IRAQ RECONSTRUCTION

Hearing Before the
Senate Foreign Relations Committee

July 23, 2003

OPENING STATEMENT OF

RICHARD G. LUGAR
A Senator from Indiana, and
Chairman, Senate Foreign Relations Committee

LUGAR: This hearing of the Senate Foreign Relations Committee is called to order. We thank the witnesses for their promptness. The Senators were called to the floor for a roll call vote that is still in progress, but we'll be joined by our colleagues as they complete their duties and come to the hearing. Let me just say at the outset that we may at some point have a quorum of the committee present and I want to seize that opportunity when it comes to ratify five treaties advanced the coring service and a list and other purposes which should be unanimous if received, but did not occur earlier this morning when 11 of us were not assembled.

Let me simply say that Committee of Foreign Relations welcomes in fact, Dr. John Hamre, former Deputy Secretary of Defense and currently the president of the Center for Strategic and International Studies. Accompanying Dr. Hamre is his team from the Commission on Post Conflict Reconstruction, Dr. Robert Orr, Mr. Frederick Barton, Dr. Johanna Mendelson-Forman and Ms. Bathsheba Crocker.

Also with us today is Anthony Borden, Executive Director of the Institute for War and Peace Reporting. We welcome Mr. Borden's insights on the media situation in Iraq.

Dr. Hamre, we're pleased especially to have you to be able to discuss with you the excellent reports that you and your colleagues have prepared on Iraqi reconstruction.

I commend Secretary Rumsfeld and Ambassador Bremer for commissioning your mission to Iraq. The resulting report entitled, "Field Review and Recommendations on Iraq's Post Conflict Reconstruction," was published last week by the Center for Strategic and International Studies. It carefully outlines the difficult challenges our country faces in Iraq and makes 32 urgent recommendations for improving conditions in that country.

For the Senate Foreign Relations Committee, this hearing provides a marker with which to measure both our hopefulness and our frustrations. We are hopeful because the recommendations of your report are being taken very seriously. Since the report was released last week, Defense Department officials have praised its conclusions and emphasized that work is already underway to implement many of them. It is a frustrating occasion, however, because many of the issues you raise -- particularly those concerning the need for improved application of resources, for better planning, for broader international involvements are the same issues that we have been raising here in the committee for months.

I would like to read two paragraphs of a letter that Senator Biden and I wrote to President Bush before the war in Iraq and I quote from our letter: "The United States should pursue a policy [in Iraq] that has broad international support. Such support is desirable for both substantive and political reasons. Our allies around the world and our friends in the region have important, and possibly even necessary contributions to make to the effort to disarm Iraq.

We may need their support for any initiatives we take at the United Nations. Should we pursue military action, we will want them with us and, at a minimum, require basing and over flight rights from several countries. If, in the course of disarming Iraq, we end Saddam Hussein's regime, a massive rebuilding effort will be required that the United States will not want to shoulder alone.

We also depend on the active and continued cooperation of many allies in the unfinished war against terrorism. In short, building international support for our Iraq policy must be a priority." End of quote from that portion of the letter.

But, we continued. Quote, "We must be candid with the American people that Iraq represents a long-term commitment by the United States. We urge you to formulate and express a vision for a democratic, unified, post-Saddam Iraq, living in peace with its neighbors. The American people must know the military, financial and human capital the United States would be prepared to commit to help realize that vision.

The Iraqi people and their neighbors must be confident that chaos will not follow Saddam Hussein. Moreover, you would help assuage international concerns that the current unsettled situation in Afghanistan may be replicated in Iraq, with far greater strategic consequences."

That's the end of the passage from our letter. Senator Biden and I sent that letter to the President more than 10 months ago on September 10, 2002. I share this historic footnote, not to prove the prescience of this Committee, but rather to underscore that the basic questions and problems surrounding postwar Iraq have been known and discussed mercifully by many expert witnesses before this committee in many hearings for a long time.

We must answer those questions and implement solutions to those problems now. The report before us is a good place to begin a review of what will be necessary to achieve our objectives.

We know that the planning for postwar Iraq was inadequate. But we must move beyond simply second-guessing the administration. None of us should pretend that a few adjustments to our reconstruction strategy or an extra month of planning could have prevented all the challenges we now face. Even in the best circumstances, reconstructing an unpredictable country after the overthrow of an entrenched and brutal regime was going to stretch our capabilities, resources, and patience to the limit.

Moreover, Congress, as an institution, has not fully lived up to its own responsibilities in foreign affairs. We lament that nation building in Iraq has not progressed as quickly as hoped, but many members of Congress considered that term, nation-building to be pejorative just a few months ago.

We worry about the urgency of Administration initiatives in Iraq, while we allow unrelated domestic obstacles to delay Senate passage of the Foreign Relations authorization bill.

The findings of Dr. Hamre's group confirm that we must act with both urgency and patience in Iraq. America must take critical steps now to give nation-building a chance to succeed. We must be prepared to stay the course in Iraq for years.

The report states that "The potential for chaos is becoming more real every day," and the Coalition Provisional Authority "lacks the personnel, money and flexibility needed to be fully effective." The report describes the resistance in Iraq as "well-trained, well- financed, and well-organized irregular forces throughout the country."

We need to ensure that there are adequate resources and the right type of resources to respond to the attacks that are occurring. There must be enough military forces, police, and civilian personnel, and we must not marginalize non-military agencies with expertise in post conflict reconstruction.

I'm particularly interested in the recommendation that we mobilize a "new reconstruction coalition." The broader international community remains the one untapped resource with the potential for completely changing the dynamics on the ground in Iraq.

The coalition that won the war is not the same one that can win the peace. And the United States needs to involve the international community in Iraq to reassure the Iraqi people that the results of our nation-building efforts are legitimate and accepted by the international community.

Building an effective coalition that reduces U.S. burdens and expands the legitimacy of our efforts must be the top priority of American diplomacy with respect to Iraq.

I look forward to your suggestions on how the United States can internationalize the effort. We need to overcome our disagreements with allies over pre-war strategy and move forward on the common objective of ensuring that Iraq emerges as a peaceful and stable nation.

The pledging conference in October is an opportunity for all nations to exhibit leadership and engage in stabilizing and rebuilding country.

Having recently visited Iraq with my colleague, Senator Hagel and Ranking Member Senator Biden, who will join us in due course, I'm confident that the officials and the troops in Iraq understand what is at stake and the urgency of their task. They know that U.S. national security depends on what they do in the coming months. We cannot afford to let Iraq become a failed state that could be an incubator of terrorism and anti-Americanism throughout the Muslim world.

Today, the Foreign Relations Committee should focus on how we can help the administration and our troops and officials in the field succeed. How can our Committee and this Congress expand the tools available to the Coalition Provisional Authority? How can we support efforts to broaden the international coalition engaged in Iraq? How can we strengthen the resolve and understanding of the American people with regard to the realities of this mission?

The situation in Iraq is changing quickly, and the next few months may well determine, as you pointed out, the type of nation emerges. With this in mind, we are very thankful for the work that our witnesses have done today, namely yourselves and we look forward to your testimony.

When Senator Biden arrives, of course he will have an opportunity to offer an opening statement and will be recognize. For the moment, I want to recognize Dr. Hamre for his opening statement. And we will then give the other four members of the Commission, beginning on the Commission's left with Ms. Crocker, an opportunity to add personal observations they have. Finally, we will recognize Mr. Borden for his statement concerning the media situation in Iraq.

Let me say at the outset that your full statement will be made a part of the record, so you need not ask for permission to have them listed, they will be a part of the record. And you may proceed as you wish for the discussion. This is an important hearing. You've done important work and we really want to hear from all of you.

Dr. Hamre?

STATEMENT OF

DR. JOHN HAMRE
President & CEO, Center for Strategic and International Studies

HAMRE: Chairman Lugar to you and your colleagues, it's a real privilege to come here. These are enormously important issues. Your statement -- I'm very careful to take notes -- your statement has laid out I think a very challenging agenda for the cermet (ph) to take on this shared task of making sure we're successful in Iraq. We have to be successful in Iraq. And I think it means listening carefully and wisely to the issues you've put out in front of us. And we'll try to be responsive and helpful to you today. Thank you for this privilege.

I was the weakest member of the team on this delegation, so they're going to let me go first with the clear instruction that I quickly get out of the way and I will do that.

First, let me just say we were invited by Secretary Rumsfeld and Ambassador Bremer to go. They initiated it with us and we said we will if we can be helpful. And I must say they were completely open. The very morning that we arrived -- we arrived in the evening, in the morning, the next morning when we arrived, Ambassador Bremer invited me into his staff meeting and he went around the room, he listened to everybody with their normal report and then he said, "by the way, that's Hamre, he's been sent over here by Secretary Rumsfeld. Anything he needs, make sure you give it to him, because he's here to help us." It's that kind of approach, very open and I think my colleagues would agree. Nothing was kept from us. And there's a tremendous sense of openness and willingness to hear both our experiences and our reaction to their ideas.

Second, when we returned, we've experienced nothing but complete openness to our ideas. We have met extensively with members of the administration. That doesn't say that they agree with everything we've recommended -- they don't, but they've been completely open and interactive with us.

