this exception says you never have to get a judge involved. >> does that include -- are you including a little hamlet, los angeles, new york? >> i do not know the answer to the particular city, but there are a lot of the cities that do not have this rule. >> they can do that by keeping their own records successfully. you have conceded that they can require the information as a matter of law. mr. goldstein: well, that's because your precedents say they can, your honor. and my point is this, because your precedents say -- justice scalia: well, that means it's true. [laughter] mr. goldstein: well and hence, my answer yes. but my point is this: because they can do it here, justice kennedy, they can do it everywhere. the government can require any

business to keep track of all of its transactions and all of its customers. and if the government can then just say, all right, now, give us all that information, then they've reduced the fourth amendment to a nullity. the final point i'll make is that don't be confused with the idea that there's something special about hotels. the amount of government regulation here is massive. the reason that the deputy solicitor general is here on behalf of the united states is that there are hundreds and hundreds and hundreds of regulatory schemes the federal government administers where it is now required to use a subpoena. but what self-respecting regulator wouldn't love -- justice alito: a subpoena, a subpoena is worthless when what is sought is something that can be easily destroyed, hidden or falsified. it's, it's very useful if you're altered between the time when the subpoena is issued and the time when the subpoena is enforced. but nobody, nobody issues a subpoena for the murder weapon that one is you know, that you suspect is in somebody's house. so these records are more like the murder weapon where there's something that can be easily falsified.

you, you seem to concede when you say that the police can seize them, then, then the subpoena is worthless. mr. goldstein: lone steer says the opposite with all respect, and that is, the records there are how many hours did someone work at what amount of pay. the court has insisted on this as a bare constitutional minimum, both to keep the enforcement officer in line and to let us know the enforcement officer is kept in line. it has not it has been attentive to the fact that we don't want to put undue burdens on the government and that is, it's just a subpoena and that we have less than fourth amendment rights. justice alito: you think you think payroll records in general are no more complicated than the ledger at a motel that runs by the hour? mr. goldstein: in the relevant respect, justice alito, if the question is, did the person work 50 hours or 35 and the record says 50 the actual record would be 30, 50 and i just want to fill in 35, yes. the court didn't even think that that was a remotely plausible argument in that the line of

cases that i'm describing. chief justice roberts: thank you, counsel. four minutes, mr. rosenkranz. mr. rosenkranz: thank you, your honor. let me start with the facial point and then circle back to the, to the merits. so as i hear mr. goldstein describing the rule, the only objections that are going to be raised are harassment and whether this is for a legitimate purpose. but if that's the concern, that's a classic as-applied challenge. if a hotel has a cop coming up to them five times a day, they come in and say, this is really harassment. these searches are and if the if it's the purpose of the officer, he's doing criminal investigation rather

than actually caring about whether my records are complete, that is an as-applied challenge. now, the plaintiffs have not even tried to demonstrate that this ordinance is unconstitutional in every circumstance. on pages 19 to 20 of our brief we develop numerous scenarios, and mr. goldstein mentioned only one of them. so, for example, where the hotel is required to upload the records to the police department every day, it may not even be a search, but it's certainly less intrusive. justice kennedy: but that's, that's not the statute. i didn't understand those examples because some of those examples, the police could act without this, without this. mr. rosenkranz: well -- justice kennedy: without this -- mr. rosenkranz: so not that one, your honor.

justice kennedy, not that one. so some of them in some of them, the ordinance has the purpose of requiring someone to do something that they would not otherwise have to submit to. but let me even circle to the merits because -- justice sotomayor: i'm still very confused about this. there is always a potential exception to a warrant, even a fourth amendment warrant of going into the home, exigent circumstances, there's someone sick on the other side, if there's a fleeing felon into the place, but that doesn't eliminate the need for a warrant. it's not a tell-us-later issue. police can't just keep going in and then fish around for an excuse. that's a process issue. mr. rosenkranz: understood, your honor. justice sotomayor: you're entitled to a warrant, you're entitled to a subpoena, you're entitled that's what they're

challenging, which is they're not challenging all of the other reasons why the police could go in legitimately -- mr. rosenkranz: well, your honor -- justice sotomayor: as an exception to the fourth amendment. they're asking whether this kind of search, generally, without all of those other exigent circumstances or other fourth amendment exceptions is constitutional. let's talk about another example where the motel continues to keep the register in the open, like they did for 100 years, and then snatches it away when the police come.

that -- justice sotomayor: you know something, but that's a different issue. it's in the public. mr. rosenkranz: well, right. and they would -- justice sotomayor: and how often do you think that's going to happen? mr. rosenkranz: and for that reason, they would have no expectation of privacy and the fourth amendment calculus would be totally different. but let me let me -- justice kagan: well, but then it's not a search at all. and, once again, it's not this statute that's doing the work. mr. rosenkranz: well, no, your honor. if they snatch it away, it certainly is this ordinance that is doing the work. mr. rosenkranz: thank you, your honor. so let me just emphasize that this is a very narrow rule that we're talking about. we're talking about a rule that is unlikely to be repeated in so many of the other circumstances that have been discussed today. it's about an inspection of only a single book of information

that the government requires hotels to maintain and that the that mr. goldstein has admitted the government should can require hotels to maintain. it's in a context that is especially prone to criminality. people are using these hotels precisely to commit crimes where the gaps are quite detectable in real-time but not detectable otherwise. in an industry where there has been hundreds of years of chief justice roberts: thank you, counsel. the case is submitted. mr. goldstein:mr. goldstein:>> taking

your phone calls tweets, and facebook comments. >> the senate commerce committee looks at progress in establishing the wireless safety network, called "first net." on monday, first net for numbers approved to opt out of the national network.

