low level thinking and i will say this and don't get shocked. i am a bible reader. i really believe in revelation 17. clinton -- obama is the deceiver in dinner. i say that because they are doing things outside the law. any law. he is not a king and she is not a clean. -- a queen. only god is above the law. he sits on the throne only. host: the last call is the republican line. florida. jack. good evening. are you there? caller: you have a lot of idiots talking there. it is a pity. host: well, you get the last

word. caller: it seemed plausible to me. host: we're going to let you know. we appreciate all of your comments and remind you more of them are welcome tomorrow morning at 7:00 a.m. eastern. ahead tonight, a senate committee considers arming ukraine in its ongoing conflict with russia. and we show you the news conference you just saw coming hillary clinton speaking about her private e-mail accounts. later on, the supreme court hears all argument on whether police can conduct war and bliss searches of hotel guest registry. we take into the senate relations -- next, arming the ukraine. republicans sent a letter to the

administration in their frustration. a hearing today is about 2.5 hours. >> the committee has now come to order. this appears to be an attempt to silence those and roger who want to see their company -- country move away from the lawlessness of today's russia. we must remain committed to this vision for a democratic russia at peace with itself and its neighbors. he was especially critical of pu tin's aggression in ukraine. our country made a commitment in 1994 to defend ukraine's

sovereignty, which has been under a near constant assault by russia for more than a year. more recently, we learned -- lured the crane west. now, with ukraine's eater -- future and balance, the refusal of the administration to step up with more support and whether pressure on russia is a blight on u.s. policy. the conflict in eastern crane was started by a russian mercenary, now directly involves thousands of military personnel. it has resulted in over 6000 debts and generated -- debts and generated 1.5 million refugees. roughly two weeks after the cease-fire agreement was signed, the russian backed rebels continued their offensive activities ultimately acquiring a strategic railway hub.

the determination of the rebels to secure -- despite the agreement p,utin has no intention of honoring the cease-fire. while the violence has subsided the cease-fire is far from being a success. in addition to the constitutional electoral conditions required of ukraine to regain control of its borders, the second minsk agreement is burdened by the cellular of the first -- burdened by the failure of the first. officials have referred to the recent minsk accord as an agreement. jumping from cease-fire to cease fire is not a strategy and

certainly not a strategy for success. in my view, any strategy will not be effective unless the united states begins to provide you crying with the ability to inflict serious military cost using defensive weapons on the thousands of russian troops operating in its eastern regions. the crane freedom support act passed unanimously by congress and signed into law by the president and offered military assistance to ukraine. yesterday, we heard germany's ambassador to the united states say president obama privately pledged to chancellor merkel in february that the u.s. will not deliberately bowl you military -- legal -- n administer lethal admin-- not administer lethal military support.

no amount would be sufficient to defeat the rebels. our objective is not to provide ukraine with enough weapons to overwhelm the russian military. rather, the provision of legal assistance aims to increase ukraine's defense capabilities in a way that will give kiev the ability to produce on the ground so my trick peace process. united states will be contacting to a quicker, fair, and more stable settlement. our support for ukraine must go beyond imposing cost on russia. the current currency reserves have diminished to a month worth of imports. they have lost 80% of their value since april 2014 and the

economy continues to teeter on the brink of collapse. while i believe the government is committed to reforming, more people -- more needs to be done by the authorities to move forward with these reforms especially in the energy sector where corruption siphons billions of dollars away each are. even if the u.s. does more to help ukraine and kiev defeat the rebels, but the economy implodes, we have failed. putin has had an even greater success if that occurs. this is why we need a copy answered strategy that will drive political economic and anticorruption regimes in ukraine.

i look forward to your testimony and i thank you for being here. i turn it over to our distinguished ranking member for his opening comments. >> thank you for holding an important and timely hearing on countering russia and the ukraine. i appreciate our witnesses being here. let me join you in a very heartfelt condolence to someone who was a courageous opposition leader. sometimes, a true patriot pays a price. i find it pretty outrageous to see the latest narrative that is being portrayed, that an islamist plot is the reason he

was assassinated. to his family, friends, and followers, we have our heartfelt thoughts and condolences. there are many experts who would contend the complexity of the politics that led to the retreat from europe created an opening for the ukraine. we must closely coordinate with our european friends for the sanctions against russia to work but i think without any doubt we can agree on one point and that is the united states must take the lead i believe the administration should fully in bloom it measures and the crane freedom act -- ukraine freedom act. the legislation passed with inanimate consent in both houses -- unanimous consent in both houses. it provides aid to the ukraine and imposes additional sanctions

against russia. this was necessary in december and it is necessary today. we all want a diplomatic solution. but i believe this can only come about when the cost of ravaging the ukraine is to live. providing nonlethal equipment is well and good but giving ukrainians the ability to see russians, and but not the weapons to stop them is not the answer. night vision goggles are one thing but providing antitank and antiarmor weapons drones, secure communications better, it would be fought better. i have disappointed the administration required to report to congress on its plan for increasing military assistance to the ukraine has yet to send us that report. i was glad to join with the

senator yesterday on the importance of providing defensive weapons and that we need to see this overdue report. it is time to impose additional, target extensions on the russian energy sector to add to existing sections. the administration should tighten restrictions on the development of arctic drilling and offshore drilling. the last thing we want to do is use technology to create a russian revolution that could only extend its reach into europe and beyond. the freedom support act called for the administration to impose sanctions on other industry targets as well on special russian crude oil projects. i am still waiting for the administration's response. at the end of the day, the most effective sanction is an economically viable and stable ukraine. the u.s. may provide an additional $1 billion in loans.

in my view this is a worthy investment and it needs to be matched by continued reforms. i think we need to reinforce the transatlantic agenda. we must take a more strategic approach and facing this resurgence in russia. we joined a great institution that has contributed to the triplet atlantic -- transatlantic and stability. we need nato integration. the attention on europe's has been necessary. we need to focus on the self. south -- south. our intelligence community also needs to repair ties a russian threat. not only by addressing the immediate security but across

the board in europe. i understand administration is working with a broadcasting board of governors to commit over 23 million two russian language programming, which is a 49% increase. i think that and other public diplomacy funds are important to talk to russian propaganda which when i travel to the region last year the russian propaganda is overwhelming. a strong american leadership is what will matter. i thank you for the opportunity. >> we want to thank you for the comments and we turn to the witnesses. our first panel, witness, is victoria. our second is brian.

our third witness is the assistant secretary of treasury for international finance. our fourth, frank, director for strategic land and policy at the joint staff. we thank you for being here. we remind you you're full statement will be entered into the record without objection. please summarize about five minutes or so. we look forward to our questions. thank you for being here. >> thank you chairman corker ranking member menendez and members of this committee. thank you for the opportunity to speak to you today on the situation in ukraine and for your personal investment in that country's future. today, ukraine is essential to our 25 year transatlantic quest for peace.

