns in this regard, so there's a whole array of different interests that need to be taken into effect, and i think mr. whitaker may have more to add on that.

>> if i could just add on with a couple of points here. u.s. policy in venezuela as a number of folks want u.s. national security and counternarcotics and counterterrorism, all of those are very important to us. we would need to weigh, it seems to me, the effect of sanctions we take on issues like that. the ambassador mentioned the effect it would have of a sanction against venezuela when venezuela views colombia as a close ally of the united states, how would venezuela then react with respect to its dip diplomac efforts in colombia? that's unknown to me, but it's out there. again, that might be an avenue or a place where the venezuelan government would seek to identify that group and take some action in response to an action that we took. finally, we have many u.s. companies in venezuela, and it's our goal as the department of state to understand their

interests, defend their interests. and we would need to take into account as well any impact in that regard with respect to those companies that continue to do business in venezuela. >> thank you. if secretary's just decided to throw the book at venezuela and just take the more extreme sanctions on that, what would the anticipated, current anticipated response of the venezuelan government be? >> it's hard to say. i've worked on venezuela since 2005, and hugo chavez can be unpredictable. but one of the threats of his policy since taking office in 1999 is consistently to try to turn whatever problem or issue that arises into one of him versus the united states. whether that's accurate or not. i think that he would do this, he would seek to turn this into a matter of a u.s. attack on his government and seek to use it for internal political purposes. how that would manifest itself whether in diplomatic policy or with respect to democratic opposition in venezuela or with

respect to u.s. companies is difficult to predict. .. optimistic to case that the action that chavez has taken for

farc and colombian demands and encourages vote by the fact that there had been further shipments of the kinds of petroleum additives, gasoline additive that the kind that were recently sanctioned. at the moment we are cautiously up domestic. >> thank you. now recognize the gentleman from ohio, mr. chaffetz. scenic thank you, mr. chairman. obviously, our capacity as middle east and south asia where we devote most of our energy and time. having to be in the region there recently in saudi arabia is obviously very concerned at this time about iran exploiting the so-called arab sprig or whatever terminology one prefers that

they see themselves as being encircled, whether it's yemen, egypt, it has close relations with iran, bahrain and we saw the saudi reaction they are. there's certainly a man is flexing its muscle and they really do welcome and command my fellow chairs were talking publicly about this venezuelan connection with iran because it's a great concern. it shows the iranian threat is really global in nature. and obviously can't saudi arabia, a lot of oil there. the most resources in the world at this time, i ran this tech in her third depending on that she's deep. the point i take to get to at this point is oreo is a commodity on the world markets and what we pay in the united states is a set date by that

supply. and so, our interest here whereas we do import iranian oil and it affects the pricier, e-mail, depending how much we get from here and elsewhere, many of us believe we made a terrible mistake becoming so dependent upon foreign oil in many ways and some of that is by restricting access to read resources, whether it's in water, the arctic continental shelf and a whole range of other things here. relative to venezuela inhabited by this are many general, are we putting ourselves in a much more vulnerable position but essentially we are reliant upon the venezuelan oil. the money goes down there and they are clearly one of the bad art is in this hemisphere right now and what they are doing this against our best interests.

so that's continuing to be so dependent upon foreign sources of energy, our policies in the area have been counterproductive here. would you agree with that, mr. delare? i'll ask you if you'd like to take a -- >> well, there's little to argue with in your statement date because it is the fact that our sanctions policies are oil producers and we are dependent on the external source of energy. i think we all wish to retrieve that we had many alternate sources of energy to depend on, but at this historical point in time we have to move carefully as to how we apply some of the tools provided to us and we can maintain the flow of energy to our market while still demonstrating a strong political message to certain types of behaviors are and accept the bull. >> and they think it is clear

that venezuela and chavez in particular has been using american money in particular either to bribe or influence other nations in this hemisphere and the actions that they were encouraging them to take are often times diametrically opposed to what the united states best interest is. i think we basically have in venezuela now what we had in cuba over the last number of decades. the difference being cuba didn't really have a resource. they were dependent upon the soviet union -- former soviet union. venezuela has oil and is perhaps even more dangerous than cuba was over these last decades. i would at this time -- i didn't give him a lot of time. i might yield to the gentleman for any time i may have remaining. >> thank you. and to that point, i believe

that we are sending basically $117 million a day to venezuela through paid face. so we are funding someone who we've sanctioned. we are funding the fact to the deepest support terrorist organizations that is sending. once again, i think we covered the state department, needs to look at alternative ways instead of continuing to buy oil from chavez, we need to find alternative ways to get that oil. >> the gentleman's time has expired. i'd like to let members know, we have one vote on the floor. if the intention of the chair to recognize mr. delare and then to recognize that the hearing. >> thank you, mr. chairman.

i want to get back to the question every and then the flight in the end this cme activity in venezuela. i had dinner with a group of people and they tell me that the amount of people in the iranian embassy in venezuela is one of the largest in the world. i thought to other people. they tell me that's not true. in your best estimation, what is the embassy in venezuela from iran, the personnel. how many people today have their? how active are they? how many flights a week they have? does it conform -- i don't want to conform, but the amount you have in venezuela, can anybody respond to that? >> i can try, congressman. there was some months ago a

direct flight initiated between tehran, damascus and caracas. our information is that as at september 2010, flight in tehran had been shot and now it is caracas, to madrid in return. there are pointing out instead that the originals of venezuela are not subject to immigration controls. we've heard the stories, too. we don't have a way of verifying that. since 2006 it attempted to contact the statutory that required an inspection of the airports in venezuela because they are hitting .4 flights in the united states. because venezuela refused to permit the safety inspections, security inspections, in september 2008, dhs issued a public notice on the point informing passengers of our inability to do the inspections. in an example of, you know, i'm not going to call it progress,

but there's a change in tsa was able to make a visit to venezuela last week. they spoke to venezuelan security officials. you know, this is not the end of the process. for the first time since 2006 we had a meeting on this topic. in terms of the size of the arabian embassy in venezuela, according to the tip will not come at their many embassies in venezuela, and clicking around that are far larger than that. i didn't consider it to be particularly at his embassy in terms of diplomatic activities, showing the public diplomacy, et cetera appeared we can't see how active they were within the venezuela government. there is that same information on that and if appropriate -- >> how many flights do you have a week now? >> at the weekly fight and it doesn't go to tehran. >> all these rumors have two or three fight to be coming in and

out of come you can't confirm that? >> was a weekly flight. there is no more. >> currently chavez is in cuba. you have any information on that? be not what we now is that we can talk about it in early may he adequately defined as an indie operation. in june he cannot publicly and said he had a public abscessed strain. he has not appeared for some weeks now. >> he has not treated in his twitter account for some weeks. >> his sons jocular, but in fact he's the very act it tweeter and it's interesting he is, fine.

>> i don't know if that's a good atf. >> are we hope in the up decision? and of the opposition is growing in venezuela. are we assisting the process and venezuelan? >> thank you for the question. since 2002 dict is provided to court to encourage development to settle society and democratic practices. much of what was done in recent years has focused on getting out the vote, protect the vote in these kinds of activities to ensure the maximum number of people can vote in free and fair conditions. it is important to know we do this in an ecumenical way. it's not designed to approach any particular end, but support democracy. >> thank you very much. thank you, mr. chairman. >> we have roughly eight and a half minutes in the folk good who will stand in recess until

approximately 10:35 and then will resume the remainder of the hearing. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> as you just heard, members of the committee are taking a break to go vote on the house floor in a resolution regarding military action in libya.

