2 We are particularly fortunate and honored to have before us Mi- khail Margelov, the Chairman of the Committee on Foreign Affairs of the Federation Council of the Russian Federation. As you are aware, the Federation Council is the upper House of the Russian parliament, and Chairman Margelov is in a position to give us a well-informed and candid assessment of the thinking of Russia's policymakers on these and other subjects. It is rare that we have the opportunity to hear from so senior an individual from a foreign government, and I wish to extend my per- sonal thanks to you, Chairman Margelov, for your gracious accept- ance of our invitation to appear before our Committee. I will now turn to Mr. Lantos, the Ranking Member and senior Democrat, for any remarks he chooses to make. Mr. LANTOS. Well, thank you very much, Mr. Chairman, and I want to add my warmest welcome to Chairman Margelov. We are delighted and honored to have you, Mr. Chairman, and we know you will come back frequently to visit us. We look forward to seeing you in Moscow. Mr. Chairman, I would like to ask for your indulgence in giving me more than the usual amount of time because I just returned from Moscow last night, and obviously I would like to express some thoughts stemming from my most recent visit to Moscow and my meetings with your friends, colleagues, and associates, Chairman Margelov. Chairman HYDE. Take as much time as you would like. Mr. LANTOS. I am deeply grateful, and I won't abuse the privi- lege, Mr. Chairman. Let me begin by sharing with Chairman Margelov the historical fact that I knew Moscow before you knew Moscow, because I first went to Moscow in 1956 when you were not even a gleam in your parents' eyes. I have had the great pleasure of going back on a reg- ular basis, and as always, the visits to Russia are extremely inter- esting and valuable, and it certainly was on this occasion. Although this was not a cultural trip, may I just congratulate you, Chairman Margelov, that Boris Godunov and the Bolshoi are as good as ever, and we had the great pleasure of seeing Boris Godunov in the Bolshoi as well as a new ballet by your outstanding company. And let me report to you, Mr. Chairman, that cultural life in Russia is at an all time high. It is a remarkable phe- nomenon. I am delighted that the personal relationship between President Bush and President Putin is as good as it has become, and I want to give the President credit for recognizing that in the post-Soviet era, Russian-American friendship will be a very important corner- stone of a more civilized and peaceful and prosperous and better world for all of us. I have had the occasion in the last few days, Mr. Chairman, to have extensive discussions with the Foreign Minister of Russia, Mr. Ivanov, the Minister of Atomic Energy, Mr. Rumyantsev, and a wide range of leading political and economic figures across the po- litical spectrum. I am extremely optimistic about the long range relationship be- tween Russia and the United States, but I do see some problems 3 in the near future. I would like to raise some of these in the hope that Chairman Margelov might choose to react to these. I believe that the very complex and nebulous cell of statements by our Russian friends concerning the issue that preoccupies all of us, namely Iraq at the moment, would be very different if Mr. Chirac and Mr. Schroeder would not be providing very convenient cover for the Russian government to play an ambivalent game. I am convinced that in the final analysis Russia will not oppose the resolution that our British and Spanish friends and we intro- duced a couple of days ago, and I think it is even possible, and I hope it is possible, that our Russian friends will join us in an af- firmative vote. But I am convinced that there will not be a Russian veto, and that is somewhat encouraging. I also think that the very excellent cooperation that we received from President Putin in the wake of September 11th, with the Rus- sian President being the first one to telephone our President and assure us of Russian solidarity and cooperation, could be extended to our determination to remove all weapons of mass destruction from Iraq. It is self evident that all of us want to achieve this by peaceful means. Only an idiot would prefer war to peace, and when public opinion polls ask people whether they wish peace or war, and the answer is 95 percent peace, sign me up on that side, Mr. Chairman, be- cause if that is the option, we all choose peace. The question is whether we remember Chamberlain bringing back peace in our time from his meeting with Hitler, because that peace was not worth the paper it was written on. So the question is, are we in favor of a meaningful peace or a propaganda peace? Certainly the American government and our British friends and the large number of other countries, from Australia to