my interagency colleagues and i are pleased to update you today on us efforts to support ukraine as it works to liberate the country from its corrupt oligarchic past, chart a more democratic, european future, and bring an end to russia and separatists aggression. in my remarks, i'll focus on two areas, first, the work ukraine is doingwith u.s. and international support to reform the country, tackle corruption , and strengthen democratic institutions. second, i will give an update on our efforts to support implementation of the february and september minsk agreements including our readiness to impose further costs on russia if the commitments moscow made are further violated. parliament knows they are in a race against time to clean up the country and enact the difficult and socially painful reforms required to kickstart the economy and to meet their commitments to their own people and to the international community. the package of reforms put

forward by the government and enacted by the rada is impressive in scope and political courage. just last week, the corinthians passed budget reform, which is expected to slash the deficit significantly this year to give more fiscal control to local communities. they made tough choices to reduce and cap pension benefits, increase work requirements and phase in a higher retirement age. they created a new banking provision to stiffen penalties for financiers for stripping assets from banks at the public's expense, a common practice among oligarchs. and, they passed laws cutting wasteful gas subsidies and closing the space for corrupt middlemen that buy low, sell high, and rip off the ukrainian people. the ukrainian people will use the $400 million in increased revenue from state-owned gas companies to help care for the poor including some of the 1.7 million people driven from their

homes by the conflict. with u.s. support, including a $1 billion loan guarantee last year and $355 million in foreign assistance and technical advisors, the ukrainian government is improving energy efficiency and homes and factories with metering, consumer incentives and infrastructure improvement building e-governance platforms to make procurement transparent and basic government services cleaner and more publicly accessible. they are putting a newly trained force of beat cops on the streets of kyiv who will protect, not shake down, the citizens. they are reforming the prosecutor general's office, supported by u.s. law enforcement and criminal justice advisors to help energize law enforcement and increase prosecution.

they are deregulating the agricultural sector and allowing family farmers to sell more of their produce in local and regional wholesale markets. there helping those who are forced to flee with new jobs and skills training. there is more support on the way. the president's budget includes an fy16 request of $513.5 million to continue these efforts. as you said, ukraine's hard work must continue. between now and the summer, we must see budget discipline maintained and tax collection enforced across the country, notably including on some of ukraine's richest citizens who have enjoyed tax impunity for far too long. we need to see continued reforms at naftogaz and across the energy sector. we need to see final passage of agricultural legislation, full and impartial implementation of anti-corruption measures including a commitment to break the oligarchic, kleptocratic

culture that has ripped off the country for too long. as you both said in your opening statements, the best antidote to russian aggression and malign influence is for ukraine to succeed as a democratic, free market state. for this to happen, we have to help ensure that ukrainian government lives up to its own promises to its own people and keeps the trust of the international financial community, but at the same time , the united states, europe, and the international community must keep faith with ukraine, and help insure that russia's aggression and meddling can't crash ukraine's spirit, its will or its economy before reforms take hold. that brings me to my second point. even as ukraine is building a peaceful, democratic independent nation across 93% of its territory, crimea and parts of eastern ukraine have suffered a reeign of terror.

today, crimea in eastern ukraine, russia and its separatist puppets have unleashed unspeakable violence and pillage. this is a manufactured conflict control by the kremlin, fueled by russian tanks and heavy weapons, financed at russian taxpayers expense. it has cost the lives of more than 6000 ukrainians, but also of hundreds of young russians sent to fight and die there by the kremlin. when they come home in zinc coffins -- “cargo 200,” the russian euphemism for war dead -- their mothers, wives and children are told not to ask too many questions or raise a fuss if they want to see any death benefits. throughout this conflict, the united states and the eu have worked in lock-step to impose successive rounds of tough sanctions, including sectoral sanctions on russia and its separatist cronies as the costs for their actions.

our unity with europe remains the cornerstone of our policy toward this crisis and the fundamental source of strength. and it is in that spirit that we salute the efforts of german chancellor merkel and french president hollande in minsk on february 12 to try again to end the fighting in eastern ukraine. the minsk package of agreements, the september 5, september 19, and the february 12th agreements offer a real opportunity for peace, disarmament, political normalization and decentralization in ukraine, and the return of ukrainian state sovereignty and border control. for some, eastern craniums conditions of already begun to improve. the osce reports that they are holding on many lines of the contract. there have been significant withdrawals of heavy weapons. although that process is incomplete as is osce access.

demining has already begun under osce auspices. the picture is very mixed. yesterday, shelling continued in a key village over the weekend. just in the last few days, we can confirm new transfers of russian tanks, armored vehicles, heavy artillery, and rocket equipment over the border to the separatists in eastern ukraine. in the coming days, we need to see a complete ceasefire in all parts of eastern ukraine. full, unfettered access to the whole conflict zone, a pullback of all heavy weapons, and and in -- and an end to the unexpected

cargo over the ukrainian border. if fully implemented, this will bring greater peace and security in eastern ukraine for the first time in almost a year. as the president has said, we will judge russia rides actions, -- judge russia by its actions not by its words. , the united states will with our international partners start rolling back sanctions on russia , but only when the minsk agreements are fully implemented. the reverse is also true. if they are not implemented, there will be more sanctions. we have already begun consultations with our european partners on further sanctions if russia continues fueling the fire in the east or other parts of ukraine, fail to implement minsk, or grab more land as we saw in debaltseve. mr. chairman, members of this committee, america's investment in ukraine is about far more than protecting the choice of a single european country. it's about protecting the

rules-based system across europe and globally. it's about saying “no” to borders changed by force, and to big countries intimidating their neighbors or demanding spheres of influence. we thank this committee for its bipartisan support and commitment to the sovereignty and territorial integrity of ukraine and to europe whole, at peace, and free. >> senator menendez, i appreciate the opportunity to appear before you today. having spent nearly half of my professional life on the staff of this committee under then senator biden it feels good to , be back in this room, although a little daunting to be on the side of the witness table. the statement i have submitted to the committee is on behalf of myself and the admiral. i won't repeat the state of play on the minsk agreement. since the beginning of this crisis, the united states

vigorously pursued a multipronged approach. we have raised the cost to russia for its actions, we have assured allies unwavering support, and provided tangible support through bodies to ukraine. the department of defense has halted corporation with russia. the administration is also prohibiting exports of sensitive technology and and post sanctions on 18 rushing defense firms. second, we are taking concrete measures to reassure our allies and to deter further rushing aggression. -- russian aggression. thanks to congress, the european reassurance initiative is helping the department to increase and enhance united states air, sea, and ground presence in europe and to

improve facilities needed to enforce allies along the border with russia. additionally, funds will be used to bolster assistance to ukraine and baltic partners. as part of our reassurance measures, we have maintained a persistent presence in each of the baltic states, poland, and the black sea since april of last year. we have also had a near persistent presence in bulgaria and romania. we tripled the number of u.s. aircraft taking part in our baltic air policing rotation provided refueling aircraft for nato airborne warning and control system missions, deployed u.s. navy ships to the black and baltic seas 14 times and increased training flights in poland. in 2015, using eri funds, the united states will increase its reassurance and deterrence efforts with additional measures detailed in my prepared statement. we're taking defensive measures proportionate, and in line with our obligations under nato

treaties. allies have agreed to improve the alliances long-term military posturing capabilities and ensure it is ready to respond to new challenges. last month, nato defense ministers decided to enhance the nato response force by creating a spearhead force, which will be able to deploy at short notice. the task forces consist of a land component of 5000 troops with an appropriate next -- mix of air and special operations forces. it aims to strengthen the collective defense and ensure that nato has the right resources in the right place at the right time. we are providing substantial support to ukraine. ukraine has been a strong partner to the united states and nato since its independence, and our security cooperation with ukraine dates back to 1992. such

cooperation over the past two during this time, the united states provided ukraine with military training, professional education, communications equipment, and support for border control and counter proliferation efforts. unfortunately, the corruption of the yanukovych regime starved ukraine's armed forces of resources. the neglect of the armed forces by the regime did not strip the military of its professionalism or its determination to fight. since the start of the crisis , the united states has increased its security-related assistance to ukraine. we have committed $118 million in material and training assistance to ukraine's military, national guard, and border guard service. under eri in 2015, we will dedicate at least another $120 million including $45 million for state department security assistance programs. our assistance has been consistent with identified ukrainian needs and priorities and it is vetted by our country team in ukraine and by a

flag-level u.s.-ukraine joint commission that continuously assesses how to maximize the effect and impact of our assistance. key areas of material assistance include sustainment items, medical support, personal protective gear, secure communications, and perimeter security. we have also provided counter-mortar radar capabilities, which the ukrainians tell us they have used to good effect. similarly, we also continue to conduct longstanding exercises such as rapid trident to increase interoperability among ukraine, u.s., nato, and partnership for peace member nations. the most recent rapid trident iteration in september 2014 included a multinational field training exercise and saw the participation of 15 countries and approximately 1300 personnel. other measures remain under active consideration in the administration, including the provision of additional security assistance. as the president has said, we are looking at all our options including the possibility of lethal defensive weapons. at the same time, we have made clear that we do not believe there is a military solution to the conflict in ukraine, and are working actively to support the diplomatic track.