until they return come here's a portion from this hearing from earlier today. >> good morning. the committee will come to order. welcome to today's hearing, venezuela's sanction activity. this is a joint hearing between oversight security of national defense and foreign operations subcommittee. the foreign on western hemisphere and on the middle east and south asia. we are joined today by the chairman of the subcommittee, chairman mack of florida. i'd also like to welcome the ranking member tierney, raking member ackermann for the ranking member angle today. i thank you all for being here today. we are examining the administration's policy for national security threats abroad through the use of sanctions. since the 9/11 attacks americans have invested over trillions of dollars fighting the wars in

iraq and afghanistan. since 2001, americans have died in operations during freedom and iraqi freedom. another 44,266 have been injured. these numbers have risen dramatically since the current president took office in 2009. 33,000 troops in afghanistan by the fall of 2012. this will leave hawksley 67,000 troops behind to watch is twice as many when the president obama entered office. because of this great thing to do based on facts, not because it's the convenient. while the combat terrorism and middle east, middle east, we must not neglect that we face in iran hemispheric. in recent years, venezuela has grown significantly closer to reshoot openly hostile to the united states and its interests. venezuela has been a willing partner to countries such as

iran, syria, cuba come with the exception of north korea, each of these countries has been designated as a state sponsor of terrorism by the u.s. government. senior officials within the venezuela government had provided material support to hezbollah, a terrorist organization. it also maintained ties with the revolutionary armed forces of colombia, farc, eln and eta. hugo chavez has accused the united states has been the first state-sponsored terrorism, end quote. president chavez is also called sanctions against iran a legitimate and venezuelan government will back iran under any circumstances without conditions. there is little question venezuela's behavior is questionable. the question is how is the u.s. government should respond to these activities in the future. what options are available should we continue to impose a mnemic sanctions that are merely cosmetic or should we impose sanctions that truly impact

venezuela's ability to threaten the united states of america. before you begin the analysis, to express my deep frustration with the administration. it has frustrated the work of the sub and a better presenter read witnesses as requested. instead, it sends only witnesses said police are quote, i'm quote appropriate. it does so without any regard to the judgment prerogative of elected representatives. this congress and especially the oversight government reform committee has a constitutional obligation to oversee management, efficiency and operations of the branch. the duties that question and without exception. the same time the administration has a responsibility to provide information american people seek to representatives. its critical check and balances designed to ensure the federal government does not overstepped boundaries and here's to the will of the people. the executive branch is not respond appropriately to increase at the american people. this is the third time congress

has attempted to hold this hearing. the administration either refused witnesses have claimed it had too little time to prepare. it's unacceptable they require more than two weeks to formulate a thought about it matter if studies in greece to executive branch leaders and policymakers on a regular basis. it is equally unacceptable the administration did not admit written testimony for today's hearing until late yesterday. the administration over three weeks to prepare testimony and is known for this topic -- about this topic for nearly three months. it is unacceptable the administration was so unable to adhere to our simple 48 hour deadline for submitting testimony last possible minute. we should investigate the efficiency in this regard here to look forward to hearing from our panel of witnesses about the success and challenges they face. the subcommittee is ready to work with the department in any way possible. we appreciate you being here

today, but understand frustration of the committee had not been able to do is hurt because you're unable to do its work and giving us the documents that we deserve and need to have. i would now like to recognize the distinguished ranking member for the national security subcommittee, the gentleman from massachusetts, mr. tierney. >> thank you, mr. chairman. i think the witnesses for being here as well. we all are familiar with the 2010 comprehensive iran sanctions act as accountability of 2010 and we also understand that the secretary has made a finding in the gasoline sales to be in contravention of the above. the question does come down to what are we going to do and what should we do? i think that we have to have a clear understanding of the current sanctions regime, which i hope you will be able to share with us today for full appreciation of how much we discuss these diplomatic priorities in this region, what our goals, how exactly we will accomplish them and bubbled the

current sanctions due to drag his choice of schools in the additional sanctions due to it's moving that direction in how should they be structured? we have to understand the impact of any ramping up of sanctions before moving in that direction. it's a good time for the conversation. i think hopefully between the four of you will be able to give us all the information in a form that can benefit us as we move forward. with that, ask unanimous consent to my formal remarks he placed in the record. >> without objections ordered. the mac i now recognize the foreign subcommittee in the western hemisphere, mr. mack for his opening statement. >> thank you, mr. chairman. i want to associate myself with the opening statement and also a statement of the ranking member. before i begin in my formal opening statement, i just want to say the frustration rent deepening know you guys know this. we first ask you to come in front of the set committee and

refused a roadblock after roadblock and flat-out refusal and i hope this serves the next time you come to the senate committee will come because the neocon mayor, come here and if we have to use the subpoena power you have to do it. let's not go to the circus another time. okay? >> today in light of the recent actions in sanctioning paid a base, the purpose of this hearing is to review them better understand the role of the state department and treasury department in utilizing sanctions as an instrument of u.s. foreign policy. specifically like to concentrate on sanctions available under u.s. law and discuss potential application in cases are venezuela, individuals, businesses and the government are able to be sanctioned. venezuela has become the wild west under the crack, hugo

chavez. this is true for the following reasons. first, there is rampant drug trafficking and corruption. second, terrorist organizations like hezbollah and the farc are linked to government officials. third, venezuela is supporting iran and iran's desire for nuclear weapons. under hugo chávez, venezuela has come to have been the region for money laundering and shipment of illicit goods. the relationship between drug trafficking and terrorist organizations has come closely intertwined. if you will notice on the screen, we have the definition from the state department of what a state sponsor of terrorism is and i'll let you read that on your own. it is widely acknowledged that terrorist groups have turned to joe trafficking as a source of revenue. and if we can put up the other side. the slide represents in 2003 the

drug trafficking flight patterns in latin america. and if you go to the next flight, this is what it looks like in 2007. unfortunately, we can't show the flights from today because those are still protect it and classified. but the difference between 2003 and is not the same 2005 hugo chavez kicked out our dea. as chavez has provided venezuela as a safe haven for these narco terrorists, the farc, drug trafficking terrorist organization who largely operate sections of columbia have long received assistance, relief and material support from venezuelan authorities. i think this is pretty well documented. when columbia took out brain as it took the computers in their

pope was able to review those hard drives in some found significant cooperation with officials from venezuela, the venezuela government and the farc. clearly if we go back to the definition of terrorism come you can check a box of that there is a close tie and terrorist organizations and the government of venezuela. i also want to talk a little more about the drug -- in the drug trafficking. recently the arrest of a drug kingpin -- a drug kingpin by the united state that god was arrested. not glad was then send -- extradited to venezuela. he also talked about payments to government officials in venezuela said the juror trafficking organizations know that they have a friend in hugo

chavez. we also have a talked about know that there is a relationship between the farc and hezbollah and the treasury has sanctioned members of the venezuela government with their relationship in venezuela. lastly, i want to talk about venezuela and iran. after many discussions and not until a hearing when i was able to supply the state department with specific evidence that the shipment and sale of gasoline, we finally sanctioned venezuela. unfortunately, those sanctions have no teeth. the things that you sanctioned, we currently aren't engaged in with venezuela in the first phase. on one hand it info we actually did put sanctions on venezuela. it's a good start, but this is a guy who supports terrorist organizations, drug kingpins,

drug narco trafficking and iran. hugo seanez should be and deserves to be labeled a state sponsor of terror and our government, the gentleman in front of as common need to explain to us why he is not on the state sponsor of terrorism. with that, i yield back. >> thank you. the chair will now recognize the gentleman from new jersey, mr. sires. >> thank you, mr. chavez -- not chavez, chaffetz. thank you for a witness for being here today. since we've been in power 1998, shabbos has cast revolution at the full maturity against the oligarchy and continues to include popular models, undermining democratic institutions in stifling of freedoms that the venezuelan people. however, the president wants approval ratings have stumbled

and the most recent legislative elections come as ottey said jordi sprague. setting the stage for a heightened attention for its emboldened opposition. the result of the selection shows the venezuela people desperately want change and chavez's losing his grip. i shabbos continues to grow in venezuela, chavez has further invested site restriction of freedom or speech and prize. the government has systematically undermines the journalist freedom of association in groups or remote human rights, come lately disenchanting authentic engagement within the country. officials harassment and intimidation of the political opposition has grown, including the persecution of the lack did state and local government officials and media outlets such as our ctv international that has been critical of the government. internationally, shabbos

continues to cultivate relationships with countries with terrorist like cuba, iran and syria. i cannot emphasize enough how troubling the relationship between venezuela and iran is. with weekly flights that are connect iranians do with caracas, collaboration between these countries have hit a new high. i've often discussed before the western hemisphere is that maybe make an earns about the slide and i hope the representative could elaborate on this topic, as well as acknowledge the threat this poses to the united states and the free nations. i commend the state for its most recent sanctions and been connect it to iran's proliferation activities. thus far, strategy has been pragmatic, he's been a fact which chavez to have a touch of mental effect on progress that has been alerting me and further

emboldens popular suggestion. we must continue to make smart decisions in regard to u.s. policy and further to see bush out of his control to defend his support democratic petitions and principles. recently, chavez seems to have peaked probably remain vigilant where he is likely to support like-minded political allies and movements in neighboring countries to seek to undermine moderate governments. it continues to oppose nearly every u.s. policy initiative in the region, including expansion of free tape, counter drugs and counterterrorism cooperation in the regional security initiatives. venezuela continues to expand to colombian narco trafficking organizations with significant support and safe haven along the border and remains one of the referred trafficking routes with the transit of under south america. u.s. sanctions has successfully targeted against our convict traffickers and organizations in

venezuela, helping to ensure regional security. venezuela has proven it cannot be trusted in the united states should take the necessary measures to stifle the power and ensure regional security. we must do so in a tactful manner. the national security threat posed by venezuela are complex. we must implement the appropriate measures to protect the people of venezuela and promote u.s. interests. i would like to thank our witnesses and the road to the testimony. >> we now recognize the chairman of the foreign affairs subcommittee on the middle east and south asia. the gentleman from ohio, mr. chaffetz. >> thank you, mr. chairman. ..

