don't want our witness to panic. i will call upon mr. ellis and mr. pittinger, mr. purl mudder, and then we will release our first witness and we'll welcome our second panel. so at this time the gentleman from minnesota, mr. ellison is recognized. >> mr. cohen, thank you for your service to our country. and your hard work to help combat terrorist financing. earlier you mentioned the remit answer improvement act that passed through congress earlier this year. now we're in the phase where we want to see it implemented. i wonder if you might elaborate on how you see the bill being adopted, absorbed into the financial community so that we can stop bad people from getting money and allow the decent people to remit money. >> congressman, i think this is an important piece of legislation.

i commend you for pushing it through the house -- >> i had help even from the other side. >> exactly. the way that it will be used and be effective is that it allows the federal regulators to rely on state examinations for purposes of overseeing compliance with anti-money laundering regulations, that will expand our ability to get insight into the quality of the anti-money laundering efforts out in the -- across the country, particularly in the money services industry. and that will, i think, enhance the confidence that financial institutions have in taking on money service businesses as customers. so to get back to the de-risk in question. what we are hoping to foster is an environment where institutions do in fact engage in a -- continue, really, to

engage in a balance of risk, and the better foundation for that risk assessment, i think the better off we all are. >> thank you. i want to say, i would like to work with you to help more financial institutions understand what's available under the act. let me ask you another question, and then i'll pass it so we can have as many people as possible ask you a few questions. do you feel like our international partners, we have enough cooperation with people in the middle east, european world, do you think we have enough international cooperation to identify and freeze off some of the sources of terrorist financing in this situation -- in dealing with isil? >> that's a good question. the answer is, we have cooperation. it varies, as you might expect, from country to country. we have some partners that are

100% committed and effective. other partners where i think there's work to be done. one of the things that we do at the treasury department is travel around the world to try and enhance the effectiveness of partners in cutting off terrorist financing. it's a big part of my job, a big part of the job of the folks that i work with. we have made enormous progress over of the last decade or so in improving international efforts to combat terrorist financing. but, you know, this is a task that is never going to be complete, and there is obviously still some work to be done. >> thank you again. and i yield back. >> the gentleman has yielded back. the chair now recognizes the gentleman from north carolina, mr. pittinger. >> thank you, mr. chairman. secretary cohen, following up on congressman pierce's questions,

during operation desert storm, we had an average of 1,100 strikes a day. 12 years later, against saddam hussein, iraqi freedom, we had 800 strikes a day. the last two months, against isis, we've had a total of 412 strikes. seven average a day. is this limited amount of air strikes as a result of not having the intel on the ground, as a result of precipitously pulling out our forces a few months ago? or is it the lack of the will by the administration to take out, particularly these transfer of oil out of country? >> congressman, i'm not sure it's either of those. but i'm really not in a position to comment on the military campaign. >> secretary cohen, are you in dialogue with dod? are you in conversations with

them regarding our approach? and how we would seek to dismantle, disrupt, and destroy these transports of oil out of country? given that that is the most significant manner of which, that isis has obtained their $1 million to $2 million of revenue a day? >> absolutely. and the conversations that i'm involved in, as you might expect, are conversations about policy and broad approach. i don't sit at centcom. i'm not doing targeting on the day in, day out basis. but in terms of the overall policy direction, and the contribution that i cited, that the defense department can make to efforts to undermine isil's financial strength, that is something that's as part of the overall integrated strategy that general allen is leading, is

part of the conversation. >> do you believe it -- number one, is it in our best interests, and also the best strategy if we would seek to destroy all of the transports out of the country? >> all of the illicit oil transports? >> transport of oil out of country. >> it would seem to me to be one of the ways that we can impair the oil trade is to stop them from bringing it out of the country. what i'm not -- what i am not in a position to comment on is the practicality of doing that. it's just not my area of expertise. >> i appreciate that. please convey our continued concerns on the manner of the limited approach that we've had in terms of our commitment to air strikes in various capacities, but particularly related to trying to disrupt the income flow back to isis.

on another matter, i mentioned earlier the availability of technology. >> right. >> there's robust analytic software programs. i've worked for a dozen years with major software companies. originally related to medicaid fraud. but in these discussions, we've transferred now in talking about how we can dismantle the terrorist funding and the transfer of it, outside the united states, and inside the united states. as such, i wrote jennifer calvary, the director of the financial crimes enforcement network on september the 4th, and requested a meeting to make sure that the department is utilizing every available possible analytic support software available. i'd appreciate your help in response, so i could meet with miss calvary. it would be most appreciated. >> certainly, congressman. i can tell you that fncen which

directs it overseas, has gone through an i.t. enhancement. it has some advanced analytical tools to it, and they are using those tools to go through the reports that they receive from u.s. financial institutions to identify potential fund-raising for isil, and to push that out on a very rapid basis to our law enforcement colleagues. so that is happening. but i will convey your request. >> if you could help bring about a meeting with her, i would very much appreciate it. and i yield back. >> gentleman yields back. the chair now recognizes the gentleman from colorado, mr. perlmutter. >> mr. secretary, thank you for your testimony today. i want to thank the administration, the stock markets are hitting new highs again today. so, you know, from where we were six years ago. i want to follow up on the line of questioning mr. pittinger was

asking you. he was talking about one of your points was, we've got revenue, we've got the flow of money, and we have expense. >> right. >> get back to basics, okay? on the revenue side of this, you've got the production piece, which is what he was talking about, can we eliminate or destroy the production. i'd rather focus on the price. we've had a 30% reduction in the price of oil in the last five months. so west texas intermediate's gone from 103 down to 75. to the basic economics would say to me, that's got to hurt these guys somehow. that they have less money for any barrel of oil that they have. can you tell us kind of what you guys see the drop in oil prices doing to isis, and its revenue stream? and then i'll get to expenses in

a second. >> congressman, the price at which isil is selling the oil that it's stealing has never been at the open market price. >> okay. >> just to make sure you understand. whether the drop in oil price has also forced a decline in the discount that isil is taking off the oil it's selling, i don't know the answer to that question. but let me see if there's something that i can get you. >> what price in the black market, if you will, do you think they are selling it at? >> can i get back to you on that in a different setting? >> okay. so let me move to the expense side. so on the spengs side there is some cost to extract oil from the ground and then refine. do we have any sense of what it costs them to produce this oil?

>> i think not a lot. because this is not a -- you know, sort of sophisticated operation. you know, we've seen them take over wells, but also in some respects destroy the wells and just have the oil pool, and taking it that way. so i can't give you a dollar figure on what it costs for them to produce a barrel of oil. or to them refine it in one of their mobile refineries. there's obviously some expense involved there, but -- >> i'm not trying to stump you on this. but it's basic stuff i'm trying to understand. everybody else has kind of gone into monologues about what's going on in the middle east. i mean, just basic price, production, expense of producing this. let me change it just a little bit. so on the revenue side, we've

got oil. and there's some revenue stream that's coming from oil. and i'd like a little more specificity from you on how the price of oil affects that. what other pieces of revenue does it get? you mentioned sort of charity from some other countries. does it have other earnings? i mean, what other kinds of revenue do they have? >> just on the price of oil, i can provide you more detail on that in another setting. the other sources of funding for isil are ransoms from kidnapping, extortion and crime from within the territory where they're operating, essentially forcing people to hand over cash at gun point. and to some extent, donations from external sources, from wealthy donors overseas. those are the four most significant sources of funding for isil. >> so now moving to their total

expense. obviously they've got to be paying their soldiers, or whatever they're called, their fighte fighters, their terrorist group, they've got to be paying somebody something. and your point was, at some point, whatever revenue ne have is going to outstrip those expenses. can you elaborate on that? >> yeah. particularly as we make progress in squeezing down their revenue streams. their expenses for paying fighters for attempting to deliver social services of some sort in the territory where they're operating will outstrip their revenue. just in terms of the fighters. if you assume that they have 30,000 fighters, give or take, we have information that they pay their fighters about $1,000 a month. that comes to $360 million a year. in just the expenses for fighters. now, that figure is obviously a

soft number. i don't know that's exactly right. but it gives you sort of an idea of the magnitude of the expenses. if you look at what the iraqi government has budgeted -- had budgeted for this year for the territories where isil is currently operating, for the delivery of social services, it was well over $2 billion. now, nobody expects isil to deliver social services to the same extent as the iraqi government was planning to. but isil does try to portray itself as if it were a government that can deliver social services. that's going to be quite a substantial -- >> thank you, mr. chairman. >> undersecretary cohen, we appreciate your testimony today. we will release you at this time. and invite the witnesses for the second panel to please come to the witness table as quickly as possible. >> thank you, mr. chairman. >> thank you.