Bulgaria, have chosen to stand with us in favor of peace of a substantive and real kind, and we are somewhat disturbed that Mr. Putin and our Russian friends are playing an ambivalent game at this time. I very much hope, when the final decisions are made, Mr. Putin and the Russian government will clearly come down on the side of a meaningful peace. Now, I fully understand the enormous economic pressures which are operating on Russia. Russian products basically are non- competitive in the global marketplace, except for armaments, nu- clear technology, and oil. Since both Íran and Iraq represent the market for Russia in the field of armaments and nuclear tech- nology, it is a fact of life, in my judgment, deeply deplorable but perhaps understandable, that despite repeated assurances our Rus- sian friends are continuing very questionable trading relations with these countries whom the President properly labeled parts of the Axis of Evil. It is incomprehensible to the rational mind that Iran would need developments in the nuclear field for energy purposes, and it is self-evident to a child that Iran's determination to develop its nu- clear technology is militarily oriented. In the last few weeks, Iran announced that it will participate by itself in the full nuclear cycle. I notice in your written statement, Chairman Margelov, you talk about Iran's nuclear program being at a germinal stage. It is way beyond a germinal stage. 11 Chairman HYDE. Thank you very much, Chairman Margelov. The procedure in this Committee is that you get 5 minutes for questions of the witness in the order in which you arrive to the hearing, which is a little more democratic than just going by se- niority. So we will observe that. And for 5 minutes the gentleman from Nebraska, Mr. Bereuter. Mr. BEREUTER. Thank you very much, Mr. Chairman. Chairman Margelov, thank you very much for your testimony. I think it is an advance when senior members of the parliamentary body in Russia have an opportunity to directly engage in dialogue with us. I happen to have the privilege of being the President of the NATO Parliamentary Assembly, and when I took that position in November, I had three priorities staked out. One of them was to increase our positive contact between the NATO Parliamentary As- sembly and Russia, and certainly the parliamentary body with the first emphasis within Russia. I think it complements NATO's effort to develop a strong NATO- Russia Council, and I would hope that we will have better success than the previous effort, and I expect that we will. I believe that the United States wants to invigorate that Russia-NATO Council relationship, and you are right to watch that development, as we will watch it. I spent time taking the NATO parliamentary delegation to Brus- sels at the same time that the EU Summit was underway, coinci- dentally, for our annual meetings. At that time, of course, it was the heart of the debate before the North Atlantic Council, and then ultimately a decision taken to something unusual, the “Defense Planning Committee.” As you know, France is not a part of the military structure of NATO as it opted out of the defense compo- nent 35 years ago. I believe that an objective observer of what is happening in Eu- rope today would conclude that while it is not to be demonized, France clearly wants to marginalize the influence of the United States within Europe and wants to reduce the influence of NATO and accentuate the influence of the European Union. Now that is a legitimate objective on their part. It just happens to be probably counter to our interests. As I visited Slovakia, the first of the seven aspirant states I will visit in the course of this year, the views I heard there were com- monly expressed across the band of countries that wish to accede to the European Union. The seven that have been granted acces- sion opportunities for NATO see things much differently than the French and Germans, who want to provide their vision of what Eu- rope will be like. I believe that it is important that the ties between Russia and the nations of Central and Western Europe are strengthened. I like some of the things that are underway in Russia. We have some concerns that I hope you will look at, which include the still very large stock of biological and chemical weapons in Russia. I want my colleagues to know that I think what we are doing on Nunn-Lugar is exceedingly important, and we should not allow some of our colleagues on the Armed Services Committee to place unreasonable impediments in the way of President Bush as we at- 13 I mean, that is our considered view. If Iran gets nuclear tech- nology from Russia, that nuclear technology will not remain in Iran, it will be shared with dangerous terrorist groups and coun- tries that harbor terrorism. Our whole war against terrorism glob- ally, the war we will be engaged in