Well, why do you think that? What led you to that conclusion? Who did you talk to? How solid is that judgment in your view? Those have been the total tenor of the conversations we've had with them. And it's been very good, very constructive.

Third, I would say I think they've already tried to implement things that we've brought back. And as I said, they've been extremely open to working on the problems, those that we've identified, frankly, ideas that they had of their own that preceded our return. So, it's been a very constructive perspective.

I would like to speak about two issues and then I would like to turn to my colleagues. First, the issue of security. Iraq is currently insecure and we have a complex problem that goes beyond the Saddam loyalists that we see in the paper.

There are a good number of just flat out criminals. And remember, Saddam opened all of the prisons right before the war. He let our 100,000 criminals, people that are living among the Iraqis today, creating great personal threat and violence in this society. So that is a problem.

There are of course the Saddam loyalists that are out trying to rekindle an affection for the past with these mindless acts against our own throats. And then there are large organized Mafia-style black market gangs, gangs that were created during the years of sanctions, the years of oil for peace. Those gangs are plundering the countryside and that's a very big problem, in some sense, a bigger longer-term problem to deal with.

That's all part of the security picture. And it's bigger than just simply saying we need more American soldiers on the ground. That's a judgment that the military has to render.

I'm worried about our troops. I think they're pretty tired, but the security picture is bigger than just that and we have to do, as the Secretary has recently done, bring more Iraqis to the business of defending their own country. And he's made some very important constructive steps and developments in the last couple of weeks and we really need to support him with that and take other steps to make it possible.

HAMRE: Second, let me just say a word about finances. I was surprised. I used to be the Comptroller of the Defense Department, so I know how budgets are put together. I sat down and spent probably a half a day with the budgeting people over there and I was surprised to find a fairly good, relatively simple right now, but relatively good budget process for building the next budget for the next 18 months in Iraq.

Ambassador Bremer has $5.9 billion right now he can count on to work with. Remember, this is an economy that was before the war probably a $25 to $30 billion gross domestic product. And he has about $6 billion to last for 18 months. That's not going to be enough.

Now, obviously we're hoping that we can oil moving quickly. Frankly, I think they have conservative assumptions for oil, but they need to be. I think it's very hard to get the oil moving in Iraq. And they're only counting on a fairly modest amount of revenue coming from oil over the next, say, nine months and then the following nine months, it's still pretty conservative, which I think it ought to be. It's not nearly enough. It's probably only 40 percent of what the gross domestic product would require.

Obviously, we're hoping for a good donors' conference. There are a lot of questions about the donor's conference. The donors themselves are going to be skeptical until we resolve the issue of prior debt. That's a big issue. The other big issue for the donors' conference is, is there a legitimate government that we can make an agreement with? Right now they don't feel they want to make a deal with the Coalition Provisional Authority.

They want to have an Iraqi government and the question that you should be asking is, will the governing council that Ambassador Bremer has created, will that be strong enough to become the basis for donor countries to make contributions to in the October time frame, a very important issue.

But, I also just have to say, you really need to start thinking, we're probably going to require another supplemental. I leave it to the administration to decide what that's going to have to be and when it's going to be, but there is not going to be enough money in my personal view, to carry us through the next 18 months until you get significant oil revenues. And that's should just be on the table in your thinking right now.

One last statement -- 30 seconds -- Ambassador Bremer needs to have more flexibility on how he spends his money and how he makes contract actions than he has. I'm afraid we're doing too much business as usual for him. He needs to be given much more authority to be able to do his job in theater. And I'd ask you and your very capable staff to look into that issue as well.

Let me now turn to my colleagues and I think Bathsheba, you were going to be the next person.

LUGAR: If I may interrupt now for just a moment. We're going to have our magic moment of business with consent of the group and if members will suffer through this for just a second, we will be able to ratify five treaties, foreign service officer list and other important issues.

Committee will interrupt the hearing to address these issues I outlined this morning. The Resolution of Ratification for five treaties on Aviation, Fisheries, Wildlife issue now before the committee. Unless there are further comments, I propose we vote in block on Resolutions of Ratification listed on the agenda.

(UNKNOWN): I would second that.

LUGAR: Hearing no objection, the committee will now vote. All in favor please say aye.

Opposed, nay?

I thank the members.

Next we have a list of nominees for promotion within the Foreign Service. The nominees have been reviewed by both sides of the aisle are non-controversial. I propose the committee now vote on reporting these nominees with a favorable recommendation. All those in favor, please say aye.

Opposed, nay?

The ayes have it and the promotion list proceeds.

We will turn now to H. Con. Resolution 209, passed by the House of Representatives on June 23. The resolution expresses support for United States Adriatic Charter and for the Aspirations of Albania, Croatia and Macedonia, become members of NATO and the European Union. I understand the resolution's agreeable to both sides of the aisle with a technical amendment. A copy of the amendment is before each Senator. Unless there is further discussion I propose the committee adopt the amendments and the resolution as amended.

Hearing no objection, all in favor, please say aye.

Opposed, nay?

The resolution is adopted.

Finally, we turn to S.Res. 184, which was introduced by Senator Jon Kyl and cosponsored by four other senators, including Senators Allen and Brownback of our committee. The Resolution condemns China for ongoing dementia, Dr. Yang (inaudible) and calls for his release. I understand there's an amendment to the resolution agreeable to the resolution sponsor and to both side of the aisle.

I would now entertain a motion to amend, S.184.

(UNKNOWN): So moved.

LUGAR: Is there objection? All in favor please say aye.

Opposed, nay?

The members have opted. If there are no objections to the amendment, I ask unanimous consent that the amendment is adopted, all in favor, please say aye.

Opposed, nay?

And unless there is further discussion, I propose the committee now vote to report the resolution as amended with the favorable recommendation. All in favor please say aye.

Opposed, nay?

The resolution is forwarded. That concludes our agenda. I thank the witnesses for their patience for this intervention.

I call now upon distinguished Ranking Member for his opening statement and then we'll proceed to Ms. Crocker for her comments.

Senator Biden.

OPENING STATEMENT OF

JOSEPH BIDEN
A Senator from Delaware, and
Ranking Member, Senate Foreign Relations Committee

BIDEN: Thank you very much, Mr. Chairman. I apologize to the witnesses for being a few minutes late.

I'm going to begin by saying, Mr. Hamre, I think your report and that of your colleagues is first rate, absolutely first rate. And I compliment the secretary on asking you to undertake this.

Coincidentally, the three of us in the middle here were on the ground almost in the same time frame that you were. And it will not surprise you, speaking for myself, but I think my colleagues, our conclusions we reached were very similar to the ones you've reached. And the committee report is forthcoming. I think you'll find it mirrors your report.

I'd also like to suggest that, with the chairman's permission, we left (inaudible) behind for eight days, two senior staff members, the senior Republican staff member handling this area, as well as a senior Democratic staff member. And again, their eight days on the ground and extensive interviews that they had and they went back on their own back into the country and had wide ranging freedom to move about, although they were in peril like all of you were and everyone is who wanders around that country right now, particular Baghdad. And they reached the same conclusions basically.

We have in my view, a very first rate team in Iraq helping people like -- not like, Ambassador Crocker, who I think is one of the finest people we have in our foreign service. Walt Stockholm (ph), serious player from the Defense Department and a truly professional team working with them including the former commission of New York and a number of people who I have dealt with at length in my dozen visits, literally, into Bosnia and Kosovo over the previous six or eight years. We have a considerable learning curb that we've already turned on in terms of police forces.

And so we have some very, very serious people there and unfortunately, it seems to me, it's painfully obvious that their job is made all that much harder by the fact that the planning for the aftermath of the war started much too late and was based on some deeply flawed assumptions.

I think unless we examine some of the assumptions that the rebuilding of Iraq was based upon that we now know were inaccurate, it's going to be kind of hard to figure out exactly what we should be doing, it seems to me. We were told that Iraq would inherit a fully function government. That the ministries would be fully operational in a short time after they have been decapitated of Bath leadership, that the military would be basically intact after being decapitated at the general level of Baathist party members and that the police forces remain on the job.

Well, in fact, none of occurred for whatever reasons, none of that is in place. We're also told that we would have a quick ramp up of oil production and then we could basically the impression was we could pack up and go home, because all of this would be up and running.

Now, a number of people led by the chairman of the committee and by very different folks from uniform military, General Shinseki to a whole range of other people. We thought -- and this committee's held extensive hearings -- thought it'd be a lot more difficult. And that many of those assumptions were not based upon what a lot of the experts we were talking to were telling us on both sides of the aisle.

There was a pretty consistent message we kept getting in this committee that things would be different. And there are some things none of us anticipated in my view, at least I didn't. I didn't anticipate just how badly broken the Iraqi infrastructure was. I didn't realize how badly treated and/or maintained the oil fields were, separate and apart from the fact that we've miraculously worked our military so that they were not destroyed. They were already in many ways destroyed in ways that we didn't anticipate.