>> is particularly concerning. when not oppressing etc. own people -- oppressing its own people, the regime in tehran devotes a great deal of energy to threatening american national security as well as the security of our allies in the region. the threat posed by iran takes on a new and more ominous geostrategic significance when coupled with the potential of an iranian base of operations in our own hemisphere. this prospect hearkens back to the days of the cold war when all of a sudden we were no longer separated from our enemies by oceans, but faced

threats in our own backyard. although the nature of the threat may have changed, such a situation is just as unacceptable today as it was decades ago. i hope that the witnesses today can shed light on the nature of this threat. more importantly, however, i hope they can outline a clear and cogent policy to address it. one of the most fundamental roles of government is to provide for the security of its citizens. we are having enough trouble combating iranian meddling and dismantling terrorist safe havens on the other side of the globe. the last thing we need is for threats from bad actor ors even closer to the american homeland. again, i want to thank my fellow chairmen and also the ranking members for holding this hearing today, and i yield back the balance of my time. >> thank you. we'll now recognize the gentleman from virginia, mr. connolly. >> thank you, mr. chairman. and thank the panelists for being here today. i listened with great interest

to my friend from florida berate you for not being here previously. i serve on both the oversight government reform committee and the foreign affairs committee, and i must say i have not particularly been struck with the reluctance of the administration to act acquiesceo hearing appearance requests, but perhaps many this subcommittee there was a problem. i don't know. in any event, we're glad you're here. each sovereign nation has the right to develop alliances beneficial to its national interests, but not at the expense of its neighbors. that's the point we've reached with venezuela's relationship with iran. as a result, the obama administration, for example, recently sanctioned venezuela's stay-owned oil company pdvsa for its business with iran. several illegal activities in latin america conducted to the government of iran. an example, an iran-backed hezbollah has undertaken illicit activities.

the terrorist group has profited from film piracy and drug trafficking in that area. the group is also suspected in two bombings in buenos aires that killed a total of 115 people, the 1992 bombing of the israeli embassy and the 1994 bombing of the argentine/israeli mutuel association. eight of the nine arrest warnings were for iranian government officials. though iran and venezuela have been linked since the founding of opec in 1960, the two countries recently strengthened that relationship, especially troubling under the guise of diplomatic relationships. one example is the absence of customs enforce m, for example, on weekly flights from caracas to tehran by the venezuelan airline. it's unclear who or what's being transported, but reports indicated that the flights do carry weapons of terrorists. >> members are back now from the house floor and we'll resume our

live coverage of this hearing of sanctions on venezuela. this is live coverage on c-span c-span2. >> what is happening with that money, why do we give it, and how do we monitor where it goes? >> [inaudible] thank you for the question, chairman. the purpose of our democracy funding is to encourage the development of civil society in order to insure that venezuelan democracy be as robust and inclusive as possible. we've used a number of different tactics over time. this program has been in place since 2002 and has averaged about $5 million a year. it has gone up, and it has gone down. initially, the democracy program was intended to encourage reconciliation in the wake of the 2002 coup. over time government,

government-affiliated, chavez-affiliated actors have refused to participate in these programs which we regret because they are intended to be ecumenical in nature and demonstrate that it's open to all a, politically balanced and in support of the process rather than any particular -- >> the details of what's going on in that program and how that money is spent, is that something you can provide to the committee in, say, 30 days? would that be fair? >> absolutely. more than enough time. >> thank you. i'd like to yield now to the gentleman from florida, representative mack, for the remainder of my time. >> thank you, mr. chairman. and ask just for the committee's knowledge, by recommendation to the full committee is that that budget be zeroed out moving forward. i want to go back to kind of the sentiment that chavez will use this kind of struggle between the united states for his own benefit. and i've been pretty consistent and on the other side of this

feeling. so what we have in hugo chavez is a classic bully. so he tries to get people to do things based upon fear of what he might do. and i think this is an important point that we instead of looking at what it is that we're fearful that chavez might do, we ought to look at what is the right thing to do for national security, what's the right thing to do for the people of this country, and what's the right thing to do for our friends in latin america and around the world. not because of threats from a bully. so i hope that, yeah, i'd love to hear if you want to make comment on that, but let me just add one other piece to that. you also talked about that we have some great or beginnings of some strides where there's been some extraditions from venezuela to colombia of some drug

kingpins. but the reality is that didn't, that's not due to the actions of the united states. that's due to the actions of the president of colombia, santos. i'll remind you about the mackled case where we fell asleep at the switch, he was arrested on our warrant. when they arrested him, the colombians asked if we wanted him, and we said we're not interested, and then they sent him to venezuela. and that's why the extraditions are happening, not because of some great policy position or foreign policy by the u.s. government, if you care to react to those two statements, i'd love to hear it. >> thank you, mr. chairman. on the first point, i think that the reaction or potential reaction of chavez with respect to the united states and trying to demonize the united states with respect to colombia, the democratic composition in venezuela are all matters that one can make analysis about.

they are factors. i wouldn't say that any one is necessarily the determining factor. what we're looking for is results. in the case of the sakss, from -- sanctions, for example, there's a specific result we want. on the extraditions, actually, we're getting -- and i don't want to overplay this because there's much more that venezuela could do, but just in the last since july 2010 we've gotten on the order of ten senior narcos who were deported directly to the united states, removed from venezuela directly to the united states -- >> let me, because my time is, and -- i'm going to go through, because i just want to hammer this point home that hugo chavez, okay, i'm going to do this anyways. hugo chavez -- well, my time is running out. so thank you and i'll, apparently, we'll have another opportunity to speak with you again. thank you.

>> thank you. now recognize the gentleman from america samoa. >> thank you, mr. chairman. and i do thank our witnesses for their testimony this morning. i just want to follow up on a couple of issues or questions that were raised, at least i would like to raise at this point. we, we duly recognize, gentlemen, that you're just simply following the statute, at least what we did in the congress, passed laws into statute, you're just trying to enforce these sanctions, laws whether it be for economic reasons or whatever. i noticed earlier that chairman chabot had asked the question about venezuela's oil supply, and i'm just curious for the record what is the total dollar value of oil that we import from venezuela? say just last year or say over the period of the last five years.