many years to come, has as its focus to prevent weapons of mass destruction falling into terrorist hands. And while we are very sympathetic to the Russian nuclear indus- try's need to have jobs and contracts, it is up to the West to see to it that these jobs and contracts do not involve sales to countries such as Iran. Our view of Iran, according to the State Department, is that Iran is the most dangerous state sponsor of terrorism on the face of this planet as we meet here this morning. That is the offi- cial view of our State Department. Clearly terrorists who use airplanes as their weapon would love to have the use of nuclear weapons, and we are determined to stop that. If I may come back to your observations concerning Iraq, and I deeply appreciate the candor with which we can share views. I find it very ironic that both our French and German and Russian friends point to some marginal progress which is being made as a result of inspectors being in Iraq. Well, let me point out, and I know you agree with me, that the inspectors are in Iraq today not because Mr. Putin arranged for them to be there, not because Mr. Chirac arranged for them to be there, not because Mr. Schroeder arranged to have them there, but because the American military has an incredible armada on the Iraqi border, and Saddam in an attempt, in a last minute desperate attempt to prevent his own re- placement, has opened the country up to inspectors. So I don't think it is realistic to claim credit for the work of in- spectors and fail to recognize that it is American foreign policy which put them there. Point one. Point two, with great respect, we disagree with you that the in- spectors are there as policemen. They are not there as policemen. They are there to receive the voluntary, full and immediate compli- ance of Iraq in turning over all weapons of mass destruction and all credible evidence that some weapons may have been destroyed already. They are not policemen. They are not detectives. They are unable, whether there are 100 of them, 200 of them, or 2,000 of them, to find in a huge country weapons of mass destruction which are hidden. That is simply unrealistic. The final comment I would like to make, and I would be grateful if you would react to that, you emphasize the importance of the United Nations, and I fully share with you the view that we need the United Nations for a wide variety of purposes in a complex world. But I think it is extremely important not to paint a picture of the United Nations that does not exist. The one thing the United Nations does not have is moral author- ity. The United Nations has, as Chairman of its Human Rights Commission, Libya. Come May, the United Nations will have as Chairman of the Dis- armament Committeehold on to your hats—Iraq. So the notion that the United Nations somehow represents a superior moral au- thority is absurd, and we here, most of us at least, reject it. 85-339 D-2 14 Secondly, I think while we clearly prefer to have the imprimatur of the United Nations for various actions, the United States Gov- ernment in my judgment quite properly stated that if it becomes necessary to move against a regime such as that of Saddam Hus- sein, we are ready to do so with a coalition of the willing, with or without United Nations support. It is our judgment that Resolution 1441 does provide U.N. ap- proval of such action and no additional resolution is called for, but we would be pleased to get one. I wonder if you could respond. Mr. MARGELOV. Thank you. Well, first of all, with all of my re- spect, I would like to disagree with you saying that inspectors are in Iraq because American armada is near Iraq. Inspectors are in Iraq because there were extreme international efforts inside the United Nations and outside of the United Nations to put pressure on Saddam Hussein. The American armada is important, but I also think that what was done and still is being done in the political field, in the field of diplomatic pressure, is also important. And if there was only armada but no diplomatic pressure, I don't think that without diplomatic pressure, Saddam Hussein would allow in- spectors in. Then, as for the United Nations, on the one hand, I would not overestimate the effectiveness of the United Nations during the last years. On the other hand, I would not agree with some of my friends from the Israeli Knesset who call the Ŭ.N. the United Noth- ing. While I think that today we have a major problem with all inter- national institutions, all international institutions which we have, including NATO, including OSCE, including the United Nations, are inherited from the time of the Cold War. They are inherited from the post-World War II world. And the technology they are using, the way they are structured, the way they operate, is still not very efficient. And they are, let's say, kind of old-fashioned, if