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[H.A.S.C. No. 108–15]





OCTOBER 8, 2003



One Hundred Eighth Congress

DUNCAN HUNTER, California, Chairman
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CURT WELDON, Pennsylvania
JIM SAXTON, New Jersey
JOHN M. McHUGH, New York
HOWARD P. ''BUCK'' McKEON, California
WALTER B. JONES, North Carolina
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
KEN CALVERT, California
ROB SIMMONS, Connecticut
JO ANN DAVIS, Virginia
ED SCHROCK, Virginia
W. TODD AKIN, Missouri
JOE WILSON, South Carolina
TOM COLE, Oklahoma
JEB BRADLEY, New Hampshire
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JOHN KLINE, Minnesota

JOHN SPRATT, South Carolina
LANE EVANS, Illinois
GENE TAYLOR, Mississippi
MARTY MEEHAN, Massachusetts
VIC SNYDER, Arkansas
ADAM SMITH, Washington
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
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JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
RICK LARSEN, Washington
JIM COOPER, Tennessee

Robert S. Rangel, Staff Director
James M. Lariviere, Professional Staff Member
Justin Bernier, Research Assistant



    Wednesday, October 8, 2003, Iraq: Reconstruction and Rehabilitation


    Wednesday, October 8, 2003
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    Hunter, Hon. Duncan, a Representative from California, Chairman, Committee on Armed Services

    Skelton, Hon. Ike, a Representative from Missouri, Ranking Member, Committee on Armed Services


    Rodman, Peter W., Assistant Secretary of Defense, International Security Affairs

    Hamre, John J., President, Center for Strategic and International Studies, Iraq Reconstruction Assessment Mission



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[The prepared statements can be viewed in the hard copy.]

Hamre, John J.

Hunter, Hon. Duncan

Rodman, Peter W.

Skelton, Hon. Ike

[The Documents submitted can be viewed in the hard copy.]

Iraq's Post-Conflict Reconstruction, A field Review and Recommendations July 17, 2003

Coalition Provisional Authority Baghdad, Iraq, Achieving the Vision to Restore Full Sovereignty to the Iraqi People

[The Questions and Answers can be viewed in the hard copy.]


House of Representatives,
Committee on Armed Services,
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Washington, DC, Wednesday, October 8, 2003.

    The committee met, pursuant to call, at 10:10 a.m., in room 2118, Rayburn House Office Building, Hon. Duncan Hunter (chairman of the committee) presiding.


    The CHAIRMAN. The committee will come to order.

    This is the latest in a series of hearings the committee is conducting on the conduct and consequences of Operation Iraqi Freedom, and we are fortunate to have as our witnesses today the Honorable Peter Rodman, Assistant Secretary of Defense; the Honorable John Hamre, president of the Center for Strategic and International Studies (CSIS) and a frequent visitor to the committee in days past. And, Dr. Hamre, thank you for being with us. Secretary Rodman, thank you. And also we have with us Mr. Dave Oliver, who is the chief financial officer for the Coalition Provisional Authority (CPA), and thank you also for being with us today. We appreciate it.

    Just two weeks ago we reviewed the administration's plan for the reconstruction of Iraq with Ambassador Bremer, and today we've asked the Department of Defense (DOD) official to update us on that plan as the House considers the President's request for supplemental funding. So Mr. Rodman is joined by Dr. John Hamre, once again of the Center for Strategic and International Studies.
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    At the Department's request, Dr. Hamre and his team visited Iraq in late June and offered his thoughts on reconstruction as an outside group. Among other things, Dr. Hamre's team highlighted that the next 12 months would be critical in getting Iraq off on the right foot. To its credit, the Department both asked for and quickly embraced the results of Dr. Hamre's study.

    Moreover, in the President's supplemental request we are seeing an administration that is working to obtain the resources needed to implement many of the report's recommendations. The administration has thus clearly demonstrated a willingness to heed outside advice when that advice is thoughtfully given.