we will now turn to our second panel of witnesses. i will introduce briefly, we first welcome the honorable jimmy gurelei, professor at notre dame law school. he has notable experience in the finance drawing on his tenure with the department of justice. we welcome dr. matthew levitt, on counterterrorism and intelligence at the washington institution for near east policy. dr. levitt previously served as deputy assistant secretary for

intelligence and analysis at treasury. last, but not least, dr. patrick johnson is an associate political scientist at the rand corporation. where he specializes in counterinsurgency and counterterrorism, especially in afghanistan and the philippines. without objection, your full written statements will be made a part of the record after your oral remarks. i'm not sure who has testified before congress before, but like the traffic light system, we have of the green, yellow, red light system. the yellow will go off when you have one minute to go. i would ask that you each observe the five-minute time allocation. professor gurule, you are now recognized for a summary of your testimony. >> thank you, chairman hencer ling and other distinguished members. permit me to thank you for inviting me to testify on the important topic of primary sources of funding for the islamic state of iraq and syria, also known as isis.

to enhance the u.s. government's counterterrorism strategy against isis, i would like to make several recommendations. the first recommendation targeted blocking actions. the centerpiece of the government's counterterrorism strategy is to freeze the assets of suspected terrorists, terrorists related entities, deep pocket donors, and other financial supporters and facilitators of terrorism and prohibit such individuals and entities from doing business in the united states. the strategy is a preemptive strategy, intending to prevent the financing of terrorist attacks, and the killing of innocent civilians. more specifically, the authority to block isis related funds derives from executive order, 13-224. it was actually issued after the terrorist attacks of september 11th, 2001, by president george

w. bush. the treasury department has not yet gained its footing with respect to isis related designations. the isis related designations by the department raises two primary concerns. first, the individuals associated with isis have been designated under executive order, 13-224. this year, there have been only four. two of the designations did not involve individuals involved in any way with terrorist financing. the third individual was a relatively lower level facilitator, with respect to moving money from kuwait to syria, and then the fourth was involved in raising money from deep pocket donors, and external funding. none, unfortunately, of the treasury designations include individuals engaged in any of the major sources of internal funding for isis. absolutely none.

i have a very basic fundamental question. and that is, who is the finance minister for isis? who is he? and why is that individual not on the treasury list under executive order 13-224? it seems to me that there needs to be a direct nexus between the treasury department's designations and the principal sources of internal funding for isis. whether, again, we're talking about illicit oil trade, ransom payments, trafficking and trading in stolen artifacts in iraq and syria, extortion payments. those are the individuals that the treasury department should be focusing on for designating blocking their assets, if any, in the united states. it seems to me, i don't know if this is the case, but it would seem to me, and it would seem to make good sense that there should be financial intelligence

teams focused on each of the principal sources of internal fund-raising for isis. there should be a financial intelligence team dealing with the payment of hostage ransom payments and where those moneys go. there should be an intelligence team dealing with oil, the illicit oil trade and how that's happening. who's involved in that. and designating individuals involved in the illicit oil trade. the second recommendation, enhance terrorism financing prosecutions. there's been some discussion of this so i'll keep my remarks on this front very brief. the bottom line is that the department of justice has a mixed record on prosecuting terrorist financing cases. since the september 11th, 2001, terrorist attacks, there have been very, very few major terrorist financing cases. i'm aware of one. there has been reference to the holy land foundation case. it was a charity.

by the way, a charity that was involved in raising money for hamas. i'm not aware of any significant terrorist financing prosecutions dealing with terrorist financiers of al qaeda and certainly none dealing with terrorist financiers of isis. to increase the number of terrorist financing prosecutions, my recommendation is that the treasury department should intensify and accelerate its efforts in sharing financial intelligence information with doj, so the doj has the evidence that it needs to bring criminal indictments against terrorist financiers, and take those indictments to successful prosecution. the last point has to do with recommendation, it has to do with the bsa, bank secrecy act. i would add under the bsa, there have been over the last ten years only two enforcement actions where fines have been

imposed on banks for noncompliance dealing with terrorist financing. i think that effort needs to be enhanced. thank you very much. >> dr. levitt, you're now recognized for a summary of your testimony. >> thank you, mr. chairman, it's an honor to be here to discuss this timely and important issue. to counterisis is focused on five mutually enforcing lines of effort, to stop the isis financing and funding. it may be a difficult task because of the al qaeda affiliates. combating isis's financing is an international campaign against the group too extreme heen for al qaeda. the tools have proven uniquely effective to stem the funds, but the sources of actionable financial intelligence. sometimes you let the money flow so you can watch it and tag there. there's no doubt in areas where

isis financing crosses the international borders, especially the formal financial sector, but banks, but even alternative financial mechanisms. in those cases they've developed since 9/11 will continue to be an effective means to improve the financing. it comes from illicit oil smuggling, and the deep pocket donors we know about in the gulf and elsewhere, kidnap for ransom payments, black market, sell looted ancient artifacts and more. this is likely to dismantle isis. unlike al qaeda and other groups, isis was self-sufficient for about eight years as an insurgent group before committing itself to running a proto state. they went through many iterations.

isis was financially independent for years by engaging in criminal activity enterprises domestically within iraq. today criminal enterprise still accounts for significant isis financing, come me meaplme me m the group's other means of income. the source of funding for a group committed not just to terrorists and insurgent activity, but to capturing, holding and administering territory, which involves significant expenditures and requires more revenue streams. therefore, while it's true isis criminal enterprises in iraq are currently beyond the reach of traditional law enforcement and regulatory action, we do not have threats on the ground like we once did. focusing even in those areas that are vulnerable to current tool sets will effectively deny isis the money it needs to hold and administer the islamic state. meanwhile, military tools under other circumstances would be the

last thing one might think of as a logical means of combating crime. the fact is air strikes against isis have already significantly undermined some of the group's criminal enterprises and further such strikes should continue that trend. they can't tax people in that territory, they can't abuse domestic resources, et cetera. while the prospects of real political reform in iraq are bleak today, should the iraqi government at some point reprioritize governance and a rule of law over corruption, then perhaps local iraqi law enforcement could at some future point prosecute isis enterprises in their country. treasury's isis strategy focuses on imposing financial sanctions on anyone who trades in stolen oil and seeing our foreign partners put an end to the kidnap for ransom payments, restricting isis' access to the national financial system.

i think those should be done in those places where it makes most of a difference, not where we feel good about ourselves in the morning. most of those are happening domestically in iraq. it's a wise strategy using these treasury tools that we currently have. i encourage people to look beyond these tools. as i'm sure treasury already is, to envision the tools the treasury and its partners might need to adapt to the evolving illicit threat. thinking outside the box, we should develop the strategies needed to deal with tomorrow's threats. treasury's grants did that after 9/11 to deal with the threat of al qaeda. it did it more in a substantial way in 2005 and 2006 to contend with iran's illicit financial conduct support for terrorism, and nuclear proliferation. i expect we will see similarly creative tools coming up soon. a few policy prescriptions. first i'll say this. there is no silver bullet to

dismantle isis financing, let alone to ultimately defeat the organization. isis presents a unique set of circumstances and treasury should assess the situation, to develop new tools to develop with the threat. consider the case of a jihadist on trial in germany for joining a group in syria. the islamic state struggled to send funds to the middle east largely because of measures treasury and others had put in place. it was described as sending a member to europe for supplies because it had become too hard for them to transfer money without being traced. the extremists used the western union to send money around the world. it becomes so nervous of transactions being monitored, they're afraid to pick up the money. just a couple of -- >> if you could summarize quickly, please. >> absolutely. we have to use the military to disrupt the oil, no question.