I can use that word, speaking about international politics. Definitely we have to think about the reshap- ing, the restructuring of the way the system of international insti- tutions works. During NATO enlargement, I was saying—during the last stage of NATO enlargement-I was always saying that I am against that enlargement for only one reason. It produces again and again the old technology of preserving international stability. We are not cre- ative. We are not looking for new options. We are not looking for new mechanisms. Will NATO become more strong after the 4,000- man Estonian army joins it? I doubt that. And that is why I think that it is also another part of our whole work which has to be done together. We have to think of the new or maybe old but modernized international institutions, which can be more efficient. Chairman HYDE. Thank you. Thank you, Mr. Chairman. Mr. SMITH OF NEW JERSEY. Thank you Mr. Margelov. Thank you for being here and for your insights. I, like many other Members of this House and the Senate as well, welcome areas where we can cooperate. I have been a member of the Helsinki Commission now for 23 years and frequently meet with friends from the Duma and OSCE Parliamentary Assembly members. We have been trying for 15 years to encourage the Russians to enact a comprehensive law on trafficking. We did this in our Congress in the year 2000, a sweeping effort to stop that modern day slavery, and I am happy to say Elena Mizulina, who I know and worked with for years, has introduced a comprehensive bill. I do hope your government will adopt it and aggressively implement it. I chair the Veterans Affairs Committee, and I have met with many of your Duma members to talk about some of the programs that have worked well in our country, particularly the Home Loan Program, which has created the modern day middle class, and the GI College Education Program that might be considered on a pilot basis in Russia. So my sense is one of cooperation to the greatest extent possible going forward. Having said that, I am very deeply concerned about a couple of items, and it was mentioned earlier by some of my colleagues, this cooperation with Iran. We know that Khatami visited St. Peters- burg and toured a nuclear facility. Ariel Cohen in his testimony spoke about this very troubling trend, and spoke of purchasing or buying a nuclear facility; that, in a land, Iran, where natural gas is in great abundance and nuclear energy is highly questionable in terms of merit. There are other more nefarious purposes for that fuel, and we are deeply concerned about it. You mentioned what happens the day after. What happens the day after Iran announces they have nuclear weapons and the capa- bility to deliver them? The second issue I would like to raise is Belarus. As we all know, Alexander Lukashenko remains one of the last Ceaucescus, Milosevics, a terrible, despicable leader, who tortures his own oppo- sition, and has shut down the independent media. Independent candidates who would like to run for office are routinely disquali- fied, and he runs a barbaric country, sadly, of some 10 million. Many of us have been concerned, however, about the pass- through of Soviet or Russian weapons from Minsk to Baghdad, often under the guise of humanitarian flights, and that even broke into a Newsweek article that was published on February 13th. What can you tell us about that? There are many, as we know, joint Belorussian-Russian military cooperations. We know that Belarus remains one of the largest im- porters of Russian weapons for a country of 10 million with no ap- parent enemies. For what purpose are there arms transfers occur- ring? What is Russia doing to try to stop it? Again, those weapons will be used if there is a war, the anti- aircraft weapons and alike, against Americans and allied forces, which would be unconscionable if there were some complicity by our friends in Russia. Mr. MARGELOV. Thank you. First of all on Iran and nuclear power, you raised that problem, Mr. Lantos was also saying about the threat of nuclear. I don't think that you can find any politician in Moscow who will applaud the idea of nuclear terrorism. We un- derstand quite well that we have two major challenges today. One is international terrorism and another one is proliferation of the weapons of mass destruction. And you can hardly find advocates ei- ther in the Duma or in the Federation Council, either in the gov- 17 I do not like what Russia is doing. I make that clear, and I think that people's objections on this Committee are right on target. But I don't know how that is a whole lot different from what Vice Presi- dent Cheney has done. The Russians have an interest in Iraqi oil. They have contracts and infrastructure agreements, but the U.S. has an interest in Iraqi oil as well, probably quite similar to Halliburton's from 1997 to 