in conclusion, russia's aggressive actions in ukraine are a threat to a bipartisan objective of american policy since the end of the cold war of seeking a europe whole, free and peace. the united states will continue to work closely with our ukrainian and european partners to counter these actions and to provide reassurance and support to our partners and nato allies. thank you for the opportunity to be here. >> chairman corker, ranking >> the objective of the strategy toward ukraine has been to support the efforts of president poroshenko's government to stabilize, revitalize, and restructure the economy. i will elaborate on the strategy

. i would note that our efforts to support you great financially have been imposing costs on russiae. last spring: the united states supported an international assistance act. this assistance centered on a $17 billion imf program and also included a $1 billion guarantee and $2.2 billion from the european union. ukraine has lived up to its economic reform commitments made in exchange. the ukrainian government has initiated steps to reduce the deficit and proved targeting

social assistance strengthen the rule of law, increase transparency with inefficiency, and initiate repairs that are very much the comprehensive approach that you referred to. in support of these efforts we are providing them with technical assistance. this will always be a challenging program of reform. unfortunately russian aggression has created significant additional pressure on ukraine's economy and necessitated further international support. as such, during the past few months we have mobilized the international community to increase support by $10 million. further, the imf plans to support ukraine through the end of 2018 with a larger growth financing package. allowing more time for the economy to adjust and for economic reforms to bear fruit. as part of that international

effort, the u.s. intends to provide a new, $1 billion guarantee in the first half of 2015 provided they remain on track with the reform program. if they continue making concrete progress and conditions warrant the administration will also be willing working with congress to consider providing an additional loan guarantee. . to meet its reform a court -- reform requirements the ukrainian government has passed meaningful reform measurements to reduce inefficiencies. the imf projects that ukraine's economy.

in view of the uncertainties and security situation, there continued to be risks. this year's intensification of the conflict has imposed severe conflict. currency depreciation has put a strain on the banking sector and structural damage has occurred within the economy. and it is challenges ukraine's reform agenda requires our support. it is a central part of our strategy to respond to russian aggression as long as ukraine's government continues to undertake difficult reforms, the international community must do all it can to help ukraine succeed and adaptive strategy is required at the same time, as long as russia disregards the commitment the costs will

continue to rise. as with all emerging-market crises the path to success is not without obstacles, or take merely amid the current security backdrop. however, critical elements needed for success in ambitious reform programs, a government committed to change and a sizable international support package are currently in place. to that end, we will work closely with international partners to support ukraine. the strong backing of congress has been a critical foundation and we look forward to work closely in the months ahead. >> thank you. we thank you for your testimony and for being here to answer questions. i know in the past you have characterized what russia has

done as an invasion. does that still stand? >> we have used that term in the past. >> how many russian soldiers do you think have been killed? >> as you can imagine, it is pretty difficult to have a completely accurate assessment. hundreds and hundreds. >> i thought the numbers were substantially higher -- under 1000? >> i can't speak to more than 400 or 500 at the moment. >> i know that you have been a

strong advocate publicly for supporting ukraine. and you have been a good person for us to talk to at home and as a witness -- what are the administrations positions right now as far as demands regarding withdrawal? >> as you know we were extremely concerned to see the flattening. the bulk of it is outside the special status territory that the government did ukraine did have control of. under the minsk agreement there was supposed to be a complete withdrawal for the lines agreed on september 19 >> by what date

we support minsk. it calls for the full pullback of heavy weapons and military equipment within 16 days or beyond that they are working on it. >> russia is working on it? >> we have seen in complete compliance in terms of osce access and being able to verify the pullback of heavy weapons.

when you get to the political phase, which is to follow, the political jewett -- political jurisdiction does not include the town. if the separatists comply, they should be not insisting on having political control >> secretary mckeon, we appreciate you coming to today and sitting on that side. we have talked about the fact that we would like to see defensive secretary -- weaponry supported. we have passed that unanimously at of both houses. there seemed to be some debate within the administration, and

obviously the german ambassador thinks the president has made quiet commitments that were not going to do that. what is the status of this debate within the administration where we are all getting mixed signals and confused by the stands the demonstrations taking? >> i can't speak to what happened in the bilateral meeting between the president and chancellor merkel. it probably won't be a very satisfying answer. we are still working on the interagency and reviewing a number of options, including defensive weapons, but i can i give you a timetable on when we might provide additional assistance. >> you said there were other kinds of assistance, but it's my understanding that we committed $120 million. we have only delivered half of that, is that correct? >> that is correct. >> this feels like three years ago come the syrian opposition we were basically going to help in doing all these things, way beyond their usefulness, what is happening?

we have the secretary come in, speak strongly, we thank her for that, and the administration doesn't do what it said it would do. what is going on with the administration question market is incredibly frustrating for all of us to think the administration truly support ukraine and yet it feels like it's playing footsie with russia. they're not really committed to this. i'm warning if you could speak clearly to what is happening? >> what i can say is that we share your frustration in the delivery of our commitments. the new secretary has presses on this. in one of my first meetings, he said let's start a new policy and not promise assistance and

was we can deliver it quickly. >> what would keep us from delivering 118 main dollars worth of nonlethal assistance? >> sometimes it's finding it in the stocks of the u.s. military, some agreements being purchased off the production line. i continue the head of our defense cooperation agency has made this a iparty we are pushing them all the time. in the case of counter mortar radars, we have approval for those in late october and we got been delivered, trained, and fielded within two months. we are able to move quickly in some instances, and others it is unacceptably slow, but i can assure you that we are making it a top priority. i just can explain why some assistance is going slower than we would like.

>> we know this is not your decision. we appreciate you being here. russia has invaded ukraine. we agreed to protect their territorial sovereignty. they gave out 1200 40 nuclear weapons, and we agreed to protect that. as russia has invaded, we are still not willing to give defensive weapons. i would just go to secretary nuland. why would we be so feckless to agree to something in 1994, and be unwilling to defend them, why would we not be doing that? what is your impression of our inability to make that happen? >> we have provided some significant defensive systems, which have saved lives in ukraine. we have not answered the entire shopping list from the ukrainians. there are a lot of factors that go into that. we are continuing to look at the situation on the ground and the

needs and limitation as we evaluate this going forward. >> we have also dropped back from training the ukrainian national guard and put that on hold. can you briefly tell me why that is the case? >> as you know, we have notified we are providing the assistance necessary to keep ukraine of float. we have never had a decision on the final timing and scope of it. we had talked about doing it this month but it is still under consideration. >> pretty evident we are not going to do much. pretty evident the strong statements we have made our statements and i will close -- i will just say, thank you for your presentation. i do hope we are committed to providing the financial assistance necessary to keep ukraine afloat. i hope that the greatest

victory for putin -- his greatest victory would be for ukraine to fall and him not to have two on it by break it -- i hope we are committed. others may ask you questions about how much we are committed. you are messengers and not making these decisions. >> thanks for the promotion. let me say -- i'm not quite sure why we cannot move ahead. the former national security advisor, former secretary of state, both testified before the