states can either adopt the plan or create their own access network that meet first net standards. our live cap it -- coverage begins at 10:00 a.m. eastern. here is some of our featured programs for this weekend on c-span. saturday, starting at 1 p.m., book tv is live from the university of arizona for the tucson festival of books. discussions of race and politics, the civil war,. sunday at 1:00, we continue with our live coverage on the obama administration, the future of politics, and the issue of concussions in football. saturday morning at my caught eastern on c-span3, we are on long road -- one would university in virginia -- longwood university. talking about the closing of the civil war in agency five.

-- in 1865. we'll talk about the integration of confederates to brazil. cd: schedule on www.c-span.org and it let us know about the programs you are watching. e-mail us at comments at cspan.org. works and is a tweet. join the c-span conversation, like us on facebook, follow us on twitter. now the senate foreign relations committee here's the state defense, and treasury department officials on ordering ukraine in its conflict with russia. the ranking terminus at a letter to the president asking for an update on arming ukraine. the administration is nearly a month late with their reports to congress. from capitol hill, this is about two and a half hours.

>> we will come to order. we will begin this hearing by expressing my condolences to the family and friends of boris nemtsov. the murder outside the kremlin fears -- seems to be an attempt to silence the critics of russia. nemtsov salt a better vision for his people, and we must remain committed to a democratic russia and peace with itself and its neighbors. he was especially critical of

putin's progression in ukraine, where for over a year now russia has continued its occupation of crimea and the destabilization of the country's we made a commitment in 1994 to defend ukraine's sovereignty and territorial integrity. which has been under a near constant assault from russia for more than a year. more recently, we lured ukraine west by supporting their desire for more interaction with europe. now with ukraine's future in the balance, the refusal of the administration to put more pressure on russia is a blight on u.s. policy in a 70 year defense. the conflict in eastern ukraine was started by a russian act mercenary, has no directly involved thousands personals which has resulted in over 6000 deaths and generated 1.5 million refugees in internally displaced persons.

for up to two weeks after the second minkss -- the determination of the rebels to secure the spot despite the fact that the mesnk cease-fire agreement 11 to go to a demarcation line showed they have no intention of honoring the cease-fire. the cease-fire is far from being a success. in addition to the ambiguous constitutional electoral conditions required of a ukraine to gain control of its borders the second mensgk agreement is burdened by the first agreement as it stands. in fact, administration

officials have repeatedly referred to the recent accord is the first accord. jumping from cease-fire to cease-fire in hoping to convince russian backed rebels to is not a strategy, and certainly not a strategy for success. in my view any saturday will not be effective unless u.s. provides ukraine with the double dq lacks serious -- flex serious military power. they say that president obama ruggedly pledged to chancellor merkel that the u.s. will not

deliver lethal military assistance to ukraine, despite the fact that he and other officials told the american public that they are seriously considering this policy. deputy secretary of state argued last week in berlin that no amount of legal assistance for ukraine would be sufficient to defeat the rebels and their russian sponsors. our objective is not to provide ukraine with enough weapons to overwhelm the russian military in direct confrontation, rather the provision of legal assistant aims to increase ukraine's defense capabilities in a way that will give kiev the ability to produce editions on the ground favorable to a genuine peace proccesses. by equipping ukraine with it means to impose greater military cost on russia, the u.s. will be contributing to a quicker error, and more stable settlement of the conflict. our support for ukraine must go beyond simply imposing costs on russia. ukraine's foreign currency

reserves have diminished to a months worth of imports. the foreign currency has lost 80% of its value since april 2014. it's economy continues to teeter on the brink of collapse. at the same time, i believe the government in kiev is heavily committed to reforming, more needs to be done by the ukrainian authorities to move forward on these reforms especially in the energy sector, where corruption siphons really is of dollars away from the budget each year. -- billions of dollars away from the budget each year. even if the u.s. does more to help ukraine, but the ukrainian economy implode, putin has exceeded. he will have an even greater success that occurs. this is why the u.s. needs to have a copy has a strategy that counters russian aggression, but also drives economic and anticorruption reforms in ukraine. during this hearing, i hope to

have a detailed discussion that explores the ukraine situation since the minsk cease-fire agreement was signed. to examine why the u.s. has failed to provide ukraine with lethal military assistance and considers additional ways to support ukraine, through its ongoing economic challenges. i look forward to your testimony and thank you for being here. i turn it over to our distinguished ranking member for his comments. >> thank you mr. chairman for holding what is an extraordinarily important and timely hearing. i appreciate our witnesses being here. let me join you in very heartfelt condolences to someone who was a courageous opposition leader. sometimes, true patriots pay a price. boris nemtsov led efforts in which he passionately believed