and also to move isis back from control of the territory, so it cannot engage in criminal activities in those areas. even though today major donors are not a big part of isis financing, as soon as we have more success in cracking down on the existing streams, that will increase, so as i get into my written statement, we need to focus on qatar in particular, but also kuwait. the fact that they have passed a new law doesn't mean anything. we need to isolate isis from the national financial system. at the end of the day, president only way to stop criminal enterprise within iraq is with law enforcement in iraq to be able to do the job. thank you very much. >> dr. johnston, you're recognized for summary of your testimony. >> mr. chairman, ranking member and distinguished committee members, thank you for allowing me to testify. today i'll discuss how isil accumulated the wealth that made it the richest terrorist group in the world. how isil's money amplifies the threat that it poses -- >> i'm sorry, doctor, could you

bring the microphone closer? >> better? >> thank you. >> and challenges and opportunities for degrading its finances. i want to note that countering isil's funding is both difficult and important. the methods isil uses to raise and move money make it a hard target for finance instruments. nonetheless, money is a critical component of all of isil's activities and failing to degrade isil financially would increase the threat both in the region as well as europe and the u.s. homeland. i want to make three main points. my written testimony contains the full discussion of each. my first point is that isil raises almost all of its money within the territory that it controls. this has been discussed already by other members, so i'll be brief. but the funding scheme differs from a lot of the terrorist organizations. that some of these tools and instruments that treasury uses now were developed for, and this

is challenging given the way that isil makes its money internally, which i'll discuss in turn. but i've had a chance to look behind the curtain to a degree through some historical documents that were captured during the second iraq war. between 2005 and 2010, that were captured from the islamic state of iraq before it became the islamic state of iraq. and these documents show with meticulous detail how the group raised money during this period, and how the group spent money. and they were fairly comprehensive over certain time periods in 2005 and 2006, and 2009 and 2010. what these documents show, i think, really importantly are two different things. one is that this group has been making its money, at least in mosul, in basically the same ways for at least the last six years. and probably longer.

so this is nothing new, despite the change in the group's name, and creeping up on the united states and the world after the u.s. withdrawal. but the group has been there, and using a lot of the same kinds of methods that it's using now. the main difference in really what's going on in mosul, and with isil, is the scale at which it raises funds. so what we're able to see through looking at the group's captured financial ledgers is that in mosul in 2008 and 2009, the group known as the islamic state of iraq, was making about $1 million total per month on average, and now as we know just from oil revenues alone, revenues have been estimated between $1 million and $3 million per day.

so it's an enormous increase. and one that i think needs to be appreciated when we think about how threatening we viewed al qaeda in iraq and the islamic state of iraq. and then with the additional finances that the group has now. what that might mean for their capabilities. and also, for their ability to sustain a long-term protracted fight against various enemies. there are real challenges in disrupting isil's targeted sanctions in restricting access to the international financial system. i think undersecretary cohen is correct that the involvement in the activities should be targeted for sanctions and isil does benefit from the international financial system. these facts don't negate the other fact which is a large share of isil's revenues made internally. it's moved through internal

channels, and other methods that are used. all these methods combined make it difficult to collect the precise financial intelligence that's necessary to effectively apply targeted sanctions. absence such intelligence we're left with a rather blunt set of financial circumstances at our disposal to cut off isis to sustain the organization for the next several years or longer. my third point covers a few things that could be done to disrupt and degrade isil's internal financing. this refers specifically to extortion, and various types of crime. robust partnerships with local, regional and u.s. government interagency partners will be necessary to collect the high quality intelligence on isis' local funding sources, methods. several steps could be taken, including enhancing intelligence cooperation, with kyrgyzstan and

iraqi oil facilitatorfacilitato prioritizing the quantity and prices of oil over time that facilitators and mediators are smuggling, to maintain the situational awareness of isil's financial capabilities. as an early warning of sorts. and identifying and monitoring all external contracts for areas in and around the territory that isil controls, allowing action to be taken to reduce isil extortion revenue by stopping these contracts if they are not absolutely necessary for the population. to recap, the three main points is the importance of isil's internal funding scheme. the challenges associated with targeted financial sanctions and efforts to cut off a group like isil's access to the international economy, and to use this as sort of the primary tool kit to degrade this

specific threat, the financial capabilities, and improved financial intelligence as a way to understand the threat better. and then to conduct targeted operations, whether by treasury, dod or other agencies. thank you. >> i want to thank each of the gentlemen for their testimony. the chair now recognizes the gentleman from pennsylvania. >> thank you, mr. chairman. professor gurule, you talked about the global terrorists, and we've only had four identified, i think, with isis. and you made a good point about who is the finance minister for isis. can you just give us a little historical context going back to the early 2000s when you were in public service, and individuals we would have been identifying within al qaeda, just compare and contrast? >> thank you for the question. first of all, we have to keep in

mind that the method of raising money by al qaeda is very different than the method that isis uses to raise money. al qaeda relied almost entirely on external sources of funding. so, for example, we focused on corrupt charities that were raising money for al qaeda and related affiliated terrorist groups. when i was undersecretary, we designated global terrorists probably closer to 40 charities for that purpose. but again, the focus was on external sources. isis is very different. it's principally a self-funded organization. what treasury has to do is they have to pivot, they have to refocus, they have to recalibrate their efforts to the dynamic that they're currently facing with respect to isis funding. and my point is, i think they're struggling to make that change, to make that adjustment.

and it's borne out by the fact that there's only four -- >> do you believe that there would be individuals that treasury would be aware of today that could be designated? >> i would certainly hope so. because if they're not, then the situation is even more dire than it appears. >> we've talked a little bit with the undersecretary and other panelists havre menti isi some of the countries in the area, and members of the panel can address this. the undersecretary talked about this, that there still needs to be more work to be done, for example, with qatar and what they're doing. we've talked about the charity law that qatar has in place. i think the undersecretary had previously made statements about qatar and kuwait being permissive jurisdictions for terrorist financing. what kind of things could these countries be doing now that

they're not doing today? >> a lot. mostly these are countries that have passed fantastic laws on the books when you look at them on paper. i've gone to the middle east many times, sat with some of these individuals that give me enough hard copies, soft copies, i could wallpaper my house with them. but when you get them privately, and you ask them, this is a great law, 3.1, have you ever implemented it? no. have you ever used this? no. there's very few cases, especially in kuwait and qatar of any kind of implementation. even the case that the undersecretary pointed to you earlier, qatar did not prosecute the individual, didn't hold the individual accountable, he's deported and presumably continuing that activity from someplace else. i get into qatar in great detail in my written report with the concerns, the financial action task force, the international monetary fund, and others who have gone to qatar and

investigated like i have with their ability to implement. similar concerns about kuwait. on the question of the sgdts. what we should not be asking treasury designate as many people as possible. we want them to designate as many people as possible that would have an impact. there are people around the world relied to isis and other groups. you could designate them. but they don't have assets here, or around the world. they're doing things domestically in iraq. it would not make a difference to add them to the list. what we want to do ultimately is make a difference. what we need to do in particular is not just focusing on the guy today who has the title of finance minister and doing things only within iraq, but the middle men who are facilitating oil payments and anything crossing the borders. >> are there leverage points that treasury, or anywhere in the administration, that we could use to encourage whether

it's kuwait, qatar, or turkey, or other countries in the region, to follow through? >> i think there are. one of the concerns that i have is whether or not these vast sums of money that are being generated internally by isis are entering banks in qatar. and we should be scrutinizing, working very closely to ensure that those banks are applying the relevant anti-money laundering, terrorist financing regulations that they should. and if not, perhaps their banking licenses, if they have u.s. branches in the united states, perhaps those banking licenses should be revoked, or other restrictions should be imposed on their ability to do business in the united states. >> time of the gentleman is expired. the chair now recognizes the gentleman from massachusetts, mr. lynch. >> thank you, mr. chairman. i want to thank the panel. thank you very much. you've all helped us enormously today. dr. johnston, i had a chance to

read some of your earlier stuff back in august, and then your testimony today. you indicate today that you believe there might be a surplus that isis might be a surplus of about $2 billion. how do you think they're holding that? from a custodial sense, how do you think they hold that reserve of about $2 billion? >> so this is purely speculation, but i think the easiest way to hold it would be in the banks that it overran mosul, and to store the money securely in a facility that is intended to store money of a high quantity i think is a reasonable guess. but there could be applied