>> congressman, we -- the figure i used earlier in my testimony was -- or maybe i didn't -- was 900,000 to one million barrels per day. i would have to get back to you with a formal response and cost it out for you. >> yeah. i would think it's important. we need to know. i mean, my next question for the record, exactly how many sanctions do we have against venezuela at this point in time? you know, i know there's sanctions against individuals, sanctions against companies, sanctions against officials of the government, sanctions for terrorism, sanctions on nuclear transfer, on non-proliferation, what is the total number of sanks that we currently -- sanctions that we currently have against venezuela? >> um, well, we can go through them. there's not fully cooperating on terrorism matters which was imposed in may 2006. every year since 2005 they've

been found to have common availably failed in their counternarcotics -- >> as i listed to your statements, do i say maybe a count of nine or ten different sanctions that we've put against venezuela? small sanctions? and then there are sanctions against individuals. so when you net it all out, there are a number of sanks -- >> yeah. at least how many. nine or ten? be more specific, i'd appreciate it. >> some of these are broader sanctions. for example, the not fully cooperating on terrorism implies other articles, so do you count that as a single sanction? then that would be one sanction. >> here's my whole point -- >> would the gentleman yield? >> i'd gladly yield -- >> thank you. it's approximately $117 million a day. >> and that includes citgo oil company? >> >> that is what we are sending

the pedevesa -- >> the money that we're we're paying -- >> 117 million a day. >> do you gentleman agree to that figure, $117 million a day that we're paying venezuela? >> well, sir, it obviously goes up and down depending on the production levels, the consumption levels in venezuela and the market. as i mentioned, i'd be happy to give you a more formal reaction in writing. >> so and i thank the chairman for that figure because the point i want to make is that we're putting all these sanctions into the fact that venezuela has this whole bunch of oil that it exports to our country, and it make it -- doesn't it make our sanctions look somewhat oblivious to the idea that, so what, you put sanctions, but we're still getting our money? does this make sanctions, our sanctions laws somewhat a little -- >> if i may -- >> defective? >> the sanctions we're talking about are the sanctions directed

against the government in tehran. now, of course, they capture venezuelan activities in tehran, i'm sorry, in venezuela because he was this active economic partnership. but that's the focus of this particular sanction. so, no, i don't think it looks silly. i mean, by the same token we've just sanctioned an israeli company, a u.k. company, a singaporean company. >> i'm not trying to say it makes it silly, my point is making it effective. have they been effective if we really want to use part of our foreign policy towards hugo chavez's regime and all that he's done, supposedly, contrary to our basic, fundamental principles of democracy and all of this? >> well, sir, i'll just speak to the iran side. >> no, i'm not talking about iran. i'm talking about venezuela. >> well, we continue to provide him, obviously, with a flow of revenue. is if a decision is made to somehow create another mechanism

that we would want to restrict that, or if pedevesa continues to ship -- >> wouldn't you say it's somewhat of a contradiction we have here? we're putting a whole bunch of sanctions against venezuela, and yet at the same time we're paying venezuela $117 million a day for its oil supply? and i'm sorry, my time's up, mr. chairman, thank you. >> thank you. the gentleman's time has expired. we now recognize the gentleman from florida for five minutes. >> thank you very much. congressman sires allude today the relationship between that nexus between venezuela and cuba. i want to try to drill down a little bit more, and i know we're going to have another round, so if we don't get through it all, i'll continue on the next round. for mr. benjamin, you were the coordinator for counterterrorism. how many countries are on the list, the u.s. state department list of sponsors of state

terrorism? is. >> currently on the list, iran, syria, cuba and sudan. >> so four countries. and with respect to cuba, why is cuba on that list? >> cuba was put on the list, i believe, in 1982 because of its support, principally, for its support of various terrorist and revolutionary movements within the hemisphere, and i think it's important to underscore that cuba has not met the standard for rescission which is to say that we need to be able to either certify that there's been a fundamental change in leadership and the country has ceased to support international terrorism, or that the administration can certify that cuba has gone six months without

support to foreign terrorist organizations and has given assure,s that it will not -- assurances that it will not support any international terrorism in the future. because of its continued relationship with the farc and the eln, cuba has failed to meet that standard. >> so cuba has a relationship with the farc, the eln, both terrorist organizations. what about eta? >> it's a good question, sir. i don't recall if there's any continued relationship with eta, but i can get back to you and confirm that. >> and what about any middle east-based terrorist organizations, hamas, hezbollah? >> i am unaware of any fund raising activity or operational activity from either of those groups in cuba, but i will double check, too, and determine if that's correct. >> is cuba harboring any terrorists? >> >> cuba has over time harbored members of the farc and the eln. and i believe, also, eta, although i don't know if they're

currently doing so. >> you don't know if they're currently harboring -- >> eta. >> eta. but currently they are harboring farc and eln? >> yes, they have. >> how about members of the fbi most wanted list? how many of those do we have in cuba? >> frankly, sir, that's a -- in the law enforcement channel, and i would have to get back to you on. >> well, let me refresh your memory. does the name janet choosemard mean anything to you? would you consider her a terrorist? >> sir, i'd have to get back to you. i'm not familiar enough with the case. >> you're not familiar with the case? >> no, not sufficiently -- >> i'm going to yield for a moment to congressman sires to, perhaps, give us a little bit of the background since this occurred in his home state. >> thank you, congressman. there's currently a $1 million bounty on janet. she was accused of shooting a

state police officer point-blank on the highways of new jersey. so that's the reason. the state police has put a reward of a million dollars. she's been in cuba, now, for a number of years. thank you, congressman. >> thank you, congressman. and i believe that that was not just a random robbery, it was politically motivated, and i think most people would consider that a terrorist act. um, so i hope you'll become a little more familiar with that case in particular. what about narco traffickers in cuba? >> i think some of my colleagues may have more to say on narco trafficking issue. mr. whitaker? >> yes. as ambassador benjamin noted, there is evidence in the past eln and farc members having been present in cuba. there are continuing allegations of cuban government involvement

in narco trafficking, but nothing that we've been able to act upon. again, as ambassador benjamin noted, must much of this is in w enforcement channels. i would note that we have tried to reach out to the cuban government, and we have a coast guard attache who tries to work with the cuban government in order to identify and interdict -- >> before my last few seconds, just let me say in my next round i want to follow up with this because it seems as though we're placing sanctions on venezuela which is not on the terrorist list, but more recently we're lifting sanctions on cuba, and i'll get into that in the next round, which is on the terrorist list and, in fact, is harboring a cop killer from this country. so i'll go into that in the next round. thank you, mr. chairman. >> thank you. i will now recognize the gentleman from florida for five minutes. >> thank you, mr. chairman. i apologize, i was a little late getting back. v you spoken -- have you spoken

about the venezuelan airline at this point? my question is as follows: the u.s. announced it's going to sanction venezuela for it role in shipping weapons. can you speak to the possibility of sanctioning that airline, and wouldn't it be possible as well to sanction any airline that flies in and out of tehran if it can be linked to the shipping of sensitive technology and/or weapons? >> i'll give the preliminary answer and then my colleagues may want to follow up. as a practical matter, we do not discuss designations in public because of the possibility of tipping potential designees. regarding the hypothetical of whether others who are involved in the support of iranian efforts to advance their nuclear program, it is certainly within the scope of the legislation to

do that, and we would certainly look hard at doing that. but, again, i'll let those who deal with sanctions and the venezuelan case specifically -- >> and before they do, mr. benjamin, my point here is i would very much like to tip off, that's the purpose of the question, i would like to tip off any airline that is engaged in if transporting this sort of technology and/or weapons into or out of tehran that they would be summit to these sanks -- be subject to these sanctions. that's what i'm trying to confirm. >> i think that is a well known fact that airlines and other businesses in support of that effort can be sanctioned. >> then let me just move on to the sanctions regime. mr. delare, your office, your office commences and conducts all of the investigations of the companies that may be subject to sanctions? >> mr. deutsche, no.

we primarily work on the energy side of things. >> right. and under -- >> we work closely, of course, with mr. szubin on a variety of other things. >> but under, under ccsada the focus, those would be under your information? >> correct. >> how many people in your office do you have conducting those investigations? >> >> at the present time we have four plus support from our legal staff and the intelligence and research bureau. >> four full-time employees? >> three and a half. >> three and a half full-time employees. who are responsible for conducting the investigations to determine whether a company could be subject to sanctions under ccada? >> that's correct. >> can you, i won't ask you whether that's a sufficient number, but i will ask whether you think the process, whether it would be possible to -- how many, let me do it this way.