    I think that is the kind of advice you will get from us. On both sides of the aisle, we are committed to supporting the troops and doing what it takes to ensure Iraq does not become a future threat to our security. Today's hearing will help us ensure that our advice is based on an accurate understanding of the facts on the ground, not on secondhand media reports. So I want to thank Mr. Rodman and Dr. Hamre and Mr. Oliver for opening before the committee this morning.

    The CHAIRMAN. And so, before we turn the floor over to our witnesses, let me turn to my colleague, the gentleman from Missouri, Mr. Skelton, for any remarks he might want to make.

    [The prepared statement of Mr. Hunter can be viewed in the hard copy.]

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    Mr. SKELTON. Mr. Chairman, thank you.

    I join you in welcoming Secretary Rodman and Dr. Hamre, and also thank Mr. Oliver for being with us here this morning. I will be very brief, as I know Dr. Hamre may have to leave by noon; am I correct?

    And I might note that I recently returned from an interesting trip with several of my colleagues to Iraq, and the point is we must win this effort, but the thing is it could go either way. There are many news stories that are not being reported in the media, such as the many reconstruction projects entertained by the American military units throughout the country. It wasn't going as well as it could or should, and I remain concerned about the security conditions, whether the CPA has adequate people and resources to turn the country around quickly. I hope the witnesses today will address those as well as other issues.

    Thank you.

    [The prepared statement of Mr. Skelton can be viewed in the hard copy.]

    The CHAIRMAN. I thank the gentleman, and the entirety of the witnesses' statements will be entered into the record without objection.

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    So, Mr. Rodman, Secretary Rodman, thank you for being with us this morning. The floor is yours, sir.


    Secretary RODMAN. Thank you very much, Mr. Chairman, Mr. Ranking Member, members of the committee. I want to thank you for your courtesy in receiving us today. I want to thank you even more for the bipartisan support that the committee has given to this important national enterprise in Iraq, and, again, I thank you for the opportunity to come before you today to talk about the important issue of postwar reconstruction. This is a matter of the highest priority for President Bush and his administration as demonstrated by the emergency supplemental appropriation request we have submitted to Congress to pursue the war on terrorism.

    I'm also honored to appear with John Hamre, former Secretary of Defense and a friend, to discuss points he has raised in his report, the report that he and his team published that the chairman referred to.

    As the chairman pointed out, this is a mission that Dr. Hamre undertook at Secretary Rumsfeld and Ambassador Bremer's request or suggestion. We wanted an independent view, and we valued his judgment and his opinion.

    His team was in Iraq from late June to early July. The report said, and I quote, we saw significant progress everywhere we went, unquote; but the report also included a very candid assessment of the challenges ahead, things that needed to be done, and the report made a large number of constructive recommendations.
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    We have taken those recommendations to heart. The administration's commitment to intensify its efforts in Iraq, as demonstrated again in the supplemental request, signifies our request to move forward as rapidly as possible in areas that we and Dr. Hamre agree are priorities. Since you have my prepared statement, I will not read all of these points in detail, but I will touch on some of them just briefly.

    Dr. Hamre and his colleagues argue that we need a strong office in Washington to backstop the Coalition Provisional Authority. We have such an office, and even as we speak, we are in the process of expanding it, expanding its personnel and its capability. We need such an office to help coordinate activities in Washington to be a more rapid channel of communication between Baghdad and the Pentagon, to facilitate decision-making in both capitals. It includes detailees from all agencies, all relevant agencies and departments of the U.S. Government that are supporting Ambassador Bremer. This office also serves as a portal, as a place where businesses, non-government organizations (NGO), universities, others who want to help in Iraq can go, a place they can turn to.

    A second important point, in fact, perhaps, one of the most important points that Dr. Hamre stressed, was security, public safety in all parts of the country as he put it, and we agree this is absolutely essential. It is a precondition for the achievement of almost every other goal we have.