distribution, it could be in other countries. and so i suspect it's some of each of those. >> the one vulnerability they have now that they traditionally, that terrorist organizations have not had, is that they have to defend their turf. and i know that your report, i think all of you have hit on this, that our response to the traditional financing of al qaeda as the professor has outlined, our response was really sanctions and restrictions on, you know, proper banking practices, and things like that. and the money laundering statutes. but the way that isis is operating now, they're internally generating this revenue. so they're not relying on, principally on qatar and saudi arabia as al qaeda did in the past. so we really have to get at the

oil revenue. i understand, professor, in your report, you indicate the second largest source of revenue for isis is the selling of antiquities. but that's -- i think they'll exhaust that at some point. it's really the oil that's going to be there, if they're going to have a sustainable, you know, system here, an organization, it's going to be the oil. how do we get at that, dr. johnston, in terms of our strategy? i know that we're doing targeted missile strikes and bombings, but to really take away the capacity to produce oil, you've got to occupy the ground. and i'm just curious if you think that our current strategy that really looks at population centers like mosul, it is the

right strategy, would it not be better for us to encourage the iraqis and the kurds to really focus on the oil production areas and try to take them away from isis control? >> thanks for the question. i think that the appropriate way to do this is pretty much what's being done right now, actually. and that's using air strikes to -- you know, to limit the freedom of movement and the ability to move oil and smuggle it as easily as isil was able to before the air strikes started. meanwhile, buying time for an advise and assist effort to try to stand up in some cases with local security forces, or the iraqi army, to conduct effective operations. essentially to push isil back from the territory that it's

controlling. >> i appreciate that. i don't mean to cut you off. but from 2003 to 2011, we spent $24 billion, the united states taxpayers, we spent $24 billion training 938,000 iraqis how to fight. and to equip them, train them. and here we have 30,000 sunni that they're overrunning the country. and syria. in the race against time, as this isis gets stronger and stronger, we're back again with this training operation. and i just -- i just have some misgivings about, you know, what's that saying that the definition of insanity is doing the same thing over and over again, and hoping for a different result. i'm just a little bit -- i think the training piece in kyrgyzstan

where we did not train before is probably money well spent. but i'm a little skeptical what we're doing with the folks we trained already. >> time of the gentleman is expired. the chair now recognizes the gentleman from kentucky, mr. barr, for five minutes. >> thank you, mr. chairman. would you all assess -- and let me just direct this first question to dr. levitt. would you assess that the primary source of revenue for isil is the oil revenue? >> by far. >> okay. and so how effective has u.s. efforts been so far, the coalition's efforts been so far at targeting the middle men in iraqi -- the iraqi kurds, or the turkish elements that are -- that constitute the middle men, how effective have we been at

identifying those middle men that are delivering the oil to other parties? >> there's very little in the open source about it. when i talk to people privately, my understanding is there has been some progress in identifying these people, and taking time to put together packages and get to the point that you can actually designate somebody. i expect those designations will be forthcoming. we've seen more success in working in partners in places like turkey, and in kurdish areas in the north of iraq, where the problem isn't so much criminal middle men, but corrupt politicians who are involved in this as well. keep in mind, these are oil smuggling routes, and individuals have been involved in this for years, since the oil for food program. so combating something that has that kind of traction is difficult. >> what about air strikes with these mobile refineries? how effective has that been so far?

>> military strikes have been very, very effective. if you look at the numbers, at one point we're saying isis was making as much as $3 million a day, and now most say about $1 million, maybe a little less. so i'd say that's about two-thirds reduction. that's tremendously successful. nowhere near where we need to be yet, but heading in the right direction. >> to follow up mr. lynch's line of questioning, is there any way, even if we have had some modest success with respect to the mobile refineries and the air strikes, is there any way that we can truly combat, or is it practical to believe we can combat the source of oil revenue without retaking identifiable oil fields from isil control? >> to fully deal with the problem, you're going to have to retake the oil fields. even short of that, if you can deny your adversary the ability to extract, to move, to refine that oil, if they're sitting on

it, but not making money on it, are only making as much money as they can make domestically, which is happening already, that you can further degrade their capabilities. >> how well do we know whether or not the assad regime is a primary purchaser, or a small purchaser of some of this illicit oil trade? >> my understanding is there is no question but that the assad regime purchases isis oil. has been doing so for some time. we're talking about oil fields on both sides of the border. i talked about the need that we need to make sure we do things, combating their financing not only in iraq, but also within syria. but the extent of that which i'm sure fluctuates, i don't know exactly. >> what about turkish cooperation with respect to the oil trade? >> i understand that the turkish cooperation has increased significantly. it's going to be difficult, though. this is something that has been going on for years and years and years. the price of oil in southern turkey is more expensive than if you've ever rented a car in

europe, that says something. so there's a built-in supply and demand, even at the sharp discounts that people are selling the oil at in southern turkey, you can still make a profit. because the market will bear it turkey, the market will bear it because the market price is so high. >> let's address this issue of kidnapping for ransom, secretary cohen's -- refuse the payment of ransoms or make other concessions to hostage takers, can any of you assess how the release of the five prisoners at guantanamo in exchange for sergeant bergdahl impacted the u.s. position with respect to sending that signal to partner nations? >> response is it wasn't helpful, i think it's inseptembi inconsiste inconsistent, i think it's sending a mixed message to our

allies who we're being critical of, to france and spain for making ransom payments for the release of isis hostages, i think it was counter productive and it undermines our effort. at the end of the day, it may not be the most significant source of isis funding, but isis making $20 million a year, up to this point, $20 million a year, that's significant. we need to undercut that ability and when we're engaging in this type of conduct, i think it's counter productive. >> the chairman now recognizes the ye the gentleman from kentucky. >> it's initial designation as isis as being a jv team, i have looked at the strategy of the administration in regard to its mission to disrupt, degrade and defeat isis, take issue with the way that lays it out.

but spending $500 million and trying to train 500, quote, moderate unquote rebels to take on 40,000 jihadist rebels doesn't sound like a strategy to defeat this group of radicals. and i think it was indicated that the bombings per day seems far too little and what too late. and my concern has been with the administration's strategy, and i'm concerned that the lackluster approach that i have just referenced is also taking place on the finance side. does the paneli think that the treasury has been adequately engaged on the terror side on disrupting the money that flows to isis. >> as i stated in my opening statement, i think they're

struggling. i think certainly they have good intentions and they want to -- >> i think they're struggling with gaining their traction, gaining their footing, because that's reflected in the low number of designations. >> isis has been struggling, treasury is struggling is that correct. >> to the panel, i think mr. pierce asked this question, but i'm maybe a little bit confused. moving oil is not like moving nuggets of gold or diamonds, right? there's a large quantity of oil that has to be moved from the oil field and/or the refineries, is that correct? >> we're talking 20,000 to 30,000 barrels a day. there may be some -- you know, it's not an exact figure, but it's a significant amount of oil that's being transported every single day. and once it's sold, i think it can be more difficult to identify those who are participating on the finance side and the purchasing side and the middle man side of oil, but does it seem impossible that we

couldn't bomb tankers of oil as they leave the refineries or leave the wells, why aren't we engaging in military action to destroy the oil as it leaves, why aren't we doing that? to anyone on the panel. mr. lovett? >> i don't know the answer to that. it's more of a military question than not. my guess is that if it were that simple, we would be doing it, because there's no one that disagrees with the premise of what you're saying, sometimes there's small trucks, and to think that we have complete aerial coverage of something that's happening at all times, i don't have the perfect answer to your question, i would just say i am absolutely certain that the approach to treasury is not lackluster in the least, people are working very, very hard on these issues. it's the nature of the problem that they're facing. if what congress really wanted them to do is just designate 40

people, we would do that tomorrow. >> we are moving large quantities of oil, and that we can't take that out is of somewhat of concern. >> we're dealing with large a.s of money, and i imagine it's easier to trace large amounts of money than a few million dollars here and there to different terror networks. # we're talking about hundreds of millions of dollars? >> i would just imagine the idea that we have complete coverage at ail times. >> i want to switch to another topic, the united states and turkey are co-leading an initiative within the financial action task force r you guys aware of that? is it fair to say that turkey was just removed from the gray list from the task force? >> that's right. and that was a lot of treasury and other work to get them listed and then to get them to the point where they can be delisted at the end of the day, we don't have a choice of who

sits on the borders of syria and i rack, if you can get turkey to get on the list, which would be helpful. this is a favor to us. this is on their border not ours. it is absolutely right that we need to sit on them very, very carefully. >> looking at turkey and quiet, iraq, qatar, are we applying adequate pressure to those countries to get them to engage with us on the finance side of isis? >> i think there's always more that can be done, and one of the points they made in my written testimony is i think there's been inefbltive or inadequate use of the bsa fence it can impose significant civil fines on banks that are not complying with the counter terrorism regulations. with respect to counter terrorist financing. i think the treasury has done a pretty good job on the anti-money laundering side, but with respect to designating or finding banks that are not in

compliance with the terror financing regulations, i have only identified two banks in the last ten years and those include the arab bank and the doha bank from qatar. so i think treasury could be doing a much better job in that area. >> time of the gentleman has expir expired. the chair now recognizes the gentleman from california, mr. sherman. >> the oil revenue is -- electricity continuity is shoddy in much of iraq. before this outbreak a lot of this electricity from mosul came from the mosul dam, is that dam still providing electricity to these living under isis?