in in a different russia. i find it pretty outrageous to see the latest narrative that is being portrayed, that an islamist plot is the reason why he was assassinated. to his family, his friends, and his followers, we have our heartfelt thoughts and condolences. as we release to today's hearings, there are many experts who would contended that the plexiglass to the u.s. retreat from europe created an opening for putin in ukraine. clearly, we must closely coordinate with our european friends for the sanction against russia to work. but without any doubt, we can all agree on one point -- that is that the united states must take the lead. i believe the administration should fully and lament measures in the ukraine freedom support act, which the president

signed into law. with unanimous consent in both houses of congress. it authorizes the president to provide military and humanitarian aid to ukraine. it imposes additional sanctions against russia. this legislation was necessary in december, and it is certainly necessary today. we all want a diplomatic solution. but i believe this can only come about when putin believes that the cost of continuing to ravage ukraine is simply too high. providing non-lethal equipment like night vision goggles is all well and good. but getting ukrainians the ability to see russians coming, but not the weapons to stop them, is not the answer. night vision goggles are one thing, but providing antitank and anti-armor weapons, tactical troop operated surveillance drones, secure command and communications, would be much better. frankly i'm disappointed that the in ministration failed to

report to congress for increasing military assistance to ukraine on february the 15th. i was glad to join with the senator sending a letter to the president on the importance of providing defensive weapons and that we need to see this overdue report. in my view, it is time to impose additional, targeted sections on the russian energy sector, to add to existing sanctions that are already costing the russian economy about $140 billion a year. for about 7% of its coming. we should tighten extinctions -- tighten restrictions on shell oil drilling. the last thing we want to do is use american technology to create a russian shale revolution that will reach europe and beyond. we call to impose sank is on other industry targets as well. i am still waiting for the

administration's response. at the end of the day, the most effective thinking is a economically viable -- section is an economically viable ukraine. the u.s. provide $1 billion in loan guarantees on top of the $2 billion guarantees already provided. in my view, this is a worthy investment and it needs to be matched by continue reforms by the ukrainians. finally, we need to reinforce the trends that led to this agenda. we must take a more strategic approach in facing this resurgent russia. first, we need to reinvigorate the institutions that have so long contributed to the transatlantic relationship of peace and stability. needs to sharpen our arsenal of response options, which means nato and eu integration. in my view, the attention on europe confronting this thread is necessary.

we also need to focus on the south, also vulnerable to undo russian influence. we need to strengthen relationships in the balkans, and bulgaria. our intelligence community needs to reprioritize the russian threat. not only in kind, but across the border in europe. third is communications. i understand the administration is working with governors to commit over $22 million to russian program -- russian leg which programming. -- russian language programming. i think those are viable to countering russian propaganda. they say they are overwhelmed by russian propaganda in that region. there is one key point, and that is at the end of the day that strong u.s. leadership is what matters. i ask that my statement be included in the record and i thank you for the opportunity. >> we want to thank you for the comments and return our witnesses. our first panel, first witness

is victoria nuland. our second witness today is brian mckeon, principal deputy under secretary of defense. the title, thank you. third witnesses -- our fourth and final witness. director ports strategic plans and policy at the joint staff. we thank you all for being here, sharing your thoughts and viewpoints. we remind you that your full statements will be entered into the record without objection. if you would, please summarize about five minutes or so. we look forward to questions. thank you very much for being here. >> thank you chairman corker, ranking members of this committee. thank you for the opportunity to tell you about the situation in ukraine and for the personal investments that so how many of you having in that country's

future. today, ukraine is central to our 25 year transatlantic quest for a europe whole, free and at peace. my colleagues and i are pleased to update you on office two support ukraine -- efforts to support ukraine against its oligarchic path and to bring an end to the russian separatists aggression. i will focus on two areas. first, the work ukraine is doing with u.s. and international support to reform the country cannot to tackle corruption, and to strengthen democratic institutions. second, i will give an update on our efforts to support the limitation of the february and september menkes agreements including the post further costs on russia. if the commitments moscow made our further violated. ukraine's leaders in the executive branch and parliament know that they are in a race against time and external pressure 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, to the imf and to the international community. the passage of reforms already put forth by the government and enacted, is impressive in its scope and political courage. just last week, the ukrainian budget reform, which is expected to slash the deficit significantly, and to give more fiscal control to local communities and spur economic and political decentralization. they have made tough choices in the last few days to reduce and cap pension benefits and to save in a higher retirement age as requested by the imf. they have created new pension -- banking provisions. they have passed laws cutting wasteful gas subsidies enclosing the space for corrupt middlemen

who buy low, sell high and rip off the ukrainian people. ukraine will use the $400 million in increased revenue from these measures to care for the 1.7 million people who've been driven from their homes by the conflict. with u.s. support, with your support on this committee and in this congress, including a $1 billion guarantee last year i'm a do hundred 55 million in foreign assistance and technical advisors, the ukrainian government is recruiting energy efficiency at homes and factories, and infrastructure improvements building e governance forms to make procurement more transparent and basic government services cleaner and more accessible. they are putting a newly trained force of beat cops on the streets of kiev who will protect, not shake down the citizens. a prototype of what they hope to do nationwide.