how many more investigations could be conducted at one time, how many can be conducted by one person? let me start with that. >> that's an interesting question. as it now stands, we have it divided by sectors, and i have, i think, everyone in the office doing a number of things simultaneously because various, let's face it a lot of media reports come in the door, they have to be evaluated. we then begin checking trade press embassies, businesses, the intelligence community, so it's a constant pushing things through a process with lots of things in different stages. so hard to answer that directly. >> well, let me be a little more direct. >> yeah. >> for those of us who have expressed frustration for the pace of investigation -- well, we're not sure of the status of some of these investigations because we're not informed until the end. but they don't seem to be moving quickly enough, could that be addressed if you had additional

investigators, if you had more than the three and a half people who are responsible for all investigations? >> i think that's a fair assessment. but let me also make two points in regard to that. the ccada is a relatively new piece of legislation even though it dates back to last july. in the intervening period since then, we have set up a procedure that never existed before. we have been exceedingly careful to do due diligence on everything we've done. hence, we probably have spent a little more time as we get used to this than would be necessary double checking facts -- >> i'm sorry, i only have ten seconds. let me just ask one more question. if companies were required to disclose in their filings made to the sec, those trades on american stock exchanges, whether they're doing business in iran, that would be considered credible evidence and

should immediately subject them to the possibility of sanctions, correct? >> seems like that might be so. let me get back to you more formally. >> be i appreciate it. thank you, mr. chairman. >> thank you. we'll now start the second round by recognizing the gentleman from florida, mr. mack, for five minutes. >> thank you, mr. chairman. mr. ambassador, could you tell us again why cuba was put on the state sponsor or -- of terrorism list in '82? >> cuba was put on the state sponsorship list for supporting foreign terrorist organizations engaged in activity primarily in this hemisphere but, again, for repeated acts of support of international terror. >> okay. and then in answering questions from my colleague, mr. rivera, you outlined some of those terrorist activities.

can you tell me what the differences between cuba and vens rail what? -- venezuela? >> i think it's important to underscore that the process of putting a state on the list and the process of taking another state off the list are two very different things. we have a very high bar for taking countries off the list. we want to make sure that when we put countries on the list, that we're not setting such a low threshold that we will both incur, create side effects that will undermine our efforts and our broader national security interests. as a result, um, the -- one secretary of state after another has looked very carefully at a number of different countries over the years for a possible listing -- >> yeah, but -- okay. what i want, you said you gave us the definition of why cuba

was put on the state sponsor of terrorism list which is exactly what chavez is doing in venezuela. so why is it that we have cuba as a state sponsor of terror and not venezuela? and it goes to this point, the inconsistencies that i think another member brought up. on one hand we have restricted visas to people in honduras who have fought for and defended their constitution, the rule of law, their freedom and their country. on the other hand, there are people in venezuela who are not restricted, and they are supporting terrorist organizations. so how can cuba under your definition be put on the state sponsor of terrorism list and then venezuela doing the same thing not be placed on the state sponsor of terrorism list? >> first of all, i'm not conversant with the honduran case, but let me just say --

>> take my word for it. >> as i said, this is about effectiveness. and about using the appropriate tools at the appropriate time to elicit the correct response. >> when is the appropriate time? >> i think that's a matter that we have to evaluate on the basis of the activity going on. and i would say, sir, that as we noted earlier it's, the indicators are going in the right direction, it would seem not to be the right time. >> you mean the indicators that are being brought about because of another country's actions, not ours? is. >> we judge countries by the totality of their activity, and if other countries can elicit good behavior, we certainly view that as a positive development. >> well, let me -- i just want to, real quick, if you could put up the first slide. [background sounds] >> technical difficulties.

you're familiar with that, right? if it walks like a duck, quacks like a duck and looks like a duck, then it's a duck? right? next slide. if it walks like a terrorist, talks like a terrorist and acts like a terror itself, then it's a terrorist, and you recognize hugo chavez and fidel castro, reyes, raul reyes and ahmadinejad, we can agree with that? next slidement hugo chavez, quote, enough of the imperialist aggression. we must tell the world down with the u.s. empire. we have to bury imperialism this century. isn't hugo chavez a sponsor of terror? >> as i said before, sir, venezuela is engaged in the activities that we find unacceptable, and we are engaged in a sustained effort to get

them to stop those activities. and i think that we are taking the appropriate measured approach to get them to stop those activities in a way that will produce results. .. and they include high-performance jet aircraft, which have been delivered to include t. 7210 scam which have not been delivered. air defense systems and in

excess of 100,000 a km ak-47 rifles. there has been a significant arms program by the venezuelan government. some of these purchases could probably be defined as purchases to replace the super integrated, old antiquated equipment. you might, for example, say that with respect to sue greece. venezuela has long been a nation with purchased aircraft's. we sold f-16s to venezuela in the 1980s. those aircraft attended their service life in the venezuelan government showed to replace them. so that is an example of replacing superannuated equipment. many have examples of new capabilities as the t. 72 tanks of the new capability, which traditionally venezuela has not had. >> you said also a factory that

was elton venezuela to make ak-47s or something like that. >> venezuela and russia have signed a contract to build such a factory that would produce akm assault rifles. that's not a production. there is more we provide to a different setting. >> i had conversations with members of other's countries and one of them is tantamount. they have found that venezuela has tried to influence the people of the interior panama, so i am going to get a decent essay sounds will find a way to different countries in south america. to have any concerns about that? >> it would be a significant concern is venezuela were to start exporting weapons to other nations. i think what we've seen principally over the course of the last several years is rather than exporting munitions and weapons and things like that,

it's more trying to buy influence with money. that's the tack tick the venezuelans have engaged in principally in central america, caribbean, for example. there are limits to benefit a large. venezuela as a matter of policy has chosen to spread a lot of money into the population and this has been less money available to support these foreign activities they would engage in. >> talking about me, how michigan nsa listens to cuba currently? >> the truth is we don't know the answer to that question. publicly available information indicates 50,000 barrels a day go to -- go to cuba in addition. that would be free or virtually free. venezuela has agreed to reengineer can you rebuild a refinery in cuba.

that activity has not been completed. finally, cuba apparently charges for the top areas and other experts that provide to work in venezuela, the numbers which are estimates we don't have precise figures, but the estimates are 30, 40,000 individuals in there as they see that the cuban government charges per person to the venezuelan government. >> i just thought you wanted to know from chairman max's statement that we buy $117 million worth of oil a day from cuba. >> from venezuela you mean? from venezuela. the $32.7 billion worth of oil that we buy from venezuela each year. that's my limited knowledge of not nymex, but that not peanuts in my opinion. i thank the gentleman for

yielding. >> i just want to add that following up on my friend, congressman barrera, it's not just chesson. that goes to 100 at upstate the united states and cuba basically with sanction, with camino, living to come come in the and everything else. thank you. >> all i can tell you is actually in the past on key about this is a regular topic of conversation we had with respect to chest omar and other fugitives from u.s. justice. >> i can tell you the troopers are not going to ever give up the request to have chesson ma in cuba so he can report can trail again. >> and we join him and not. >> i recognized myself for five minutes. mr. whitaker, isn't the only reason we haven't a venezuela on

the state sponsor terrorism list, isn't the only reason because we consume a lot of their oil? is that fair to say? >> yeah, chairman, i would associate that we are trying to engage in substantial intruded statement designed to accomplish different ends. there's a number of that yours that go into this process, including the economic effects we talk about, the effects on democratic development. >> what other major economic effects are there other than oil? >> recited the number several times. that is the administration's concern. we assume a lot of their oil. it's the only thing holding us back, isn't it? >> i think it's broader than not. i think that is a factor. i think the economic relationship broadly stated

there are dozens and dozens of u.s. companies that do business in venezuela today, some intimately involved in the oil industry, provide oil services, some of which are international oil companies like chevron, some of which are like xerox, american airlines. so these kinds of factors need to be taken into account as well. in addition to the effect on democratic development within venezuela, the diplomatic outreach that our neighbors have engaged in. >> let's talk about all this money that does flow in. where does the money go once it gets -- do we have any idea or a sense of where the soil profits go take it to venezuela? distress srinath track that at all? we send them over $100 million a day. what's happening with that money? >> i can't speak to venezuelan reprimand. >> it does go to their

government. i'm sorry, to someone else want to address that? >> this is a change from the past. the past database operated ever been known, but operated as an independent entity with the financial structure. one of the changes was to insist on receipts going directly to the government. and so, if your assertion proceeds go directly to the government, i think that's accurate. >> in comparison to other parts of their economy, what portion of their oil proceeds -- other economic input, how big is that in their economy? >> if you're talking about government receipts, it's about half of government receipts. if you're talking about exploits, it's the lion share of exports. i can get you the precise number, but it's in excess of three quarters of total receipts from export. >> very good. feel to the gentleman from