does anyone have an answer? does isis collect money from those who receive that electricity? >> they don't control the dam, but how are they getting electricity from mosul. >> my understanding is that the government is still allowing electricity to go into the city because there are citizens that live there. >> that is the point, the electricity go into mosul, isis collects for that electricity. >> i don't know that that last part is true. >> we do know they're in a position to tcollect revenue fo electricit electricity. >> we didn't provide anything to france for the people who lived under nazi occupation.

when -- is the iraqi government being paid for that? >> i don't know that. >> so it supports the economy of mosul and the other areas under isis control, isis then taxes those people and it's -- it's very hard to wage war if you supply strategic assets to the areas under enemy control. i have never seen that done in a war of -- i, you know, in the past. >> yeah. i hear your point, i just say we're short of world war right now. and if you want one sure way for the central government in iraq to go even further to losing the support of more of their constituencies, deny electricity to iraqi citizens who are captur capture ed captured. >> if you supply energy to those who are under isis control.

do we -- not only did not provide free food or electricity to the people of france, obviously electricity wouldn't have worked, but food, but in fact we prevented food imports in france? didn't we retain the support of is civil wian population that w under occupation. is there any support where free electricity goes from one side to another. >> i don't know if it's free electricity, i don't know if they're taxing electricity, but this is a deeply sectarian war more than anything else. so before you make divisions in the sectarian -- so you think, you're for a policy of supporting the strategic elements of the economy under isis control, you know, that's certainly your point. >> that's not what i said. >> what?

>> i think you know that's not what i said. >> you can clarify for the record in writing what your position is. now i guess that would also apply to petroleum, i mean if you're in favor of the lights being on in mosul, then people ought to be able to drive from north mosul to south mosul. we are preventing them from exporting oil, have we done everything possible to prevent them from producing enough oil for the civilians under their control? professor? >> again, i think this is, as we have already discussed, a very important source of income from -- >> i'm not talking about exporting the oil. i'm talking about providing for the millions of civilians under their control. >> i don't think it has been a priority. i don't think it has been a focus -- >> so turning off, we did not hesitate to bomb oil fields during world war ii.

we did not think that making sure that the people of france could drive around paris was essential to retaining the support of those civilians. the idea that there would be people driving civilian cars to mosul, but somehow the tanks captured by isis would not have -- obviously, a lot of this hearing is focused on the oil exported by isis. but isis has no shortage of oil for military operations and even for the civilians under its control, i yield back. >> the gentleman yields back, i will announce that we will clear the remaining three members who are in the hearing room and then we will adjourn the hearing. the chair now recognizes mr. hurt. >> i want to thank the witnesses for providing testimony today.

most of the people that i represent have concerns about the way this administration has approached this crisis in syria, in iraq and i think that there is a lot of concern that the administration was either didn't know or ignored critical information that could have prevented us from being in the situation that we find ourselves. with that said, i was interested in the testimony of each of you as it relates to the hard work that goes into identifying those who should be subject to the sanctions that are allowed by u.s. law, and law of other countries. and it strikes me that that information has to be gathered really on the ground, and is ---has to come to treasury

through, again, department of defense and intelligence agencies who are -- who are in the business. so i guess my question is, after listening to under secretary cohen for two hours, i came away with a little concern that maybe he is not -- treasury is not at the table as much as he indicated that it was. i wanted to start with you, mr. johnson and maybe get testimony from the other two witnesses. but my question is this, secretary cohen indicated that he was, in his words at the table. there were a lot of questions he couldn't answer, and perhaps that's the nature of an open meeting like this in a classified setting. but i do wonder whether or not he is getting the precise information about these targets from intelligence agencies and

from the defense department and is he getting what -- is treasury getting what it needs to be able to make these decisions and impose these sanctions and secondly, if not, what can be done to make sure that treasury is at the table because i think we all agree, those of us sitting here today, that the -- you know, stopping the financing is extremely important. so dr. johnson, if i could start with you. >> so on the first point, the first part of the question, i think it's hard to say the extent to i which he's at the table for any given decision, but my sense is the treasury has done extremely well in working with inner agency partners to include the department of defense and various parts of the intelligence community to get the capabilities that it needs to make the impact that's desired for policy outcome. >> why do you say that, though?

can you explain that? >> so since the -- i mean, since 9/11 and the realization that terrorist financing really matters and that to disrupt terrorist networks and terrorist attacks going after their financing is really a useful instrument to have among the various tools that we have, treasury couldn't do it alone, it didn't have the capacity and it's worked successfully with interagency partners in iraq among other places during the second war. but i think that for the purposes of the current treasury effort, it's still a young effort, and i think that really their programs and approach is, you know, kind of still developing and i think we'll see more as the policy becomes

clearer and kind of the overall posturing footprint that the administration wants to have becomes clear. >> thank you, just briefly, we only have a few seconds, but the question is, are they getting enough information, are they at the table and if not, how do we -- what can we do as congress to help that out? >> i think the portion where mr. chrome was saying that he was at the table that he couldn't answer the question was military strikes, and i don't think they were at the specific table where targets were being selected. but i don't think he was at the assistant secretary level. but intel lens has it's own analysis which i once ran, they're not only getting information from, they are actually part of the intelligence community in every way. the problem is not that there's not enough people at the table,

but developing the intelligence takes time. it's an excellent question as to why we're just developing that intelligence now. that's an interesting question. but the way people in other agencies and departments are located in treasury a and vice versa are at the table. >> the gentleman from pennsylvania, the vice chairman of our oversight investigation committee, mr. fitzpatrick. thank you, mr. chairman, i have a question for perhaps any of the witnesses who want to answer about the mobile refineries, what do they look like? more importantly, where are they coming from? who's manufacturing them and how are they delivered to the area where is the oil fields exist? >> i would love to know that too. >> i'm not an oil expert, so i can't answer that in any detail. it's clear that those were there already, it's not something that's been imported from iraq. apparently they're relatively low tax, it's a very small refinery you put in the back of

a truck, but more than they don't know. >> do you believe they're being manufactured in that region or are they being imported from somewhere else. >> my understanding is that this is something that is slapped together. and so it's being put together by, you know, people right there, i don't get the sense that this is something that's being imported and to the extent that i'm wrong, if this is something more sophisticated that needs to be imported, i sense that this is something that's happened a while ago. >> once this oil has been refined, you testified that the assad regime is purchasing some of that oil, some of that is being smuggled into the southern regions of turkey, you said that the prices of gas are higher than we see here or that you would see in europe. if you're purchasing oil at $30 or so a barrel, there's reason to know that this may be illicit oil. are we doing enough, the treasury of the united states, our intelligence agencies to

determine who the middle men are who are purchasing oil at $30 a barrel. and make sure that we're following that money into what accounts? >> that's exactly what treasury and others are doing, identifying those middle men, i think that's what under secretary combs was referring to and what i was referring to explicitly in my testimony. i think's also a diplomatic push to get something done in southern turkey. oil costs so much there, people have been for years putting basically garden hosing across the river and just air pumping oil from the syrian side to the turkey side. there's lots of ingenious ways that this is being moved and there's a market for it. >> one of the concerns that i have or the banks that are helping move the proceeds, the profit from the sale of this oil. if isis is making 1 million $1 $2 million per day, that oil is