they are reforming the prosecutor general's office supported by u.s. law enforcement and criminal justice advisers, to help energize law enforcement and increase prosecution. with the help of u.s. aid exports, they are deregulating the agriculture sector and a loving family farmers to sell more of their produce to local and regional wholesale markets. they are helping those who are forced to flee the next -- donetsk with new training. there is more support on the way. the presidents fy 16 request includes $513.5 million to build on these efforts. as you said mr. ranking member, ukraine's artwork must continue. between now and the summer, we must see continued budget discipline and tax collection enforced across the country notably including ukraine's richest citizens, whether included -- who enjoyed tax impunity for too long.

we need to seek tax reforms across the energy sector. we need to see final passage of agricultural legislation, full and impartial legislation of anticorruption 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 maligned influence is for ukraine to succeed as a democratic, free-market state. for this to happen, we have to help ensure that the ukrainian government lives of to its promises of its own people, and keeps the trust of the international financial community. but at the same time, the u.s. and europe must keep pace with ukraine and help ensure that russia's aggression and meddling can't trash ukraine's spirit its will, or its economy before reforms tickled. that brings me to my second point.

as ukraine build a more peaceful, democratic nation, crimea and parts of ukraine have suffered a reign of terror. in eastern ukraine russia 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 have also lost their lives in eastern ukraine, sent there to fight and die by the creme lip. 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 sanctionson 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 sort 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, agreements and february 12 implementing agreements offer a real opportunity for peace disarmament, political normalization and decentralization in ukraine and the return of ukrainian state sovereignty in the east and border control. for some eastern ukrainians conditions have already begun to

improve. the osce reports that they are holding on many lines of the contact, there already been withdrawal of heavy weapons, though that process is incomplete as is osce access. and demeaning has already begun under osce auspices. but the picture is very mixed. just yesterday shelling continued in a key village over the weekend. access for osce monitor, particularly in separatist controlled airsa -- areas has been spotcy. just in the last few days, we can confirm new transfers of rush and 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 an end of unexpected convoys 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 by its actions, not by its words. the united states will with our international partners start rolling back sanctions on russia 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 sadgeses should russia continue fueling the fire in the east or other parts of ukraine, fail to implement minsing or grab more

land -- 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 a sphere of influence. we thank this committee for its bipartisan support and commitment to the sovereignty and territorial integrity of ukraine and to a europe whole, at peace and free. >> senator menendez, i appreciate the opportunity to appear before you today. 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 which i will

now summarize is on behalf of myself and admiral pendolfe. since the beginning of this crisis, the united states vigorously pursued a multipronged approach in response to russia's actions in ukraine. we have assured allies of unwavering support and provided tangible support to ukraine to help it through the crisis. we have imposed real costs on russia for is aggressive actions. the department of defense has halted cooperation with russia. they have also halted exports of sensitive technology that could be used in russia's actions.

second, we are taking concrete measures to reassure our allies and to deter further rushing aggression. thanks to congress, the european reassurance initiative is helping to enhance united states air, sea, and ground presence in europe and to improve facilities needed to reinforce 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 of u.s. military forces in each of the baltic states, poland and the black sea since april of last year. we have tripled the number of u.s. aircraft taking part provireded refueling for nato airborne missions, deployed ships to the baltic seas 14 times and increased training fights in poland. in the coming year, we'll increase our reassurance efforts

with additional measures detailed in my prepared statements. similarly, nato has taken concrete steps to assure allies. 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 readily -- ready to respond to new challenges. last month, nato defense ministers decided to enhance the response force by creating a spearhead force known as a very high readiness joint task force which will be able to deploy at very short notice. the task forces consist of a mix of land and air troops. 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 as it deals with economic and military crises. ukraine has been a strong partner to the united states and nato since its independence, and our security cooperation with ukraine date back to 1992. during that time, the united states provided ukraine with military train, 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 the military, national guard and border guard service. under e.r.i., in the coming year we'll 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 1,300 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 member menendez, and members of the committee, thank you for the opportunity to testify today on the u.s. government's actions to support ukraine's economy.

the objective of the u.s. and international economic assistance strategy toward ukraine has been to support the efforts of president poroshenko's government to stabilize, revitalize, and restructure ukraine's economy. my remarks today will elaborate upon this strategy, and its evolution over the past year in response to the conflict in eastern ukraine. i would note at the outset that our efforts to mobilize the international effort to support ukraine financially have been complemented by the work of others at the treasury department to impose costs on russia for its aggressive actions in crimea and eastern ukraine that have exacerbated the challenges facing ukraine's economy. last spring, the united states together with international partners, supported an international assistance package totaling $27 billion. this assistance centered on a two-year, $17 billion international monetary fund program and also included a $1 billion u.s. loan guarantee and $2.2 billion from the european union. donors agree the ukraine lived up to its agreements made in

exchange for this support. over the last year, the ukrainian government has taken steps to reduce the deficit, improve targeting of social assistance, strengthen the rule of law and reduce corruption, increase efficiency in the state-owned energy company and initiate sector repair. s the comprehensive approach to reform, chairman corker, you referred to. in support of these efforts, treasury technical advisors are providing the ukrainian government with expert assistance in the areas of bank supervision and bank resolution, and government debt and liability management. this was always going to be a challenging program of reform and adjustment. unfortunately, the intensification of russian aggression has created significant additional pressure on ukraine's economy and necessitated further international support to bolster the government's reform efforts. as such, we have mobilized international support for increasing the assistance.