florida, mr. mack. >> so half of the receipts to the government come from the oil that is sold here in the united states -- to the united states, is that what she said? >> half of government receipts come from proceeds. not all of pay to face the receipts come from the united states. the majority of export go to the united states. >> so i think what you are hearing from us as we want to see some sanctions that is not the oil industry in venezuela. and it's not an industry. it's chavez. right now all of that oil oil refunding ability to continue to sponsor terror. and i think it can apply to of

us are wondering -- and this is obviously a bipartisan issue. i mean, everybody's talking about the same thing. why are we putting the sanctions ip-based, especially when the state department, the secretary with the signature of her pen can allow the keystone xl pipeline to move forward, which then we wouldn't need to buy the oil from venezuela. and if we don't buy the oil from venezuela, he cannot continue to sponsor terror. so it seems pretty simple. maybe you can explain why it's not that simple. >> i would hesitate to ever tell the congressman that it wasn't that >> i would hesitate to ever tell the congressman that it wasn't that >> i would hesitate to ever tell the congressman that it wasn't that >> go for it. >> in fact, i fully appreciate your argument about energy prices. it'll probably take 10 years to come online. >> isn't it true that there's been study after study already,

all the times the study comes back in a positive way, but then the environmentalists with it all up again? will continue to buy the soil from chavez and the need for american in canada. >> that's very true. we have to look at the market as it stands today and during a difficult economic past as you well know. >> you can't look at the market yesterday? >> all look at it for the next five years and say we've got to make adjustments. in the meantime, we need the energy from somewhere. >> as i wrap up him and there is a concerted effort to say we're okay with tears in the fun is to keep the price of gas go down here and that's the concern a lot of us have that the administration is making a concerted effort to make have come at three quarters of revenue to hugo chavez. it's okay even though they're participating in terrorism as long as we keep the price of gas down at 711. yield five minutes to mr. rivera. >> thankthank you very much.

foreign minister szubin, your director of the foreign assets control and you're in charge of regulating the trading with the enemies act, is that correct? >> yes. >> cuba is regulated under that act? >> there are sanctions pursuant to trading with the enemy. >> cuba is an enemy of the united states. to >> the title of the statute that congress passed is the trading with the enemy act and that is the authority which you mentioned. >> i would present cuba is an enemy of the united states? >> not for me to characterize. you're correct for the sale. >> how many flight were there between iran and venezuela? i heard one flight a week no longer exists. is that correct?

>> what mr. whitaker mentioned earlier is there was one flight a week and i believe has now stopped. >> how many flights are there between united states and the other countries who are on the terrorist list direct flights, north korea, sudan and iran. hominy direct flights a day? >> i know now, but i'd be happy to look into that. >> do not regulate trading with the enemy? would that not fall under your purview? >> there are none. >> how many flights are there between the united states and our enemy, cuba a day? >> if you're talking about direct flight, private charter flights? >> airplanes that fly between the united states and cuba daily. >> i don't know the answer to that. >> do not regulate?

>> yes we do. at happy to get the answer, but i don't know what a fan. >> you're the director of opec. you regulate the trading with the enemies act, flights between the united states and cuba enemy are regulated by you. the only flights that exist according to the enemies list or korea, sudan, iran zero comic cuba -- you don't know how many flight? >> that's right. >> faq to give me that information. >> i'd be happy to, congressman. >> i'd like to know not only how many flights, but he's charter flight, what company is on the airplanes that are chartering misplace. are you familiar with that? >> what i can tell you is that too operated charter service with respect to cuba, you need

to be like our office. there is an elaborate process which travels service providers are charter service providers need to come in. their ownership and you should be intimate with these fights. if i had a better memory, i could recite the names about these charter companies that stand. >> would you say the number is more than 10? >> i don't know the number of flights a day. >> mr. whitaker. i understand there was a summary produced of a conversation you had with the affairs in venezuela. are you familiar with this?

>> i've spoken to them on the phone. >> i received information of it being published. he did a few things. he congratulated him on the excellent diplomatic work on the honduran crisis. you're invited to meet with secretary of state for venezuela, reassured him that venezuela was well represented in the state department desire to work together to improve relations. >> as i sat i spoken with rivera on the phone. >> recently? >> which you to set us on conversation. sir, i rarely speak with him. i did have a recent conversation. it was highly operational in nature and i'd be happy to discuss that with you. the fact is that you just mentioned were not part of that conversation and they are not things i was.

>> thank you, mr. chairman. >> thank you, if there are no further questions will thank the witnesses for appearing here today. i would just employ you again in the future and asked the administration and providing witness says in a timely manner and providing testimony of 48 hours in advance so we can do our jobs as well. i appreciate your patriotism and commitment to our country comments sacrifice to the country. it was at too painful to come to this committee and perhaps we will have you here again and we appreciate your testimony here today. the committee will stand adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> while this wraps up to houston and venezuela,, house members continue to debate military action in libya. two measures, but not the rice is the limited use of force in libya, but prevents ground troops in the second prohibits the defense department from spending any money to support the ongoing military operations in libya. we'll keep you updated on any new developments on that front. let's take a look at some of the life programming coming up on the c-span network.

>> were trying to reach people and interest to do and how it works. that's everybody from a high school student who's curious about economics to a person is just trying to make a living and get along and is worried about what is going on in washington or the country. >> "the wall street journal" cfl network held a two-day conference in washington d.c. this week for chief financial officers from some of the world's largest corporations. next, a panel discussion from events on the state of the u.s. and global economy. speakers include chief economist at the world bank, former

federal reserve board governor and a former treasury department undersecretary. this is just over a half hour. >> we came to realize that now you can't ignore macro. macro matters and it probably matters more than you'd like. i am kelly evans, i write a journal. i host or video shows day today as well. so let me briefly introduce these guys. we've got justin lin who is chief economist at the world bank. the first developing economies by the way at the world bank and certainly with all the uncertainty china looks for that. john taylor, president of economics at stanford university undersecretary of the treasury and perhaps best known over the past decade for being a willing critic -- someone who is willing to criticize them will talk about the federal reserve starts today at meeting washington who served on the federal reserve in

the late 90s and cofounded macroeconomic advisers, a tracking firm that does a great job of giving us a sense of what's happening in the economy right now. larry, i'd like to start with you. last night i think clay christiansen summed up what she said for the first time in my life, i'm really worried about america. i think there's been a lot of pessimism, both from companies or just in general out there isn't warranted. >> absolutely. i think it is absolutely nothing to do with the current data of the economy. it really has to do with two things. the master budget deficit. it's not china. if education deficit. you can't be 20th in the world in every field and be a competitive economist. whereas the economic power and you should be worried about it.

and the chances are things getting better as opposed to worse is limited by a dysfunctional government and ugly political dynamics. so yes, very things we definitely need to do, taking care of the budget deficit, obviously working to put the economy back on a path of self-sustaining recovery and larry and the unemployment rates, but it's a long road back there to full employment. >> larry, if they are telling us it's going to be a libra. the latest duke survey says they'll increase by 0.7%. that equates to about 100,000 payroll cement that basically means the unemployment rate might be parked at 11%. but just as i do. >> you have to think about where we are. this is the second anniversary of beginning this recovery. when the recession ended, believe it or not.

it hasn't even really been a recovery by most measures. the growth of average 2.8% in that period of time and by comparison, neither is the previous bad recession like this, which started -- recovery started in late 82, we have 70% growth. so 2.8 versus seven. that's why unemployment has remained as high as it is over 9%. so i think a lot of the pessimism is based on this situation wherein combat is related to policy, but i'd start with the school policy. we had the stimulus packages which didn't work in my calculations in the last two years. they've increased the debt. we've had a monetary policy with quantitative easing, which i don't see is done any good, but they've increased monetary overhang. i got in the previous session people ask about regulation.

regulation is a track on the recovery. there's a reason we had to grow at 2.8%. unfortunately i don't think we make changes in the policy that are pretty obvious when you look at what's happening is the recovery began two years ago. it's pretty obvious we got to really take some strong action on all these positions. i'd start with fiscal policy. >> just in time you play not at work recently that the first time in the last decade china says the biggest to global growth. he contributed more than the u.s. put all this negativity in a global context and maybe explain now whether he's the risks in china for more of a serious slowdown that by definition would effect the global economy. >> well, yes. china's economy in the last two years that tremendous contribution to the growth of recovery because china grows at