senate armed services committee that the u.s. should provide defensive weapons to ukraine. when asked about providing such weapons to ukraine, ash carter said we have to help ukraine defend itself. in order to provide the necessary muscle for a diplomatic solution. the chairman of the joints chief of staff have suggested the same. i have a question. are they all wrong? >> i take it that is a question to me? >> either you or -- the secretary of the defense department. whoever wants to take it. you have an overwhelming view

from a wide spectrum. i don't get it. are they all wrong and if so why are they wrong? >> as the discussion on the subject has taught us, there are factors on both sides and we are continuing to evaluate. from where we sit at the state department, if we can see these minsk agreements implemented and can see peace in eastern ukraine that offers the best hope for the ukrainian people. we will continue to evaluate the situation as we go forward. >> lets stop there. minsk i was a disaster. minsk ii -- it only went ahead and largely incorporated more territory that the rebels had taken since the first agreement and made the boundary lines to ensure less capable of being pursued because it is all dependent upon some

votes on decentralization of the government. there have been about a thousand violations? >> i can give you a precise figure. >> 1000 violations since the cease-fire. we keep working on this aspirational basis while russia works effectively to take more ukrainian land. there is not enough money in the world to be able to help the ukrainians sustain themselves if they continue to bleed because of the conflicts russia has created and still stokes in eastern ukraine. so much for our statements that we are not willing to forgive the fact that crimea is gone.

i don't get it. i don't know how much the process is going to wait. according to the law, the administration is supposed to report on its plan for increasing military assistance to the government of ukraine. it was close to have done that by february 15. when can we expect this to be submitted? >> we are continuing to work on some of the program at issues we want to reflect in these reports. including those that flow from our 2015 budget. we are hoping to have them up to you in the coming weeks if not coming days. >> welcome back to the

committee. on december 10, you testified before the armed services subcommittee that the u.s. was considering a variety of military responses to russia's violation of the treaty. among the responses, you outlined the placement of u.s. ground launch cruise missiles in europe. which i assume would have nuclear capability. can you further elaborate on the military response is the administration is considering to russia's violation and how nato allies have reacted to the suggestion to the introduction? >> on last issue, where i talked about that in the hearing, it was in the hypothetical sense. it would not be in compliance with the treaty. i had put that out there is something we could do if we chose to come out of the training. -- treaty. what we are looking at in terms

of options and countermeasures some of which are complying with the treaty, some of which would not be, i can describe a range of things in different buckets -- one would be defenses of nato sites. second would be a counterforce capability to prevent attacks. third would be countervailing strike capabilities to go after other russian targets. we are looking at a range of things. we are trying to persuade russia to come back into compliance with the treaty. that does not succeed, our objective is to sure they have no significant military advantage from their violation of the treaty. >> so far, we have not succeeded in getting them back into compliance. >> that is correct. >> secretary toloui, at the height of the protests

in december of 2013, russia extended a $3 billion bond an attempt to keep the president in power. he fled the country with unknown millions. ukraine and it's citizens retain the debt. given the exorbitant terms of the bond, russia can demand immediate repayment in full and if ukraine refuses to pay, it would trigger default on all ukrainian debt. in my estimation, that is clearly an economic weapon. there is precedent for shielding countries from this type of coercion. in 2003, the u.s. and eu adopted in their legal systems un security council resolution 1483 which made iraqi oil and gas assets immune to seizure by private creditors. the u.k. parliament could similarly an act legislation legislation under english law. if russia refuses to reschedule payments on the bond or

reclassified as a government to government debt under the auspices of the terrace club, as -- under the auspices of the paris club, as the administration engaged with the british government on the possibility of denying enforcement of the bond under british law? >> you touched on a few points. let me touch on a few aspects that are relevant. first of all, russia has not asked for or demanded so-called acceleration of this payment. in addition, the ukrainian government in the context of its imf program has indicated it intends to discuss with creditors, which would include russia, the rescheduling of obligations falling do. primarily within the scope of the imf program. that would include this russian $3 billion.

those discussions are only beginning with what we anticipate will be the approval of the imf program tomorrow. second, let me also mention that treasury, specifically -- is cooperating with the ukrainian authorities on the other issue you mentioned, the recovery of assets. those assets went missing with the departure of the previous regime. we are willing to look at the issue you mentioned should that eventuality arise. right now, russia has not accelerated this claim. also, this claim is going to be subject to the discussions between the ukrainian government and its creditors. >> one final point, i hope we don't wait until russia pulls the trigger.

i hope they don't, but then, if it's all too late in the process of doing what is necessary to create appropriate protection under international law as it relates to the un security council resolutions, it may be too late. it seems to me there is no harm in having a discussion to be poised for that possibility so that we are not on the back end of trying to play catch-up ball. >> senator gardener? >> thank you to the witnesses for testifying today. i want to talk briefly about the comments that were made last week at a hearing the committee held with witnesses. when i asked the president about his role with ukraine, talking about the promises he believes have been made by the united states to ukraine and whether or not we had met those promises, the answer was clearly he did not feel we had lived up to all that we had promised. the bargain that the united

states had entered into in terms of promises of our commitment to them. in your testimony, you stated that the united states must keep faith with ukraine. how do you mesh his believe in ukraine with your statement that we have kept faith with the people of ukraine? >> i cannot speak to how a former georgian president comes to his conclusion. i would simply say that i think this congress has been enormously generous and responsive, including going above and beyond in some cases, the requests we have made. we have more money for ukraine then we asked for.

what we have been trying to do both through the loan guarantee program and through the bilateral assistance i outlined in some detail is to try to support the implementation of these very tough reforms the ukrainians are making and we will continue to do that. we have fielded a huge number of technical advisors into the ministries to help them with the drafting of legislation and the implementation. on the security assistance side, the numbers are significant compared to previous support for ukraine. as under secretary mckeon said we want to see it move faster. >> i believe this question is more appropriate to mr. mckeon. you mentioned in your comments ap articles, german ambassador president obama agreed not to send arms to ukraine. what is the current posture on lethal assistance to ukraine? >> we are still reviewing it.

it is still an option. >> when do you believe this review will be completed? >> i hope soon. i cannot put a timetable on it. >> days, weeks, months? >> i hesitate to predict. >> what has your conversation been with ukraine leadership regarding this assistance? >> conversations go on all the time. my former boss, the vice president has put the president on speed dial. he talks to them once a week, it seems. i don't know the latest of what he has said to them on this issue. in general, they are getting the same information i'm giving you. it is under consideration. >> they would say the same thing to you as well? they don't know when this assistance -- >> that is correct. they have made that request and

interests known. there is no doubt about that. >> when we are talking about the cease-fire and the russian-backed offensive in your reports, how much time do we have before putin renews his push into ukraine? mr. mckeon? >> getting inside president putin's had and predicting his next move is a challenge. they continue to operate in eastern ukraine. fighting alongside the separatists. they are providing command and control support, operating air defense systems, and fighting along separatists.

they are moving military equipment and there are still tactical groups across the border. when they may make another move, i don't think anybody can say. >> you mentioned the sanctions. what are we doing right now in terms of the european governments, those nations that have been opposed to additional sanctions? what have we been doing to talk to them about the steps needed for additional sanctions? >> despite some publicly stated concerns, those countries have supported sanctions when the leaders come together. we continue to talk to them bilaterally about these issues. i will make another trip to those countries in the coming days and weeks. we are working with the commission to continue to design sanctions that if we needed to use them and they need to be

applied in deterrent or actual -- have more effect on russia than the european economy, that is part of the conversation we have. >> in that consideration of sanctions, does the administration support expelling russia from the financial swift system? >> it's probably not good to get into a discussion of potential actions we could take. the framework we evaluate all potential actions is basically the impact they would have on russia and the russian economy against the spillover, blowback, that would occur to the united states and partners in europe. without commenting on specific actions, that would be the prism through which we would be a violating something like that. >> you have discussed this action with the european counterparts? >> we have discussed a range of options for further sanctions.