furthermore, they intend to support ukraine allow manager time for ukraine to adjust and for investments to bear fruit. the united states plans to provide a new $1 ppt 5 billion loan guarantee prorkvided ukraine remains on track with thery form program agreed with the i.m.f. if ukraine continues making progress on its economic reform agenda and conditions warrant, the u.s. administration will also be willing, working with congress, to consider providing an additional up to $1 billion loan guarantee in late 2015. the next step in further driving this augmented international assistance effort is to secure i.m.f. board approval on march 11, tomorrow for the new i.m.f. program. to meet its reform requirements in advance of the board meeting the ukraine government has passed meaningful reform measures to reduce inefficient

energy subsidies. provided that the authorities adhere to the reform program and the security situation does not deteriorate further, they expect that the ukrainian economy will expand in 2016 and foreign exchange will rise. in view of the inherent uncertainties, there continue to be risks this year's intensification of the conflict imposed severe damage on an already fragile economy, paw strain on the banking sector and significant structural damage has occurred within ukraine's economy. amid these challenges, their ambitious reform agenda deserves continued support. core u.s. global security interests are at stake in ukraine and providing support to the ukrainian government is an essential part of our strategy. as long as ukraine's government continues to undertake difficult reforms, the international community must do all it can to help ukraine succeed and be

prepared to adapt its assistance strategy as required. at the same time the international community must continue to ensure that as long as russia disregards its commitments and fuels violence and instability in ukraine, the costs for russia will continue to rise. chairman corker, ranking member menendez, members of the committee, as with all emerging market crises, our assistance strategy is not without risk and the path to success is not without obstacles particularly amid the current security backdrop. however, critical elements needed for success and ambitious -- an ambitious reform program, a government and country committed to change and a sizable international support package are currently in place. to that end, we'll continue to work closely with our international partners to provide ukraine the support it these, the strong backing of congress has been a critical foundation to these efforts to support crew yain and we look forward to working closely together in the months ahead. i look forward to answering your

questions. >> thank you. i'll fin with you, secretary nuland. in the past you have characterized what russia has done in ukraine as an invasion. does that description -- does that still stand with you? >> we have used that term in the past. >> are you using that today? >> i'm comfortable with that word. >> just for record, just because russia does acknowledge that deaths of soldiers publicly, how many russians soldiers have been killed in ukraine as part of this conflict? >> as you can imagine, it is difficult to have a completely accurate assessment of russia's efforts to mask its dead. >> what is our intelligence? >> hundreds and hundreds. >> i thought the numbers were substantially more than

that. less than 1,000? >> i can't speak to more than 500 at the moment but if we have better numbers for you in the future i'll come back to you. >> i know that you have been a strong advocate for support in ukraine and have been a good person for us to talk to. both by phone and here as a witness. what is the administration's position right now on debaltseve, the withdrawal from that area, and by what timeline? >> mr. chairman, as you know and i think it is in my longer statement, we were extremely concerned to see the flattening of debaltseve after the signing of the minsk agreement. debaltseve it is outside the special territory. it is territory that the government of ukraine did have control of under the minsk

there is supposed to be a complete withdrawal to the lines agreed on september 19. that would include the vacating of debaltseve by the separatists. >> we are demanding they leave that's the u.s. position and by what date? >> yes. >> what is the timeline that they have to step back away from debaltseve? >> the implementation agreement of february 12 calls for the full pullback of heavy weapons and military equipment within some 16 days, we're already beyond that, but they are working on it. with regard to when the -- >> they're working on it? russia is working on it? >> as i said in my testimony, we have seen incomplete compliance

in terms of osce access in debatseve, in terms of osce being able to verify the pullback of separatists and heavy weapons. when you get to the political phase of minsk, which is to follow this, the political jurisdiction of the special status zone does not include debaltseve. if the separatists comply, they should not be insisting on having political control of that area. >> secretary mckeon, we appreciate you coming to today and sitting on that side. secretary carter and the joint tissue and joint chief dempsey have talked about the fact that they'd like to see defensive weaponry supported. secretary nuland i know has advocated for that we passed that unanimously out of both

houses. at least passed it unanimously out of the sfath, it came out of the house. 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 stance the administration is taking? >> i can't speak to what happened in the bilateral meeting between the president and chancel -- chancellor merkel. >> can you speak to -- speak to where we are today? >> i can, 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 mentioned $118 million in other kinds of assistance. ke we committed $118 million or $120 million, but only delivered