    We also believe that progress has been made, that most of the country is secure, and the lives of the Iraqi people are improving. Seventy thousand Iraqis, seventy thousand Iraqis have been trained and armed to take on the security functions themselves of different kinds in order to contribute to that stability.
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    Another point that was made in the report was Iraqi ownership of the enterprise. The Iraqis must feel that they are—they own—they have a huge stake in what is happening and what is being done by CPA, and that is happening. Around the same time that the report appeared in mid-July, the Governing Council (GC) was created, and the Governing Council may be one of the most important things in the country. It is an achievement in itself. The Governing Council brings together all of the major groups and regions of the country, all of the forces and people that will make up the future of democratic Iraq. It is an inclusive, broadly representative body of Iraqis who are taking on increasing responsibility for their own affairs, and this is the future. This is the future of Iraq, and it is already there.

    Turning Iraqi affairs over to Iraqis as soon as practicable is what the mission is. That is what we are there to do in this context, to turn over the country back to Iraqis in the context of freedom, peace and prosperity so that they can continue on the course in which things are headed.

    The Hamre report talked about economic issues, employment. There are public works programs that we have undertaken in order to—for short-term—to make sure that there are no idle hands in the country, and that is an important recommendation that we have taken to heart.

    But in the economic context, I wanted to take this opportunity to mention something else that is about to happen; namely, the introduction of a new Iraqi currency. This is a very significant milestone in the formation or the reconstitution of the Iraqi economy this is going to be happening in the next week or so, and it has not only an obvious economic significance, it is the foundation of future economic growth, but politically it signifies, again, a new step in the supplanting of the old regime. Wouldn't have to look at Saddam's face on the currency anymore, but it also represents the unity of the country, because for a long period of time, as you know, there has been a dual—dual currencies in effect, and this now unifies the country in this important dimension.
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    Another point that Dr. Hamre and his colleagues mentioned was a change in the Iraqi frame of mind, a national frame of mind, to adapt from a centralized authority to significant freedoms, from skepticism to hope. This is where the media come in, Iraqi media. We know that much more work needs to be done in this area, but the Hamre report was absolutely correct in pointing to the importance of that dimension.

    Another point was internationalizing the effort, a new reconstruction coalition that is significantly broader than the coalition in the war. From the very beginning we have sought this ourselves. In May, the United Nations (U.N.) Security Council—U.N. Security Council passed Security Resolution 1843, which was a major resolution that laid out an outline for the postwar effort, and that resolution was a clarion call for broad international participation in the security field, political field, economic and humanitarian fields, and, you know, that is the mandate we have. Forty-five nations have offered military support in Iraq, and other countries even now are considering joining us in the security dimension. A conference of international donors is about to convene in Madrid on the 23rd of October, and that—so, again, we have always sought broad international participation.

    Another area in which we agree with the Hamre report is that money must be significantly forthcoming and more flexible. The administration's supplemental request and the international donors conference are two essential elements of assuring that security and reconstruction efforts are fully funded.

    The last point that the Hamre report made is about timing, about the sense of urgency, and this is an absolutely critical point. The report said that the next 12 months may be decisive, and we agree with that for a number of reasons. For one thing, there have been a number of interesting public opinion polls taken in Iraq which tell us some encouraging news, that the people of Iraq not only welcome their liberation, but they are willing to put up with a period of hardship as the inevitable accompaniment of this period of transition. But we all know that the patience of the Iraqi people is not going to be unlimited. They have a right to see progress, to see visible process, and it is in our interest to help them achieve visible improvements in their situation at an early time to sustain their hopes, to vindicate those hopes in order to sustain a democratic future.
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    But, in addition, from our point of view, the administration believes that a major commitment now offers the maximum chance of having a decisive impact. We believe that this is a success so far, and we think we should invest; that now is the time to invest in the progress that has been achieved. Cutting corners, in our view, may only add to the risk. It may only dilute or weaken the effectiveness of what is being done now and could only end up being much more costly in the long-run. So we believe that now is the time for this country and the international community to make a significant commitment to launch Iraq on the path to a brighter future.