2000. Iraq's proven oil reserves are estimated at 110 billion barrels, enough to meet U.S. needs for decades. Much of Iraq has not been explored. Probable reserves may be 300 billion barrels and Amer- ican oil companies are taking tickets to line up to rebuild an Iraqi infrastructure that will be damaged or destroyed by a military campaign and ensuring a hand in Iraqi production for the foresee- able future. Historically, Mr. Chairman, the United States and our allies have stood united and proudly against tyrants like Saddam Hus- sein, and make no mistake he is that. In the past we worked with our allies and we respected the United Nations, we built on rela- tionships developed over the course of decades. We did see the U.N. as a moral force. Most of us still do. Now we are berating those al- lies with petty insults: My way or the highway, you are either with me or against me, you are on our side or your are not on our side. There is no objective, rational analysis coming out of the White House. There is only adolescent fingerpointing and adolescent bul- lying. The Administration has not even attempted to answer impor- tant questions that may be addressed. Will attacking Iraq reduce the threat of terrorism? Our CIA thinks not. What is the Adminis- tration's plan for reconstruction and humanitarian aid in Iraq? We haven't seen a plan. How much will the war in reconstruction cost? The Administration won't tell us. If we are to apply the justifica- tions for military action against Iraq to the rest of the world, to Iran, to North Korea, to Pakistan and other countries, the United States would likely find itself involved in more wars at one time than all wars it has fought previously. North Korea, as we know, 2 days ago launched a test missile into the Sea of Japan. It was not a coincidence that this occurred simul- taneously with the inauguration of South Korea's new President and no accident that our own Secretary of State was there at the time. We know North Korea has nuclear capabilities; meanwhile, we do not address the North Korean crisis. We sit in Washington and question our allies for not supporting our war, accusing all too many of our own citizens of lack of patriotism and accusing other nations of bad motives—France, Russia, Germany, and China and dozens of other nations. My question is—and there is a question, believe it or not-my question, Mr. Chairman, what do the Russians think about what seems to me is our incompatible positions on Iraq and North Korea? Mr. MARGELOV. Well-good question. First of all, I think that the Iraqi crisis should not let us forget about the situation in North Korea. The priorities to my mind should be as far as: Definitely Iraq is a burning issue, but North Korea is as burning as Iraq. I think that more efforts and more steps should be done in the field of diplomacy. The Speaker of the upper house of the Russian Par- 19 Mr. MARGELOV. Thank you. As far Russian-American cooperation and discussing the situation on the Korean Peninsula, I think it is and it will be much more efficient than it was in 1945–1949. As for our economic relations with North Korea, well, I think that our approach is following: The more the regimes like in Pyongyang are plugged into the world economy, the more they are interdependent with the entire world, the more transparent they will be. And I do not think that either American or Russian diplo- macy can say that it knows 100 percent of what is happening in- side North Korea and the peculiarities of its political life. So I think the only option to make such states more transparent and less dangerous for the entire world is to try to plug it into the world economy. I think that definitely the nuclear sector of North Korea is our major concern, and it is our mutual concern. I hope that we shall expand our cooperation in monitoring the situation on the Korean Peninsula. As for small arms trafficking, I fully agree with you that small arms trafficking feeds the regional conflicts in Africa, in Asia. You guys wanted the Soviet Union to collapse, so I could not be respon- sible for the Ukraine. It is not a Soviet republic anymore. I under- stand quite well that there is much trafficking from the former Warsaw Pact countries in small arms. We all understand that. It is also one of the results of the Cold War. It is one of the remnants of the global Cold War and arms race. I think what we need, we need to raise that issue as a serious issue, as a serious threat for international stability, and one of the possible mechanisms for such a discussion can be a Russian-NATO Summit and a format of the Russian-NATO Council. We have to bring substance to this new relationship, and I think that the issue of small arms trafficking can be one of the real things that can be discussed in that format. Mr. ROYCE. I appreciate it and I wanted to make sure that my comment