[inaudible conversations] >> we're live inside of the senger room at the national press club. we're awaiting start of discussion on the future of the kurds in iraq. this is hosted by columbia university. expected to get underway in just a moment here on c-span2.

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now. thanks for all of you for coming. my name is jonathan landi, national security and intelligence correspondent for mcclatchy newspapers for another week 1/2. and, again, thank you for coming. to the release of this new report sets out recommended pathway for the kurdistan regional government to take to what many believe is inevitable independence from iraq, for iraqi-kurdistan. the full report is on the web. i think you guys have got the executive summary. the report was prepared by a task force organized by the program on peacebuilding and rights of columbia university's institute for the study of human rights. the task force chair, to my immediate right is ambassador nancy soderberg. her foreign policy resume' is

extensive. includes serving as third highest ranging official on president clinton's national security council. alternate u.s. delegate to the united nations. she served as a foreign policy advisor to a number of democratic presidential campaigns and to the late massachusetts senator edward kennedy. to nancy's right is david phillips. full disclosure, david and i are old friends. we go back to the wars in the balkans. he has extensive experience in the balkans, middle east, south asia in conflict resolution and human rights advocacy. david is the director of the program on peacebuilding and rights, and he launches this report. he worked as advisor to the united nations and u.s. state department and author of numerous books and articles on foreign policy. no matter how you feel about the question of the iraqi kurds long quest for independence, this report couldn't be timelier,

given upheaval in the middle east and particularly iraq, syria and turkey with their large kurdish populations. at least the way i see it, it is hard to argue with the report's essential premise, or one of the essential premises, the site middle east is no more. iraq and syria are partitioned for all intents and purposes and all but impossible to see how they can be put back together again. more than half a million, more than half of syria's population is uprooted and four million are refugees. i was there twice last year and saw entire towns utterly destroyed and depopulated. i have no idea how that can ever be rebuilt so people can live there again. i was also in iraq. the country is awash with millions of internally displaced and refugees housed at crippling

expense by the krg. iraqi army and shiite militias have failed to liberate anbar province and there appears little chance that mosul will be recovered anytime soon. the central government is all but dysfunctional. it is financially strapped and driven by ethnic and sectarian hatreds and corruption. turkey is facing serious political instability with the rum shun of the -- resumption of the war between the pkk and the government. one of the only cohesive political unit that continued functioning in this upheaval is iraqi-kurdistan whose people yearned for decades for independence and whose leaders vowed to give it to them despite option from baghdad and their chief ally, the united states. however they face serious, daunting, political, economic, and security challenges, hurdles, in delivering on that promise. this report is being issued today chart as difficult and challenging course to that goal.

i will now turn it over to nancy and david. we'll take questions. there is a microphone there at the side. i would ask you to please identify yourself when we, when you do ask questions. >> okay. thank you very much jonathan, for joining us and also for your long work in these war zones where we all crisscross over the years. appreciate all of you coming out on short notice. so we're very delighted that you're here. i want to first say thanks to david phillips to my right without whom this project would not have occurred. david has spent decades analyzing the kurdish issues. i was delighted when he conceived of this task force and asked me to chair it. i also want to thank columbia university and its program on peacebuilding and human rights at columbia's university's institute for the study of human rights.

it's been a wonderful host and provided a lot of support to this project. so thank you for that. i also want to thank the task force members which included former u.s. officials, u.s. and european scholars and activists, who have many decades of experience in kurdish affairs. we met regularly since april of this year to discuss strategies, methodologies, findings and our recommendations. a number of us visited the region including erbil and ankara. i want to thank all of the members for their participation and expertise and time. delighted to welcome brendan o'leary, who has been an invaluable member of the task force. he is the most knowledgeable on constitutional issues and legal issues in the region. so thank you for your contributions. we also have contributor

christina who has been a key interlocutor on this issue from her now home in istanbul. thank you for coming. i will be remiss, she will hate me for doing this, if i didn't thank ibina hussein from the atlantic council who provided invaluable support. thank you. for those who would like us to mail you copies of the pretty-looking, glossy report, there is sign-up sheet out on the cookie tray. we'll be happy to email you a copy if you like that. so, we're delighted to review recommendation. i will talk briefly, david will talk briefly, we'll answer questions and end promptly at 1:00. as jonathan mentioned this region is one in crisis. you have the collapse of the iraqi state, the brutal sweep of isis through the region, the civil war in syria, a flood of four million refugees and

another six million displaced in syria. half of the country has moved. obviously the latest moves by russians have upped the ante, propping up the assad regime and increasing the carnage there. these are all consuming policymakers on both sides of the atlantic and in the region. in our view these events should be a wake-up call for u.s. policymakers and international policymakers that the current course is failing. and the u.s. is gradually shifting from some of its policies in recognition of these facts. in the midst of this chaos we want to highlight a critical and all too often critical element, march of iraqi kurds. we recognize this is part of a larger puzzle. we want to focus on this underanalyzed, and underappreciated fact, in hopes it spurs further thinking in

capitols and further analysis of the kurdish question going forward. iraqi kurds, baghdad and the international community have to make some very tough decisions. with respect to iraqi-kurdistan march towards independence, if correctly, the democratic, stable and prosperous iraqi-kurdistan is win/win for the region, advancing the kurds, the iraqis, and broader region. i will summarize the three key findings in three broad areas and turn it over to david. i will talk about the need for the international community to work with and not against iraqi kurds independence. the need for the international community to build a more unified effort to combat isis and lastly the need for the international community to help the kurds address the overwhelming refugee crisis. now first, a recommendation for

the international community to stop blocking the iraqi kurds march towards independence. if you look back, defacto independent states since 1991, since 12 years continues the 2003 u.s.-led invasion of iraq the iraqi kurds sought to work with the central government in baghdad through the last 12 years. but with iraq's collapse and baghdad's obstructionism they will no longer do so. during the negotiations on the 2005 constitution the kurds made a deal to remain in iraq if iraq were truly federal, democratic and decentralized. such an iraq does not exist. in july last year kurdistan regional government announced a referendum for independence

which will set the stage for a declaration of independence and the krg, the kurdistan regional government, understands it must not act hurriedly and impulsively and must not do so lest it invite conflict with iraq, turkey and iran. we do not know how and when iraqi-kurdistan will seek independence but it is not in the interests of the international community to block the legitimate aspirations of the kurds for self-determination. rather we argue that the international community should work with the regional kurdistan regional government with baghdad and concerned countries that the process is consult tiff, democratic, responsible and stable. certainly iraqi kurds march towards independence even with consideration risks destablizing countries with kurdish

populations. the international community as well will face challenges as iraqi kurds consolidate their state. we lay out a few recommendations in the report and i will just highlight a few of them here. first, our recommendation to the iraqi government is that irrack must resolve its outstanding territorial issues. in accordance with article 140 of the iraqi constitution, we recommend it holds referendum on kirkuk and other disputed areas in the dalia and governorates with monitoring by international community. if the government of iraq is unwilling or unable to do so, we recommend the kurdistan regional government conduct the referendum with strong international assistance and monitoring. our recommendations to the kurd disstand regional government are as follows. first, reassure turkey and iran that the krg harbors no plan for

a greater kurdistan incorporating parts of turkey, syria or iran. second request monitoring by the international community should there be a referendum and independence and work to insure that iraq's neighboring states and international community are kept fully informed of the process. third, develop special, special power-sharing arrangements for kirkuk and other territories should they vote for independence following that referendum. and engage iraq, turkey and iran's governments in a dialogue on postindependence political issues, such as boundaries, materials of recognition and economic issues. our recommendations to the international community include understanding that iraqi-kurdistan is moving towards independence. work with the kurdistan regional government and iraq and their neighbors to support the development of a transparent road map and timetable for the

possible decision by the iraqi kurds to separate from iraq. transparency would enhance stable postindependence relations. we should also provide direct assistance to kurdistans high elected commission so the conduct of any referendum on independence meets international standards and we should dispatch monitors to verify that the ref den sum is free and fair. secondly i want to touch base on the need for a stronger effort against isis in the region. the kurds are key to the fight against isis both in syria and iraq. we were all impressed by the is effort in support of the kurds to defend erbil in 2014 to keep isis from overrunning that city. the international community has an interest in making iraqi kurd disstand a bulwark of stability and a better ally in the fight

against isis. isis as we know is well-armed with u.s.-made, state-of-the-art military equipment is seized from iraqi security forces and u.s. collaboration with the kurdish forces, the peshmerga is a model for successful security cooperation that should be expanded as the fight against isis expands. now, first our recommendation for the kurd disstand regional government is to strengthen its own ability to take on these tasks. the ministry for peshmerga affairs should enhance civilian controls and military and must transform the peshmerga into a professional army by defining salary structures, pay pay salaries on regular basis and offer pensions and other retirement benefits. it should organize peshmerga from rival parties, kurdistan democratic party and patriotic party of kurdistan an unify