half of that, is that correct? >> that's correct. >> for what it's worth, this feels like the syrian opposition where we were going to help there were all these things we were going to do, we were going to deliver truck harkse got there way beyond their usefulness. what is happening? we have secretary nuland come in she speaks strongly, we see her in munich she speaks strongly, we thank her for that, yet the administration doesn't do what it says it would do? what's going on with the administration. it's frustrating for us to think the administration truly supports ukraine yet it feels like they're playing footsy with russia, there's something else happen, they're not committed to this i wonder if you can speak clearly to to the 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 -- unless we can deliver it quickly. >> what would keep us from delivering $118 million 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 can tell you the head of our defense cooperation agency has made this a high priority and we are pushing him all the time. in the case of the countermortar radars, is a good example, we got approval for those in late october and got them delivered, trained and fielded in two months. so we are able to move quickly in some instances, in other instances it is unacceptably slow duh but i can assure you we're making it a top priority. i just can't explain why in some circumstances it goes 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. in 199 , they gave up 1,240 knew career weapons and we agreed to protect that. and now, as russia has invaded, we're still not willing to give defensive weapons. i would just go to secretary nuland. why do you think that is the case? why would we be so feckless feckless in agreeing to something back in 1994 and yet be unwilling to give them the kind of defensive weaponry that they can utilize, not more than they can utilize, why would we not be doing that? what would be your impression of our inability to make that happen? >> as undersecretary mckeon has said, we provided some significant defense i have systems, including the

countermortar fire radars 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 -- and the implementation of minsk as we evaluate this going forward. >> i understand 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, senator mckeon? >> as you know, we have notified the committee about a program of training for the national guard. we have not had a decision, 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 as to when we would do that training. >> we're really not going to do much. pretty evident that the strong statements that we have made are statements and i'll close, i

know my time is up, but i'll just say thank you for your presentation. i do hope that we are committed to providing and our partners, the financial assistance that's going to be necessary to keep ukraine aflolet. i think the greatest victory for putin other than certainly making us look really weak to the world right now, and certainly not following thru on our commitments, i think the greatest victory would be for ukraine to fall and us not -- and him not to have to break it to own it, or own it by breaking it, but break it by economic conditions on the ground. i hope that we are committed. i know others may ask you questions about how much we are committed to provide them but thank you all for your testimony. i realize each of you are messengers and not making these digs. secretary menendez. >> 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 madeleine albright 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 -- said, i am very much incluned in that direction because i think we need to support ukraine to defend defend itself. secretary hodges supported providing weapons to ukraine, 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 all these witnesses and all

the congress all wrong? >> i take it that is a question to me? >> either you, minneapolis or secretary of the defense department, whoever wants to take it. but you have an overwhelming view from a wide spectrum and i just, i don't get it. so maybe you can elucidate are they all wrong and if so why are they wrong? >> i think as the interagency discussion on this subject has taught us, there are factors on both sides and we are continuing to evaluate, i think, from where we sit at the state department, if we can see these minsk agreements implemented, if we can see peace in eastern ukraine that offers the best hope for the ukrainian people but we will continue to go forward -- >> let's stop thereminsk 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 between ukraine and russia less capable of being pursued because it is all dependent on some votes on decentralization of the government. there have been about a thousand violations of the cease fire is that a fair estimate? >> i can give you a precise figure. but there have been violations. >> that's a common number mentioned, 1,000 violations of 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 i don't get it. unless you change the calculus for putin, this is going to continue. it he will get his land bridge to cry mia and so much for our statements about we are not willing to forgive the fact that cry mia is gone. i don't get it -- that crimea is gone. i don't get it. i don't know how much the process is going to wait. when all of this is solidified, it will be too late. according to the law, the administration is supposed to report on its plan for increasing military assistance to the government of ukraine. it was supposed to have done that by february 15. it has not. what day can we expect this report to be submitted? >> we very much regret that the reports are not ready. we are continuing to work on some of the programmattic 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. >> secretary mckeon, welcome back to the committee you did a lot of distinguished work when you were here. 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 i.n.f. treaty. among the responses you outlined was the placement of u.s. ground launch cruise missiles in europe which i assume would have nuclear capability. can you further elaborate on the nuclear re-- on the military responses the administration is considering to russia's violation and how nato allies have reacted to the suggestion of that?

>> 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. we would have to withdraw from the treaty or declare it null and void based on russia's actions. i put that out there as something we could do if we were -- if we chose to come out of the 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. or u.s. sites in europe. second would be a counterfort capability to prevent attacks. third would be countervailing strike capabilities to go after other russian targets. we are looking at a range of things. with we're still in the first instance trying to persuade russia to come back in compliance with the treaty and remember why they signed it in the first instance but that does not succeed our -- but if that does not succeed our objective

is to ensure they have no sig tant 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. but ukraine and its 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 enact legislation to deny enforcement of the bonds since it's governed 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 paris club, has the administration engaged with the british government on the possibility of denying enforcement of the bond under british law 1234 >> ranking member menendez, thank you for that question. you touched on a few points, so 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 due primarily within the scope of the i.m.f. 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're certainly willing to look at the issue that you mentioned should that eventuality arise. but right now, russia as i said russia has not accelerated this claim and 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 such a tigger. i hope they don't, but then if it's all too late and the process of doing what is necessary to create the appropriate protection under international law as it relates to the u.n. 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. >> thank you, senator. senator gard never. -- gardner. >> thank you to the witnesses for testifying today. i want to start with secretary nuland and talk briefly about the comments made last week at a hearing the committee held including witnesses gary cass prove as well as others.