about Victor Bout or the Ukraine was not a pointed com- ment about the Russian position, but it was a request for coopera- tion with respect to Victor Bout. Thank you very much. Chairman HYDE. The gentleman from Florida, Mr. Wexler. Mr. WEXLER. Thank you, Mr. Chairman, and I too want to thank you for your very forthright discussion this morning. I think it is Hopefully mutually beneficial, but certainly beneficial for those of us on this Committee to hear your thoughts. I would like to follow Mr. Bereuter's comments earlier with respect to what appears to be Mr. Chirac's aspirations of creating an enhanced EU to be some- what of a counterweight to the United States, what appears to be Mr. Chirac's pursuit of Mr. Schroeder to be a part of that effort. I am curious if you could share with us from two different per- spectives: One, what is Russia's role in that context? Mr. Putin, of course, President Putin, met with Mr. Schroeder and Mr. Chirac and signed a joint declaration. What is Russia's role? What will it be in that context? And two, from a totally different perspective, if you could offer us some candid advice as to why it is that the divide between the United States and our traditional allies in Europe seems to be be- coming greater. Is it inevitable? Is it substance over style or style 46 achieve its objective to become a successful country, and a new kind of 21st century great power. The challenge to our policy lies in trying to get Russia to think past the short and medium term in its relations with Iran and Iraq and think_toward the long term. I must say, in Russia's shifting policy on Iraq and the likelihood that it will not veto a Security Council resolution enabling use of force, the signs are that the United States is able to move its policy forward in a way that pre- serves that partnership. Thank you. [The prepared statement of Dr. Wallander follows:] PREPARED STATEMENT OF CELESTE WALLANDER, PH.D., DIRECTOR OF RUSSIA AND EURASIA PROGRAMS, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES Mr. Chairman, I am privileged to contribute to the work of your committee at a time when the United States faces significant challenges to its national security, and seeks to find the right policies and partners to secure our homeland and inter- ests. The subject of this hearing is an important one, because in the context of a U.S.-Russian relationship that has proven so constructive and positive since sum- mer 2001, Russia's ongoing (and possibly growing) economic ties with Iran and Iraq are a persistent obstacle to a truly serious partnership. We need to understand the interests behind Russia's relations with these countries in order to develop policies that allow the U.S. to cooperate with Russia, while securing U.S. interests. My assessment of Russia's “axis of evil” policies has two components. First, Rus- sia's current leadership seeks power, status, and prosperity through economic mod- ernization and international trade. This definition of Russia's national interests lead to a strategic choice for cooperation with the U.S., but it also means nurturing trade relations with countries that are markets for goods Russia cannot sell on most inter- national markets. Second, Russia is also playing out a geopolitical strategy to manage America's overwhelming global power. However, this is not the classic game of global of re- gional balancing: Russia's leaders are far too pragmatic, far too much practical real- ists to fool themselves that any balancing coalition can be effective, or that it is worth sacrificing recently hard won cooperation for quixotic tilting at American power. Russia's policy in not geopolitical balance of power, but rather constraining U.S. policy through international rules, institutions, and procedures. Not Quixote and windmills, but a Lilliputian enmeshing Gulliver in the law and institutions that the U.S. led in creating during the Cold War. The geopolitics of Russia's policies to- ward Iraq and Iran are the geopolitics of constraint and maneuver, not confronta- tion. The Russian Economy and its National Interests The first part of the puzzle is why a Russia that has improved it relations with the U.S and Western Europe, that has supported the U.S. in the fight against the Taliban and al Qaeda in Central Asia, and that seeks membership in the World Trade Organization and to attract foreign investment would maintain and even deepen trade with Iran and Iraq, countries with regimes that reject market and de- mocracy. Furthermore, Russian trade with Iran and Iraq appears to support those regimes in the pursuit of what the U.S. believes to be policies to acquire weapons of mass destruction and the means for their use. This apparent contradiction sug- gests that Russia does not hold as a priority economic transformation, international integration, and fundamental cooperation with the