brigades. it shut support ministry effort to create non-partisan battalions which new recruits do not affiliate by political party. recommendations to the international community with respect to the security against isis would be first, to support a more unified effort in both syria and iraq to defeat isis through cooperation among kurdish groups with the necessary training and equipping to win. continued to review the military needs of the peshmerga as isis threat and role of the kurds evolve. they need immediate provision of anti-tank weapons to more effectively defend themselves against vehicle-borne improvised explosive devices and we ought to train and equip the peshmerga with more sophisticated weapons as needed for offensive missions against isis. now to date the u.s. has managed to deliver weapons quickly to the kurds despite its insistence on first seeking approval from

baghdad. but should that become a problem, we point out that there is a presidential waiver that could be invoked to deliver weapons directly to the kurds if the peshmerga need to receive weapons for quickly. given the ongoing critical security needs in the region over time we recommend that the u.s. should develop plans to place a u.s. military base inside iraqky kurdistan that would only become fully operational should iraqi-kurdistan become independent. given the critical needs there, the kurds are welcoming friendly and good fighters and it could advance u.s. security interests dramatically. lastly, i will touch mn the humanitarian crisis. the u.n.'s oha office, humanitarian affairs estimate 8.2 million people in iraq that need support.

1.6 million of which are in kurd disstand and the regional government is struggling to provide relief, resettlement and protection of those 1.6 million refugees and idps. iraqi-kurdistan's population has grown 28%, creating all sorts of budgetary issues and social tension. the challenge is exacerbated by suspension of baghdad of payments to erbil which were supposed to be 17% of the national budget prorated for oil exchanges but those payments were stopped by baghdad in february of 2014. the world bank estimates that the cost of stablizing the refugee and idp situation in kurd disstand is $1.4 billion. so we have a couple recommendations both to the kurdistan regional government and the international community for consideration. one would be to position the kurd disstand regional

government for direct donations by the international community by developing a post-conflict recovery plan that focuses on stabilization during the transition from relief to development. to the international community we suggest they invite the krg to present this recovery plan at a special session of the u.n. security council convened in what they call the rea formula which is, an informal method to allow non-member-states of the security council to address the security council in an informal session. we do also suggest providing enhanced direct donor to agencies of the kr. g such as ministries of health and planning and renally-based ngos that provide health and humanitarian services to assist with this crisis. certainly no new state is ever ready for independence. but the international community can help the kurds meet these challenges. let me turn it over to david who

will present recommendations both to the u.s. and to some of the key challenges that the kurds are facing as they prepare for independence. thanks, again. >> thank thank you, nancy. there is old kurdish adage which case the kurd has no friends by the mountains. i submit to you today that the united states has no better friend in iraq and syria than the kurds and needs to exert its influence in order to help iraqi kurdistan be viable, stable and secure, advancing its progress towards ultimate independence. its focus needs not only to be on iraqi-kurdistan but regional issues. u.s. is uniquely placed in turkey and syria. we've seen recent announcements of plans to provide ammunition

and maybe some weapons to the people's protection units. they will need more sophisticated weapons to successfully establish a viable buffer along the syria and turkey border. needs to be more frequent and higher level contact between u.s. officials and the authorities, including members of the democratic union party, the pyd. the purpose of those discussions are multifold including discussions about reinforcing the partnership with the pyd and its commitment to kurdish autonomy in a reconstituted syria. we all have watched with great concern the resumption of the war in turkey. the u.s. needs to encourage both

ankara, and the kurds to resume its cessation of hostilities, to go back to the negotiating table. the trend towards escalating violence which was initiated in a large-scale by president erdogan is not constructive to the broader goals of turkey or all turkish citizens including those of turkish origin. as far as the u.s. role towards you are rakeky kurdistan we recommend -- iraqi-kurdistan, we recommend involving a project involving u.s. officials and private experts and iraqi kurds in order to develop a capacity-building plans for iraqi-kurdistan democratic and economic development as well as its security. so that kurdish issues don't

slip between the bureaucratic cracks in washington we recommend the appointment of a special envoy for kurdish issues bridging the gap between the bureau's of near eastern affairs and european affairs at the state department. this special envoy would serve as a interagency focal point within the u.s. government andless help to coordinate policies between the u.s. and european countries. columbia university several years ago invited sali muslim, the co-chair of the pyd to the united states. his application was submitted to the u.s. embassy in stockholm. it has not been acted upon. he should be issued a visa to come to the united states and attend high-level meetings in washington. nancy spoke about the economic crisis facing iraqi-kurdistan. well the budget crisis is

exacerbated by the suspension of oil payments from baghdad, the depressed energy prices in world markets and also the collapse of investor confidence due to the invasion by isis. the kurdistan regional government stepped up paying enormous costs for humanitarian assistance. it also has to bear expense for its security in the fight against isis. so we who offer some recommendations to the krg and also to the united states in this regard. in order to revitalize the economy in the kurdistan region the krg should review and strengthen the investment law. steps are needed to create a predictable environment for doing business through a legal system that governs commerce and property rights as well as taxes and tariffs that are levied in a

consistent and transparent way. the krg has made enormous progress but done so in ad hoc fashion which is not systemic. it needs to improve its economic planning and develop a consolidated public sector balance sheet that harmonizes its budgetary practices across the three governorates of iraqi-kurdistan. it has a cash based economist. needs to develop the banking sector, reduce cash-based transactions and promote foreign direct investment by creating special economic and industrial zones. i'm going to speak briefly about the issues surrounding the kurdistan government. progress towards finalizing iraqi-kurdistan constitution stalled in 2006. there is ongoing debate whether

to have parliamentary system or strong executive presidency. recently there have been conflicts over the term of president barzani and the presidency law. we recognize the need for internal reforms and finalizing those reforms through legislation and a new constitution. in the words of a krg official, the dispute over the presidency is a very unfortunate, self-inflicted wound. it comes at a moment when iraqi kurd disstand is on the brink of real aspirations. i worked with iraqi kurds will contest until the 11th hour. they know what suffer something

about and will put national interests above self-interests. we call upon officials in erbil to keep that in mind so we can move beyond the impasse of the presidency. specifically the report recommends that the krg settle the controversy peacefully over whether to have a presidential system, a parliamentary system or combination of the two. with a new constitution which is long overdue, should meet and exceed the highest international standards for individual human rights as well as linguistic, ininternational, and minority rights and provisions for local autonomy, so minority groups living in iraqi kurdistan believe they're fulling participating and have their interests upheld. the krg needs to promote women's rights more vigorously by issuing civil codes that grant women equal rights, working to change cultural mores on honor

killings and enforcing ban on genital mutilation. when i raise the concerns over the years they rightly point out the status of human rights in iraqi kurdistan much better than human rights in iraq as a whole. as an old friend of the kurds, we feel it is incumbent to point out areas we feel they can make improvement and encourage them to take those steps. we also recognize the importance of transparency. that the failures and problems resulting from corruption and lack of transparency risk undermining prosperity and political stability in iraqi kurdistan as it would in any country in the middle east or in the world. our recommendations to the krg involve the prosecution and punishment of corrupt public officials regardless of their administrative rank, civil servants need to be provided clear anti-corruption guidelines, a code of conduct

especially when it comes to government contracting and of course the rule of law overall needs to be enforced. the data on oil revenues should be published so it is known to all. in addition there is a wealth of knowledge that exists in the international community on anti-corruption activities. links to the u.n. global compact, to transparency international, industries transparency initiative are all relevant to kurdistan's economic development. an ombudsman or comparable agency including complaints hotline responsible for investigating instances of alleged corruption would also improve the environment for doing business. my grandfather had an expression. woe say the future is beckoningly bright and for kurdistan i think we can say that undoubtedly the case. the hydrocarbon sector is the pillar of iraqi kurdistan

economy. it is estimated that iraqi kurdistan may have 45 billion barrels of recoverable oil as well as large natural gas reserves. the problem for the krg how to transport and monetize its hydrocarbon resources. traditional sectors such as agriculture are also important to the kurds who live off the land. it is a largely rural society. tourism has potential if visitors can travel freely and in security. iraqi kurdistan needs to invest in human capital and competitively upgrade it is internet and broadband systems moving further towards the establishment of a modern information-age economy. overall, economy in iraqi-kurdistan today suffers from overemployment by the state and the lack of an autonomous banking system which limits

financing and capital flows. so the report includes a set of recommendations in each of these sectors. for the hydrocarbon field we propose that krg diversify its export options. it is also important that international oil companies that are working in iraqi-kurdistan are assured they will be paid arrears as soon as the krg's economic crisis is addressed. concerns about nationalization of their assets should also be addressed. when it comes to banking and credit there is need for a central bank for iraqi-kurdistan and transition from a cash-based economy to one with better banking and financing. you also need to foster a banking culture where citizens have public confidence in order to deposit their money into banks. this needs a legal framework for retail and commercial banking. new york is a banking center. there are a number of bankers

that i have spoken to there who would be more than pleased to lend that -- their expertise and networks to the kurdistan regional government. with the question of food security which is also related to water resources we propose the conduct of a comprehensive study of water resources critical to sustainable agriculture production and food security. this would also enable the use of more modern irrigation systems. the u.s. geological service has expertise that can be brought to bear in the partnership with the krg. tourism has great potential. we talked before about the need for security. that is paramount. tourism should be marketed to visitors from iraq and other middle eastern countries. as the situation improves tourism outreach can be expanded to western asian countries. we learned a great deal from

christina about the question of education and human capital. there is a large percentage of the population which symphony employed by the state. steps are needed to strengthen the private sector by expanding employment benefit such as pensions, health care, unemployment insurance. overall we recognize significant steps that iraqi-kurdistan made over the years. my first visit was in 1992 in february. there was no electricity. there was no heating. you go there today, it's a thriving metropolis. erbil is a very orderly well-managed city. kurds have made the most of their opportunity for self-rule. its progress is threatened by the islamic state.