>> last week we also talked about the length of time it would take for nato to train a ukrainian military they could successfully defend its territory. how long would it take? >> depends on the type of training and scope of training and how many units. the training the chairman asked me about that was on the books is being looked at for the national guard forces. it would be over the course of six months. it was five or six companies or battalions. do you know the details on that? >> for -- four. >> if we were to train all of their military come over 100,000 people, that would take a much

longer period of time. >> secretary shaheen? >> we are all getting promotions today. thank you. thank you to all of our witnesses for being here today. i want to begin by sharing the frustration we have heard from other members of this committee about the slowness with which we are providing assistance to ukraine. on the weapons aside, not just about the decision which aims to -- which seems to be taking a lot of time, but the other form of assistance that would be helpful to the ukrainian military. i had the opportunity to meet with representatives of ukraine. one of the things they talked about was -- i got into a back and forth with them about the reservations that have been expressed by this administration and chancellor merkel and other europeans about providing weapons and the extent to which that might escalate the

conflict. they said a couple of things that resonated with me. they were not sure that the conflict could be escalated to much worse than they expected to be. in fact, under the current circumstances, and that there was a real symbolic impact should we provide defensive weapons that would have a real morale boost on the military and the people of ukraine. so, in our analysis of the pros and cons of providing defensive assistance, do we disagree with that assessment that there would be a symbolic impact to

providing that help? i guess this is directed at either you, secretary nuland or brian mckeon. >> all of our assistance to the ukrainians is providing not just symbolic but real assistance. to support their government across the board, economic and security assistance. i'm not going to deny any assistance we provide would be of importance to the ukrainians. what i can say about what we have already provided and committed, it is meeting real ukrainian military needs. the armed forces were stripped bare by the corruption of the last regime. >> i appreciate that. i am not disagreeing with that at all. i'm expressing my frustration

with the timeliness of providing that assistance and a decision about whether we are in fact going to provide defensive weapons. do we think there is a point at which chancellor merkel would feel like the second minsk agreement has failed and that an effort to find a peaceful resolution to the conflict has failed and therefore we may need to think about other steps? >> we are in intense conversation with our allies about a common standard for measuring implication -- implementation with minsk and making sure the osc gives us all a clear picture of where the cease-fire is holding and where it is not. where weapons are being pulled

back, so we can measure. we have talked with european allies about two things. not only seeing those things implemented, but also the danger of any future land grab, which is why i shouted out this village. there is now this third concern, the continued resupply over the border, which is not compatible with either the spirit or letter of minsk. we need to watch all those things together. sanctions will have to increase in pressure will have to increase. >> as i know you all know, there was a european subcommittee hearing last week on ukraine. one of the concerns expressed was about the economic assistance. because if the economy of ukraine fails, then a resolution of the

conflict probably is moot. but one concern we discussed was the ability of the ukrainian people to continue to support the reforms that are being enacted. i'm wondering if you could speak to that. secretary nuland. >> thank you, senator. this is a real concern for ukraine's leaders, whether they are in the executive of the rada. the kinds of intensive changes to the structure of the economy are going to have impacts in people's pocketbooks and people's lives. this is why we are working so

hard with the imf that as ukraine takes these tough measures, the support comes in quickly so that the economy can stabilize and investment can come back and the people can see a light at the end of the tunnel. we have to get ukraine growing again. >> thank you. one of the other things mentioned at last week's hearing , and i guess that this question is probably for you. the concern that putin might try to test the article five of nato countries. what kind of steps are we taking to try and deter putin? from thinking that he should test us. >> our commitment to article five is ironclad. to emphasize that, nato has enacted some reassurance measures which include increasing air, ground and sea forces in the eastern

parts of europe. they are adapting their force structure with a task force, standing up what is called nato force integration units. these all come out of the wales conference, so it's a heads of state level commitment, and nato is moving forward with that. the eri moneys authorized by the congress are also appreciated. >> thank you, mr. chairman. >> thank you, mr. chairman. i want to echo the frustration you are hearing this morning. because of the intransigence of this administration, it seems to me that all of a sudden we are in an era where our allies don't trust us and our enemies don't fear us. ukraine gave up 1000 nuclear weapons on the assurance that their national security would be protected. nato and the united states was behind that. last september, the president promised to help ukraine buildup

an effective security of force to defend themselves from aggression. here we are talking about more delays to that support. a former u.s. ambassador to nato has written that this new cease-fire leads to a frozen conflict inside ukraine. this is exactly what the kremlin wants. do you think putin's objective is to create a frozen conflict like the ones in georgia? >> his objective is to keep ukraine destabilized so it does not join the west. he is threatened by progressive democracies on his border, in my opinion. he is trying everything he can to prevent that from happening.

in response, as secretary mckeon and secretary nuland have pointed out, he has implemented a wide array of initiatives focused on generating pressure to try to force the russians to stop this behavior and respect the territorial integrity of ukraine. >> thank you. from a strategic perspective russia has kidnapped and estonian intelligence officer. warned latvia of its consequences of treatment of ethnic russians. forcing sweden to reroute a civilian airliner to prevent collision with a military jet. and flown strategic bombers over the english channel. and sent unannounced formations of military aircraft into our airspace. i would like to follow up on the question about article five, but do you believe putin's strategy is to undermine nato's credibility to defend all its member states?

>> i do. i think president putin would like to undermine the nato alliance and we are working hard to communicate to him the solidarity of the alliance taking these steps to illustrate that solidarity. >> can you talk about what is being done by nato and east area, latvia and lithuania in regard to that? >> the reassurance measures being taken to include -- it include rotating forces through the baltic states, engage in those states and facilitating additional aircraft being stationed in those countries. they are flying flying over eastern europe. -- nato awacs are flying over eastern europe. ships are in the baltic and black seas. all of this is designed to bolster and underlined the article five commitments.

>> we have said -- all four of you have said that the solution is diplomatic, economic and military. my question is on the sanctions. they don't have a consumer economy. russia doesn't have a consumer economy. they have an energy economy. their banking sector can be hit and also there -- their military arms manufacturing sector. can you speak in a nonclassified way about what needs to be done from a sanctions perspective that can get his attention at this point? >> thank you for that question. the sectors that you mentioned have been targeted through the sanctions. both the defense sector and financial sector have been subject not only sectoral sanctions, which restricts the early of companies to borrow money and access capital markets needed for them to develop businesses, but also particularly in the defense

sector, there have been individual companies listed subject to asset freezes. those sectors are very important. they are part of the reason why the sanctions have had the effect they have had on the russian economy with the their banking sector can be hit and their military arms manufacturing sector. those sectors are very important and have been part of our tailored sanctions program and these are the effects we have seen. >> thank you, mr. chairman. >> senator murphy? >> thank you to the panel for being here today. senator mccain was in connecticut yesterday and we held a town hall meeting with the ukrainian american population and we had an overflow crowd, probably around 400 people.

they raised some of the similar concerns raised here today but also expressed real and heartfelt appreciation for the fact that if it were not for the leadership of the united states rallying the international community, if it wasn't for our leadership on rallying the international community towards a policy of sanctions, this story would have played out in a different way. this is a dire situation in ukraine today. many people understand what we have done thus far and its importance to continue -- i want to talk about some of the concerns many of us have about a policy of providing defensive arms. first is this question of what the budapest memorandum

obligates the united states to do. already today, i have heard my colleagues talk about the budapest memorandum obligating the united states to defend or obligating nato to defend ukraine from a territorial attack. it is important for us to know exactly what we are obligated to do when we sign these international agreements. maybe i will post this question to you, secretary it obligates each country to respect the territorial integrity of ukraine but is not a mutual defense treaty, does not obligate any of those countries to defend ukraine. it is not comparable to article five. it is important for us to understand if that is the case.