My purpose today is not to dwell on the past, but focus our attention on the realities, which I think is what your report did. And law and order, especially in Baghdad which is collapsed, the electricity, water, fuel supplies that remain unreliable and temperatures as high as 120 degrees, it's not like having those things having to occur in an area where the mean temperature is 80 degrees. And on top of it all, we lack, in my view, a public information strategy to communicate with the Iraqis.

I would note, Mr. Chairman, I found it fascinating today and tried to call the secretary that we were in demand on the part of the Iraqi people to be shown that Saddam's sons were killed, we're talking about disseminating photographs. Why in Lord's name wouldn't we let Al-Jazeera television or anybody come and look at this? I don't know whether people over there seem to understand. We are not believed. We are not believed when we lay out these things in our own terms.

And so, there's an awful lot to do in stabilization of that country and in order to be able to begin to do what every American wants to do is share the cost and bring our troops home. Bring them home more rapidly than we otherwise would have to.

We have, it seems to me, three choices. One, we continue to bear the burden ourselves, deploy additional forces that are needed, spend the tens of billions of dollars for reconstruction out of our own treasury and maintain, again, the carrying of 90 plus percent of the cost. We can do that.

We can figure out a way to internationalize this to get other people to take on part of the burden, take on part of the cost and remind everyone with this committee, reminded everyone for the last year and plus that the first Gulf War, we only paid about 20 percent of the total cost of that war. We only paid about 20 percent. Everyone from the Japanese to the EU to the Arab states came in and picked up the bill.

We're paying it all now, virtually. And so there seems to be a lacking of a game plan or a will to figure out how to internationalize this and get everybody in on the deal. As you point out, folks are going to want to know, Mr. Hamre, what this provisional government's going to look like. How legitimate is it before they decide in this donor conference they're prepared to jump in.

Well, part of that is, I've never found people being very receptive to being able to pick up the check without having to pick up, at least have some say of what's on the menu, having some say about what's going on in the country. I think we are kidding ourselves if we think that that's going to happen.

We have third option. One, do it all ourselves; two, try to internationalize this in the broadest sense of those words without losing control; or three, just decide that -- which I predict will happen if we don't start to get things in order pretty quickly -- decide that we're going to put an a Iraqi provisional government in power, we're going to basically try to turn it over to the UN, we're going to try to bring folks home and get out of there and leave the circumstances, I think, would be a prescription for absolute total chaos, absolute total chaos.

And so, the thing that I most welcome about your report is to start desertion and I'm paraphrasing, that we have a relatively narrow window and I want to make sure that I characterize it correctly from reading your report. The narrow window is not whether we can get anything done, the narrow window is, we have a narrow window in which to convince the Iraqi people that we in fact are part of their salvation and not their problem. That if, in my view, 60 to 90 days from now, conditions have not markedly changed on the ground as it relates to security, as it relates to basic services, particularly electricity, as it relates to police forces on the ground. Then I think we're going to find ourselves in a tough spot.

Serious polling has been done showing that the Iraqi people are prepared to give us the vast majority between six months and two years to begin to get this right. They want us to stay. They want us to stay. That's the part and some good things are happening. Some good things are happening on the ground over there, but I think we have a fairly narrow window.

And the last point I want to make is this and I want to talk to you about this. You mentioned oil. One thing the chairman spoke about last July, August, September, October, November in his straightforward, traditional, conservative, insightful way was how are we going to set up an economy. Remember we kept saying that? What's going to be the economy?

As my grandfather would say, what horse is going to carry the sleigh? What's the horse that's going to carry the sleigh? And we keep being told or implied that don't worry, Iraq has the second largest oil reserves in the world, that can do the job.

I want to make it clear to everybody what we were told in Baghdad by our persons on the ground and I can't remember the man's name.

(UNKNOWN): Phil Carroll.

BIDEN: Carroll, Phil Carroll who's a serious oilman, appointed to get that oil industry up and running. My recollection is that he said that everything goes as planned without any serious interruption of oil flow through sabotage and investments in the fields continue. That over the next 18 months we may generate up to $16 to $18 billion in revenues.

Now, one little thing; we are handed by our folks over there are going to train Iraqi police forces, telling us that they need now a minimum of 5,000 trained police officers from Europe or other parts of the world on the ground now to allow them to maintain order and to train.

One year budget for that operation is $725,023,000.00. So, almost three quarters of a billion dollars, just for one year to maintain a total of roughly 6,000 trainers and police officers on the ground. And we're paying $4 billion a month just to maintain U.S. forces on the ground. That's just to get some sense of proportion.

So, if anybody thinks that we're going to "be able to rebuild Iraq" not pay for any of our stuff, rebuild Iraq with Iraqi resources over the next 18 months, they're kidding themselves, because, you laid out, we have $6 billion that is on hand now. We're going to have max, $14 to $16 billion the next 18 months in oil, based on everything we've been told. And we're hoping for the donors' conference. That requires us to focus on the thing the chairman talked about last October and what to do about Iraqi debt.

And so the point I want to make is, I hope we start to get rational and reasonable about how urgent this is, how badly we need others in on the deal to help carry a lot of this burden and how much that requires us to have a patina of sort of a legitimacy that I think that can only come through the United Nations, NATO, the EU, and the Arab nations as to the government that we are helping put in place to be chosen by the Iraqi people ultimately.

And I think your report is a first rate contribution to alerting us to, A, we're going to need more money; B, the window is pretty narrow; C, it's going to take a long time; and D, we better get underway.

And so, I have specific questions when we get to that, but again, I want to compliment you. I think it's a first rate report and it's one heck of a starting point. When I heard you say as I came in, your statement is that you're being listened to and I hope you can, in your weighing in, you will help settle the ongoing debate within this administration about which way to go in terms of what we do from this point on.

Again, I thank you. I thank you for the time Mr. Chairman and I will wait until we get to questions to pursue some of the things I'd like to talk about.

LUGAR: Thank you very much, Senator Biden.

Ms. Crocker, would you proceed with your testimony?

STATEMENT OF

BATHSHEBA CROCKER
Commission on Post-Conflict Reconstruction

CROCKER: Well, thank you Mr. Chairman and I think I will pick up on one of Senator Biden's important points about how we need to remember that there are some good things happening on the ground here.

One of the areas where we saw that was the area of the setting up of local and provincial political councils and the recent establishment of the Iraqi governing council, all of which are very important steps going forward.

What we were concerned about and have highlighted in our report is the need to make sure that we give these councils all of the tools they need to succeed so that we can sort of maximize what we've started in the way of progress in this area.

In thinking about the local councils, what we noticed when we went out in the field was that there's a bit of a disconnect still between what is happening out in the field, very excellent work being done by our military commanders and the civilians in the field to set up local councils and provincial level councils, but they are not as of yet really connected in any way to what's going on in the national political front and we will need to make sure that we find a way to make that link.

One piece of that may also be making sure that we engage in some revenue sharing so that we get some resources out to the localities that we decentralize this effort a little bit so they can start responding to the local needs in their community.

And just a second point on the Iraqi governing council itself, one thing that also concerned us was that the Coalition Provisional Authority of course has a natural and understandable inclination to want to put an Iraqi face on some of the very difficult issues that they're facing.

And although I think we all agree that that is the right direction to be going in, we will also have to be careful to make sure that we don't overload that council too early by sort of dumping off all of the very controversial issues that will be coming up.

LUGAR: Thank you very much.

Mr. Orr?

STATEMENT OF

DR. ROBERT ORR
Commission on Post-Conflict Reconstruction

ORR: Thank you Mr. Chairman. In your initial remarks you said that you'd be looking for tools that you might use to move this process forward.

I'd like to call your attention to one very powerful tool that we heard calls for from around different parts of the country. And that is decentralization. Iraq is a huge country, as all of you who have visited it know. It is a very diverse country. If you go north, go south, go to south-central, Baghdad, it looks very different, the problems look very different and I would argue the solutions look very different or need to look very different.

We need to pursue a strategy where we consolidate gains in those places where things are going well, even as we naturally are going to focus on the places where there are problems.

To do that, we need to get authority and resources out to our own people out in the field at the provincial level. There are 18 provinces in Iraq. I think on paper, we do have at least one person in every one of those provinces, but we cannot kid ourselves here. We are not up to the task out in the field. Most of our resources, human and otherwise are concentrated in Baghdad and the area around Baghdad.

I think what's interesting about this is the model we've been using up to now through the military is a decentralized model. It's these amazing majors and captains that are standing up town councils, that are getting economies going, that are starting quick impact projects. But, by their own account, out in the field, they've said in numerous conversations in all parts of the country, "we've done what we can, but sir, I just don't know what to do with this town council now. Can you please get some civilian out here who's been on a city council or has at least seen one before?"

I think our military's done an amazing job. What we need to do is now get the civilians into the fields to follow through on their good startup work.

In order to do that, we have to get mechanisms in place to recruit civilians aggressively and get them out to the field. I think there is a recognition that some of the bureaucratic problems here in Washington have held up a lot of the civilians that we need to get into the field. It is time to get past our bureaucratic problems in Washington.