    Mr. Chairman, members of the committee, in April the armed forces of the coalition won a great military victory, but ultimate strategic victory in Iraq will come when, as I said, we are able to turn the country back over to its own people in conditions in which they are able to continue on course toward freedom and peace and prosperity. With Congress' help and the American people's support, we believe we can achieve that goal.

    Thank you very much.

    The CHAIRMAN. Thank you, Secretary Rodman.

    [The prepared statement of Secretary Rodman can be viewed in the hard copy.]

    The CHAIRMAN. And, Mr. Oliver, I take it that you do not have a prepared statement, but you are here to answer questions with respect to your shop.

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    And, Dr. Hamre, I once again thank you for your service to your country. You have visited us many times and on many issues past, and you know we took your excellent judgment on this evaluation and analysis, and we welcome your thoughts, sir.


    Mr. HAMRE. Mr. Hunter, thank you. And to Mr. Skelton, to all the members of the committee, I am quite pleased to be invited back. I think that's been 20, 22 years ago when I first had a chance to come into this room as a humble staff member of the Senate Armed Services Committee, and usually to try to defend the position in conference, you know, with modest success, as I recall, and it is great fun to have a chance to come back to be with you today. Thank you very much.

    I also was quite grateful to have a chance to be included on the panel with Mr. Rodman, Dr. Rodman.

    I do apologize that I have a constraint, that I have to leave by noon, and this way I am able to get a statement in, and if I can help in any way, I would be delighted to.

    Let me say, also, I first met with Dr. Rodman before we were sent to Iraq, and it was—and I want to say it because complete openness in every step of the way, coming from the Secretary, Secretary Rodman, Secretary Fife and others who asked us to go over. And when we arrived, the first thing that Ambassador Bremer did was invite us into his morning staff meeting, and he turned around and he said, he has been sent here by Secretary Rumsfeld, he is going to help us. Make anything available to him that you can. And it was like that every step of the way, so it was complete openness. And I turned around the corner and bumped into Dave Oliver, my old friend Dave Oliver, who is running the Office of Management and Budget (OMB) over there, and he was completely open about everything that was going on. So I want to report to you this is—we did not go as a criticizing agent. We went as an effort to try to find the constructive set of recommendations that would help.
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    Let me say how crucial I think it is that you are holding this hearing. I fear that the American willingness to stay the course here is eroding, and I fear it is eroding significantly. We cannot walk away from this challenge in Iraq. We have to succeed, and I look, as I know you do, to worrisome trends that the public is not certain that this is worth the effort now.

    We cannot walk away from this. The American public is going to be guided by what you do. When it is the declaration as, we, the people, well, that is you. You are the ones who create the consensus for the American people and lead us to what is involved. That is why this hearing is absolutely crucial. You have got to help us get this consensus as a country, stay the course on a job we have got to complete, and so I thank you. I thank you very sincerely for what you are doing.

    As Dr. Rodman pointed out, we were there in June and July. That is three months ago, and lots has changed since then. I have not been back. I have had a chance to try to keep current with developments indirectly by talking to people here, and then we get a lot of e-mail traffic from people in the theater who continue to communicate with us. So I want to be fair to say that my knowledge about the current environment is a bit derived, in the sense I have derived it from conversations with others, but my knowledge is still somewhat dated from when I was there.

    The situation is dramatically better, even better than when I was there, and I think that a good example is when I was there and we would try to meet with Iraqis in the evening to say, let us have dinner, as soon as it started getting dark, they were nervous. They wanted to get home, okay? They were afraid to be out after dark. That is not the case now. People are now out in restaurants late in the evening, and they feel more safe in their homes. That is a very important development. That was not the case, back then.
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    Now there is still, I think, a fair amount of general criminality; you know, hijackings, carjackings. It is still kind of common unfortunately. We do not have the police presence throughout the country that we need. But when I was in Baghdad driving around, I saw a total of eight Iraqi cops, and now I think we have got 40,000 or something. So there is dramatic improvement, and there needs to be.