>> as a native connecticut girl, i'm glad to see the connecticut ukraine americans are active in support of ukraine. i was part of the negotiating team that work on the budapest memorandum. it was a political agreement among the four signatories notably the united states come u.k., russian federation and ukraine to respect the territorial integrity of ukraine, not to attack her. it did not have legally binding treaty force or legally binding national defense obligations. that said, it is russia that has miley did the spirit -- violated the spirit of that agreement. >> i want to talk about how circumstances on the ground would play out in the effect that we decide to give substantial defensive weapons to the ukrainians.

the supposition is that putin is not paying a high enough price and the price you would pay in greater numbers of lives lost that he would not be able to cloak in secrecy with changes -- would change his calculus. it is a chance and there is also significant chance that is not how things will go. he will continue his march straight through the lines we have fortified. i don't know if you are to this point in terms of your thinking or the proposals you have been making to the president and secretary. what would we do in the event that we provided a certain level of defensive weaponry, putin moved straight through the lines that we supplied?

would we be in the position to have to send additional supplies, additional weapons? how does this play out in the case that it doesn't go the way we hope it goes whereby putin pays a bigger price, stops his aggression or comes to the table? what happens if that does not work? >> without getting into the specifics of the internal debate, you have put your finger on the conundrum. from the beginning of this crisis, we have looked at ways to increase costs on president putin to deter further aggression and change his calculus. that is part of the thinking that goes into weighing whether additional weapons including lethal defensive would achieve that.

does this raised the ante? i don't want to say does this provoking because he has that he doesn't need any provoking. what would ukraine feel that the united states owes them in terms of additional assistance? it is trying to see down the field to the third and fourth move on this chessboard. >> i don't buy this argument that supplying ukraine with defensive weapons will provoke prudent. he has a plan that he will carry out. i just want to make sure and i think you were suggesting you are having these conversations we are playing this out not to step one but step two and three and four. speak to us about the greater challenge here. we are seeing the tip of the iceberg when it comes to the tools that russia is using.

our government is vastly under resourced to try to prevent the next ukraine from occurring. at the same time we are debating the assistance we should be giving to ukraine, we need to be having a discussion about how we resource state and defense to help these other countries we are talking about, the baltics the balkans, georgia to make sure this is the last crisis of this proportion we face in the region. >> thank you for your attention. in addition to the security challenges, not only the challenges and ukraine and the other keeper periphery states

like moldova and georgia and the alliance itself, there are all sorts of asymmetric challenges. the use of energy as a weapon come original cars us to work more intensively with the eu on energy diversification. we would like to be able to do more to help bulgaria, hungary and croatia. we are doing a lot together with the eu. things like use of corruption as a tool to undermine sovereignty, whether you are talking about directly paying political candidates are just ensuring there is enough dirty money in the system to undercut democratic institutions or to make individual political actors vulnerable to outside pressure. we are working with countries to

expose that and to close the corruption in their system. the propaganda which is not simply what you see in terms of news, but also under the table efforts to some or that support -- efforts that support -- there is a lot to focus on particularly in the balkans where they are at risk, but also in allied territory. >> i do want to say that countries watching, the last exchange, from a person who

helped write the budapest agreement, apparently it was a superficial agreement, only a political agreement. i would say that countries watching that last exchange would be pretty reticent to come to any agreement with the united states, the u.k. and russia regarding nuclear arms. that last exchange would be a major setback to anyone who thought we were ever serious about an agreement relative to nuclear proliferation. >> the answer to that question is not reassure the allies, one of the phrases i heard in the testimony. the hearing we had last week in our european subcommittee -- i

called that hearing to try to lay out and describe the story of what russia has become under vladimir putin. i would refer you to my opening remarks were we laid out a timeline. 29 political assassinations. we saw the assassination of boris -- gary kasparov -- we have talked about the objectives of the vladimir putin. he rebuilt the police state in russia in full view of the world and is confident in his power to export that police state of -- police state abroad. only this with an immediate action can stop putin's strategy to --

do you agree that is what vladimir putin is trying to do? if you don't agree, what is his strategy and overall goal? >> i certainly agree with the way he characterized his motive earlier in this hearing. he is looking to keep countries in the former soviet space under his political and economic control. he is looking to roll back the gains of europe. which is why all the things we're talking about here, whether it's ally reinsurance making sure where we do have treaty commitments that every millimeter of spaces defended. also to help strengthen and provide more resilience.

>> earlier in his aggression against ukraine, i heard a number of officials saying that we are offering an offramp to vladimir putin. does anybody on the panel believe that he is looking for an offramp? he is simply looking for on ramps. anybody want to dispute that? >> i don't know that i would call it an offramp. there was a point earlier in the crisis were he arguably was trying to keep ukraine out of the west and keep it in 80 stabilize the situation. whether he seeks to go further and ukraine, i cannot say. -- and keep it destabilized. >> according to the ihs consultancy firm, the potomac

institute, currently, 14,400 russian troops on ukrainian territory backing up the 29,000 illegally armed separatists. there are hundreds of pieces of two and rocket artillery. there are 29,400 russian troops in crimera and 5500 along the border. is this the administration's assessment of what russian troop strength is in crimera and ukraine? >> senator johnson, without going into the specifics of the intelligence, on the number of russians in eastern ukraine, i -- he changes from week to week.

>> senator johnson, without -- suffice it to say there are many russians in eastern ukraine, it changes from week to week. >> you are not saying that this >> i cannot say that the number is exactly right in terms of 14,000. in terms of the numbers on the border. there are 11 russian tactical battalion groups. you >> they were concerned about a potential spring offensive by russia. secretary newland, you talked about them moving additional heavy equipment into russia.

isn't that a bit concerned? -- a big concern? >> that is why we are seeking the greatest degree of fidelity on whether the minsk agreement is being implemented so it can give us an accurate picture. that is why we are here calling out some of the specific concerns that we have, whether it is about the rearming that we have seen in the last couple of days, whether it is the continued firing in strategically important villages. if minsk is implemented before spring and if things pull back that will allow space for politics to begin in eastern ukraine. if not, we have to be prepared to have more sanctions and pressure on russia. >> i would argue that sanctions haven't worked. in one of my meetings with

european allies, the comment was made that as russia becomes weaker economically, they become more dangerous. i kind of agree with that assessment which is why i believe we have to provide a military response, lethal defensive weaponry. let me just close with a quote by georgian president chuck is feeling -- president shaka seele. he was there on the front lines when russia invaded jordan. the bush administration was sending in supplies without russia really not knowing what was on the cargo plane. certainly one of the factors in causing russia to stop further expansion into georgia. he basically said that appointments from the far east are proof that the kremlin is

on the rise. they have a very thin later of tolerance for human casualties. if we would show some resolve, respond to president poroshenko's plea. they will provide the boots on the ground to fight vladimir putin's aggression but they can't do it with blankets. thank you, mr. chairman. >> senator. >> thank you, mr. chairman, and thank you for holding this important hearing. i thank all of our witnesses. there is no question, there is some consensus that the united states needs to do more to help the ukraine defend themselves. i just want to make that clear from the beginning, the ukrainians need defensive support so they can defend themselves as far as weapons are concerned. this committee has spoken and many of us have voiced this.