Undersecretary Fife the other day at the Pentagon noted that in fact, he was planning to take one of the recommendations and in fact had started to set up a backstopping office for Ambassador Bremer here in Washington and that one of the key functions of that office would be to collect an interagency group of people. He said someone from all of the agencies that are on the ground in Iraq and to use that office for one very important purpose among others, and that is to recruit the right civilians.

Get the Agriculture Department employee who knows all the right people in this area to identify the five agricultural engineers that we have to get to specific provinces. Have the Justice Department play their role and the State Department play theirs. Only by having that office up and running I think are we going to see the right people getting out into the field.

As you and Senator Biden noted, this window is closing. And I think the key here is to go from the talking about decentralization stage to the implementation stage immediately. Thank you.

LUGAR: Thank you very much, Mr. Orr.

Ms. Forman?

STATEMENT OF

DR. JOHANNA MENDELSON-FORMAN
Commission on Post-Conflict Reconstruction

FORMAN: Thank you Mr. Chairman. I wanted to talk about what I think is probably something that both of you have referenced in your statements and that is, in order to restore the economy, we need to get the power running, the oil pumping and the water flowing.

But, we also need the Iraqi people employed back again in the jobs that they once held, even if in the short term that is not the key to privatization they need to be off the streets with a meaningful existence and some money in their pockets so they can buy the food that they need and the way to survive in this critical window is to make them feel they're part of this operation.

My colleagues like to talk about an iron triangle of water, oil and power. And I think it's clear that we all know that we were uninformed about the gravity of the power situation. But, we now know what to do to solve it. And I think the faster we get every generator available and every kind of technical capacity available into the field, the sooner Iraqis will feel a greater sense of progress, because they will feel the air conditioning, they will feel the power on more than two hours a day. I spoke to women whose children had to study by lantern light in Baghdad because there was no power and it was a continuing blackout. So, these are emergencies.

On the jobs end, many people in industries have to be reemployed in the status industries right now. It is a recurring cost, it's going to add to the budget that Mr. Biden made reference to, but in the long run, this will provide the stability and the security that we need.

And finally, I think we're moving ahead on some of the credit areas, but the provincial council, while it's not the actual government, has to provide some kind of a legal framework so that investors and people who want to start business in Iraq can move forward and understand that there's going to be reliability of the economic system.

We were in a meeting yesterday. Nobody wants to invest when there's no regular regard to a contract. But, if these three areas are taken care of in the short run and I think they can be, we certainly could move forward.

LUGAR: Thank you very much Ms. Forman.

Mr. Barton?

STATEMENT OF

FREDERICK BARTON
Commission on Post-Conflict Reconstruction

BARTON: Well, thank you very much. It's a pleasure to be here. My father was a member of the staff 30 years ago and had the chance to work with you. For those staff members who wonder what might be happening to them, may your children grow up to testify before this committee? It's a pleasure to be here.

In the midst of enormous challenges that we're looking at here in Iraq, perhaps one of the greatest is moving the Iraqi mindset in a society that is dominated by rumormongering and the complete lack of trust. The availability of constantly reliable information and that constant communication is absolutely essential.

We believe that this is an area that still needs a tremendous amount of attention. Other than the $25 million reward for bringing in Saddam Hussein, in our travels we found very little understanding of what was going on in their country, where it might be heading and what their individual roles might be.

And so what we suggested is that what is clearly needed here is a national marketing campaign in the best sense. We felt that there are really three large voids. We don't know what the Iraqis are thinking still. Despite our presences in the community, we're living in something of a bubble.

Secondly, we're quite clear that the Iraqis don't know what we're thinking and then the third area is we're not sure that we know what we're communicating to ourselves among ourselves.

And so the national marketing campaign obviously needs to be first and foremost built on a fully informed sense of what the Iraqi public is thinking and what it wants. And this will not be able to be done in sort of the traditional ways. We're going to have to get way beyond our occasional polling or some of the other methods that we've seen here.

The second part of that is that we have to get the full contact with the people of Iraq and we have a lot of opportunities that we think are being missed. We are paying salaries to tens of thousands of Iraqis and we're not using those opportunities. We have some TV programming that we've put into place, but again, that's nowhere near the 24/7 appetite that we saw there on the ground.

We have the oil for food program, which is essentially still reaching the vast majority of the people of the country. These are channels that can be used and they need to be used if we're going to really get the kind of well-informed participation from the Iraqi public that we think is necessary.

So, this is something that is not typically within the working strengths of our government. In a way, when we've talked among ourselves, we've said there's probably only one person in the United States government who really is prepared to run this kind of an effort and it may well be Carl Rose. But that's the sort of focus and attention and seriousness of effort that we believe is absolutely necessary.

LUGAR: Thank you very much Mr. Barton.

Let me know call upon Mr. Anthony Borden who is Executive Director of the Institute for War and Peace Reporting in London, United Kingdom for his comments. Mr. Borden?

STATEMENT OF

ANTHONY BORDEN
Executive Director, Institute for War and Peace Reporting

BORDEN: Thank you Mr. Chairman, Senators, Ladies and Gentlemen and my distinguished colleagues on the panel. It's a particular pleasure for me to be here, especially with curtailing on their excellent reports.

As Executive Director of the Institute for War and Peace Reporting, I've been working in post conflict and conflict areas seeking to strength and local journalism for more than 12 years. And this is in many cases working in training, reporting, research programs, and local capacity building.

Our organization works in the Balkans, (inaudible) Central Asia, Afghanistan and now Iraq. And we have a long-term program supporting information flow from the War Crimes Tribunal in the (inaudible) on the former Yugoslavia.

Personally, I traveled to Iraq just before the war to get some sense of what one could of the regime and also the information system there. And with a number of other organizations, I traveled to Baghdad and throughout the country in the proceeding month. My remarks now are based on an assessment report, which we produced and which has been disseminated, but slightly updated since that report was finished.

Mr. Chairman, efforts by the U.S. led authority in Iraq to establish responsible media are in crisis. Poor planning and implementation are undermining efforts to inform the Iraqi population and to lie out a framework for media development. The stakes are very high. A prerequisite for any kind of emerging democracy is it trusted in professional media to convey facts, support responsible debate and represent the diversity of communities and views within the country.

But, the absence of reliable Iraqi media exacerbates the frustration and growing anger is held because the absence of Iraqi governance and the continuing lack of basic security and services. Powerless and uncertain, Iraqis need a voice.

There has been a dramatic post war boom in local media, with the launch of up to 150 newspapers and many radio stations. In deed, there is a bewildering, even exciting diversity of new media for a changed Iraq emerging from decades of dictatorship.

But, the majority of these media are highly partisan operations established by rival political interests jockeying for positions and could be destabilizing in a fragile post conflict environment.

Many are directly produced by political parties or by former senior Baathists or other figures with a political rather than a journalistic orientation. Media being then from other countries in the region with very different agendas, have far outpaced any U.S. launched initiatives. Informed media with balanced reporting is largely absent.

Most disappointing, the United States through the Coalition Provisional Authority has failed in the core task of communicating with the Iraqi people. With a weak and poorly executed information and media strategy, the U.S. has spent around $20 million, yet failed either to provide basic information about its actions and intentions or to lay a meaningful groundwork for future responsible Iraqi media.

BORDEN: The central problem is a conceptual one. The U.S. Administration has not firmly separated its policies for media from its agenda for public diplomacy. Both are very important objectives. The occupying authority has a responsibility to communicate with the population, to relay fears, provide basic information, and explain the purpose and potential of its intervention.

But, independent and reliable reporting is entirely different and must be structurally separate. In particularly the Iraqi Media Network, which is the Authority Media team has been passed both with broadcasting and with regulatory authority, with producing media and with providing information for the CPA.

Over all, IMN has simply not demonstrated the vision and professional capacity to meet the major challenge it faces. Compounding the problem, interagency rivalry has contributed to an absence of strategy, bad hiring and purchasing practices and debilitating internal dispute.

TV programming, as my colleagues mentioned, has in particular been poor. As a result, the IMN television news neither provides credible information to the population nor serves as the flagship fresh face of a new and democratic Iraq.

An urgent step change is therefore required in the structure and ambition of U.S. media and information strategy focusing on three main points. One, the CPA must create a professional and substantial information operation to communicate basic facts to the population. Treat Iraqi people with respect by speaking to them honestly, regularly, and in their own languages about the challenges and prospects for their country and they will give their support. Keep them in the dark or communicate through spin and half-truths then frustration and anger will grow.

Two, establish an independent Iraqi media commission to create the legal framework and regulatory and other institutions necessary for a free media environment. Superseding the existing Iraqi Media Network, the new commission must include an incubating and Iraqi public broadcaster which itself would gain early independence.

Through an initiative of USAID and the U.S. Organization Internews (ph), a framework for just such an approach has been drafted and consensus at a senior level appears to be emerging. Yet, it is important to emphasize that as with IMN, the effort will falter if right from the start it is not granted full independence from direct CPA control or if ambitious multi air resources are not reliably pledged. The challenge of winning buy in from Iraqis also remains.

Third and finally, empower Iraqi democrats. Draw on existing professional talent, urgently launch training to develop new capacity and provide meaningful positions of responsibility for Iraqis in all new institutions.