    The formula which the administration has embraced is to dramatically indigenize, and I think they are making strides in doing it. And we are still a long ways away from having a secure environment, I think they would be the first to say that, but it is definitely better.

    About the money. You know, when I found out that Dave Oliver was putting together the budget, I felt, well, he is the most onerous pup I have ever met in my life, and he is going to do a good job, and he is the kind of guy that is going to put you through the detailed steps to make sure there is a good rationale for what you are asking for. And we sat down and talked about the process. I was surprised; rudimentary, because it was the early days, but a very good, solid process for determining priorities, arranging different priorities against each other, a process of kind of arbitrating what makes more sense, where it should be established, for sequence, et cetera.

    It was very clear then that we were going to run out of cash, and we are going to run out of cash. At the time I was there, it looked like we were going to run out in March. My guess is we are going to run out in January, so we need the supplemental. There has to be a supplemental appropriation. We are not going to get substantial funds from the donors conference in any terms. We will get gifts in kind, something they make up in their own country. They rarely give cash, and we are going to need cash, and the supplemental is crucial. You have got to approve the supplemental.
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    There has been a lot of criticism that you do not know what is in the request. It is a good thing Dave is here. He is going to answer everybody's questions until the end. Now, he is not going to know every answer. I mean, when I was the comptroller, you guys kicked me in the butt for having incomplete estimates.

    The CHAIRMAN. Well, sometimes you knew too much.

    Mr. HAMRE. Yes, sir. That was a very rare occasion around you. When you do have to make an estimate, either your solution is to be very transparent about what you had to assume, and I think the administration is willing to do that. Frankly, there has been some tension between Congress and the administration over defense budgets, I understand that, and it is the backdrop of that that is making this supplemental more questioned. But I promise you he is going to give you as straight an answer as he has with me, as straight an answer as he has got to how he built the estimate, and you are going to have to trust his judgment on that. And you will make up your own mind if you think it makes sense, but that is the way the system is going to have to work. He cannot give you a precise formula on everybody that is going to get paid for the next 12 months, but he can tell you in general categories, and why it is a fair number, and who's going to be looking over his shoulder, and I think that is a fair process for you to ask of him.

    Finally, I have been asked many times, because in our report we said that there was a small window, and the window was closing, and I have said many times—I say, we said the window is three months. It is now three months. Has the window closed? Absolutely not.

    There has been a lot of change in Iraq through the efforts of the CPA and the joint task force. We now have, I think, 20,000 of the facilities protection people on the beat, you know, that are protecting facilities. We didn't have that when I was there in June. We now have 40,000 cops on the beat. Now, they are not as well trained as they need to be. Jordan has really stepped up with a substantial commitment to train policemen. It is just starting, but, again, we are making great progress.
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    That window is not closed by any stretch of the imagination, and we are seeing substantial improvement, but it absolutely hinges on you appropriating the funds to keep this operation solid for the next year. We are going to be there for a while, but we have got to be there for a while. We have got to get this right.

    Thank you very much, Mr. Chairman. I would be happy, of course, to answer any questions.

    [The prepared statement of Mr. Hamre can be viewed in the hard copy.]

    The CHAIRMAN. Okay. Let me start off with one question, I think, is—kind of goes to the politics of the situation, the security of the situation and how fast we get these economic wheels turning, and that is a question of ready money.

    Nothing is so disturbing and so productive of resentment as promises that are unfulfilled. When those promises are the promises of increasing electricity hookup, and electricity hookup is necessary to combat 110-degree weather like we had in the summertime, and because of sabotage and other reasons you are not getting the megawatts that you intended, that obviously has a negative effect on the attitude of the Iraqi people and, I think, their acceptance of the leadership that we are trying to maintain.