not being placed in shoe boxes or in somebody's mattresses. that ---the department of treasury needs to be doing a better job of intensify it's efforts, let me say that, intensify it's efforts to identify the financial institutions that are knowingly receiving and transferring isis related funds. >> so where are the gaps in the system then? >> one of the gaps could be the fact that some of that money may be going to iraqi banks, i think principally foreign banks and of course the u.s.'s lack of control over foreign banks, banks in qatar, banks in kuwait, banks in iraq. that's the difficulty. there would be an opportunity where we could exert greater leverage to the u.s. branches to ensure that the foreign banks are being used to finance oil

money. >> nothing further, thank you. >> the last member to be recognized will be the gentleman from north carolina mr. pittinger. >> thank you mr. chairman, professor, in your testimony, you stated that there were only two banks who had violated our bank services act, the arab bank in jordan and the arab bank in new york, if i heard correctly. and that's just over the last ten years. is that as a result of our lack of capacity to track these folks? or that -- or are there others who are complicit that we haven't been successful yet in tracking? >> that's the question. the question is, why is it that to the -- done a fairly good job

of sanctioning banks that comply with the bsa, but with respect to counter terrorist financing, it doesn't seem to be a priority. and i wonder, is that because of the lack of resources, personnel within fence in, maybe there's not enough bodies to be engaged in oversight with respect to whether these bank pose a high risk for terrorist financing or perhaps, the weak spot may be with the other federal regulators, that the other federal regulators aren't focusinging and emphasizing on whether or not these banks are in compliance with the counter terrorism financing under the bsa. but it seems to me that it's unacceptable that we could have only two banks, where if you look at the actual orders issued by -- references in those orders to threats regarding terrorist financing. >> yes, sir.

in that light is we look at our partners throughout the world, we have relationships with them, many of whom we give tens and even hundreds of millions of dollars of foreign aid, it's always of concern to me, of how we are not honored by our relationships with our partners, and particularly in this situation, that's so critical for our national security and for theirs as well. to what extent, what would you advise us as a congress going forward and how we could put greater pressure on these respective countries and their banks to be in compliance with our bsa requirements? >> one point that i haven't made and my testimony today has to do with the anti terrorism act. and it does have a civil

provision that authorizes private litigants to bring civil tort actions against individuals that commit acts of international terrorism. and i think that that statute could be enhanced to make it a more effective remedy for victims of terrorism, including people, entities that aid and abet terrorists for example, banks that knowingly provide financial services and transfer money to suspected terrorists. there's a problem, there's several problems with the current legislation as it stands, one, it doesn't explicitly authorize aiding and ab abetting. the plaintiffs are left with a dilemma of having to prove that the bank is primarily responsible for theable acts of international terrorism by being an aider and abetter for specific acts of terrorism. by that, we could unleash

plaintiff, we could unleash an army of litigants to go after banks and charities and other entities that are facilitating the advancement of terrorism. this is the right thing to do, these are victims, these are the surviving family members of victims of violent acts of terrorism. >> with all objection, all members will have five legislative days to submit additional questions to the witnesses to the chair, to be forwarded to the witnesses for their response. with that all member also have five days to submit their answers to the objection. this meeting stands adjourned.

coming up on cspan 3, a british house of commons committee on the semiautonomous government of kurdistan in northern iraq, republican congressman walter jones talks about president obama's funding request to combat the group isis in iraq and syria. and later the house veterans affairs committee examines the quality of veterans health care. >> with live coverage of theist house on cspan and the senate on cspan 2, here on cspan 3 we complement that coverage by showing you the most relevant congressional hearings and public affairs events. and on cspan 3 is the home to american history tv.

including six unique series, the civil war's 150th anniversary visiting battlefields and key events, touring m inin ining mu historic sites, history bookshelf with the best known american history writers, the presidency looking at the policies and legacies of our nation's commanders in chief. and our new series, real america, featuring archival government and educational films from the 1930s to the '70s. cspan 3 created by the cable industry. like us on facebook and follow us on twitter. officials from the british foreign office updated a parliamentary committee. the panel also took questions on legality of the british military fighting the militant group isis in syria. this british foreign affairs committee is 90 minutes.

order, order. can i welcome members of the public to the sitting of the foreign affairs select committee, it's our third and final evidence session of our committee into kurdistan and on this occasion we're taking evidence from the foreign office. so welcome. and can i also welcome edward oakden who's the director of the middle east and foreign office. i welcome you both. minister, it's now three months since mr. abb abbad did -- what the prospects for him having a

more inclusive government. >> thank you for the opportunity to appear frin front of you and thank you for the work you are doing not just in the region, the country but the middle east as well. it helps our work, the government's work, that the british parliament is engaging in trying to understand these issues in furthering british influence. i'm very grateful for what you are doing, i understand you have had very interesting -- it is a short amount of town -- the town potentially could have been blown up, baghdad itself was under threat. and we look at today and we see that maliki is no longer there,

abadi is in place, he has a more inclusive government than anybody expected to produce. the length of time it took for the cabinet members to be announced, i think we should be pleased with the progress that actually has been made. the coalition itself is now an international coalition that's been formed of over 60 nations, able to hold back and deter isil, allowing the space for the depleted armed forces of iraq to reinvigorate, train and themselves provide a ground capability to take on isil. i'm not complacent and we shouldn't be naive, it's going to be a long-term game here, we should not expect results certainly overnight. but considering where we are today, i think we should be pleased with the progress. >> and this inquirely is about

kurdistan, but have you got a view as to how reaching out to the sunni communities in iraq and getting the cohesion from the shiites? >> this is the big challenge that the new prime minister and president actually face. and the appointment of the defense minister, abadi, a sunni himself, and the speaker in the parliament as well, engaging with senior representatives is so important. we have to remember and you i'm sure will witness this on your visit of how disenfranchised that the sunnis were in the maliki regime. and this is why it's so important, that we engage not just in anbar province, but the whole of the northwest of iraq. they have been -- by recent events of the sunni community,

there isn't a single sunni voice that represents everybody in the northwest of iraq and that i think is the challenge of bringing people back to the table, recognizing that the baghdad government represents them all. and looks to the future. >> there's a lot of talk about -- is that how you see it? >> that is, i think, a little sensationalist to say, there's no doubt that there is the frustration that we saw under maliki, you had sunni dm demonstrate fors coming out wanting a better life and it was the sunni government that attacked them. so there's massive distress, there's no doubt about it. and there's the complications of the relationship that i'm pleased to see moving forward with the kurdistan region as well. i don't take away from perhaps the implication, the fact that life is very, very tough and

it's good that the international community is reengaging with this part of the region in trying to facilitate a solution. >> thank you. moving on to the oil and gas side, while we were down there, we were well aware about the nature of the dispute between irbil and baghdad, i am very much welcome the fact that you've been able to reach an interim agreement on this. can you tell us about the agreement and did the uk play any part or did they manage to do it themselves? >> the grg agreement is very -- it's worth stepping back and saying that iraq has a country is fortunate to be sitting on such enormous mineral wealth, it provides that vision, the direction of travel of where the country should aspire to spend that wealth wisely, on thursday, an interim deal was signed so

this i hope will be the beginning of further discussions and agreements that will take place between baghdad and irbil. but essentially the agreement was a lump sum of $500 million which was granted to irbil and this was to pay for a number of outstanding debts, legacy debts. in addition to that, there's also a licensing agreement of 150,000 barrels to be sold with essentially the blessing of baghdad and this was perhaps the difficulty that the last couple of months that we have seen in irbil having invested in pipelines, able to secure routes to export the oil, or not being able to do it with the legitimacy perhaps the rest of the world and indeed baghdad wanted to see. >> and on the -- i mean this is an interim agreement, there's a lot more to come, is there any role for the uk in helping to reach a final conclusion on

this? >> well, we could be selfish and say we have a british interest in this, it's 50% of the oil production in iraq is actually thanks to the british country is actually involved in that, we want to see the country prosper, we want to see british countries do well in the region. there is a role, i stood up in foreign office questions, when i was asked this very same question, to say will -- i'm pleased to say that our embassy has been very active with some -- to encourage voices to come together. this is a priority for the country, no matter where in the region you're in. the oil alliance on hyde drro carbons is actually huge. it's in the region of 1% employment, but 93% of the

revenues actually come from hide doe carbons, which is 63% of gdp, therefore the country enormously relies on finding oil and producing it and exporting it. so i'm pleased that there's an interim deal, which i hope will be the first consolidated deal in the future. no with the disputed areas of kirkuk that still need to be reconciled. but this is the direction i hope we continue down. >> what remains british's interest. >> i think it's simpler to say, we want to see british countries flourish there, we want to see a safe environment for all international countries actually go in and be able to operate. amend we want to see oil move to parts of the world and not have legal question marks over whether or not it can actually indeed be purchased and i am pleased to say that's actually taken place, so i think we're heading in the right direction. >> as you know, iraq and

kurdistan is sitting on a lot of gas, in fact a huge amount of gas. is there any role for britain in facilitating that? >> i think this is something that is worth investigating and worth further discussions and something i think the embassy may have some thoughts on this. but certainly, you're right to say that the potential for -- in northern iraq is actually huge, it's a lot of it is untapped and i think it will help the country for many, many years to come. >> i need to say, mr. chairman, that -- major gasification progress in the south and it will be logical for they or others to look at the north as well. but that obviously will need -- will be easier once there is a resolution of the share of the energy resources. >> let's get a final agreement.