It is their county and the only effective approach will be one that makes them direct stakeholders. This should include a new Iraqi Media Institute as a coordinating body for training and media development and for strengthening the ties between emerging independent media and the broader Iraqi civil society, which must sustain and be sustained by it.

This is the area of focus of my organization, the Institute for War and Peace Reporting, which with British support will be launching a significant journalist training and humanitarian-reporting project in the coming weeks.

No one should underestimate the extreme difficulties facing Iraq, a civil society destroyed and economy in ruin, communications nonexistent, continuing uncertainty and violence. It will not be easy to overcome years of censorship and brutal repression of descent. Yet, Iraqis are confronting this huge challenge with considerable energy and initiative.

Of proud people, they are highly educated and have shown enduring desire, even through the (inaudible) decades of Baathists rule to be informed. The possibility for a responsible press and a sophisticated audience is evident. A potential revolution in open media for the whole region, this would only make the loss of such an opportunity all the more disappointing. The information chaos in Iraq undermines both Iraq's interest and America's and urgent steps to charter fresh course for a clear new democratic media voice in the region must not be missed. Thank you.

LUGAR: Thank you very much, Mr. Borden, for that excellent statement.

I like to suggest, because we have a number of senators present that we start with a seven-minute limit and then we may have a second round if senators are not able to satisfy their questions or get the answers they want on the first opportunity.

Let me begin by picking up on a point that you made, Mr. Hamre, that the economy of the country -- and you described this as roughly a $25 to $30 billion economy prewar -- really calls for a multiyear budget testament, at least in my judgment.

We heard from Mr. Bremer yesterday that he has fashioned a budget for the final months of 2003, which is a considerable advance and it's plugged in figures of oil revenue, revenue from miscellaneous sources of compounded funds, gifts, whatever we are doing, other countries might do, and this somehow looks like a budge that might fit for the remainder of 2003.

But then comes 2004 in January. Now, in 2004 we've been told by other witnesses that other countries in the world and ourselves have said there will be no payments or servicing of the debt that Iraq owes. And the estimates of what it owes, what legitimate situation is there is certainly in dispute, but billions of dollars. Some would say tens of billions and some go into hundreds of billions.

So, all that is like an 800-pound gorilla overhanging the situation. Once they're on the ground we begin to deal with figures like $10, $20, $30 billion for an annual budget and out here somewhere are people in countries or sovereign states, as a matter of fact, demanding of someone in Iraq with the sovereignty and the legitimacy not yet well established as to who can assume that the (inaudible) should forgive us and this is a very big problem.

Now, it's been there for a while, but it has not been addressed and I think it needs to be and by our government or others that we are able to pull together with us.

Now, secondly, the budget itself, I've been raising this issue, so it's not a new idea today, but I would like for someone to fill in the blanks for 2004 and 2005 just as starters. It could very well be additional years are required for this exercise to estimate how much money comes in.

Senator Biden has pointed out, Mr. Carroll said to us, and my recollection is about the same as his, we could estimate $14 billion in oil revenue. Now this is exported oil revenue over and above oil that would be needed by the Iraqi people for their internal use. So, there's $14.

Now, when we pressed Mr. Bremer for what are the other sources of revenue he kept saying oil, oil, oil. There aren't any until there is an economy that perhaps somebody might be able to tax or some revenue comes from that. And in due course that will happen. So, he would fill in, at least hypothetically, maybe five percent, maybe ten percent from other source on the ground from Iraqis themselves.

Now at that point, if we're dealing with the feeding of the people, the security of the people, the infrastructure repairs, leaving aside tough judgments, do you fix up the oil wells in the way that they could pump more oil, if that's a source of revenue? Make an investment in the future of that kind. How much money on the revenue side is required and what is going to be expended on the expenditure side.

To this point, no one in the administration wants to deal with that issue. Each person would say -- you're dealing with hypotheticals, you're dealing with role we don't know about, you're dealing with all sorts of things that we don't want to talk about.

But you, Mr. Hamre, have mentioned this word, supplemental. Now, the reason it is so important that the administration, our administration or whoever the administration is going to be of this country, get into this is that it is obvious to me and I think to many of our members that substance for United States monies are going to be required in one form or another. Hopefully not always in the form of an emergency supplemental as a surprise, but rather in a straightforward way in which we understand that for the next few years, our budget is going to have a component along with the budget of Iraq.

Now, to the extent that we are successful with pledging conferences, with sharing the burden, with almost an international united way like the first president George Bush brought about in the half of Desert Storm. Then that figure, whatever it is on the revenue side may be shared in various ways. Our burden may be substantially less. We hope. But it will be there and the thing that I think is important about your report is not just the next three, the six months that you say are critical, but rather the trust of the American people that we are all leveling now with what is a multiyear situation. Now, that is a tough thing for all of us to do, whether it's in administration or Congress.

As I mentioned in my first statement, nation building has had a pejorative sense. People didn't like that idea. They said we are not in that business. And don't let us ever slip into that situation. In fact peacekeeping is not very popular and we don't want to get into that situation. But yet, we are there and we are trying to keep peace and establish order and build a nation and in fact, the objectives of the war are often given the success of it on how good of a nation's state emerges from this.

So, we've made that commitment. And I would just like some more thoughts from you, Mr. Hamre, you have been a budgeter for the Pentagon, so this is why it's a fair statement or line of questioning.

Is it reasonable to try to fill in the blanks, even hypothetically for the next two or three years so there is some idea of how much money is required, some idea of how much money might be required from the American people, so there is not one supplementary surprise after another, because my fear is during some hearing, some day, perhaps in the time of this Congress or the next one, many people are going to revolt and they're going to say we've been surprised enough. We simply don't trust your figures.

LUGAR: It was apparent to all of you, as it is to everybody in this room today that there were expenditures that were going to be required unless we just bail out and say this was an unfortunate experiment, didn't work. Now you're saying that would be unconscionable, and we do, too. That is not the objective of the hearing. And it's quite hard to turn it around. But the bill is sent to trust that somebody understands in the real world.

You're, as a budgeter as well as a fine person, that brought together this report, and some of us having responsibility to vote for these things. And all of us have constituents will at least look to us to have some foresight and some honesty as to how we foresee it.

Now, is the idea of a multiyear budget a good one? And if so, who begins to fill it in? Where is the expertise somewhere in our government to fill in those figures?

(UNKNOWN): Sir, I think you do have to take a multiyear perspective on the budget, because there are multiyear investments that we're going to have to make, to help the Iraqis make, so that they can get a sustainable economy. The oil infrastructure needs serious renovation -- serious renovation. It's been badly maintained and frankly plundered for the last eight years.

The electric industry -- there's probably only 60 to 70 percent of the generating capacity that the country needs. And it is antiquated. So there is probably a $5 billion to $10 billion dollar investment in electricity generation and distribution that's required. These are all multiyear projects that need to be undertaken.

And I honestly think they really do have a good start on this. They've put together a process for, you know, aligning (ph) what are the obligations and when do we need to make them, how do we assign priorities between oil, gas, et cetera.

So they've got the tools there, and I honestly think it has to be built up there. And it has to be built up with as many Iraqis as possible. Because they need to feel we're not dictating their future, turning them into a plantation, we're simply helping them get started, what they need to do.

But as I look at the resources that Ambassador Bremer has, right now he has $6 billion of reliable money.

LUGAR: And that's it.

(UNKNOWN): And that's it.

LUGAR: He runs through it this year.

(UNKNOWN): Well, sir, it actually has to carry him for the next 18 months.

Now at some point he's going to get oil revenue. It's coming more slowly than we know. The original expectations for getting oil production were probably too optimistic. And we heard exactly the same thing that you did when you were there. We'll hope to get $12 billion to $14 billion dollars a year, you know, for oil revenue over, say, the next 15 to 24 months.

As I said, this is a $25 billion to 30 billion economy. It was. It doesn't need to be -- it's not going to get there immediately, but that's roughly the level of expectation for living standards, et cetera.

So somehow we're going to have to fill the bucket up. This needs to be done as much I think on international basis.

But if you get right down to it, I think we are going to need to acknowledge we'll probably need supplemental funding. And I think it's a lot better to tackle that problem right now than it is to all of a sudden to look at a supplemental next March and April. The politics are different next March and April. It would be a lot better to take on the issue of the supplemental now in my view.

LUGAR: Thank you.

Senator Biden?

BIDEN: I'd like to follow up on that a little bit.

The thing that I found most striking about your report -- you know, we get a lot of reports filed and half the time to get a staff summary of and half the time to read that. I read your report.

The fact of the matter is the central point you make, and I think is the absolutely essential point that we all focus on is that we have this window relating to the Iraqi people, the Iraqi people saying that it's a good idea for us to be there and they think we can help them to get the job done. The moment they change their mind about that, en mass, that is the moment that makes everything exponentially 20 times harder, no matter what it is we're going to do.

But the point the chairman's making here, if you will forgive me for piling it on, is that the American people are going to get to that point pretty soon -- the American people. The idea that we're not going -- the idea that we're not factoring in, not a supplemental, but into our regular budget for next year a considerable number for Iraq is shameless. The failure to do that implies to the American people that we don't need to do that. We're not going to sit here and not factor in what the costs of our military is going to be, period, overall.