    And, you know, we saw the early figures. I was over earlier with some of our folks in late May, and we had our targets for electrical hookups, targets for water hookups, targets for our security people coming online, for the Iraqi security forces coming online. And I think, generally speaking, the security process has been pretty much up to speed, pretty much what we projected. I know it has been difficult to get the electricity system online, and, similarly, the water system is getting enough potable water, which I think at one time below 50 percent of the populace was getting what we considered to be potable water. It wasn't that much higher in the days of Saddam Hussein. But I think those time lines seem to me to be—my recollection of the numbers, that we lagged, that we didn't meet those numbers in the closing months of the summer, although we are making progress.
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    I guess my question is—and this goes to the system of standing up these local governments, like the city councils, where you would have division commanders like Ray Odierno of the 4th Division taking this group of community leaders and electing from that group of some 300 the city councils with the 6 Kurds, 6 Turks, 6 Assyrians, 6 Arabs and 6 independents, and, from that group, electing mayors, deputy mayors, and really putting together these local governing bodies. A lot of that, the success of that construct, of that—of getting the wheels turning economically and developing viable local governments depends on ready cash. That means when you have a project where you got to hook up a certain neighborhood with water, being able to get the cash to buy the polyvinyl chloride (PVC), to put the work crew together, to get the equipment together and to get the job accomplished, and, with respect to hooking up electricity, running those lines, developing the generational capability, all those things.

    As I understand early on, and I know this is a long windup to this question, the military commanders had ready cash. The British had, especially, a formula where a brigade commander had a lot of resources under his power and could put out cash money to get things done. I think that was valuable, and what I have heard in recent times is it has gotten more—as the bureaucracy has settled in, it has become more and more difficult to deliver ready cash to projects that move our agenda forward. So, Secretary Rodman, and maybe Mr. Oliver—incidentally, Mr. Oliver, we have worked with you many times in the past. You have got a great reputation as being a practical, pragmatic guy that gets things done. Are we getting money into these important economic projects, and are we getting it in in an effective and speedy manner?

    Mr. OLIVER. Mr. Chairman, yes, yes, and I think it has actually improved, and it is a surprise because bureaucracies do not normally move that way.
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    We are now spending——

    The CHAIRMAN. Can you move that microphone?

    Mr. OLIVER. Yes, sir.

    Is it better?

    We are now spending, the miliary commanders are now spending through the Commanders' Emergency Response Program $5 million a week, and we have that programmed, and in part of the bill, not Ambassador Bremer's part of the bill, but the Office of the Secretary of Defense (OSD) requests money to continue that program for the next year. General Sanchez told me that that was the right number about two weeks ago.

    The CHAIRMAN. Now, what is that again?

    Mr. OLIVER. It is called the Commanders' Emergency Response Program, sir, and it is essentially $5 million a week in money that goes to the military commanders, and then they spend, as you have described, normally in small sums to fix things in the community to make a difference, and it makes it effective for our soldiers to react with the people.

    The CHAIRMAN. Okay. Now, you have gone to the heart of something I think is very, very important to all of us. You are saying in Kirkuk, for example, where Ray Odierno, General Odierno, heads the 4th Infantry Division and has put together, built, this local government, if a certain neighborhood loses power or doesn't have potable water, and you need to run a 4-inch PVC line out to them and develop some pumping power and maybe do some water treatment, some basic treatment, and the city council decides they need to do that, and they communicate that information to General Odierno and he or his staff, we have a mechanism for quickly disbursing the money and initiating that project?
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    Mr. OLIVER. Yes, sir.

    The CHAIRMAN. Getting pipe in the ground.

    Are you confident that that ability is presently there?

    Mr. OLIVER. Yes, sir, I am.

    The CHAIRMAN. Okay. Dr. Hamre, what do you think?

    Mr. HAMRE. Sir, when we were there, they had a total of $17 million for all of Iraq, and we said this is a great idea, it just needs to be a lot more than that, and that is what Admiral Oliver has just said. They put more money into it.