in order to continue to develop its society an economy and be a fuller security partner with the united states we can't sit on the sideline. we need to step up and work more closely in all the areas nancy and i have touched upon. i will pause there, ask jonathan if he has any questions and we can open it to the floor. >> thanks very much. i will take advantage of the moderator's prerogative to at least one question anyway. to aspire to have chief to achieve independence and to accomplish the steps that you have set out in your report but, setting down this path in the midst of a war with no apparent end in sight is a everest-sized challenge. time frame is a vital element.

can you talk about how you see that and how you avoid major risk of another internal conflict erupting between baghdad and kurds would eliminate any chance of liberating mosul which would be heavily dependent on the kurds participation and cooperation? >> i will start. i know david will want to jump in. first, there is no one more conscious of challenge of the region than the kurds and. it is a tough neighborhood with many challenges. they make it very clear that they will move towards independence in a careful, deliberate way that doesn't involve confrontation and they will not moved precipitous what

drivers this is the collapse iraqi regime. the unified iraq is fiction. they tried to work with us. they have tried. baghdad left them. they didn't leave baghdad. they, i think one of the reasons we're doing this report is to have a wake-up call to policymakers. there is no such thing as unified iraq anymore. we need to help the process go forward. what happens to sunnis in iraq welcoming isis. because they would rather have isis than iranian-backed militia or shia? that is a bad choice in terms after time frame and conditions, president barzani told us he would worry about isis and then worry about independence. it is very much undecided. things are decided will knot work through baghdad again.

they will move towards independence. barzani's life is aspiration of iraqi-kurdistan. he was born on the days and all that. we were certainly assured there is no precipitous action here but have the international community ignore the fact they're moving in this direction and ignore baghdad anymore is i think a mistake. >> important to see baghdad for what it is, not for what we wish it were. the supply of weapons to the base requires overflight, through iran and iraq. u.s. officials on september 5th raised concerns with the iraqi counterparts and they were ignored. we learned on monday morning reading international news, iran, iraq, russia, syria formed

an agreement to share u.s. intelligence. they need to recognize who their friends are in the region and who are their adversaries. having spent trillions of dollars and thousands of men and women not only killed but who were maimed i would have expected washington would have greater influence over baghdad's behavior. it hasn't been acting in these recent weeks as a friend or as an ally. whereas kurds over many years have demonstrated that they and are worthy of closer cooperation and partnership. >> we've seen the united states shift position, for instance on independence for cost very. -- cost sew very. effect i havely partitioned bosnia to get peace there. in discussions with american officials did you sense any movement towards shifting out of one iraq policy. >> no.

>> so i will differ with nancy a little bit here. public posture of u.s. officials is adamantly supporting one iraq policy. i would say there is growing awareness in washington that iraqi kurdistan will become independent. as we recommend in the report, the u.s. shouldn't stand in it is way nor should it encourage the dissent graduation of iraq. the u.s. needs to be prepared for all-out comes, including referendum of independence, ultimately a declaration of independence. we shouldn't be caught flat-footed in a boggs where we're not able able to provide for our kurdish friends in the region. >> i would add they recognize disincident graduation of iraq is a challenge. would argue the policy how to address the challenges is lagging behind events on the ground quite dramatically.

>> open up for questions. there is a microphone there. barbara, if you want to start, use microphone. please identify yourself. >> hi, barbara slayton from the atlantic council. would i like you both to extrapolate on this. implications of an independent kurdistan, partition of iraq an possibly syria as well. you know. shouldn't we also be prepared for reality after shia-stan, and complete dissolution of syria as well, and isn't the first step on that road. >> as jonathan mentioned the artificial boundaries drawn by psychs pico are in question. i've been going to the middle east for decades. last year was first time i heard people openly saying that these borders are being challenged. i would say they're being challenged less by the kurds.

iraqi kurds are not trying to affect kurds in turkey or anybody else. they recognize that is not something they can solve. they're trying to protect themselves. big question for international community is what is going to happen to the sunnis. isis has taken over sunni areas of iraq. taken over much of syria. what will happen to them. who will protect them? when we flip the power of balance in iraq in 2003 we disenfranchised the sunnis and they haven't had a protector since. that to me is a question that deserves great thinking by folks at atlantic council and people in this room what will happen there. eventually territorial integrity will be restored to iraq and syria. isis will not stay there forever. how many people die in that

process is big question. i would argue 200,000 died in syria. would i argue twice that will die before this is done. this is absolute horrific challenge. we need more efforts to figure out who is the protect tore there. >> how can you assure the territorial integrity of iraq and syria though this. >> because i don't think -- >> what is in it for sunnis for example, in iraq, if they always remain, even with kurds taken out of the equation, they will be smaller minority, won't they because many of the kurds are sunni. >> to your first question, international community will not let an isis foment terror and destruction in iraq and syria. it will be defeated. i'm confident of that. that is longer conversation. ask david to jump in. >> on subject of sunistan there is one today, called islamic

state. sunni tribes don't enjoy any protection. they're terrorized by islamic state which asserts full control over their territoryies. we need to be honest how we view sunni regions in iraq. i also want to underscore when we talk about the past independence, we're speaking only about iraqi-kurdistan. we ad near, i admire steps kurds have taken in ramava sustainable environmental practices democracy, women ace rights but we're not proposing a greater kurdistan. rajava may some day be a confederates part of syria which also establishes confederate links to iraqi-kurdistan but we're not envisioning a greater

kurdistan that would absorb territories in syria, turkey or iran. we're very explicit in our recommendations that krg needs to make clear to its neighbors and it doesn't harbor any ambitions. >> not just say that but much where the iraqi kurds are. what happens to sunnis in iraq i yet to hear a coherent answer from anywhere. >> hi, to continue the atlantic council run, i'm ariel cohen, senior fellow at the atlantic council dealing with with oil and gas in eurasia. my question, can we separate a package of measures that would facilitate the investment into oil and gas sector in the iraqi-kurdistan? you mentioned about, you mentioned moving away from the cash economy. that's important.

strengthening the legal framework of oil and gas law strengthens institutions including the oil company, the oil ministry. they have an outstanding oil and gas minister but but when it comes to transactions things are not always smooth. when you talk about measures that could put krg and eventually independent kurdistan on the map in terms of oil and gas? >> transparency will be important. if it is able to develop its hydrocarbon sector and there needs to be some kind of revenue or profit sharing that the people of iraqi-kurdistan benefit more fully. there was a very strong strategic between turkey and iraqi-kurdistan which was based on commercial and trade links

between markets in iraq and iraqi-kurdistan. also the transport of oil largely goes to the port of jahan on the eastern mediterranean. business ties are not enough during the august 2014 crisis when isis was talking on erbil's doorstep they sent an envoy asking turkey for help, but on several occasions had several reasons no to assist. residential election on august 5th. the second reason by possession of isis by turkish hostages. so we need to restore that strategic partnership? that can't happen in vacuum. that needs to be commensurate with turkey its own kurdish issues and awarding greater cultural and political rights to

the 18 to 20 million kurds who live in turkey. if after the elections on november 1, whatever government was constituted took steps in that direction, it would create an environment that is conducive to reinvigorating the strategic partnership between erbil and ankara. >> anybody else? >> i think i will take that question. >> thanks very much, i'm dave pollack. i'm at the washington institute for near east policy. thank you for this. i've been privileged to host many kurdish delegations. got another one coming up for lunch on thursday. you're all cordially invited if you haven't received a invitation with the head of middle east institute in erbil and iraqi-kurdistan. my question is though about iran because i think that while turkey is, in my judgment still very much opposed to full