the hearing has been pretty clear about our position in this regard. it is clear that we need to take strong action against russia. -- stronger action against russia. the tragic assassination of boris nemtsov points out how extreme the putin regime has gotten. what we can do, madam secretary, and i would urge you to look at this. he exposed individual gross violations of russian rights. it would be appropriate as for us to review whether we should be imposing sanctions on those he worked with in russia. let us not forget, nadia --who was taken from ukraine i russia. -- by russia.

this senate has spoken by resolution passed in that regard. there is continued efforts and the russian violations of the agreements including the cease-fire, i'm pleased to see you are looking at additional sanctions. understand that it will take u.s. leadership. if we wait for europe to act, it will not be effective. we have to be out there, with our european partners, but it will require u.s. leadership. i want to change years, if i might. we have had a lot of questioning on the defensive issues. i want to get to the economic front. my assessment from visiting key -- kiev was that what happens in the -- happened in the protests was that it was as much about basic rights and human rights as it was about economic issues. we have to make sure that they have been effective government

with the institutions to protect the rights of all of the citizens to express their views and to be treated fairly, free from corruption, as well as economic opportunities that that country should be able to provide for its citizens. i know that the imf originally made a commitment in 2014, i think it was $17 billion, four and a half billion was released. they have a new commitment that they entered into in february of this year that takes us up to $22 billion. the united states has provided some direct assistance. how confident are you that the ukrainian government is moving towards the development of institutions critical for democracy to flourish and how successful they are on their path for economic reforms? >> thank you very the question. i cannot agree more that what we saw reflects the desire of the ukrainian people for a better life including a better economic life. i think that one reason that we have been successful in

mobilizing such a large international financial assistance for ukraine is because the actions that the ukrainian government has taken reflects a decisive break from the past. their willingness to address subsidies and inefficiencies for their government spending. their state owned enterprises. establishing an anticorruption bureau and addressing issues related to insider influence within financial institutions, all of these are actions that the ukrainian government has put forward, not that the financial institutions have imposed on ukraine. and when secretary lou and myself have visited ukraine in the last couple of months, the departure from the past practices of ukrainian governments couldn't be more

evident. so, our responsibility is to ensure that the international community and the united states as part of the international committee is doing everything it -- community is doing everything it can to support this reform agenda that the ukrainian government has embraced and has been embraced by huge legislative majorities with the recently elected ukrainian parliament. >> is there more that the united states should be doing? are we satisfied with the imf racket? are other countries coming forward with appropriate aid also? >> we think we have the right package right now. we are satisfied with the imf package. as we know, the u.s. has provided a $1 billion loan guarantee for ukraine last year, and intends to provide another one in the first half of this year. working with congress to

consider another $1 billion loan guarantee at the end of this year. so we appreciate congressional support for that. in terms of other countries, we have had europe and other bilateral donors increase their assistance to ukraine in recent months. that is something that the senior officials within the treasury as well as the state department have worked on and we'll continue to work on. we think that this government merits continued support not only from the united states but other countries in the -- and international financial and the two shins. -- institutions. >> this must support account -- must include accountability and progress being made into the governance issues. and human rights issues. we will be patient, they must demonstrate their ability to carry out their verbal commitment. we have to be tough about that. i would ask one last question

if i might, and that is an assessment of the osc mission. can someone give me an assessment of how effective that has been in ukraine? >> senator, first, thank you for the work that you do on this. this is a tool of foreign policy and of european policy that was underutilized. without the eyes and ears of the osce, i would not have been able to give the rundown of where things are going well and where things are going poorly in the ukraine at the beginning of this hearing. they are an unarmed force. they can only operate in a permissive environment. that is one of the challenges that they have, whether it was getting into secure the crash site or whether it is now working in separately withheld areas to get the kind of access that they need. that is what we have to continue

to work on. we are trying to work now with european partners to make sure that every nation carries its weight in terms of fielding monitors, in terms of paying the budget increases that this requires, but also in terms of the specialized skills. we now need monitors who know the difference between annex -- and ex kind of artillery piece and a smart rocket and that kind of thing. >> the chairman and i were in a private meeting this morning so i cannot quote by name the individual but it is a very well-respected journalist and commentator in america who as asked questions, the greatest threat of u.s. security. ironically, although acknowledging isis and we all know what is going on in the middle east, they directly cited vladimir putin as the biggest threat to the u.s. and the world.

i would like your opinion on that statement. quick senator isakson, i would with some respect defer to the ic in their judgment of the current threats to united states security in terms of the terrorist threat. we are certainly worried about the negative trend with russia and what it is doing not just in ukraine but along europe's borders and the core of the reason we have taken a lot of the reinsurance measures we have and thinking hard about making sure that the alliance commitment can be met, not just through the united states but through all of our nato partners. >> admiral. >> traditionally, a degree of threat is defined as capability and intent. in terms of capability, the

russians are world-class state with a world-class military. in terms of intent, that makes it even more important that we do the kind of initiatives that we talk about this morning, to try to minimize the risk. >> one of the benefits of old age is you have memories of experiences you went through in your life. i have memories of the u.s. cuban crisis and what kennedy did in response. and the potential of what is going on in the ukraine. finally, president kennedy put a blockade around cuba and called khrushchev's bluff.

i don't think we are at that place yet by any stretch of the imagination but you spend a lot of your careers looking into the future and saying, what if. what senator johnson was saying, what if things get worse, we need to be prepared to have the same kind of response to match the threat with the force necessary to support that threat. m i right or wrong on that? >> senator, at the department of defense, we are always worried about the threats right in front of us and also the threats of the future and we do a lot of planning to look out ahead and the military monitors nation of russia and its activities in central europe have no doubt got the mind focused on looking ahead at various permutations of what russia might do. this is definitely an area of concern and we are giving a lot of thought and attention to. >> i know you have to be careful in your answer and i respect that and understand that but i think it is a fair enough comparison to underscore the need that the committee feels in its entirety for us to look down at possible calculations down

the line and be prepared confront power with power and threat with threat. admiral. >> readiness is absolutely key to deterrence. it is fundamental to what we do and it is coupled to, as the secretary has said, alliance solidarity. those are the best way to ensure stability and security. >> secretary nolan, i want to ask you a question for my own edification. would you consider russia's use of infinite supply of oil soft power? >> certainly, it's use of energy as a weapon. i don't know if i would call it soft but it is certainly a tool of its influence? >> my question and i don't know the answer to this, so this is not a loaded question.

it will show my ignorance, probably. but had there been a counterbalance to the supply in petroleum and gas that russia could supply in that part of the world? could that have forwarded what they have done? >> well, i think that their interest in controlling supplies of energy to europe is a factor, there were many other factors in play in russia's decision that it made. >> an alternative supply would have made possibly difference in how far russia went? i'm not trying to bait you. >> i think if ukraine had been able to be more energy independent earlier, it would have had more resilience and it would have had more ability to resist and that is one of the reasons why we are putting so much effort now into energy diverse, energy security for ukraine as well as for the rest of europe. >> it is important for us to understand that the national defense interest of developing

all petroleum resources we can in the u.s., we have control to kind of balance with the -- what the russians are able to do in russia. thank you for your time and interest. >> thank you. >> mr. chairman, thanks to witnesses. i want to pick up on where senator isakson picked off and i have some questions. -- left off, and then i have some questions about economy and energy issues. i've been a strong supporter of the economic sanctions against russia and i understand there has been early questions about the possibility of more sanctions in the energy sector. it seems that this is the tool that russia uses most. whether it is sanctions or helping nations that over rely on russia to have alternate sources of energy or develop their own sources, these are shy -- are all strategies that i strongly support. senator johnson made a comment repeating some comments from a hearing last week and i am curious. to the extent that we are more

successful on economic sanctions, to the extent that it -- dan -- an extended time of low oil prices puts economic pressure on russia, there was some testimony that that makes russia more dangerous militarily and i would be curious as to your thoughts on that, i'm a supporter of sanctions and energy pressure, but does that raise the risk of unpredictable military behavior? >> i don't know that it raises the risk or makes russia more dangerous, it is hard to understand the provocations and -- understate the provocations and dangerous actions president putin has already taken. he will face some hard economic choices if oil prices stay down and the ruble continues in the direction it is going. he has a big investment.