when i asked the president about his role with ukraine and talked about the promises that he believes have been made by the united states to ukraine, and whether or not we had met those promises i think the answer was clearly he does 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. ho dow you mesh his belief through his representation with ukraine and 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 to the administration's request including going above and beyond in some cases the requests that we have made including in the category of the european reassurance initiative where we have more money for ukraine than 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 to the chairman, associated

press articles, german ambassador president obama agreed not to send arms to ukraine. what is the current, what is the administration's 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. >> soon, is it that days, weeks months? >> i hesitate to predict. >> what has your conversation been with ukraine leadership regarding this assistance? >> conversations go on all the time. both in the field with ambassador piat, but the vice president has put president poroshenko on speed dial. he talks to them at least 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 intelligence reports you have seen, how much time do we have before putin renews his push into ukraine? mr. mckeon. >> getting inside president putin head and predicting his next move is an ongoing challenge for the intelligence community as well as the policy community. i can tell you some reporting today that i can give you on an unclassified basis some of which secretary nuland gave

briefly in her testimony. 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. >> in terms of sanctions you mentioned sanctions, secretary, what are we doing right now in terms of the european union governments such as hungary, greece cyprus, those nations that have been opposed to additional sanctions what have we been doing to talk to them about the need for sanctions? >> despite some publicly stated concerns, those countries have supported sanctions in the council 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 of an effect on russia than on the european economy or our own 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? >> i think it would be better to not get into details of potential answers 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 will occur both to the united states and our 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. what time length do you think it would take? what's the length of time you think it would take to train military forces? >> senator depends on the type of train, scope of train how many units we were talking about. the training that the chairman asked me about that was on the books is being looked at for the national guard forces was going to be over the course of six months and i think it was five or six companies or battalions. frank do you know the details on that? >> four. >> four. so if we were to train all their military, over 100,000 people

that would take much longer period of time, sir. >> thank you. >> secretary shaheen? >> we are all getting promotions today. >> and y'all could all serve extremely well in those positions. sorry for the demotion. >> thank you. senator corker, that. thank you to all 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 side, not just about the decision which seems to be taking a very long time, providing assistance but the other forms of assistance that would be helpful to the ukrainian military that's in the field.

i had the opportunity to meet with representatives from ukraine, a member of parliament and some others, and one of the things they talked about was, and i got into a back and forth with them about the reservations that have been expressed by this administration and by 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. one was that they were not sure the conflict could be escalated too much worse than they expect it 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 both the military and the people of the

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. and so while i realize a lot of it seems rather basic -- >> no, i appreciate that. i am not disagreeing with that at all. i'm expressing my frustration as others have with the timelyness of -- timeliness of providing that assistance as well as a decision about whether we're going to in fact provide defensive weapons. i guess i would ask this of you secretary nuland, do we think there's 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? >> senator, we are in intense conversation with our allies

about a common standard for measuring implementation with minsk and ensuring that the osce gives us all whether it's chancellor merkel, president obama, or anyone else, a clear picture of where the cease fire is holding and where it isn't, 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, that i also mentioned in my opening, which is 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 if minsk is not implemented.

>> 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 or in the rada. as i outlined in my opening, the kinds of intensive changes to the structure of the economy are going to have impacts in people's pocketbooks and in people's lives including the raising of the peppings age,

increased energy prices. so this is why we're working so hard with the i.m.f. and our international partners that as ukraine takes these tough measures, that the support comes -- comes in quickly so the economy can stabilize so the people can see a light at the end of the tunnel. we have to get crew yain 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 admiral that is the concern that putin might try to test the article 5 commitment of nato countries. can you talk about what steps we are taking to try and deter putin from thinking that he should test that 1234 -- test that? >> our commitment to article five is ironclad. we believe that is understood.

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. to facilitate the flow of reinforcements should that be needed in eastern europe. these all come out of the wales conference, so it's a heads of state level commitment, and nato is moving forward with that. on the united states side, the eri moneys authorized by the congress are also appreciated. >> thank you, mr. chairman. >> senator perdue. >> 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.

as was mentioned earlier, ukraine gave up over 1,000 nuclear weapons on the assurance that their national security would be protect. 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. yet here we are talking about more delays to that support. curt volcker, former u.s. ambassador to nato, has written that this new cease fire amounts to and i quote, an institutionalization of a frozen conflict inside ukraine. alongside what happened in georgia and moldova. this is exactly what the kremlin wants. end quote. i have a couple of questions. do you think putin's objective is to create a frozen conflict like the ones in georgia? if so, what would be our

response to that? >> i think 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, we have implemented a wide array of initiatives focused on generating pressure economic diplomatic, and military, 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 on estonian soil, 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

-- into european air space. 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 in its guarantee to secure 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 and taking steps to illustrate that solidarity. >> can you talk about what is being done by nato in estonia, latvia and lithuania in regard to that? >> the reassurance measures being taken by nato do include, and the united states is included include rotating forces through the baltic states, engaging those states in exercise and training and facilitating additional aircraft being stationed in those

countries. nato awacs are being -- are flying other 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 to not only sec torl sanctions which restricts the ability of companies in that sector to borrow money, to tap the capital markets needed for them to develop their businesses but also in particular in the defense sector there have been individual companies listed, subject to asset freezes. so those sectors are very important. they are part of the reason why the sanctions have had the effect that they've had on the russian economy with the currency depreciating by more than 40%, the economy expected to contract this year inflation rising to over 17%, so those sectors are very important they've been part of our tailored sanctions program and these are the effects we have seen. >> thank you mr. chairman. >> senator murphy.