independence for just, for iraqi-kurdistan, leave aside kurds anywhere else, iran is even more adamantly opposed to independence for iraqi-kurdistan. so i wanted to know what specifically you would recommend for the united states, the international community and for the kurds themselves in by way of addressing that threat? >> i think the region, i think most of the world right now strongly opposes unilateral declaration of independence there. that is not what the kurds are talking about. they are defacto independent and have been really since '91. they tried to work after the invasion of 2003 but as we've seen has fallen apart. and i think you will never get anything but acquiescence from the neighbors and it's a question how can you have the support of the u.s., european union and others to say, all

right, this is a process that is going to have a very clear road map, international observers and a process that puts at ease the aspirations for a pan kurdistan state are not on the table. the aspirations for a sudden independence celebration with no preparation is not on the table and i think it's, if you, both of us have been going there for decades and the kurds are not going to work through baghdad anymore and so they're building up the elements of a state that will help it be a stable pocket of democracy in the region which is in the united states's interests to support in a responsible way. we didn't hear anyone talk about anything precipitous or sudden. there is no timetable on the table. what we're trying to do is have a wake-up call and this is happening and manage it

precisely so turkey, iran, syria are part of the discussion going forward and, you know, ultimately to be a state you have to go through the u.n. security council and have, all of that is way down the road. i don't see russia agreeing to do that in the security council anytime soon. so there is lots of steps. kosovo declared independence years ago and still not, doesn't have a flag flying at the u.n. so, this case, particularly caution will be name of any process. >> might also be a model, given the fact that a lot of people were pushing for geithner albania it remained sip rat, a move in february. macedonia has large ethnic population and albania is right next door too. perhaps that is a model, i don't know. >> let me add a quick point.

development ever institutions and democracy in iraqi-kurdistan can have positive effect on not only on kurds in neighboring states but on the countries as a whole. we envision kurds in iraq being engine for reform and democratization, for irrack and its neighbors. >> exactly what the government don't want. >> democratization is process, not an event. have to be patient using all the resources and goals. >> long-term process. >> good afternoon. i'm the kurdistan regional government representative to the united states. i would like to thank you for taking on this task and thank you as a kurd for coming to the conclusion that we are on a steady march towards independence. we are. there will be an independent

kurdistan, i can assure you of that. i would love to invite all of you to come to our celebrations. my question really is, i would love for to you flesh out a little bit more why it is in the united states interests that there should be an independent kurdistan. as a kurd i know why it is in my countrymen's interest. we suffered repeated genocides by being part of iraq. we're under fear of further genocides with the yazidis and christians. oil industry hijacked by previous regimes. the current government and previous one under maliki have held our economy hostage. there are many, many benefits to the kurds for us to become independent as well as challenges but what are the benefits to the united states? i think the people of america, congress, the state department, other friends in the united states, maybe need to hear more about why it is to their benefit

to have a strategic partnership with an independent kurdistan. >> i'll address that briefly, then give the microphone to nancy. there is already good security cooperation between peshmerga and the coalition. we believe that cooperation can be deeper an become more effective when iraqi-kurdistan is an independent state. nancy talked about the establishment of a u.s. base in iraqi-kurdistan when it becomes independent. we envision a status of forces agreement, establishing that base. right now the primary goal of the u.s. in the region is counterterrorism. the only group that has shown commitment and capability of fighting isis are the peshmerga. we need to cooperate them more

fully in their present form as they institutionalize and iraqi-kurdistan becomes more viable and sovereign to find ways strengthening our cooperation formally through erbil. >> i would just add to that iraqi-kurdistan is sea of stability and democracy in a region of neither and for the united states to have a pocket of stability in the region will be serving our interests. we'll be there a long time. these troubles are not going away. we have a great friend in turkey, nato ally. more countries are allies and stable in the region is more directly in the u.s. interests. explaining to the american public clearly why that is very good suggestion biel take on and perhaps look at that as well and perhaps make it a little clear. >> let me express my personal view. nancy says we have a great

friend an ally in turkey. certainly it has been a great friend and ally. we hope in the future its preferred status can be restored. for that to occur turkey's democracy and human rights record dramatically needs improve. >> we're running out of time quickly. there are two questions. perhaps we take both questions and wrap it up there. >> sure. i want to remind you that barzani peshmerga ran away from -- not only once and twice and they did not the defend the city after 19 years of collecting taxes from people there. up one important factor you should consider in defending kurdistan, what does it mean, what does it include and how they're going to defend that if they're going to run away from it. and what do you consider the position of the pkk now being present in kirkuk city and in

shangal and not along the peshmerga to have any say basically defending or liberating that city? . . >> during the making of iraq's constitution. i think washington knows the truth, because washington, washington's lawyers were very unhappy with the constitution of iraq. so a very simple measure that could be adopted by american

policymakers is to be neutral on the internal constitutional dispute between baghdad and kurdistan. which, in effect, would allow curd or stand to export its -- kurdistan to export its own oil. either kurdistan consolidating its rights or consolidating its path to independence. >> [inaudible] >> so on the question of constitutional rights to export its oil, you call for the u.s. to have neutrality. i would go a step further, legal and other measures that the u.s. took to actively obstruct the export of crude oil were uncalled for. if the kurds had the rev knew from those oil -- revenue from those oil sales, they would have been better equipped in places

like shangal to address the attack on the yazidis. the earlier question is quite right, peshmerga did not perform admirably at first. they subsequently have made greater efforts and have had more positive outcomes in creating security areas and protections for the yazidis. i think there's a recognition on the krg's part that they underperformed, and they need to do more to protect ethnic and religious minorites across iraqi dudder stand by providing security and legal guarantees for their self-expression. >> i would just close with thanking brendan for that comment and his wisdom and expertise. there's no one who knows the legal issues better. some of them are very complex, so thank you for that. in terms of the performance of

the forces and the presence of the pkk, none of these issues are easy, and none of them are going to go away tomorrow. the kurds are fighting isis right now. their kind of the pointy end of the spear. they're not perfect, they need more support, in our view. i think eventually the international community will come around to giving them that support. i'd like to see it happen sooner rather than later. that doesn't mean there are not questions with the impact on the pkk, how turkey would address that nervousness in iran and others. but the truth is our most urgent challenge right now is defeating isis and retaking the territorial integrity of iraq and syria. so long as that's an equation, none of these other issues can move forward, and things are going to get worse, and hundreds of thousands of people are going to die. so i think we need to look at the kurds as an integral and essential part of that battle and treatment them as an ally

accordingly. and all these other issues, they're timetable -- their timetable for undependence, what happens to the sunnis, how do you resolve the challenges of assad and the russians, all of those get easier once you can address the issue of isis. in all of this chaos, what we're urging -- and the reason that we're doing this report -- is to have a wake-up call for the international community that a unified iraq does not exist, and the kurds are not going to be working with baghdad anymore. and that opens up a whole other box of questions and policy decisions that we're encouraging those of you in this room and others to begin to look at more urgently than has been done to date. and i want to thank everyone for coming and, again, thank david for the impetus for this report. >> could i, could i also say a word of thanks? having participated in other task forces, i've never seen one so ably led as our task force by

ambassador so ther burg. of course, when you get 20 people together, there will be a democracy of different views, but nancy was always able to keep us focused and achieve some conciliation amongst our own group and the outcome on the pages of our task force report or reflects her stewardship. >> thank you. >> thank you very much. [applause] [inaudible conversations] >> and so that finishes up this discussion on the future of the kurdish people in iraq. by the way, if you missed any of this, it will air again or you can view it online anytime at

our web site, c-span.org. check the c-span video library. more live programming coming up today with a look at the life, career and legacy of margaret thatcher, hosted by the heritage foundation here in washington. you can see that live, it starts at 4 p.m. eastern on our companion network, c-span. and later tonight on c-span, it's georgetown professor laura donahue, and she discusses privacy laws and modern surveillance programs. she recently delivered the keynote address at a national security conference at westminster college in fulton, missouri. see her remarks starting at 9:30 eastern, also on c-span. and back here on c-span2 tonight, it's more booktv. the focus will be the supreme court. with a number of related program ares, including one featuring current justice stephen breyer. that gets underway at eight eastern here on c-span2. >> c-span has your coverage of the road to the white house 2016 where you'll find the candidates, the speeches, the

debates and, most importantly, your questions. this year we're taking our road to the white house coverage into class rooms across the country with our student cam contest. giving students the opportunity to discuss what important issues they want to hear the most from the candidates. follow c-span's student cam contest and road to the white house coverage 2016 on tv, on the radio and online at c-span.org. >> and now a hearing looking at volkswagen cheating on emission tests. the house commerce committee recently heard testimony from the company's u.s. ceo. this is just over three hours, ten minutes. [inaudible conversations]