We're not going to say we're not going to guess about what the military budget should be, what HSS should be, what other things should be. And so when we -- if we were to say no, don't worry about that -- the supplemental implies we have enough now, if we need more we'll come back for it. We don't have enough now.

And I'm telling you -- I'm telling you -- that's the wrong way to say this. I believe that if we do not start to level with the American people, we're going to lose them. We're going to lose them, and when the president finally comes -- my face (ph), and I'm not disassociating myself from the chairman. He won't want to disassociate himself from me in this.

When the president finally comes to his senses and realizes he has to go to the American people and level with them, not what the exact amount is, but this is going to cost us tens of billions of dollars in the near term, direct expenditures, and it's going to cost us tens of thousands of American troops in place in the near term, until he says that to the American people, they won't know what we're doing. They wonder what we're talking about. Because they expected Johnny and Jane to come marching home.

And so I want to pursue, in the probably four minutes I have left, priorities here.

The two gentlemen that the committee left behind took what they found in Iraq, as well as what we together found, and have drafted a report that is only in draft form. The chairman hasn't seen it yet, and I have just seen, and it's only a draft. But they lay out four, five or six things.

They say that the priorities are security, which is different than law and order; law and order is two; re-establishing services; getting the message out -- as Mr. Barton has in half of what his statement is; generating employment, the part Ms. Forman is talking about; and internationalization of this effort.

Now my question is very, very basic -- notwithstanding the fact that we ought to be able to walk and chew gum at the same time, notwithstanding the fact that Ms. Crocker said we attended those town meetings too.

They're remarkable. I don't know why they're not televised live on an Iraqi version of C-SPAN, but no commentary, just for all of Iraq to see it, just to see that. It's remarkable, truly remarkable what we're doing there.

But in the meantime we're finding that a lot of those folks aren't preparing to participate in those councils because we're afraid they may get shot dead. They're afraid.

Women are not willing to walk out of their homes. You pass schools like we did, there's all these automobiles outside of schools, and they sit there the whole day, the whole day with the parents sitting in a car, and they're wondering what the hell it's all about. Mothers and fathers will not let their daughters go into the school without staying on guard outside the school because their daughter will be abducted and/or raped.

So what do we have to do, in your view, in terms of priorities is establishing order and infrastructure, getting up and running the lighting and the air conditioning is that -- should that be the immediate priority notwithstanding the fact we got to go out in the countryside, notwithstanding the fact that (inaudible).

If you were only able to wave a wand and solve one of the many immediate dilemma facing us -- unfair question, but it'll at least focus us -- what would it be? What would the thing be that you think is the most urgent immediate need in the next four weeks?

HAMRE: Everybody at this table will say security. It has to be put in place because without it you don't get reliable electricity. Without it you don't get oil for long-term health because you can't pump oil (inaudible)

BIDEN: Now did you get any sense -- what was your sense, and I realize, you know, even being there a couple of weeks like you were, you're not claiming to have, you know, you're not claiming to be on mission because you don't think you know it all. But what was your sense about our ability in the next four to six weeks to really get a handle on security? What was your sense about that?

HAMRE: Well, let me say first a word for my colleagues.

I think our -- our focus understandably has been on the Saddam loyalists, the spoilers that are out actively trying to undermine our forces and the security of the emerging government. That is not going to be adequate in the long run. We have to deal with the broad criminality on the streets, and we have to deal with the economic plundering. That's not been the primary focus of our military. I understand that. It is at the local level they're trying to keep it safe at local communities.

But the big gangs that are operating throughout the country and the basic security in the cities have got to be fixed. And because, as you said, people are not willing to work with us, that means it's a broader security problem than just military. It has to be the Iraqis have to be brought to the process of defending their own country.

BIDEN: Now having said that -- and my time is about to be up -- let me tell you what we were told, and you tell me if it's different than what you were told. We were told that in order to begin to stand up an Iraqi police force -- just in Baghdad, let alone other places -- that it was going to have to be from scratch because all of the 79,000 Iraqi policemen, none of them were cops as we know them. None of them were trained as cops as we know them. They gave an example.

If there was a murder in an apartment building, everyone was expected in the apartment building to get in a car, bus, or walk to the police station and come in for an interview. Nobody went to the apartment building and interviewed the folks there. Because it's very simple: You didn't show up, you probably got shot or put in jail. It was a real simple proposition. In a democracy that doesn't work.

And so we're having to stand up a whole new police force even though 30,000 will come back and say they want to participate in the police force.

Some are not willing to go out to the police stations because they're afraid they're going to get shot on the way, or shot when they're there. And even those we're standing up need basic training.

And so we were told that we need somewhere in the order very quickly of 5,000 trained police officers, European, preferably, Arab, whatever.

And we also -- I've not gotten the impression -- this is my question -- I've not gotten the impression we have been actively above Bremer's pay grade actively seeking with a sense of urgency contributions to such a force.

What is your assessment of what you think we need and what you think we are doing? How high a priority is it at the moment with the CPA as well as within the administration?

(UNKNOWN): Let me just say one thing. I think there is a recruitment beginning on a civilian police. I don't know...

BIDEN: There is?

(UNKNOWN): There is. And we were told that in our briefing prior to our departure when we were...

BIDEN: They told us that's going to take at least six months to be able to stand up anything of any consequence.

(UNKNOWN): That may be the case, but let me talk about the creativity of our troops on the ground. They have started patrolling, using these recycled policemen with USMPs. Now obviously, it's not going to solve the problem of an absence of a legal system, but you've got to create short-term interim solutions that will give people confidence.

BIDEN: Most of those MPs are reservists and most of those MPs are National Guard and most of those MPs have no way being extended. And they're going to come home or they're going to be sent there for extended periods of time which is going to cause another problem.

(UNKNOWN): But I would suggest that in the internationalization issue, which you raised, Senator, that there is a critical need that could help draw the recruitment. And I suspect through the European community, through NATO, through other forces we could get the number of people. It won't be the exact number that we need right now. But I think Dr. Hamre, in fact, had done a back-of-the-envelope calculation of how many we might possibly get even from our coalition in Spain where they are a member of the coalition just to become members on the street.

In fact, I got a call from somebody in Bridgetown, from the Tarracom (ph) people, saying, "Do you want us out in Iraq?" So I think if there were an internationalization, if the U.N. were asked or other institutions were asked, people would send policemen forward.

BORDEN: Sir, may I just add to this that I think -- you know, the case you described where someone is murdered in the home and you need to go investigate, those are fairly advanced police skills. Police forensics are more advanced skills. It doesn't take nearly so much effort to get a guy out there to stand in front of a building and check an ID. It doesn't take nearly as much ID.

And so I think they are taking on the near-term security challenge, and frankly you could do rent-a-cops for some facilities. I mean, we went to the tomb of the unknown soldier, or whatever it was called, and you could put a couple of rent-a-cops up there who had been Iraqi citizens. They don't have to be, you know, finely skilled police detectives with good forensic skills.

So I think if we parse out the problem, I think we can advance the domestic security agenda much more quickly.

To your point, though, we clearly need more (inaudible) elements. And I think the Europeans have those. We should be asking them for them. I believe that the Italians are going to contribute them. I think the Spanish can contribute some, or at least are prepared to be asked about it. We may need more than $5,000, in my view, until we get our arms around the security environment, and we don't have them around it yet. But they're working on it.

BIDEN: To paraphrase the chairman, I'm anxious to see what the plan is. I'd like to see the administration let us know what they're asking, because if Mr. Borden now in Bosnia, we have a lot of experience in this, and it took a long time, it took a lot of effort.

CHAIRMAN: Thank you very much, Senator Biden.

Senator Hagel?

HAGEL: Mr. Chairman, thank you.

Dr. Hamre, thank you. Your associates, all the organizations that are represented here at the table today. We know it is far and wide and it's very inclusive so each of you who represent different organizations in addition to CSIS.

John, thank you very, very much.

Your statement, Dr. Hamre, focused on seven points that you wanted to reinforce which summarized your study. And I wanted to go to the sixth, which has been alluded to generally here in the opening statements of both the chairman and the ranking member, and that's the international coalition.

And if I can just read back to you a sentence or two, and then I have a question based on that. You mentioned the sixth priority -- we have an international coalition that is helping us build a new Iraq, but we need to broaden that coalition even further, we need to find ways to invite other countries in to help with the rebuilding.

How do we do that?

Now we have a donor conference but, John, get specific. And I would obviously welcome the comments of your associates.

Let's start with the United Nations. What should we be doing? Are you recommending that we go to the United Nations with a resolution? Go to NATO with a formal request? Go to where and who and when? Take us down a little deeper into how we do that?

HAMRE: I really will turn to my colleagues, first, and then let me offer a comment at the very end.

Rick and Johanna, do you want to speak to...

(UNKNOWN): Actually, this is probably something that every one of us would be happy to speak to, but I think that we feel that probably another resolution would be helpful. Clearly, this is a domestic political problem for many of our allies.