U.S. and its western allies. It suggests, some have argued, that Russia's true purpose is a new round of competi- tion with the U.S., one determined by great power ambitions rather than Soviet ide- ology. In fact, there is not much of a puzzle at all. The same conditions and objectives that led Russian President Putin to improve relations first with Europe and then with the U.S., that are driving Russian efforts to join the WTO, and that led Putin to deem Russian military bases in Central Asia and military assistance to Georgia are behind Russia's relations with these three countries. The most important condition is that Russia has no future as the country we know today without significant economic growth, which requires working with the few strengths of what was inherited from the Soviet economy while building new capabilities that fit the modern global economy. The Soviet economy did not leave many strengths: the few are energy, metals and other exportable commodities, a 57 capital to offer to Persian Gulf states. As a result, they have a wary outlook on the Gulf—their major competitor in the international oil market, which they cannot con- trol, but are heavily dependent upon because of its influence in setting the price of oil in the international marketplace. Instability in the Gulf could further exacerbate the latent tensions between Gulf and Russian oil producers. Russian oil companies have long sought to position them- selves as the alternative and far more reliable source of energy to key markets, es- pecially in Europe and even the United States. Russia's success in this regard could prove harmful to its relations with Persian Gulf oil exporters. Russian oil interests have a wary view of OPEC. Reluctant to join it for fear of having to abide by its rules, Russian oil majors have preferred to cooperate with it episodically, depending on their own needs. They have certainly shown little propensity to exercise restraint or sacrifice their own commercial interest for the sake of advancing those of OPEC members. Iraq is an important exception in this context. For Russian oil companies, Iraq represents an attractive business opportunity—Iraqi oil is a good deal more acces- sible and cheaper to produce than oil from fields in remote regions of Russia, which is yet to be explored and developed. Russia's special relationship with Saddam Hus- sein has put Russian companies in an advantageous position for political, rather than commercial reasons. Thus, a handful of Russian oil companies have—depending on the mood of the Iraqi regime—held potentially lucrative contracts to develop oil fields in Iraq, once the sanctions regime is removed. Fully cognizant of the political motivations behind Saddam's decision to award these contracts to Russian companies in the first place, Russian oil industry leaders and analysts suspect that in the event of regime change in Baghdad, Russian companies will be among the losers in the Iraqi oil sweep- stakes-Saddam's successors will be more likely to reward their backers with lucra- tive contracts. Such concerns in turn generate further suspicions among Russian oil industry executives about the true motives behind the U.S. goal of regime change in Iraq. Russia's professional national security bureaucracy's interest in the Gulf is of a less material nature. Lacking a concrete commercial interest, this group has not to terms with the loss of superpower status. It harbors deep resentment of the United States and its preeminent position in the world—as well as in the Persian Gulf-and sees it in Russia's national interest to oppose the United States, to under- cut its influence and initiatives in the region regardless of their impact on Russian security or well-being. Thus, this group's outlook is shaped by traditional, albeit out- moded, geopolitical considerations. However, given Russia's diminished cir- cumstances, this group's ability to influence Russian policy is quite limited. The professional national security bureaucracy has a further interest in the Gulf prompted by the increasing challenge of militant Islam to Russian national security. The war in Chechnya has attracted a good deal of attention in the Islamic world. The Chechen side is reported to have received support from a number of Islamic countries, including Saudi Arabia, in the form of both volunteers and material as- sistance. Russian authorities have also claimed repeatedly that Osama Bin Laden has provided support and training for Chechen fighters. As a result, curbing inter- national Islamic support for the Chechen cause has become an active concern for Russian policy in the Gulf. Two other groups deserve to be mentioned among significant Russian players who have a stake in Russian policy in the Gulf—the Jewish community in Russia and the Russophone diaspora in Israel. Contrary to many observers' expectations, Russia