>> we could have members of the media, please, move out of our way so we can begin this hearing. [inaudible conversations] >> mr. horn, you can go ahead and sit in that chair. thank you. thank you and good morning.

we now convene the hearing of the oversight and investigation subcommittee on volkswagen emissions cheating allegations, initial questions. let me start off by saying my first car was a volkswagen. it was a '76 volkswagen beetle. i could take that thing apart and put it back together, and it actually continued to work. i did nearly all the maintenance be myself because the beetle and the volkswagen had a legacy as the people's car to be people-friendly. pleasure i loved that car, loved it a lot. not so much as to call it brad, but i loved that car. [laughter] but i trusted the car to get me around, and i trusted that volkswagen would continue to build a reliable car. that word "trust" alone, as you know, is the key factor in building customer loyalty. and that trust is what helped build volkswagen, because we believed it's a company that looked out for customers first.

then just three weeks ago car owners around the world were shocked to learn that volkswagen ag, the world's largest automaker, admitted it had installed software in millions of its diesel models that defected e mugses controls during routine driving following the public announcement on september 18th that there was sufficient evidence to support allegations that vw was cheating on its emissions test. as epa reported at the time, the diesel vehicles switched into an operational mode designed specifically to pass the test, and then switched back to a different mode during normal driving, a mode that emitted up to 10 and 40 times the federal limits. the united states alone some 482,000 volkswagen and audi models were affected by cheating software. worldwide this software was used on an estimated 11 million vehicles involving several vw lines. in the wake of this aapparently massive deception, the energy and commerce be committee opened a bipartisan investigation to

get answers for the american public. this investigation will seek to understand the facts and circumstances surrounding the vw actions, the impact of its decisions and related issues about emissions compliance generally. at this morning's hearing, we will receive testimony from the head of volkswagen's american operations, mr. michael horn, and from from epa officials tasked with insuring the automobiles on american roads meet federal and environmental standards. this subcommittee intends to pursue answers to initial questions considering the troubling revelations about vw's actions; what happened, who was involved and most importantly, why. let me acknowledge that mr. horn is appearing before us voluntarily today, and i can say that i expect that he and the volkswagen organization will continue to cooperate with our inquiry. this means providing documents and information to the committee as quickly as possible including documents that have already been discussed publicly in connection with volkswagen's various board members -- board meetings in germany. as i said before, there are a

number of core questions we'll begin to pursue today both for volkswagen and for the epa. most critically, what happened, who was involved, why were these actions taken, and we also have a number of questions concerning the impact of these decisions on customers, family-owned dealerships and the american public. i hope today mr. horn can provide some important contexting for us and expand upon the nexts he represents in his testimony. we will look to him to explain the current understanding of executives about what was done to these engines and was it done to deliberately deceive government regulations and regulators. and what is vw doing to fix the problem and make whole those who have been affected by the actions? at some point prior to 2009, vw made a choice to move forward with engines in evidence -- engines that evidence now suggests were not compliant with u.s. emissions standards. the illegal software was initially deployed in the first generation of these diesel engines which accounted for

approximately 340,000 of the affected vehicles. two future generations of these engines, the software remained in place, and as the technology was improving, why did the -- what did the company understand about the software cheat? and what does this mean for fixing these vehicles? will some be easier than others? of course, for epa we have questions about its compliance and recall rams. programs. i hope we can get clear answers from that agency. why did epa's standard compliance tests and audits fail to detect problems, especially in older technology? what is epa doing to insure any fix it requires of the automaker does not negatively affect vehicle performance? there is some need for a sense of proportion regarding this matter. the 480,000 or so vw vehicles implicated in this scandal represent only .2% of the cars and light trucks on united states highways, and so far we have no evidence that the software similar to what was used by vw is present in any

other u.s. vehicles. epa's ongoing testimony will help address this question, but i hope why witnesses can understand our confidence has been shaken. at root, the behavior to which vw admitted represents a fundamental violation of public trust. and the reverberations of this violation can be seen across the united states and across the world as people grapple with the implications. we need to develop a clear understanding of the facts and circumstances surrounding this case, and this hearing will be a first important step towards that goal. i now recognize the ranking member of the subcommittee, ms. degette, for five minutes. >> thank you, mr. chairman. and in the spirit of bipartisanship of this investigation, i'll tell you my first car was also a volkswagen. it was a 1960 vw beetle with a ragtop roof that i inherited from my grandmother. and i will tell you that that 1960 beetle, i still miss that car. it didn't have my lines of computer code requires to operate -- required to operate

that vehicle. in this situation, fast forward to today, we know some things, but we don't know enough. and that's why i'm glad we're having this investigation. we know that in may 2014 west virginia university published a study commissioned by international council on clean transportation that found that on-road emissions from volkswagen's cars were well above vw standards. they also did not match the emissions outputs found under testing conditions. we know that vw tried to justify this discrepancy to regulators with explanations of technical issues and unexpected in-use conditions. we know that in december 2014 vw initiated a voluntary recall of nearly half a million vehicles to resolve, among other things, the emissions issues. yet when the california air resources board tested the

"fixed" vehicles, they found the emissions were still above the legal standards. and we though that by july of this year the epa and carp told vw that they would not approve the company's 2016 model year diesel vehicles for sale unless the emissions issues could be explained. vw was, essentially, forced to come clean, and they ultimately confessed that they had installed a defeat device in their diesel cars designed to circumvent epa emissions standards for certain air pollutants. we know that this defeat device sensed when the vehicles were undergoing emissions testing and insured emissions control systems were operating to task. and we know that during normal road use the emissions controls were reduced, and the cars were producing up to 40 times more nitrogen oxide than is allowed by emissions standards. we know that half a million cars -- almost half a million cars in the united states might be affected by this.

now, mr. horn, i'm glad you've come today to testify here, because while we know all of the things i just talked about, there's a lot more things we don't know and that we need answers for. for example, vw hasn't revealed how the defeat device affects the engine, why it was installed and how it was able to evade emissions tests. you haven't revealed when and how the engines equipped with this defeat device will be fixed. you haven't told us whether this fix will affect fuel economy or performance of the vehicles. you haven't revealed what volkswagen told regulators over the last year as epa and the california board were trying to pirg out why the vehicles -- figure out why the vehicles' emissions were out of compliance. you haven't revealed whether the voluntary recall that vw set in place in 2014 was just merely a ruse. was the vw group of america actually trying to find out what was wrong with the cars and fix them, or did vw know that the

cars had defeat devices on them and were only trying to buy time with the regulators? you haven't revealed who's responsible for this scheme. we don't know if it came from germany and who knew about it in the united states. now, we've all seen the press reports, and we can all speculate about what happened here and why. but until volkswagen comes forward with some answers and provides some assurances that we can trust them at what they're saying, the american people, the regulators and congress are all left in the dark. so i hope, mr. horn, that you've come prepared to answer some of these questions, and i also hope that vw will be prepared to work with this committee as we move forward. hundreds of thousands of owners invested money and trust in vw. many of them bought those cars specifically because they were seeking environmentally-friendly vehicle ares. now -- vehicles. now they're left with cars with much higher levels of pollution, they don't have any answers about when or how their car will

be fixed or what kind of car they'll be left with. earlier this week i visited a volkswagen dealership in denver. i saw the pollution control equipment on vw diesel vehicles firsthand. these cars account for almost 25 of the sales at that particular dealership and a significant percentage of sales at vw dealerships in colorado and across this cup -- country. now, because they can't sell them, these cars are just sitting on the lot which is a scene that's being repeated across the chairman. so a as, mr. chairman, you say, it's a small percentage of the cars on the road in the u.s., it's a tremendous economic impact to these dealers and also to the consumers who don't know what's going to happen to their cars. and so that's, perhaps, the key answer that i'm looking for today; what do we do moving forward. now, mr. chairman, this subcommittee's been here before n. the last 15 years, we've had ford and firestone, toyota, gm

and takata before this committee. we were able to get information to help us understand what happened, but most importantly, we've charted a path forward and to then consumers affected by this event. i hope that volkswagen can similarly tell us today what's happening, and i hope that they will get beyond this series of terrible decisions and do something to restore the public trust. thank you, and i yield back. >> gentlelady yields back. now recognize the chairman of the full committee, gentleman from glan, mr. upton, for five minutes. >> good morning. thank you, mr. chairman. it makes a car a volkswagen. that ad campaign swept the nation in the '90s. vw has long enjoyed an almost-cultish following dating back to the beetle, vw van and the be rabbit. but through the years something apparently became rotten, and cheating and betrayal became part of that game plan.