    Now, you are absolutely on a crucial issue. You cannot create democracy at a local level if the local representative government doesn't have any money.

    The CHAIRMAN. Exactly.

    Mr. HAMRE. Now, at some point this needs to be less the military providing the cash and more than the CPA through the Governing Council providing the cash. We need to use this as a mechanism to connect democracy. You know, they didn't have a taxation system in Iraq, and the local government had no way of getting money, except it was handed down to them, so at some point we have got to find a new way to revenue, to get revenue into local government's hands. This is a good stopgap measure, and we need to now extend it.
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    The CHAIRMAN. Okay. Let me just take it one step farther, Mr. Oliver, and tell me if you know, and Secretary Rodman. Let us take Kirkuk again. That is a place we were at, and we tend to relate to places we visited. If you need to hook up a certain neighborhood, and you have maybe a million-dollar project or a $50,000 project or $150,000 project, and you need to get some pipe in the ground, some pumping power, and deliver some potable water to that neighborhood, is that done by the Americans, or is it done, as Dr. Hamre suggested it should be, through this council that has been elected, through this city council and through the mayor and the deputy mayor, through this government? Are we empowering this government with the ability to actually do things for its constituents? I think that is a key thing.

    Secretary Rodman, jump in any time, too.

    Mr. OLIVER. We are partway, Mr. Chairman. As you know, we stood up two councils. I think there are 255. Anyway, we stood them up, started paying the people. The council members started paying the mayors and the governors, started—and we gave them—they have a budget through the Ministry of Public Works and the military commanders.

    As Dr. Hamre says, at some point you want to transition this from the military to the civilians, and we have not planned—we have a time frame we are thinking about doing that, but all that has to work through. But the answer is we have money with them. They have several mechanisms, and we are using the Iraqis to do the work in most of these cases, sir.

    The CHAIRMAN. Okay—go ahead, sir.

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    Secretary RODMAN. Just one point as—as Admiral Oliver mentioned, the ministries at the national level are going to take on increasing responsibilities in running their own affairs and their own domain. Now, that is not the same as empowering the local institutions, but at least the Iraqis are beginning to take responsibility for these.

    The CHAIRMAN. Well, I would think—and, Dr. Hamre, correct me if I am wrong—but I would think empowering the folks who we have taken, for example, in Kirkuk, the 300 community leaders, and allowed them to elect their city councils and their mayors, when you have leadership that you have supported, the best way to support them is to empower them with the ability to carry out for their constituents things that their constituents want. And if you could get back to the committee and let us know, Secretary Rodman, what the process is in these communities where you have—and, incidentally, I think the leadership is tremendous leadership. Interestingly, in this town we say, well, we guys with the bow ties, we will take care of politics, and you military guys concentrate on winning wars.

    Actually, military leaders have great leadership capability, and most of them have some sense of diplomacy and know how to work with people in the communities, and they have done, I think, excellent jobs, but they have got to have ready cash behind them, and whether or not they cut the check or the city council cuts the check on a project is probably not relevant. What is relevant is if the city council recommends it and is requested of it by their constituents, and they end up delivering; if they fix the potholes so to speak, they are going to be given credit for it, and that is something that you—probably is going to be a slow boat to China if you wait for the project to come down from Baghdad.

    So I think we have a little bit of a comparable situation that we have anywhere where you have the ability of local government to work quickly as opposed to a federal project coming down from on high. Usually the quick reaction is the local reaction. And so, I would—if you could let us know what mechanism you have for empowering the American leadership, which has developed this Iraqi—these Iraqi local governments and moving quickly to respond to their requests on specific projects and having the ready cash to get that done. I think that is a key thing.
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    Dr. Hamre, any other thoughts on that?

    Mr. HAMRE. Sir, I absolutely agree with you. I mean, these people have frankly been pretty courageous to get elected, to represent in a new government at some personal risk, so they have got to be backed up and able to deliver, as you said.