has remained home to an active Jewish community. A number of Jewish business- men achieved a position of considerable prominence and influence in the country's economy and politics. At the same time, the vast Russophone diaspora in Israel has maintained close ties to Russia. The result has been a dynamic Russian-Israeli rela- tionship. Although Jewish-Russian business leaders have not come together in a co- herent pro-Israeli lobby, Israel's interest in Russia, paradoxically, has emerged as a potentially important factor in Russian policy in the Gulf and relations with Iran and Iraq. Good relations with Russia are an important domestic political card few Israeli politicians can afford not to play, given the strength of the Russian-Israeli electorate. For Russia, with its diminished status in the international arena, good relations with Israel also represent an important goal, given Israel's role as a re- gional power in the Middle East. President Putin and the Current Crisis The large number of Russian players and interests in the current crisis and the Kremlin's limited ability to control and coordinate among them, leave President APPENDIX MATERIAL SUBMITTED FOR THE HEARING RECORD PREPARED STATEMENT OF THE HONORABLE CHRISTOPHER H. SMITH, A REPRESENTA- TIVE IN CONGRESS FROM THE STATE OF NEW JERSEY, AND VICE CHAIRMAN, COM- MITTEE ON INTERNATIONAL RELATIONS Thank you, Mr. Chairman, for calling this important hearing on Russia's policies toward Iraq and Iran, two nations that President Bush has characterized as consti- tuting part of an axis of evil regimes allied with terrorist forces that threaten our nation-indeed, all civilized nations. Thus far, President Putin and the Russian Government have been valuable allies in the war against international terrorism. However, it is inevitable that there will be policy divergences along the way, and Russia's relations with Iraq and Iran have been of legitimate concern to the Administration and Congress. It is my under- standing that President Putin's chief of staff, Mr. Voloshin, is in Washington this week to discuss Iraq policy with Administration officials. Obviously, these hearings are especially timely. In a related case, an article in the February 13th issue of Newsweek is particu- larly disturbing. According to the authors, Iraq may be trying to acquire Russian S-300 anti-aircraft missiles through Belarus. Such an acquisition would enhance the ability of Saddam Hussein's military to shoot U.S. and allied attack aircraft. The Russian Government appears committed, despite the expressed concern of the United States Government, to build up Iran's nuclear capabilities, and regular meet- ings on this subject have been taking place between Administration officials and representatives of the Russian Foreign Ministry. We hope the Russian Government understands the gravity of our concerns about this issue and our belief that enhanc- ing Iran's nuclear capability does not serve the purposes of international security. In fairness, I would note that Russia is not the only nation whose relations with Iraq and Iran have caused concern to our government. The temptation for quick profit on morally dubious grounds or the desire to keep an industry going—and peo- ple employed-can be found in any country. Mr. Chairman, while we most assuredly need to work with Russia in the battle against terrorism, I feel obliged to express my continued distress at the continuing carnage and suffering in Chechnya. Secretary Powell has announced that our gov- ernment has designated three organizations operating in Chechnya as international terrorist organizations, and we recognize the need to fight terrorism wherever it ap- pears. But—and I hope our Russian colleague, Mr. Margelov, will agree with me—this does not excuse the barbarity to which some elements of the Russian military have descended in their treatment of the people of Chechnya. I met recently with Russian Duma member and prominent human rights activist Sergei Kovalev. Mr. Kovalev has devoted much of his time and energy to the tragedy in Chechnya, and I was shocked at his description of the suffering of civilians at the hands of at least some members of the Russian military. Incidentally, by saying this I don't for minute deny or excuse the inhuman acts carried out by some on the Chechen side, but I would urge our distinguished witness to pass along my hope that the Russian Gov- ernment will live up to its Geneva Conventions and OSCE Code of Conduct obliga- tions for the internal conflict in Chechnya. Mr. Chairman, the panel of witnesses today is most impressive. Mr. Margelov, Chairman of the Foreign Affairs Committee of the Federation Council, is uniquely qualified to discuss the issue under discussion today. In addition, the members of the second panel of witnesses have consistently demonstrated exceptional expertise (69)