there's a lot that we don't know about vw's actions or their motivations in attempting to skirt emissions standards. but regardless of intent, they have betried the trust of -- betrayed the trust of regulate e, dealers and suppliers, and most important, the driving public. probably the most famous congressional hearing question is what did you know and when did you know it. asked by senator howard baker back in the '70s at watergate. now we learn that you knew some 18 months ago. so we add, what did you really do to fix it and come clean versus simply going along? ultimately, the saying rings true: cheaters never prosper. and that's why we're here today. we have many questions about how we got here and the road ahead. why would one of the world's largest automakers go to such lengths to avoid emissions requirements? who was responsible for these decisions, and why did they for years, even as the technology

improved, continue that path. if they were willing to cut corners here, what else have hay done? how will you fix the flaw and when? will the fix affect the performance of these vehicles? unraveling these questions will take time, and i don't expect we're going to discover all the answers today. but if vw is serious about rebuilding this broken trust, its leaders will need to demonstrate a serious commitment to answer these and many other questions prompted by its actions. this requires transparency, cooperation and clear, consistent communication not only with this committee, the epa and other ongoing investigations, but also with its customers, suppliers, dealers and general public. vw will inevitably pay a steep price for this dirty little secret. how it responds to the failure will go a long way to rebuilding or further eroding the public's trust. vw must also consider what implications these actions have for the thousands of americans that it employs, including their

facility in auburn hills, michigan. every single one of us who has ties to michigan is proud of our rich tradition that is so closely intertwined with the success of the automobile. in fact, michigan is one of several states that have launched their own investigations. all automakers must advance by imagination and innovation, not by gaming the system and breaking the law. we will yet some additional insight today, but the chief's investigation is just beginning. this hearing is an important step as we receive documents and information, new details are are certain to emerge. i look forward to getting to the bottom of this issue as quickly as possible. i take this very personally. as the author of the tread act to protect the public, congress was very clear in our work to protect consumers from abuses from automakers which included steep fines and, yes, criminal prosecution. vw has betrayed a nation, a nation of regulators, loyalists,

suppliers and they want customers -- innocent customers. it's time to clean it up or get off the road. e yield the balance of my time to marsha blackburn, the vice chairman. >> thank you, mr. chairman. mr. horn, i thank you for being here. and i think it's completely appropriate that you come before the committee, that you apologize for the actions and that you and vw take full responsibility for what has transpired. it is disappointing. i'm fully aware that our governor has visited the chattanooga facility, and i know that the governor, state legislators, the other members of the congressional delegation and i are quite concerned about this. you've got a lot of hard-working, honest tennesseans who are at that chattanooga facility. and we are quite concerned about the actions of a few. so a few vw employees, not

tennesseans. we're going to be very precise with you and vw. it is, as the chairman said and as chairman murphy has said, it is basically the who, what, when, where, how and why. why you did it, how you did it, when you did it, when you knew, who carried this out, where did this take place? did it go across the brands? was it pointed at e.u. regulations? was it pointed at some of the climate regulations? is the epa too overburdened to have noticed this? this is a systemic, systemic failure. and i will also point out some want to say it's a safety issue. no, sir, this is an issue of integrity. so we appreciate that you are here. we look forward to hearing from you, and i want to yield the balance of hi time to the vice chair -- my time to the vice

chair of the subcommittee, mr. mckinley. >> thank you. thank you, mr. chairman, for holding this message. my first was a 1957 volkswagen. i think i've got everybody beat on that. but, listen, there should be zero tolerance for this unethical behavior and flagrant disregard of the u.s. laws, public health and consumer. that's why this hearing's important to us today. the american people need to understand what happened, how it happened and how it be resolved. and they feel in west virginia they've been deceived. on monday there was action taken by our attorney general to file action against this. i also want to just touch on the university, west virginia university. they used a fraction of the money that we spend with epa, just a fraction of the money to make this discovery, and they found out, as you know, that 15 -- one of the cars they tested was 15-35 times more emissions than they were allowed. ooze was 5 -- another was 5-20 times emissions. mr. chairman, i wanted to touch on the fact that this opportunity about wvu and how

research dollars can work. this was a university, not the epa, able to accomplish this. so i'm looking forward to this hearing and getting some clarity as to what this is. i thank you very much for holding this and look forward to the conversation. >> thank you. we now recognize the ranking member of the committee, mr. pallone, for five minutes. >> mr. chairman, thank you for holding this hearing. we're here today because volkswagen lied. they lied to regulators, they lied to their customers x and they lied to the american people. we all have many important questions that deserve answers; what did volkswagen do to its cars, why did they do it, and who knew this was happening both in germany and here in the united states? this whole scheme makes me question how much we should trust volkswagen. and to be honest, this committee's investigations over the last five years make me question how much we should trust the auto industry in general. let me remind the committee of the difficult history the american driver has had with the auto industry in recent years.

in 2010 this committee investigated toyota's recall of nine million vehicles worldwide for unexplained cases of sudden, unintended acceleration. dozens of people died in stints linked to runaway toyota vehicles. in the end, it was determined that toyota knew about certain problems with their vehicles, that if fixed early would likely have saved lives. in early 2014 we launched an investigation of general motors ignition switches. our committee's investigation found individuals within gm knew about the deadly defect for nearly a decade before the company initiated a recall. later in 2014 we learned of the exposing takata airbags installed in vehicles made by at least 11 auto manufacturers. the recalls for airbag problems began as early as 2008, yet takata and nhtsa continued to investigate whether additional recalls are still necessary, and takata still has not determined the root cause of the defect which has killed a number of

people worldwide and injured hundreds more. and now we have volkswagen, a company that told regulators their vehicles met emission standards but had actually installed defeat devices to bypass emission controls. over the past five years, the world's three largest automakers have come before this committee to admit that they have cheated the system and lied to american customers. this seems to be a pervasive culture of deception in the auto industry, and it has to stop now. mr. chairman, the american people need to know that they're safe on our roads, and they need to know that when they decide to buy a car, they're getting what they paid for. the auto industry has perpetuated lies and misled consumers, but the american public are not crash test dummies and cannot be treated as such. mr. horn, i understand that you won't have all the answers today, but please don't hide behind an internal investigation's excuse. it's time for volkswagen to be forthcoming with its customers, regulators and congress about

what you did to these cars and why. we deserve an explanation. and i'd like to yield, mr. chairman, my remaining time to ms. schakowsky. >> thank you for yielding, mr. ranking member. we'll hear a lot from volkswagen today, we'll hear apologies, i'm sure, for volkswagen's deliberate deception of the american people and federal and state public health agencies, we'll hear a pledge to get to the bottom of this issue without delay and to fully cooperate with investigators. we'll hear how the use of so-called defeat devices are incompatible with volkswagen's corporate culture. and i want to tell you, mr. horn, i don't buy it. the american people, the epa and their counterparts around the world have been defrauded by volkswagen. the company's word isn't worth a dime. the only thing i want to hear today is exactly how will volkswagen make this right by

consumers. saying it will take time to design and implement a fix is insufficient, and i think unacceptable. people shouldn't have to wait to get the fuel economy, the lower missions and performance that they already paid for. if they want it, every clean vehicle owner should be able to get their money back, all of it. the american people deserve answers. yes, there are a lot of questions, but already also thousands of owners of clean diesel volkswagens out there, and what they're wanting to know is what are you going to do for them and when. and i say now. so i expect those answers to be provided today, and i yield back to the ranking member of the full committee. >> thank you, mr. chairman. unless anyone else on this side would like the time, i'm going to yield back. i yield back, mr. chairman. >> thank you. the gentleman yields back.

i also ask unanimous consent that the written opening statements by the members of the committee be introduced into the record, and without objection the documents will be entered into the record. you're aware that the committee is holding an investigative hearing, and when doing so has the practice of taking testimony under oath, mr. horn. do you have any objections to testifying under oath? thank you. the chair then advises you that under the rules of the house and the rules of the committee, you are entitled to be advised by counsel. do you desire to be advised by counsel during your testimony today? >> no. >> in that -- >> [inaudible] then in that case, would you please raise your right hand, and i'll swear you in. stand and raise your right hand. do you swear the testimony you're about to give is the truth, the whole truth and nothing but the truth? >> [inaudible] >> thank you. let the record show the witness

answered, "yes." you are now under oath and subject to the penalties set forth in title 18, section 1001 of the united states code. you may now give a five-minute summary of your written statement. if you'd please make sure your microphone is on and pulled close to you so we can hear you. you have to press the button. is it on? okay. >> thank you very much, chairman upton, chairman murphy, ranking member pallone, ranking member degette, other members of the committee. thank you for inviting me here today to testify before the committee. my name is michael horn, and i'm president and ceo of volkswagen group of america, a subsidiary of volkswagen ag headquartered in germany. i volunteered to come here in an effort to show our commitment to cooperation. we have not had the opportunity to review all aspects of this matter, indeed, the investigation is just beginning.