>> perhaps it's not going too far to use terminology such as last chance, as it was echoed by the foreign secretary, an i think there is a general acceptance that this is the last chance to advance the politics of the situation. just very briefly, before turning to the iraqi arm. just briefly, yes, we have a new prime minister, we have had elections, but are you at all concerned, prime minister, that the immediate -- the politicians, the administrators, the bureaucrats have essentially remained the same and does that bode ill when it comes to trying to encourage a more inclusive form of politics, which has been one of the problems. when you have replaced that tier below, and this is very important given the absence of the bureaucracy and the backup that we could associate, aren't you at all concern it about

that? >> it depends on what you mean by concern. in one respect, having these voices participate and engage with government, it depends on the authority of the prime minister and the president of course and whether they're able to yield that authority. but we're aware, maliki now continues to be involved, but he continues to be inside the tent. there's also the question mark as i alluded to earlier, as to who are the sunni representatives. i was, i think, forth right in saying there is a diverse mix of tribes in the sunni area, they don't mix and getting those sunni leaders to actually come forward, but half the country is at war, it's engaging in an incredible battle, i'm sure we will touch on it in the west. and therefore you want to attract these people absolutely to the table. they may not be in the position to come to the table.

>> but are you satisfied, minister, that there is enough tangible evidence of an inclue s ive approach. is there an sfwoenlt reach out? >> we have very much encouraged that. >> we have encouraged it, but are you seeing ed of it? >> i have seen a number of posts that have been filled by sunnis that we want to see involved are yet unable to do so because of the gee graphical ter train, they are not able to participate, they're out of the country and they're in exile as well. but we need to be careful by wanting to pick the first 11 if you like and say these actually are better people to have. we have done that in other countries, actually keeping alive a person who we might make as a future president of a country or a prime minister or something like that that didn't turn out to always go the way we wanted it to be. >> what i'm saying is there's

been an absence of an inclusive form of government. let's part from that for the moment. lets turn to the iraqi army, train bid the americans, fully equipped, brought up to a strength very strong and yet fled at the first sign of trouble. are we being naive in believing that you can meld different tribes, different cultures, given the 600-year history one to take home an opposition in which a large part of the army is recruited? >> i don't agree with your introduction and tripgs of the iraqi forces. >> you think the iraqis did well. >> no, they're not as strong as you are suggesting they were, this was before june when they sort of dropped their guns and ran. >> when they did drop their guns, they were full strength, well equipped, had been trained

by the americans and train over a period of years, but the first sign of trouble, they ran. >> that is to gloss over the leadership that was actually looking over the iraqi forces, these were generals that were placed in there by maliki himself. he was actually running the show, perhaps he was concerned about their own power, their own authority, therefore the good sunni leaders and others who operated under a structure which you and i are very familiar with having both served, that was removed, not only was it removed, but also the support element from the americans was also removed. maliki requested that that end, and therefor these generals were answering directly to maliki's office, when the attack actually came in, then the orders were not there to coordinate activity and that is why many of the generals weren't sure of actually what to do to provide that mutual support. not only that, they were serving

in a sunni area themselves and through that perhaps a complex environment led to the forces themselves crumbling, much faster than perhaps we would have anticipated. >> you would put this down to an issue more of an issue of leadership rather than trying to meld a united force at a different ethnic mix, religions, cultures. >> the lesson has been learned from there and what general allen is now seeking to do is to create a national guard which actually does work on what you're implying, is that there is a myriad, a complex sort of tapestry of ethnic groupings and each area will be able to develop it's own national guard but answerable to senior authority, that is the direction of travel, that is what the americans are now focusing on and that i think is what's best suited for that particular country. >> okay, and finally, it appears

that the uk is offering little or no assistance to the isf, why is that and is there any plans for that to change? >> i wouldn't agree with that at all. we are currently involved in air strikes which is assisting the ground forces in iraq, as you are aware, there are sortes, over 80 combat missions that have take on place were also providing important intelligence gaining that's needed, and also part of the coalition, so you may want to see the british flag doing x, y or z and we're doing what's asked of us. if the raek government wants us to do more, we will certainly consider it, we're part of a 60-strong coalition. and i think we are doing as much as we can and we will certainly consider any request to actually do more. >> okay. thank you.

>> gentleman welcome, minister, can i just raise to the committee's attention my interest -- i have a family business in iraq and kurdistan and advisors of companies as well as i co-chair the party group for krg. >> thank you very much. >> for the record. >> thank you very much, chairman. minister, one of the first countries to offer help to both the kurdistan regional government and to the baghdad government was iran through the iranian revolutionary guards and -- in the battle against is, i think this is the front lines we were told. across from kirkuk all the way

to ---do you welcome engagement from the revolutionary guard and the gifting of equipment to the kurds we're told that there was some heavy artillery. and some ammunition, from ammunition warehouses in baghdad? >> i'm going to invite edward to say in a second a couple of words on the relationship, the long-term relationship, because he's very familiar having served in the region. i would simply say that somtimeses we do look at iran through the british spectrum of events, and more modern events, we perhaps forget that there is a strong historical and geographical relationship between the kurds and indeed iran, the third largest ethnic grouping in iran are kurdish themselves and therefore there will natural be a synergy and an interest. we're aware that the revolutionary guards are -- we

have very much kept an eye on what was actually happening here. this was during a time of huge flux, huge change that was taking place with isil pushing down as i mentioned earlier. it obviously is a decision for the iraqi government. but i i believe it's best for iraqi or southern iraqi or peshmerga forces to provide that security. >> and i think the only then i would add is that the iraqi government made it very clear that they don't want foreign forces of any kind on their soil and that they think it's better and we agree with them for iraqi troops to liberate their country from isil, and we all saw the curious way in which the southern army came sort of on mobile phones, skorlt of as a

folk here row for iran, stopping the flow of iran for isil, but i think we're pretty clear here that while britain and iran might, if you like, share a common interest, a common challenge in confronting isil, that -- and iraq too, that that common challenge stops about there and the sort of iraq that iran would want to see is very different from the sort of inclusive iraq that its government would want to see, that the krg would want to see and that we would want to see. >> and presumably, if you look at the track record from syria, which you end up with a sort of a sort of militias-- >> and in fact what somali was

doing in those early days was going around the shiia militia and organizing the shiia militia in baghdad to fight isil and the way in which this militia has behaved has been pretty patchy, to put it mildly. >> we'll talk more about that later. minister, are you satisfied that the current allied military strategy against the allied states in iraq is working and has momentum, or are you resigned to as a longer term war with all that entails, including idps not being able to go home, with respect to many idps with no prospect to return to their homes? >> let me take it from a sort of kinetic literary context.

i would say please be patient, we need to be -- see this as a long-term operation not at least from the state that we're fighting, but also stabilization, peacekeeping perspective and we are in the early stages of that, this will take a lot of time north to defeat isil in the manner that we're doing. that's not to say that there are other ways that it could be done, but the other ways that the strategy at the moment which i think is the right one, which is to allow the iraqi ground forces to liberate the space in anbar province to push isil back from where they came from, which is from down the euphrates river. and it was because they were able to push back up and use that very same kit and go off to kobani and so forth. so i think we need to recognize that we, the air campaign that we're operating at the moment is

providing that umbrella of support, the training that the americans are providing and the british as well, not just with i star but also counter variety and others. we are seeing successesuccesses is indeed going to take time. the idp is an interesting aspect. i spoke about this with the american ambassador and with general allen, i pose the question, who do you have in mind to be the mayor of mosul. when these cities and towns are liberated, who's goingrunning t going to be the head teacher, these are thoughts which we need to start talking about immediately, and i'm afraid that nobody thought about them, or at least it seems that way in fwooe, we weflt -- that's why we went from liberators to occupiers because life didn't really change.