9.1% in 2008, 10.3% last year. and we will continue to have not only 6% growth rate and that is very important contribution to the global recovery. but like other emerging market channels now is confronting with inflation rate in china has been repressed levels of capacity. so that the policy in china need to return to a more neutral stance in the growth rates on the global recovery. >> something illegal be able to engineer my face after quite after recovery. i've let quickly to see a show of hands in the room of who expects interest rates will be higher than they currently are dip below 3% on the 10 year treasury. we think it's going to be higher in six months?

six months a show of hands. about two thirds of the room. what about a year higher interest rates? nearly everybody. and we've been hearing for months -- for years now the interest rates could move higher and they have confounded nearly a current expectations, compounded talks about the debt ceiling in the tribal happening and continue to sink. i beg to ask you gentlemen how you would explain that and if it is in fact a symptom of the u.s. economy and away. >> well, i think the dominant story here is the cyclical one. this economy, as john said, is actually struggling. people have significantly revised forecast. there are significant downside risks. it is certainly not unrealistic. the economy could continue to grow at a trend below. and under those circumstances, markets have moved back

expectation of the timing of monetary policy and rates have fallen. i think it's remarkable that markets are totally complacent about both the debt ceiling at this point and particularly they absolutely assume this is going to take place and thanks for the confidence, i suppose the secretary with a. and the other aspect is fights to safety to some extent coming from greece. whenever there's a global crises and they can talk all about the u.s. problems, but there is no other market as liquid and deep. no matter where the crisis begins, money ends up in the u.s. >> john, which you agree investors are being complacent? is it possible when they look at the debt ceiling, with the market tells us that the bigger risk isn't necessarily default, but some of the measures you're

talking about to get our fiscal house in order are actually going to hurt growth in d.c. that concern in lower grades. >> one of the good pieces of news in recent months is the first of a proposal to drink country like the debt increase the spending reductions. some people talk about 2.5 trillion debt limit increase to get to the election next year. you need to have $2.5 trillion in spending reductions. and i think that's a huge change really. and that is change the dynamic cast has the 2011 gtl, people forget the struggle at the last minute. instead of increasing spending by 40 billion from 2010 to 2011, spending is down by 40 billion. so there's really things going on, but i would say still will not there yet. i still complacent is the word.

it's a huge problem still. i think of it as 6 trillion, not for trillion as the secretary was saying. they see progress. you have the election in november. the president's budget submitted in february was basically withdrawn and replaced by something which is talking about kites. of those things make people say well come marketing our house to get there, but it's not there yet. >> just income were talking so much about fiscal policy and the federal reserve is asking those people which part of government matters more, they say to the said, not the treasury. that may be starting to change. we've seen for example monetary hooliganism. it's contributing to global imbalances. i want the feds to in helping the u.s. were heard in the global economy?

>> well, certainly the reason for the u.s. economy to maintain money through policy and interest rate, but at the same time to fiscal policy is very important because high unemployment rate reflects large underutilization of capacity in the u.s. economy. and we know when you have large underutilization of capacity, the investment opportunity for the your is not high. under the conciliation committee there you have policy, but you cannot push the road. and that's how i'd think the expenditure would still be. but then again, it understands that they are considering worrying about accumulation of fiscal deficit. >> are you not? >> yes or no. depends on how you spend the money. if you spend the money in the areas which can enhance the

capacity, create job, but in their own land it promotes growth. and i'm not so worried about the deficits. >> every pullback on fiscal spending at this point, do a brisk in 1937 in 1997 event where we think the economy can handle it and it turns out really couldn't. >> i don't think there's much chance at all. the biggest worry is we postpone all these promises to the future to reduce spending that we don't take any action now. that's the worst in terms of credibility. i'd like to see something getting started. so far it's been very small. they think is very positive. the best stimulus for me now would be a return to sound fiscal policy. not another keynesian stimulus package, but returned to sound fiscal policy would help tremendously in the recovery.

>> larry. >> well, john and i actually disagree on that as we know, we've had long-standing disputes on this. one, i think fiscal stimulus policies were affected to agree, but temporary fiscal policy can only shift demand around. so we've had high expectations. it was a bridge to hopefully allow time for the economy to heal. now, i also disagree that a major budget deficit reduction beginning immediately with the acoustic growth. that is just totally unrealistic and you can call me a keynesian and i'm proud of the fact diane. but you cut back on government spending by hundreds of billions of dollars or whatever you say. look, cutting the income goes to consumers. you're cutting direct expenditures.

of course the economy is going slow at times when the recovery is fragile. so as bernanke has said in jest in, and couldn't agree more with you, the task is to produce a program that protects the recovery at a time when it's fragile and puts in place a credible long-term program. now i would say this. backloaded incredible our oxymorons. so clearly it's a challenge. >> you've got a good start. >> we haven't mentioned inflation not much in a think if you had asked people and surveys three to six months ago but their concern was that is probably inflation and gas races have done a lot to undermine consumer confidence in companies pulling back as a result. so we didn't get a little bit of a break in the months ahead as

pressures go away. do you think we've sort of seen this round for this sort of move in inflation peaked? >> i think you're probably demand on some of the headline measures with gasoline prices, but i think it's sort of a downer and then you go back to these concerns about higher inflation later. unfortunately i think if we don't change policies, we're going to have kind of a sluggish growth, two and a half, 3%, but then we'll begin to see the impact of these policies on inflation. i think short-term you probably see a bit of a decline. >> would any of you say at this point there is a material concerning to say that inflation is not to worry. the worry is we have been worried about inflation and the economy is quite weak. which is that the odds of a double dip in a new recession is a serious lid on any economy at anything like 50/50 or higher?

>> a double dip recession incredibly low, but there's so many risks to the economy. you can't just say that's impossible. in pollution in europe, and improving frontloaded deficit reduction program, you know, sharper declines in home prices, which is a real risk. so were not out of the woods yet. for growing and trends during this expansion. that's terrible. so we have to demonstrate an ability to move to a level consistent with declining unemployment. so i think growth will be better. it will be disappointing. employment rates will stay elevated. we'll have the worst macroeconomic performance we've ever had an expansion of the postwar period. and the callout forecast optimistic. >> at what, 3%? >> 3.5 this year and three and a

quarter next year. >> justin, do you think the japanese earthquake magnifies issues in the near term and we will see this rebound in the month ahead? >> well yes. i think the hate on the japanese economy was largely an expectation to begin with, but i think the economy will recover and also at their high income countries can also be used in the japanese economy -- the flag and the japanese economy. overall, the economy should be manageable. >> lasting intellectual pinup to questions. i'm sure there are many, but we talk a little bit last night about information overload in the sense that now we have so many economic data point that it's not the u.s. anywhere. we have to know about greece's confidence vote and we have to know what's happening with

brazilian food prices and that kinds of things to make business decisions. to help separate signal from the noise, which to each of you is the single most important thing that cfos need to watch her father in the month ahead to have a real clear sense top level of a deterrent in global or u.s. growth is doing. larry, you get to start. >> there is a gap to train data overload and oversimplification. so to think you can look at one piece of data, i could talk about data that would be worth looking at, but to encourage you in that direction would be very bad advice. >> you are saying i won't give you one. you want us to pay for your service. >> you've got it. >> that would help. >> i think you should be looking at the moves of monetary policy

in the next six months, here. i think there's an imbalance in the world economy now with respect to monetary policy. we talk about them on current accounts on the time. right now if you look at expectations of what's going to happen, virtually every central bank around with his dirty started are beginning to raise interest rates, except for the fed and of course the bank of japan. and that really causes imbalance. you are hearing about some of the complaining, some of the political for sure, that some of that genuine. and techniques that hurt her further countries to do what they need to do to tackle inflation. so globally we do have an inflation problem. there's no question about that. unless this imbalance between the fed i say an almost the rest of the world now gets fixed, and think you could have some problems related to the financial markets which are so interested in. >> i get the sense you want a

quick rebuttal here. >> well, it's the question of who should adjust to it. let me take china while we're here. and justin is unbelievably reasonable, so i don't think i want to get an argument about him. china complains that were manipulating the currency. now the, you can argue. and john, i can argue whether u.s. monetary policy is right for the u.s., but who would say it's right to china? well, it's insane for china, insane for a short period of corsair facing inflation and asset levels. but whose responsibility is that clerics should we say okay camera not going to carry out monetary policy and were going to carry out one which is better for asia and china. take it to the bank. not going to happen. and as i run the port number to

which radically opposed it. so, we're going to ease further if we need to. and the fact that -- >> uvb in the door up into a qe three. >> i don't think it's going to happen. and qe three, the hurdle is incredibly high. but there are other teams that the fomc can do short of qe three to provide further stimulus to the economy. >> for me, the most important information that is to look at is the food prices because every 10% increase would cost 10 mins to get people back to poverty. and now the stock of green is small and there's a lot of drought. if any of those kinds caused an

increase come it's going to be very damaging and may cause and social tension. >> allen. >> kelley, i want to turn the tables on the group here because part of this agreement between john taylor and larry meyer over what the effect of a fiscal tightening would be actions in this room. there is some assumption that the private set or we take comfort from strong signs of fiscal discipline and might be more willing to spend some of the cache are sitting on, make into other investment decisions. i'd like to know if there's somebody in the room who would comment on how the fiscal situation in washington affects the way you view company decisions. come on, somebody take it on.