therefore, my testimony and my answers to your questions will be by necessity have to be considered preliminary and based on my best current recollection of information. on behalf of our company and my colleagues in germany and me personally, i would like to offer a sincere apology, sincere apology for volkswagen's use of software program that served to defeat the regular emissions testing regime. in the spring of 2014 when the west virginia university study was published, i was told that there was a possible emissions noncompliance that could be remedied. i was informed that epa regulations included various penalties for noncompliance with the emissions standards and also that the agency could conduct engineering tests on their own which could include analysis on defeat devices or other auxiliary equipment. let me be very clear about this. while i was told about the epa

process, i was not then told, nor did i have any reason to suspect or to believe that our vehicles included such a device. i was also informed that the company engineers would work with the agencies to resolve the issue. later in 2014 i was informed that the technical teams had a specific plan for remedies to bring the vehicle into compliance and that they were engaged with the agencies about the process. and you mentioned this also in your statements. on september 3, 2015, volkswagen ag disclosed at a meeting with the california air resources board and the u.s. environmental protection agency that emissions software -- [inaudible] in the diesels for model years 2009-2015 contained a defeat device in the form of hidden software that could recognize whether a vehle was being operated in a test laboratory or

on the road. high levels of nitrogen oxides when the vehicles were driven on road use rather than laboratory testing. in recent ongoing discussions with regulators, we described to the epa that our emissions strategy also included a software feature that should be disclosed to and approved by them as an auxiliary emissions control device which is also called aecd. in connection with the certification process, as a result in order to show that we act immediately, we have withdrawn the application for certification for all model year '16 vehicles, and we are now working with the agencies to continue the certification process. these event -- this event, and i fully agree on this, are deeply troubling. i did not think something like this was possible at the volkswagen group. we have broken the trust of our customers, dealerships, employees as well as the public and the regulators. and let me be very clear, we at volkswagen take pull

responsibility for our actions, and we are working with all the relevant authorities in a cooperate i way. i'm here to offer the commitment of volkswagen ag to work with this committee to understand what happened and how we will move forward. epa, the u.s. department of justice, states' attorneys general as well as other authorities are fulfilling their duties to investigate this matter, and we are determined to make things right. this includes accepting the consequences of our acts, providing a remedy and beginning to restore the trust of our customers, dealerships, employees, the regulators and the american public. we will rebuild the reputation of a company that more than two million people worldwide, including dealers and suppliers, rely upon for their livelihoods. our immediate goal is to develop a remedy for our customers. while much work is still to be done, i'd like to talk today about how we get from where we are now to that goal. first, we are conducting investigations on a worldwide scale on how these matters could have happened. responsible parties will be

identified and held accountable. thorough investigations have already begun, but any information development at this stage is preliminary. we ask for your understanding as we complete this work. second, it's important for the public to know that as the epa has said, these vehicles do not present a safety hazard and remain safe and legal to drive. third, technical teams are working tirelessly to develop remedies for the vehicles. these solutions will be tested, validated and then shared with the responsible authorities for approval. three groups of vehicles involved, each containing one of the three generations of the two-liter diesel engine. each will require a different remedy, but these remedies can only be the first step to our customers. fourth, we will evaluate our standards at volkswagen to make sure thatting that something lis cannot happen again. fifth, we commit to open and regular communication with our customers, dealers, employees

and the public as we move forward. and as first steps we have set up a designated service line, web site, microsite to be a channel for this communication, and i send a personal letter to every affected customer. i can offer today this outline of a path forward towards the goal of making things right. nevertheless, volkswagen knows that we will be judged not for -- not by our words, but clearly by our actions over the coming weeks and months. these events are fundamentally contrary to volkswagen's core principles of proving value to our customers, innovation and responsibility to our communities and our environment. they do not reflect the company that i know and to which i have dedicated 25 years of my life. it's inconsistent that this company involved in this emissions issue is also the company that has invested in environmental efforts to reduce the carbon footprint in our factories around world where our plant in tennessee is the best factory in this respect.

in closing again, i apologize on behalf of everyone at volkswagen. we will fully cooperate with the responsible authorities. we will find remedies for our customers, and we will work to insure that this will never happen again. thank you again for allowing me to testify today, and i look forward to your questions. thank you. >> thank you, mr. horn. i now recognize myself for five minutes of questioning. on september 3, 2015, vw admitted to carb and epa that it had installed defeat devices in certain year model year 2009 and 2015 vehicles. to the best of your knowledge, did vw install this software for the express purpose of defeating emissions controls? >> to our understanding -- and this is also part of the investigation -- it was installed to this purpose be, yes, for this purpose. >> in your written testimony, you noted that you were made aware of potential emissions

compliances in the spring of 2014. >> uh-huh. >> you also noted discussions at the time about penalties for noncompliance and the epa's ability to test for defeat devices. at that time were you aware or informed that these vehicles contained defeat devices? >> no. >> when did you first learn then that vw vehicles contained a defeat device? >> around the september 3rd meeting. couple of days before. >> and then why were you having discussions about defeat devices in the spring of 2014 then if there was no knowledge or at least a concern that these vehicles contained a defeat device? >> so the university of west virginia made the study. there was a jetta and a passat in there and another offroad vehicle. i don't want to name the brand now. and the results were communicated, and this context i was told by our experts in the

auburn hills office -- and it was odd, you know, just four months into this market that, of course, you know, not complying with emission standards is relating to fines and hefty fines, specifically here in the u.s. and that those experts, including the german technology department, would check on the study, and the study results as you also mentioned was a small team. results have been published with all the emissions which went overboard and that they will check this, point one. point two is they would also look with all the responsible departments, and there was a number of expert departments in germany and then how to possibly fix this x. then there was the notion in this communication that also the epa or the agencies could check also on their own -- which to my degree is known around the world that agencies check once in a while on their own -- for auxiliary devices including defeat

devices. and at that point of time, i had no understanding what a defeat device was, and i had no indication whatsoever that a defeat device could have been in our cars. >> so let me go back. mr. horn, the new chief executive of volkswagen, mr. mueller, has been quoted in media reports this morning saying only a few people were involved in the deception. i have to say i don't take much comfort in that, especially knowing that volkswagen has been known for superb engineers and mechanics. isn't it who -- can i wonder, shouldn't they have picked up on this? isn't it true the technology was installed in the automobiles at least initially because the cars could not meet the new, more stringent emission standards for diesel engines? >> yes, true, your last question. this appears to be this way. and to newspaper articles about possible quotes of mr. mueller, i don't want to quote. this, you know, as i said also, the investigations are preliminary. one week our group did the

investigation from september 22nd to october 1st, and then the entire investigations on this matter is turned over to an external agency law firm, american company which is now going through the systems outside advice, outside counsel. >> i think what we find amazing is that university of west virginia, west virginia university discovered this, and your army of brilliant engineers and talented mechanics didn't know something was amaze. and i'm sure -- amiss. i'm sure we'll have more questions about that. i want to ask you this: in terms of vw's status for remedy defeat devices, who's responsible for developing and testing a solution? >> the responsibility for developing and testing the engine and drive train softwares lies within the engine and drive train division in germany. for the two-cylinder, the four-cylinder engines. >> now, will this require a software patch or changes to the actual vehicle's architecture

and hardware? >> yes, thank you for this question. i i think we have to differentie into the three groups of cars. you have mentioned that roughly 500,000 cars are affected. out of those around about 430,000 cars are the gen-1 vehicles which were the very early vehicles, started here in 2009. and for those cars we believe that software-only solution will not be possible because also, to be quite frank and logic, you know, if it would have been possible, they would have done it in the first place. so for those cars, we are working on both software and hardware solutions, and there are different strategies about additional catalytic converter as well as -- [inaudible] tank. this is something that is hardware engineering which is a little bit -- it's complex, and it takes time to develop and to test this. this is one of the strategies.

the generation two vehicles which is just the passat model, i fear -- [inaudible] this will be most probably a software solution. this is tested now and could involve one or the other that say a sensor. but whatever i explain to you now anyways is being discussed in a timely manner now in the next couple of weeks with the california air resources board. for the generation three vehicles, for the -- >> can i ask, because i've gone way over time. i'm sure other colleagues will be asking more detailed questions, but i now these to recognize ms. deget for five minutes. >> thank you, mr. chairman. now, mr. horn, your company acknowledged that it installed these defeat devices on a number of models dating back to 2009, correct? >> sorry, i'm -- i have a problem understanding with all this noise down here. >> mr. chairman, mr. chairman, can you please have the quiet in

the room so mr. horn can understand me? >> yes, thank you. if everyone will please be quiet, especially up front. thank you. >> all right. i'll ask that again, and if i can have the clock reset to five minutes. mr. horn, your company has acknowledged that it installed these defeat devices on a number of models back to 2009, yes or no? >> yes. >> and do you know how the various defeat devices installed in the cars actually work at this point? >> personally, no, i'm not an engineer. >> does someone at vw know how these defeat devices work? >> i believe this is also within the investigations -- >> you please give us the information when you find out? >> we will, we will. >> thank you very much. now, you mentioned this west virginia university study that was conducted in may of 2014 which found that the real emissions on several volkswagen vehicles exceeded epa standards by as much as 35 times.