>> note to chairman and ranking member, senator mccain -- mckeon was in connecticut yesterday we had an overflow crowd, and they raised some of the similar concerns raised here today and they also expressed real, heart felt appreciation for the fact that if it were not for the leadership of the united states rallying the international community to the economic assistance that has allowed for the ukrainian government to still stand, if it wasn't for our leadership on rallying the international community toward a policy of sanctions, the story would have played out in a different way. this is a dire situation in eastern ukraine today but i think many of the people i represent, though they want us to go further, understand what we've done thus far and its importance to the ability of ukraine to continue to defend itself to the degree that it can.

i have one specific question, then i wanted to talk a little bit about some of the concerns that many of us have about a policy of providing defensive arms, though i support it. first is to this question of what the budapest mem ran tum only gates the united states to do. already -- budapest memorandum obligates the united states to do. i've heard my colleagues talk about the budapest memorandum obligating the united states or nato to defend ukraine from a territorial attack. i think it's important for taos know exactly what we are obligated to do when we sign these international agreements, not withstanding our unanimity in our belief that we should provide weapons to ukraine. it's my understanding that the budapest memorandum obligates each country individually to respect the territorial integrity of ukraine but

significantly, is not a mutual defense treaty does not obligate any of these treaties to defend ukraine. it is not comparable to article five. i just think it's important for us to understand if that's actually the case. >> first of all, senator, as a native connecticut girl, i'm glad to see the connecticut ukrainian americans are active and support -- active in support of ukraine. i was part of the negotiabilitying team that work thond -- worked on the budapest memorandum so i know it well. you are accurate, it was a political agreement among the four signatories notably the united states, u.k., russian federation an ukraine, respect the sovereignty and territorial integrity of ukraine, not to attack her. but it was a political agreement. it did not have legally binding treaty force or legally binding national defense obligations. that said, it is russia that has violated the spirit and the letter of that agreement.

>> agreed. mr. mckeon, i want to talk a little bit about how circumstances on the ground would play out in the event that we decided to give substantial defensive weapons to the ukrainians. the supposition is that putin is not paying a big enough price simply with economic sanctions and the price he would pay perhaps in greater numbers of lives lost, that he wouldn't be able to cloak in secrecy due to increased u.s. assistance would change his cool cue ulous. i think that's a chance worth taking. that's why i join my colleagues in supporting providing defensive weapons, but i understand it's a chance and there's also a significant chance that that's not how things will go, that he will continue his march straight through the lines we have fortified. i don't know if you're to this point in terms of your -- your thinking or the proposals you

have been making to the president and to the secretary but what would we do in the event that we provided a certain level of defensive weaponry, putin amassed additional forces, 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 raise 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 putin. 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 which requires 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 e.u. things like use of corruption as a tool to undermine sovereignty,

whether you are talking about directly paying political candidates or 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 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 nemtzov. 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 broad. -- 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 rocket artillery. there are 29,400 russian troops in crimea and 5500 along the border. is this the administration's assessment of what russian troop strength is in crimera and

ukraine? collect senator johnson, without going into the specifics of the intelligence, on the number of >> senator johnson, without going into specifics of the intelligence, on the number of russians in eastern ukraine, it changes from week to week. >> you are not saying that this is an accurate? >> 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.

>> 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 big concern? >> that is why we are seeking the greatest deal of fidelity as to whether this 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 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. 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. he was there on the front lines when russia invaded jordan. the bush and ministration, setting and 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.

so, shaka spewing said that appointments from the far east are proof that the kremlin is rise to the -- 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 cannot do it with blankets. >> 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. this committee has been pretty clear about our position in this regard. it is clear that we need to take strong 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 appropriations of russian rights. let us not forget, nadia --who was taken from ukraine i russia. 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

political rights. 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 the injured into february this year. 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? >> 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 government has taken reflects a decisive rate from the past. their willingness to address subsidies and inefficiencies for their government spending. as we know, the u.s. has provided a $1 billion loan guarantee for ukraine last year, they will attempt to provide another one in the first half of this year and working with congress, they consider another $1 billion loan guarantee at the end of this year, so we appreciate congressional support for that. 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 international situation. >> this must support account ability and progress being made into the governance issues. we will be patient, they must

demonstrate their ability to carry out their verbal commitment. i would ask one last question and an assessment of the mission. >> thank you for your work. 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 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. they directly cited the threat of cutin as the biggest threat to the u.s. and the world. >> i would 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. >> traditionally, a degree of threat is defined as capability and intent. the russians are world-class state with a world-class military. with intent, it makes it 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 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. in my right or wrong? >> 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? looks this is not a loaded question. 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 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. 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 gza 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 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 understate the provocations and actions and dangers to the

actions that 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. 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. we have given 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. 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 ability to the 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