joe, can i put you on the spot? >> yeah, sure. your view of this. >> i'm sure the u.s. government gives a lot of good advice from gentlemen like we have on the panel. i believe we always need to be very aware about the fact that companies, most u.s. companies are global companies and very successful. so they are not to tightly wrapped to when economy. today are one notch above then they can move and reallocate resources based on that demand and it is something the government should never forget. >> loading the threat. >> now, it's recursion that.

that's why i believe that tightening are not tight rein for policy in the united states is not necessarily a fixed strategy of global acting companies. >> they would not attract the policy. anyone else? want to comment on this? >> i do think this is an important calculation. >> can i say something riveted to your question? i think it's very clear that those of us who hope that better fiscal policy will include the economy, the idea is there's a lot of uncertainty out there about whether taxes are going to increase, then searching the about whether inflation will pick. and as we hear your colleagues frequently, the uncertainty is holding you back. and there could be some clarification of the cash

sitting around. we hear about it all the time, which start to move. maybe you wouldn't have to worry about managing so much. it would be going out there to investment. so i think that the nature of the question. there is that uncertainty from a lot of anecdotal evidence. >> let me ask you -- >> lineages father. i'd like to ask you is that uncertainty is holding you back from investment or just the slow economy and would you be better off -- would you say that's great? take away my subsidies immediately. i think that's a good idea that would make me spend more than raise taxes, which is inevitable as part of the deficit reduction and cut the spending on aircraft. cut the subsidies to technology and the economy will be better off.

how many agree with that? >> let's go this way. policy insurgency versus a uncertainty. how many show of hands show of hands is a policy insurgency factor holding you back at the moment? i see no hands. okay, sales and certainty. how many say sales insurgency make a bigger or? >> so you wanted to add something? >> that would be to your point. >> if i may come back to what i said earlier, putting my companies america had on his rather big each has the company has about 25 billion in revenues. but what we need for the netherlands here to invest more and more is to have three people. we have about 3000 jobs in the country. we try to open another factory

in north carolina. a dozen people, directly 2000 jobs being created. so good luck to get them. i'm not sure whether the debate about unemployment is a debate about the strength of the economy by losing fiscal policy or whether they are structurally challenged and get the right people. >> are you having trouble feeling this? >> yes, absolutely. bush's open another factory in 2000 directly 6000. maybe you can't get them. >> hang on a second. let's see if there's at their comments about the nature of the insurgency that's affecting business decisions. any of the rest of you want to jump into this before the panelists respond? any of you raised your hand? go ahead, rabin. >> i was going to say it did two

things are very connected, particularly at the moment. the truth is the government has actually stepped in, so i do think the uncertainty about what are going to do is affecting the sales. so you can't say it's one bigger impact than the others because they think right at this point in time, particularly in the u.s., but also globally what they're going to do country by country from a fiscal perspective to get patches back in order, whether it's short-term or long-term is going to have some impact on whether the underlying fundamental economy is going to get back on track. so i think its you are interrelated and then affects the interest rates and effects occurring fee. and so toehold gained, the whole level of insurgency does affect not just businesses, but also consumers and can affect how and

when the economy will get going is the way i will put it. so i think those two things are very important. and just actually knowing what the strategy sorry making sure that they articulated well. i agree no one is going to do it globally and interconnected so everyone is doing the right thing for the world to keep going for the country on its own merits. but i do think of the love of certainty is affecting the consumer as much as it does affect tina. so it ain't it's that level of certainty of government policy were addressed. >> i think it boils down to posterity versus stimulus argument plain out for a couple years now and i'd be curious to see whether you guys see it settled one way or the other yet in terms of which is the more supportive way to handle these

problems in the u.s. and in other economies. >> could i just respond to let this gentleman said because they think is just one of the most important point and i really am curious to whether others in the audience elitist, too. this goes back to the education debt to say. you can't find workers with enough skills to work in your factories. your factories demand higher scales, where technological skills. so we're oversupplied and unskilled workers whose wages are going towards china's. china's wages are increasing. but the best news for an unskilled laborer for us, but we are continuing to underproduced the kind of skilled workers that are businesses need to be successful and so we can produce more in the u.s. >> of like to respond to that question also. i agree there is some structural issues they are, but i think it's also the money issue because we know that half the

the capacities are in the construction sectors. if you have more demand for the infrastructure, then those workers will be employed. so i think the demand management is also very important. >> if i may again, the question is, do we have underutilized capacities in areas that we do not need the capacities anymore? do we have capacities not been able to so those capacities in order to subsidize? i think that's the question. we have tons of underutilized capacities in the country because people can't afford to wait for it. so i guess what get this country where it belongs to be, one of

the most powerful economies in the world that industrialized is -- do you trust realizing you get those capacities to begin because the capacities are the consumer environment. so that's how we need to look at from 5000 miles away. you know, it seems that the country has a massive sea for technology for infrastructure. there are very powerful companies in the country, which would actually want to expand india can expand to create tabs. >> i think we have time for one more question. >> go ahead, lee. >> lee schiavo. retyped about the company's give, consumer perspective, the ones really relevant to this the

market in the investor perspective heard certainly what we have experienced are smaller slower volumes of trading activity reflecting as a barometer of marketing sadie, uncertainty within the economy. i do think certainly demand as a part of that, but i was surprised that the overall policy decision and making a progress on the deficit on taxing issues is one of the key fact there's that is holding back institutional and even retail demand for investment and that certainly has a sentiment and a perception issue on overall comp is within the economy. so i would certainly suggest from an overall market is that some of those steps will have certainly bolstering impact on broader investor confidence, which in turn should drive more capital flowed into these businesses and that's

encouraging more companies to take more risks. >> we don't need a few e3 it so much as in august 2nd decision that everyone can feel good about. >> from the market's perspective, that's a very accurate -- very accurate decision. everyone has factored in the q. we even have an impact. the wall of the market needs to climb as the policy uncertainty and if there's progress on that front comments were likely to be positive market impact than the next. >> larry, quickly. >> i don't work with firms that produce widgets, but these guys do. we just saw what they said about the insurgency. what matters is what's done. it's not the uncertainty about what's done. do we get credible, sensible

programs. so ask you, if we got a program you thought was terrible but in limine. uncertainty we could be happy. >> obviously, predictability which i hear a number of you referred to is very important, not only for the markets, but important for consumers. but some of the states want searching searching and not demand or uncertainty about policy, i do think there can did. and in certain amount of policy leads to difficulty making decisions are holding back. it's common sense by the way come in basic will tell you you have to go with your gut feeling. if we could return more predictable policy, that means we will not do kiwis anymore. at least it's hard to figure out what is going on. fiscal policy, regulatory sound fiscal possibility we haven't talked about regulatory policy, but i can't imagine the uncertainty about health care, financial services regulations

or another element of uncertainty, which if it was reduced, a lot of it was removed. it is reduced to go along way to increasing demand quite frankly. >> i think after hearing this panel i can understand some of the caution showing up in the sea of those surveys, certainly the outlook speaking of uncertainty. but i want to thank you for being here, sharing your view and maybe next time we cannot there's a much more optimistic assess that the state of affairs. [applause] >> more from "the wall street journal" cfo network conference. next, gary gensler, chair of the commodity futures exchange commission talks about his agency's progress in implementing the new financial regulations law. it's about a half hour. >> well, chairman gensler, thank