following publication of that study, vw represented to the california air resources board, or c.a.r.b., and to the epa that they were due to technical issues and unexpected -- >> i'm sorry. you guys cough here all the time, and i've traveled -- >> all right. i'll ask the question again. >> thank you. >> after that study by west virginia university, isn't it true that vw told the epa and the california board that the increased e many itses were -- emissions were due to technical issues and unexpected in-use conditions? >> yes. >> yes. >> this is true. >> and those representations at that time were, in fact, incorrect and false be, weren't they, sir? >> yes. >> yes, they were. now, to your knowledge, did anybody at the voces wallingen -- volkswagen group of america know at that time that, in fact, those discrepancies were due to these defeat devices

when they made those representations to the regulators? >> to my knowledge at this point of time, no. >> no one in the u.s. did. >> no. >> okay. now, in december 2014 vw proposed a recall of 500,000 vehicles to, quote, to resolve the, quote, technical issues. is that correct? >> uh-huh. >> and, in fact, a number of those vehicles were recalled, is that correct? >> yes, most of them. >> and -- but after they were recalled, the california regulators still said that that fix did not work, isn't that correct? >> that is correct. >> now, to your knowledge, did anyone at the volkswagen group of america know about the existence of these defeat devices when the company announced that recall in december 2014? >> to my best knowledge today, no. >> mr. horn, when did you personally learn of the defeat device and under what circumstances? >> around the meeting on september 3rd with c.a.r.b. and

the epa. >> okay. now, you talked -- when the chairman asked you about these cars, i'm concerned about what we're going to do about the 500,000 cars we have on the road in the u.s. and the first thing is as you just testified, about 430,000 of those cars cannot be fixed by a software-only solution, is that correct? >> yes. >> and that's because of the way that the engine is designed in these vehicles, correct? >> i wouldn't -- i wouldn't said not the engine's design, but all the treatment systems -- >> right. and i've got to say, i've got to acknowledge my wonderful dealer, fred emmick, who's here today. and he let me come and talk to his wonderful mechanics on monday. they gave me this chart right here. i tried to take the part itself,

but it was too heavy, and they told me i'd have to probably pay 'em $2,000 if i lost it. so i decided to take the chart instead. this is the chart of the exhaust system on these 430,000 cars. and as i could clearly see, you can't do a minor little fix to fix this problem. so what is vw going to do for these 430,000 cars so that the users can use them and so that they can pass the emissions tests? >> so from from this distance, i can't see the chart, but i believe it's maybe something out of our service literature or customer literature. >> it's the exhaust system for these cars. >> yes. but -- >> what can be done to fix that? >> there's two scenarios next to the software adjustments, and one scenario -- >> these are for the cars that haven't have the -- the software adjustments will not headache. >> we are talking now about generation one cars, 430,000

cars. >> that's right. >> the picture you have shown and the treatment, software alone doesn't work because otherwise they would have done it -- >> right. so what are you going to do for those cars? >> two technical scenarios. either a urrea tank or specific catalytic converter for -- two technical scenarios. >> but those cars don't have the urrea tank right now. >> no, that's why it has to be -- >> so this would be a major fix, correct? >> yes, ma'am. >> now, what is the time frame vw has set for that fix? >> we are still working on the time frame, and it's too early to say when this fix exactly is going to take place. >> when are you, when are these dealers going to be allowed to sell these cars? >> the dealers -- the issue with the dealers, as fred emmick told you, is that we have not the model year '16 certified, and we have stopped sales on our own --

>> right. when is that going to be fixed? when is he going to be able to sell those cars? >> there's two scenarios. a scenario we are now trying to get a conditional approval with the epa until we have the final software fix beginning of next year. >> beginning of next year. and in the meantime, what are the dealers and the customers supposed to do? the ones who have these cars? >> well, in the meantime, no customer can buy a car because it's not available for them. and with the dealers, we've very early started a program to work with them to also help them financially and to communicate -- >> okay. but the 430,000 cars that are already on the road, what are those customers supposed to do? their cars cannot pass the emissions test. >> epa has said and they have repeated this also in their statement that these cars are legal and safe to drive. and until now there's no indication they didn't pass any emissions test. >> thank you. the gentlelady's time has

expired. recognize the chairman of the full committee, mr. upton, for five minutes. >> thank you, mr. chairman. i want to go back to the specifics of the defeat device. so i live in michigan. where i live we don't need to test our cars for emissions on an annual basis as many states require. certainly in this region here in d.c., i know they do. so how is this defeat device actually set up so that it was different when an individual drove it down the road versus taking it to a service station and getting the emissions sticker that is often required in the states that require such? >> so i'm -- >> i've been told a couple of things. i just want to know if you can walk me through how that could change the emissions system. what happens? >> i can share my best knowledge, but i'm not an engineer, neither software engineer. >> well, i -- >> but let me try to explain. let me try to explain. my understanding at this point

of time was that the software was designed that the vehicle, or the software could defect whether it was on a dino, on a testing laboratory environment or whether it was on the street. and one example of this, as experts have explained to me, is that the software could detect whether the steering wheel made an angling. so there might have been, and there will be other parameters like maybe speed and change of speed and those things -- >> maybe the weight of the driver in the driver's seat? >> i don't think so, but maybe. i don't know. >> so wouldn't it be easy to develop the software that would just remove that -- >> yes. this will be, this software will be ready -- >> but, of course, when that happens, the car isn't going to meet the emissions test. >> regarding the model year '16 and '15 which we are the generation three cars which we are discussing right now with the agencies, the defeat device will be either switched off and from january onwards will be

completely taken out of the car, and those cars will pass the emissions test. >> but the earlier -- so how many vehicles will not pass the emissions test? of the ones that you've identified? >> now, i mean, my question -- >> so the early, so you'll be able to do that with the later versions, right? >> we have -- >> but not the earlier versions of the vehicle. they won't be able to pass -- by turning off the device, the defeat device, there'll be a number of cars that, in fact, will not meet the current standards. and that's your -- >> the current standards, yes. >> and how many of those vehicles are there on the road? >> well, we have a total of 500,000, 430,000 generation one vehicles, 95,000 generation two vehicles and then it's around 70,000 generation one vehicles. and so, now, all of these cars are out of the legal compliance, clearly. but as epa has said, all these

cars are legal and safe to drive for the owners. so we're not selling the cars, but the owners can legally drive and safely drive their cars. >> so your dealers across the country, they have their finance plans where they, they have quite an inventory, i would guess, of cars that they are now unable to sell. they paid in advance for those under the financing plan the dealers have, and they are not going to be able to sell them for a number of months, perhaps even as long as six months at a minimum until the fixes can be done. what type of remedies are you offering the dealers in terms of financial incentives knowing that they've paid more these cars -- for these cars that, frankly, lost a boatload, i would imagine. >> yes, and this is -- >> that inventory has got to be a pretty big loss. >> this is also one of the things which troubles me personally very much, because the last one and a half years we

worked very hard, and we've brought profitability up and all of those things. but i'll tell you exactly. on friday the 18th, the notice of violation was communicated. we had a call with the national council, some of the folks who are sitting behind me. on monday we issued our first financial relief aid, so we've put all the tdis, use ared cars, cpo cars and new cars, we took all the threshold bonus out, so we paid maximum bonus for each car sold and took out the customer satisfaction targets objectives and paid customer satisfaction bonus on these cars, and that is more than $1,500 per car. coming towards october now, we provided every dealer around the u.s. with a discretionary fund, with a discretionary fund which was explained to them through the district manager, states' operations managers and which

was wired to the dealers on october 1st. i don't want to call out the number, but it's a significant amount of money in order for them to have flexibility. so now accountability towards us, flexibility to solve the most urgent customer cases or to put the money where they think it would be fit. and now when i come out of this congressional hearing, on friday, we look at the next programs and how can we help the dealers with the cash flow of their cars with a cash position? because one thing is very, very clear, and i'm sincere about this, the dealer profitability in this country is my first objective. and i said this on january 1st, and i continue to say this. so this is one part. and also on friday we look very intensively into the customer remedies and what we need to do to the customers. and there will be the first scenarios on the table. >> all right. thank you. the gentleman's time has expired. now recognize the ranking member of the full committee, mr. pallone, for five minutes.

>> thank you, mr. chairman. mr. horn, your statements so far don't give me much confidence that we're ever going to see a fix for this vehicles that are impacted. you know, you say that they can't be fixed by a software-only solution, you don't have a nsse timetable as to -- necessary timetable as to when the fix is going to begin. have you been given enough information about how the defeat device affects the engine to actually make informed judgments on whether the fix will actually work? ..