and that's really, really important. by i mentioned earlier that there were -- you've also got christians, yizidis and others who are worried about retaliation, once isil forces are pushed back. i visit ---we need to make sure that there is that assurance that there is an infrasure capability that will look back at them. assuming an area that is actually liberated is moving straight away to the outskirts so it's not forcing them back into their original homes, their neighbors ransacked their homes or pushed them out. and the sunnis were on a roll and they felt an -- they can start to go back to work or move back in their own time, and if

they end up staying there, at least it's a new community which is very closed to where they were before. >> would you say there's a re n reconciliation process that needs to take prays? >> the reconciliation process was designed and there's been a number of models, not just in south africa, but in rwanda and so forth. they clearly will need to be some method in which communities can come back together and deal with the horrific facilities that will take place with individuals choosing to take up arms simply because they got caught up in an horrific war. >> thank you very much. >> i think you need to -- an air

campaign is unlikely to defeat isil. what are needed for the troops on the ground and inclusive politics. could i suggest to you that with very little progress on the politics side, with very little evident progress on getting the iraqi army up to speed, this is going to be a very long campaign and there in lies the danger because the air campaign on its own could become counter productive. ed has been taken by the committee that suggests that the longer the air campaign goes on, the more the sunnis are going to feel percent indicated and therein lies the prospect of it being counter productive. i mean what is your view on that and is there a plan b if the politics and the army don't tick in fast enough. >> and you're very patient to see as i think everybody is, to see iraq liberated, but i don't

agree with your premise that somehow there is simply an air campaign, there's an air campaign that we're involved with, but we're just one small part of the larger jigsaw and as i say, i went to pains to say that the iraqi army is being retrained. the iraqis are very much involved in that, we're doing our part as well. if we're asked to do well, then obviously we'll consider that, but it's very important that we don't make mistakes that we have done in the past of actually compounding the problem, of putting ground forces, troops on the ground who then could end up making the situation worse. we have to give the space, and we are seeing evidence of iraqi armed forces successes, but it will take time. yes, that's absolutely right, we could move nato forces in there, but you for one have a track record of being perhaps reticent about that. are you advocating that because

i would say there's no appetite in this country. >> i have to say, if i may finish sir, there is an appetite to support the strategy which is to give the space to the iraqi forces to gain the skill sets, or reclaim the skill sets, one thing they have spent a lot of time doing is fighting, but to coordinate that to make sure they can gain ground for which that can continue. >> one was talking about the iraqi army and getting the iraqi army up to speed. but you still haven't answered the question in this respect. are you alive to the danger of air strikes alone over time becomes counter productive when it comes to the sunni minorities? >> again, there's artillery capability, there's infantry and so forth. i may be mission understanding the question, but you're only looking through the lens of international perhaps kinetic

contribution here, and that is, i think is a force -- >> until we get the iraqi army actually pushing forward, because we all know -- there's no substitute to boots on the ground, you and i know that particularly. until you get to that point, essentially we are reelying on air strikes. maybe on artillery as well, but essentially air strikes. is the politics on the ground alive to the danger that this could become counter productive over time? we don't want to rush it, but there is a real danger that air strikes without iraqi army on the ground pushing back could become counter productive. >> i can't go further and say that there are successes happening, we are seeing the iraqi army hold ground, they're not able to push back as fast as we would like or that they will eventually be able to do u but they have thwarted the attack by isil. but we have -- that will simply take time and we have to allow and be patient for that to happen.

>> it has been -- using drones out there, without giving away any operational capacity, is that a large part of the operation or a small part, or a microscopic part? >> it's one element. it's one element. from memory -- it is smaller -- i'm sorry -- it's smaller than the number of flights that have happened, subsequent to and smaller than the number of tornado flights and from memory there's been about 18 plus tornado flights and 20 strikes and the number of drone strikes is in the single figures at the moment. >> could i say that it's appreciate the style in which you asked the question, it makes sense not to probe, could i suggest too much into this area because we're giving information away to the other side. >> i understand. >> i am chair of the war party group on iraq.

no particular interest i also have a long association with the kurds. so i would like to ask you, after the >> first, can i pay tribute to the work that you have done. and supportive of all the groups in, not just the kurds themselves. the physical protection that needs to come, you are quite right to say, there needs to be that sense of security. the national guard program that is being put in place, which

allows the from a tribal perspective, a connection, a local connection, between those doing the security capability and those who live in there it you do not bus in those from another part of the country to another part in order to provide that. that is i think where we went wrong before. i couldn't, at this stage consider that introducing peace keepers, international peace keepers is not something that is being discussed at the moment. >> put the record straight about the iraqi army, i think it is criticized unnecessarily, it didn't just run away. the factors, there was no clear command. i think it is important to put that on the record. going back to my groups, homes,

traditional homes, the they feel unprotected more so now, of course. >> you pose such an important question. it is worth, perhaps, just reflecting on what part of the world we are dealing with. mesopotamia, the land between two rivers, this is where the

birth place of so many religioningreligions that lived in relative peace for thousands of years. christians, a variety of religions stemmed from this corner of the world. they have lived together in peace. they can do it again. we shouldn't over estimate how vulnerable they will now feel. when i visited a number of refugee camps, they have to be sure they are represented particularly, and protected physically, using the correct make up of national guard. >> do you think those rescued,

do they have all the assistance that they need at the moment. is there any attempt, i have asked it several times in the house, what is happening? we were shocked when so many were kidnapped. sold on the open market. bizarres and so on. it appeared it was particular y particularly -- involved with syria, who helped them more than anybody else. i don't know if we can confirm that or not. >> it was, in fact, it was a particular wing that was able to come in and provide important support. in that time of need. many have moved away, found refuge in northern iraq. there is a huge concern about the plight of of the women.

this is one of the reasons why, i travelled with justin greening to northern iraq, she made a further commitment of additional funds, britain, one of the largest dopors, i don't knlarge est donors, i don't chb if we have figures. >> i keep questions, what information do we as the british government have been those women? they seemed to have disappeared without a trace many of them. >> we will check and let you know. i don't think we have got very much to be honest. as the minister said, the not just the ones, who dropped them off, the but the evidence is that they were, as one would

expect, the most effective people in tracing the 3,000 or so who seemed to have disappeared. we are not getting, for what it is worth, urgent requests for further assistant for the azeedys at the moment. without having to underplay what they have gone through, and the push back we are getting from kurdish and iraqi groups, don't just concentrate on those women, there were a lot of other women who have been taken hostage and worse, by iso, too. it is a question of trying to trace them all, rather than, just sort of concentrating on one. the figure for humanitarian aid to the kig is $23 million, of which some was dedicated, $4

million was dedicated to specifically, help for women, protection of women and minorities. >> could i say that we, i am conscious that we not adequately answered your question. i am going to iraq very soon. i will make sure they put it on the agenda. we investigate further and get back to you. >> thank you. >> the kurdish minister of women's affairs that we met during our visit actually told us, in some cases, they had bought some of the women. >> to liberate them. >> yes to, liberate them. some of those women were being taken back, conitary to public opinion, taken back into their family, despite what happened to them. it would be useful to have more information, thank you.

the government is planning to run local -- as soon as the situation as hear stabilized. >> it key, disputed or was disputed areas. had they not done what they did, when iso advanced in the summer, there is a possibility, a probability it could have gone -- there is in the constitution there is if memory

serves, which allows the people to determine their future. i think without getting too involved in this, we believe the complexity of this t where your district boundary is. when there is such a churn of people, and so forth, how do you actually recognize what you established electoral districts are for example, who qualifies to vote? i think it needs to be done with a consensual process. it needs to be inclusive so people feel involved and it seems fair, and therefore can last.

sglp a strategy to protect christians abroad? >> i would hope that there is, i hope that there would be a strategy, which is inclussive of christians. we have eye set of human rights val valu valu value