It is not at this moment a politically popular position to take within their own body politics to really get involved with Iraq, so it's going to take the U.N. would be helpful and we all believe that.

I think secondarily we have clearly come to the aide of our allies, as we did in Bosnia when the French and the British got stuck. I think this is one of those opportunities that's saying, "We would welcome your help," rather than the more subtle, the more private communications. This has gotten such a public stage that the word has to go out in a more public way.

HAGEL: And so a resolution would be one way that you all would recommend to broaden and deepen it?

(UNKNOWN): A resolution and the more direct communication that says we need your help. This is too big a task for any one of us to succeed. And it is vitally important that we all succeed. This is not the United States and Britain; this is a global effort, and it requires a global commitment.

HAGEL: In the interests of all nations.

Ms. (inaudible) you have a -- we'll come to you here, Mr. Borden, in just a...

(UNKNOWN): Senator Hagel, I think your question and also the chairman's opening statement and Mr. Biden's statement point to internationalization, specifically on the United Nations. Yesterday the special representative (inaudible) gave his report, they gave very positive signs.

I visited with -- once with Dr. Hamre, and once by myself -- the U.N. headquarters. They're looking for a job, they want to help. And I think that's what we have to send a signal that is needed. Donors want to work with the U.N.

There have been issues in the past, but the legitimacy of 191 member states is key at this moment. And if we're going to get the money that is described in the deficit, they certainly need the fiduciary agency of the U.N. to provide that in the absence of the government. An Iraqi government will come, we're sure of that, but in the interim, even the donor regulation have the same bureaucratic problems as we do, they need to give state to state. There is no Iraqi state, there's an occupying power, and that's the fist step that a resolution would address.

HAGEL: Thank you.

Mr. Borden?

BORDEN: Yes. As the European resident at the table, I would think two things must be important to discuss. When Senator Biden referred to the problem of picking up the check without having had any say in the selection of the menu, I think that's a really strong useful way of thinking, and represents much of what the Europeans are feeling right now.

I think some very open speaking about the way we got into the conflict and where we are now would be useful. In the British press, as we know, the American ally Blair is getting hammered every day about the WMD issue. And these matters need to be cleared up and moved on. And it may be worth addressing them quite openly first.

Secondly, in the media field, just to give you an example, one of the things that we in the community of the media development groups are looking at are ways to create independent institutions from the CTA. We do this because as journalists we think media have to be at the bend (ph) of government. We also do this somewhat strategically because we think we get these things carved out of CPA.

I can go to Brussels or I can go to Stockholm, or I can go Stockholm or I can go in Europe to raise matching money for this because they will be pleased to do so even if they don't want to give money to America. But they want to give something to Iraqis. They want to give something independent, and they do, frankly, feel sore about the American dominance of the project.

So find ways to loosen the strings a little bit and I think you'll find more contributions to the budget.

CHAIRMAN: Thank you.

Mr. Orr?

ORR: Senator, you can tell by an issue you've hit on that every one of us is leaning forward in our chair to try to get in on this one. There are a couple of key things that we can do in the immediate run.

The Center for International Cooperation, the CIC, has been set up within the CPA. It's still somewhat marginal. It's kind of sticking out there, and it's headed by a very able Polish gentleman, former deputy finance minister. His deputy is an Australian. So far that body has been kind of charged with going out and rounding up funds. They are very clear that they can't round up funds unless they are brought into the decision-making. Within the CPA there needs to be progress towards getting the international voices in the councils of making decisions on how the CPA will run.

Secondly, the issue of recruiting civilians. We've been focused on foreign troops. We need to focus on foreign civilians, too. They don't require the same logistical trains.

One of the problems with going out and recruiting the foreign troops is that we have to do a lot of the logistics for them. That's an incredible burden on us. Recruiting talented non-American civilians does not bring that same burden. If we use this decentralization model that I talked about, there would be plenty of great opportunities to plug in European, Asian, Middle Eastern civilians into that decentralized structure and I guarantee you the donor (inaudible) is going to go much better when there are at least five or six nationals in a given country on the ground out there that'll be much more ready to call me out.

HAGEL: Ms. Crocker, did you have a comment?

CROCKER: I don't have anything to add to that, no.

(UNKNOWN): Could I have just 30 seconds, sir?

The one thing, though, I would say, I think that it would be very useful if we think about the U.N. to try to put our efforts around getting greater international recognition to this governing council. Clearly we intend that to be the core of the new processing (inaudible) as the new government emerges, and I think that's probably the better basis for doing resolutions.

My fear is that there are so many -- there's so much extra politics with going to the U.N. right now. And you know, it would be one thing if Europeans were ready to say, "We'll give you 100,000 troops tomorrow if you'll come back to the U.N.," but I haven't found any commitments to 100,000 troops any place in Europe. And so there isn't going to be a big serious contribution coming from that process.

So let's just do this the old fashioned way. Let's try to build up the part of it, the credibility around which this new government is going to emerge and make that our focus.

HAGEL: Mr. Chairman?

LUGAR: Thank you very much, Senator Hagel.

Senator Sarbanes?

SARBANES: Thank you, Mr. Chairman.

In The New York Times a week ago, there was a story about the U.S. trying to get help with the Iraq costs, which of course you've touched on in your report, and I do want to express our appreciation to you for your report and the effort that obviously went into it. It's enormously helpful.

At the conclusion of that story, though, there was a following -- it concluded as follows: "Administration officials say there may be resistance if other countries want some say in how money is spent for Iraq. Many officials are adamant" -- that's our officials -- "are adamant that it will be the Coalition Provisional Authority" -- or CPA, the current name for the American and British-led occupation that decides. Quote, "'It still hasn't entirely sunk into the international community that the CPA is a government of Iraq,' said a senior administration official. 'There are already unfortunate misunderstandings on that, but I cannot underline that often enough the CPA is a government of Iraq.'"

Now how are we going to get others to give money if they're not included in the decision process with respect to the use of that money?

(UNKNOWN): I think that is exactly the right question, and if we can involve them on two levels, at the national level and at the local level.

I have talked with a number of Europeans in particular that have reached out to us since this trip and said, is there a place for us to plug in? We have some people to send, everything from the carabinieri to other civilian administrator with experience in the Middle East with the language skills.

Again, if we would just say yes, open that door and get some of them into the field, I think, again, those governments will be much more willing to contribute.

SARBANES: Sir, I think that the CPA -- because I spent a fair amount of time going through their budget and what they're looking to spend money on for Iraq, for the next 18 months. It's pretty logical. I think it would stand the test of public discussion.

I think that -- and if you could say this is what our assessment is of what we think needs to happen, getting enough electricity, repairing electric fields, paying, employing teachers, getting cops on the beat. It's a very sensible set of ideas that they've worked up. I think that if we get past this initial, you know, philosophic position, which I agree with -- you know, they're not going to want to give money in the abstract to us.

But if we lay out what is the framework that we're trying to build for the new Iraqis, invest this governing council so that they see this as a logical thing as well become the basis for people making international contributions that fit a big plan, that, I think, is a good idea. And I think that it's not entirely clear to me that we can't resolve this dispute if we can work on creating greater legitimacy around the governing council.

(UNKNOWN): Well, now, Secretary Kofi Annan just this week in a report to the United Nations Security Council, and I quote him, "It is important that Iraqis are able to see a clear timetable leading to the full restoration of sovereignty. There is a pressing need to set out a clear and specific sequence of events leading to the end of military occupation."

Now what's your view of that statement by the secretary general?

(UNKNOWN): I think we're all in agreement -- and I think Ambassador Bremer is as well -- that the timetable needs to be laid out. I think we go back to certain issues that we face. We have to get the security under control in order for the troops to leave, but I also think that empowering the Iraqis through this governing council...

SARBANES: We were told here -- as I understand it, before I got here -- that in the statement, that we shouldn't put too much of a burden on the governing council because they can't handle it. They're extremely delicate and therefore we can't in effect hand off to them making any tough decisions.

(UNKNOWN): I don't think I was suggesting handing off, Senator. But I was suggesting that the first thing they're doing and they are actively working on is the creating of a constituting committee that can create a constitutional basis. That is a job that they need to get Iraqi input into. They need to go out into the countryside, they need to go...

SARBANES: Do you think the governing council now is perceived by the Iraqis as having legitimacy?

(UNKNOWN): I think it has a mixed perception right now.

SARBANES: Unlike Karzai in Afghanistan when he was selected by the loyal Jorge -- would you say that? Was markedly different?

(UNKNOWN): I think we feel that the participation, that the public participation was broader in the case of Afghanistan. But then again, we never dealt with the warlords there. So you have a compounding complicating factor in that case.

I think that the Kofi Annan statement, we would agree with it. And we should not only have the very clear sense of direction, but we should also explain what kinds of things could happen that might derail this -- the process that is laid out and that needs to happen. People are looking for that.

SARBANES: Sir, I don't think that Ambassador Bremer is opposed to giving the council as much authority as it can manage. I think our concern is that we not push it to failure before it develops the internal confidence to handle very complex issues, because they are very complex issues. And, second, I think a timetable...