military modernization is a big part of his legit. -- budget. he will have to make some hard choices if he continues to sustain those investments. he will have to weigh that in terms of his internal politics. i know it is not exactly a democracy but he does have to pay attention to what is going on in the country and the public attitudes. >> any different positions? this is not something we should be overly concerned about if we decide to do more sanctions in the energy sector or take steps to help ukraine and other nations diversify their energy portfolio? let me ask about the questions or this issue of the internal russian dynamic. there have been a lot of questions about how much the sanctions are having an effect, how the low oil prices are having an effect. we have seen statistics about capital outflow and about direct investment, devaluation of the ruble. other economic effects. what is the best that you can

tell me now in an unclassified setting about the combined effects of either sanctions on oil prices on the internal political dynamic in russia today? >> the assistant secretary has given you some of the facts and figures that this policy has wrought, not only russia's phone -- vulnerability to low oil prices because of their lack of economic diversification over the last 15 years but also as a result of sanctions. i think we have yet to see what the political impacts will be but we can clearly see from some of the statistics that russian kitchen tables are being hit now by these policy choices that the kremlin is making. when you hear the secretary talk about inflation at 15%-17%. when we have statistics of skyrocketing food prices across the russian space, 20%-40% in

some places. we know that average russians are having difficulties paying for apartments and cars. we see imports way down. it is affecting lifestyles. that goes to the point that the kremlin has prioritized their international adventure over the quality of the life of their own people and at what point that has the political effect, i think we have yet to see. >> the question about where will oil prices be in a year. this is something we should be wary of with respect to speculating. there are people that have to make that speculation. some of the projections that the oil prices would stay the same. if we are a year and the oil

prices have stayed in this historically low level, talk about what you would predict that you would see in terms of the internal russian economic dynamic and we can draw the line between that and likely political feelings. >> i think it is important to recognize that the economic outcomes that we have seen in russia have really been an interaction between what we have seen in oil and the impact of economic sanctions. higher oil prices would definitely be a positive for the russian economy. i think it is relevant to look at what both moody's and s&p have done to russia's credit rating. russia has been downgraded to junk for the first time since 2003-2004. the responsibility of agencies like moody's and s&p is not to react to what the oil price is today but to think about how russia's economy is being managed, what the impact of sanctions is, and how that affects the russian government's ability to meet its obligations

not only to foreign creditors but to its people. and so, i think if we saw higher oil prices, and i will not speculate on oil prices like you mentioned, but i think that even if we see oil prices rise, the combination of economic mismanagement and the impact of sanctions has cost the shadow on the russian economic aspects -- prospects that is expected to persist and one manifestation of that is the decision of the rating agencies to designate russian debt as junk. >> thank you, mr. chair. i don't have any other questions. >> senator rubio. >> thank you all for being here. secretary newland, in your statement, you outlined the goal as threefold. first, we want these, then -- peace, then political normalization, then a

return to borders. which i imagine includes crimea as well. in the hope is that minsk would offer that promise, with peace being the first precondition for all of these things. how realistic is that goal given the goals that putin has himself. i think the goal that putin has, is not about the ukraine, it is but completely reorganizing the post cold war, post soviet border in europe. it is not just about ukraine. in the context, he was to -- wants to weaken, divide, and force nato to fall apart. he has openly said that they believe that they need to establish a sphere of influence and not just throughout the former soviet space but also in former warsaw type packed countries. this whole talk about protecting

russian speakers this is just , the excuse that he puts out there as a justification to the international community before moving forward. the ultimate goal is to reorder the post soviet order in the region and to carve out for russia a strategic space for themselves, for influence. in light of that, why should we have any hope that these cease-fires were hold given that -- are actually going to hold, given that we know what his goals are? maybe, this is why there has been arguments that we should not go on sanctions alone because a good cause friction with the european union and split us with them. at the end of the day, he might agree to a cease-fire to consolidate gains or to try to create a point of friction between hoping that we will jump out ahead of the europeans and create that. ultimately, his goal unquestionably is to completely rearrange the order in this area

and carve out for russia a sphere influence. of how is it realistic knowing that about him to think that he is ever going to allow stabilization to return to ukraine and if he will ever return back to the borders given that we know what their goal is. he's a criminal and a thug, he is also a determined one. he has shown a willingness to act out in furtherance of a strategic goals. so, why should i feel optimistic that there's any chance of that happening given the goal that he has now unless the cost benefit analysis changes for him? >> i will not dispute any of your analysis, i will simply say that minsk is a test for russia. russia signed it, the separatist signed it, it is also a choice for russia. if fully implemented, it would bring back sovereignty and territorial it integrity. it doesn't obviously address crimea. now, we have to test. as i said, the record is mixed and we have to be ready.

both for the opportunity for success but also to impose more significant costs on russia with our european partners if minsk is violated. either because the agreement is not implemented or because there is a further landgrab, or because the separatists are further armed. and that is what we are watching. >> what is wrong with laying out clearly exactly what we're going to do if that test fails? if this test fails, we will arm the ukrainians. by the way, as a sovereign country, ukraine has a right to defend itself against any aggression. in fact, we are trying to strengthen the writ of that government, part of that to provide for their own defense. we should be doing that anyways. is it the position of the administration that we are going to lay out a clear picture about what the specific sanctions will be and what specific military aid we will provide a fresh a fails?

-- if russia fails the minsk test? >> i think in my opening, i made clear that we are working with the europeans to map out the costs. if minsk is not implemented or further violated. we generally don't signals those in advance but we are prepared. with regard to security assistance, we are continuing to evaluate that based. -- based on the situation on the ground, and implementation of minsk will very much be part of that. can you comment on whether denying russia access to the swift system is part of that? >> generally we don't discuss in a public forum any specific measures, but we discuss a whole range of things as we are evaluating it. we look at the impact it would have on russia as well as the spillover that would have on the global economy of the united states and of our european partners, but i don't want to, -- don't want to comment on any

specific action. >> irrespective, my question is -- maybe i don't expect you to comment on this, but irrespective of whether russia adheres to minsk or not, is it not the fact that we want to stabilize ukraine, and give the ability to defend themselves to aggression that may exist? we understand the absence of it invites aggression and the future. why is it a bad idea to provide them defensive systems irrespective? is there an argument to be made against providing defensive weapons irrespective of how the cease-fire turns out, since we are trying to help them stabilize government, and part of that has to be the ability to provide for the national defense. >> we have provided a range of security assistance and the nonlethal categories which have

met real security requirements because the armed forces were not stripped bare but they were lacking by the corruption of the last regime and i expect long past this crisis, we will have a defense partnership with the government of ukraine. at the present time, defensive lethal weapons are being reviewed. >> my last question is i have heard some commentary that even among critics within russia there are those who do not support giving defensive weapons to ukraine because that will lead to the death of russians and they cannot support that. i read that yesterday. i think the washington post. putin says there are no russian troops and the ukraine. therefore, if that is true, you has nothing to worry about. right? >>