(UNKNOWN): Are you recommending that we sort of ride with the council over a period of time as opposed to a trying to move to put in its place a governing mechanism that was at least more internally chosen and so perceived by the Iraqi people?

(UNKNOWN): Sir, I think Ambassador Bremer's plan -- I personally happen to agree with it -- is to grow around this council a broader process that is seen as legitimate by the Iraqi people, and that's first getting competent services demonstrated in the country, and gradually enthusing it with the authority that it can run the country over time.

(UNKNOWN): But it still has to stand for election. And it will take a little while for us to be able to do that. I don't think that's a bad plan. I think it would be very hard right now to go out and just try to have, you know, 500 people showing up and writing a constitution in Iraq. I think that would be probably failure prone.

So this strikes me as a pretty good compromise. And that's my personal view. I don't know if my colleagues agree or disagree.

(UNKNOWN): I just would comment -- two comments, please.

Senator, the establishment of the government must be a process, not just an event. That's politically cliche, but some of us remember in Bosnia where the (inaudible) a government there actually entrenched, in many ways, the forces that we were seeking to overturn mainly the warlords.

My impression was that at least the Iraqis I spoke to on that day were very happy that the council was created. They felt that this was not an open and democratic process, but it gave some voice and was part of an ongoing process that would, in time, create a more legitimate government.

I think it's understood that you will not have a realistic legitimate government until many other things are solved, such as outlawing them at the port and so on. You cannot have democracy without the society and even the economy -- punishing (ph) more broadly. First point.

Secondly, I think with respect, Mr. Borden's referring to setting priorities, and the senator referred to information within that. I think that he would understand and, I would hope, agree that information is actually not in security terms perhaps seems to be the priority. Number one.

But in all of these issues, I think, you will not succeed unless you have in formation strategy as part of it. You cannot have the process of creating government unless you have arms information around it.

If you set a timetable, you're going to break that timetable whatever you set. You need armed information around it so people can understand that. And I think even in security terms, the analogy I would use would be being in New York City in the subway when it stops between stations. When you get that announcement that there's a delay and somebody's working on it, you relax a little bit. And when you don't get that announcement, you get nervous and you're frustrated and you feel very tense. You're left in the dark. I think that's where they are, so I think security is related also to information as well.

Thank you.

LUGAR: Thank you very much, Senator Sarbanes.

Senator Sununu?

SUNUNU: Thank you, Mr. Chairman.

Ms. Crocker, you talked about the value of funds flowing to the provinces or to the local level. Are there any funds flowing locally now, even in limited amounts? And to the extent that they may be, what are they being used for, and how can they be used most effectively?

CROCKER: At the moment there are not funds flowing. And so the answer is, we don't -- they are not really being used for anything. There are some funds flowing to our military commanders out in the field, and they have been able to use those funds for certain quick start projects that have been put in place, such as rebuilding schools and sort of very small projects. And that has actually been working quite well so far.

But our suggestion is that we need to broaden that so that we also have some money flowing to these local councils.

To get back to Senator Sarbanes point before, sorry, about sort of the legitimacy of the governing council itself, because one of the ways that I think we can see that legitimacy increase is if we were able to link what's going on in the field to what's going on at the center. And so we need to make sure that those local councils that may be more representative of their communities are linked into this national process.

SUNUNU: Where the quick-start monies have been used, have they been used autonomously by the military structure command locally? Or have they been used collaboratively or cooperatively with the council? Councils?

CROCKER: Well, as far as we know, they have been used autonomously. Although I think the answer is probably that's it's been ad hoc, because I think what has been going on in the field has been rather ad hoc. And it just depends on which military commander is running the show in that particular town, so that he might find that in some, there have been very close coordinations with the local councils in terms of setting up priorities.

But I did talk to a couple of people who said there was actually a great level of frustration on the part of Iraqis. For example, at one particular hospital there had been three groups, three units of military guides who had come through at various points, had been rotating through, come to the hospital and said, "Tell us what you need. You know, give us your list of priorities." And they said finally on the third such visit, they turned to the guy and said, "I don't mean to be disrespectful, but we've actually given this list over three times," and they gave it again.

But I think that just does point out that there's still a bit of a disconnect that highlights the importance of doing that.

SUNUNU: Assuming there was a system set up that provided some level of funding to the local councils, do you see or are you concerned about any limitations in the council's ability to handle, use, distribute, invest money effectively?

CROCKER: I think we would be concerned about that, just given the lack of experience, probably with doing the sort of thing, but I think what will just be important in that regard is making sure that we have a process in place.

I mean, I would assume it's something that we point out in the report is that if we were to engage in this kind of revenue-sharing plan that you might require a co-signature of the military commander or the civilian leadership there, or that you might at least have some sort of an oversight process in place.

(UNKNOWN): Senator, I think this is an area where military terms -- we don't like to use the word, the term dual-key approach, but I think on this financial question, a dual key approach would be appropriate. The local councils make their decisions, but if you had civilian CPA officials in each of those areas, they could make sure that based on the oversight of those monies.

SUNUNU: With regard to investments in infrastructure, there were some discussion in the recommendations about the value of investments in infrastructure. And when we heard from Mr. Bremer, he noted that one of the most effective and efficient ways to make a difference economically and to deal with some of the security issues -- and I think this is mentioned by the panel as well -- is to invest in construction projects as a way to get the job, to get them to work and make a difference.

I think the structure -- does the panel have any specific recommendations for construction or infrastructure projects? Was there any sense of prioritization established in the recommendations?

(UNKNOWN): I think, again, we go back to the iron triangle and we would say that those would be the three major areas. I think all of us who visited were impressed by quite a lot of the infrastructure. Actually, the roads are superb. Much of the construction techniques looked excellent.

We visited outside of Basra a large water plant which is essentially the water supply for the entire southern, very dry region. That's already on the list. And clearly, the Army Corps of Engineers has come in as well as the AID and Bechtel people were there visiting that site. And that's going to be a public works project that will take years, would be our guess, to clean out the canal that's not really been maintained. If you looked at the infrastructure inside of that plant, it was well worn down.

So those kinds of opportunities really exist everywhere. And clearly the $5 billion-plus figures that we've heard about getting the oil industry up to the point where it can produce two million barrels a day, or hopefully three million barrels a day, is really the starting point for that industry. But I think that we would focus on that in that iron triangle which everything else depends upon.

(UNKNOWN): I don't want to put too fine a point on it, but I see a distinction here between critical infrastructure projects, or essential services, whereby the most effective way to make a difference might be to contract, to go get international contractors, foreign contracts, who have an expertise in an area of technology -- maybe having to do with energy services, maybe having to do with water plant construction -- in order to get it done as quickly as possible.

And other areas where the more appropriate goal would be to provide funding, perhaps locally, but to provide funding domestically to employ domestic workers in industry.

Did you make a distinction between these two groups of projects, or make any effort to try to distinguish between these two somewhat different sets of priorities?

(UNKNOWN): I don't think we've differentiated, but I think we believe that you've got to have a bottom-up and a top-down approach, that you -- because you have this imperative to really make tangible progress in these coming few months, that you really have to do whatever you can to get that going.

This is a management-by-chaos period. And if you think you're going to bring in lovely, well-coordinated teams of people -- we saw some of those teams come in, and they're bringing in their own private security guards, retired British special forces agents, that look as tough as anybody we saw in the country. And half of the money they were spending was on that element of their work.

So these are the kinds of -- this is the reality on the ground, and so you really got to come at it any which way you can.

But, Senator, while we were there, they released $100 million worth of construction contracts. And it was with local firms.

Now there is a good construction there, and it is exactly for that purpose that Ambassador Bremer is trying to get that going. This is for things like repairing bridges and that sort of thing. That industry, which was fairly competent, it's been a bit damaged by the (inaudible).

You know, the one company in the country that makes these long concrete pillars, you know, that span bridges, they stole -- whomever -- they stole all the electric motors for the overhead cranes. I mean, so they got problems like that.

But I think Ambassador Bremer understands that's an option, and he's pressing as fast as he can with real projects as fast as he can. It was right in the neighborhood of $100 million that he did right away.

The long-term investment, for example, electricity, which I would quote as the highest priority, that's going to take outsiders, for there isn't domestic production to produce new generation capacity.

SUNUNU: I have one more question. I see my time is up, but a final question for Mr. Orr.

You talked about civilians and getting more civilians in place for a number of reasons, which I very much agree with. Could you be a little bit more specific about the types of civilians you're talking about in terms of prioritization? What kind of backgrounds are most essential? What kind of role do you see them playing in a leadership role, was it on the ground and limitation role? And when you say civilians, are you talking perhaps about federal employees here from a department of agriculture, department of justice, that has expertise? Or are you talking about private sector civilians that are identified and take advantage of an opportunity to make a difference?

ORR: In terms of the types of civilians, first, maybe I should address the volume question.

We asked in each province how many people -- we asked the military, we asked the civilians -- we did find there. On the international side, how many civilians would you need to make this province kind of function the kind of issues that you raised with us -- agriculture, infrastructure, all those. The numbers that they came back with were fairly consistent at about 20 to 30. They differed by province as to what the functions would be, but agriculture showed about some provinces, financial management, and budget showed up everywhere...