    I think this is something that I know that—I talked with Ambassador Bremer. I know he wants to do it. The question is being able to have the cash to do it. He has had to husband his scarce resources. So I think it is a good step forward that he is coming up now with five million every week. That is a huge improvement over where we were, but we need to now make the next step, as you say, get it into the hands of the local elected officials so they can do it. The mechanism is to be determined.

    The CHAIRMAN. I want to go to my colleagues, and I apologize to the committee for taking so much time on this thing, but what I have heard in feedback from some military leaders is that early on we had this—when we were immediately there, you had commanders with ready cash who could do things, and as we begin to bureaucratize the situation, some of their ability to spend money eroded, and, with that, their ability to empower local leadership and to be as credible to some degree. So if you could let the committee know what mechanisms we have in effect, maybe get that for the record, and, if we are developed—continue to develop those mechanisms, that would be important to us.

    Thank you.

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    Secretary RODMAN. Okay.

    [The information referred to can be viewed in the hard copy.]

    The CHAIRMAN. Now I recognize the gentleman from Missouri Mr. Skelton.

    Mr. SKELTON. Mr. Chairman, thank you very much.

    Dr. Hamre, you have answered my question that I was going to pose to you regarding the security situation in Iraq, but your trip report acknowledged that the CPA was underresourced, and from what I saw, it was undermanned. To a great extent it was undermanned. It was hard finding some of these people and in some of the areas. Do you see any sufficient improvement on that?

    Mr. HAMRE. Mr. Skelton, I continue to believe that the CPA lacks the manning resources that it needs to really carry out its job in two dimensions. There aren't enough CPA personnel in Baghdad, and frankly——

    Mr. SKELTON. You say there are not.

    Mr. HAMRE. There are not. We need more. We especially need Arab speakers. This is one of our great problems. We do not have enough Arab speakers, so with that we need to work.

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    The other thing is, in my view, the CPA needs to have representative offices in the field. Now, they currently have—when I was there, they had three field offices. They now have field offices in 17 of the 18 governances, but in most cases they only have a single liaison officer. That is a step in the right direction, but we need to have greater CPA representation because that becomes the conveyor belt that links up the Governing Council in Baghdad with the local governments, and it is a very important thing to be able to give them the resources to do that.

    Mr. SKELTON. Well, it appears to me in many instances the military are filling in that gap themselves.

    Mr. HAMRE. They are, and the military would be the first to tell you they would like to have the CPA do it. There is a popular myth that the military wants to do it and keep the CPA out. Not at all. From everything we heard was that the military in the field would say, look, I need them to come, I need civilian help. So I think this is a problem that we could easily solve, but it is a resource issue.

    Mr. SKELTON. Dr. Rodman?

    Secretary RODMAN. Yes. I want to agree with that. We need more people out there, and we know that. Secretary Rumsfeld has sent a letter to his fellow Cabinet secretaries asking people from a variety of Cabinet departments to expand their ability.

    Mr. SKELTON. A lot of them are only there for 90 days. They are in and out, and you cannot build up friendships, relationships, whatever, unless they are there for an extended period of time; am I correct?
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    Secretary RODMAN. I think the longer people are able to stay, the better, that is correct, but the Defense Department is digging deep into its own personnel to try to expand the number of its people. But as I said, civilian agencies that are playing a very important role in the CPA, we want more of them, as well.

    Mr. SKELTON. Thank you.

    Secretary Rodman, of course, you come to Congress for the supplemental request that is before us now, and if we are going to be there any particular length of time, which I assume we are, there will be additional requests for additional funding in the days ahead. And the mission is to bring freedom, peace and prosperity, using your words, to Iraq, and what I was asking—and let me ask: Do you agree with Ambassador Bremer when he says to complete the mission would take four to five years?

    Secretary RODMAN. Well, I would state the mission—as I put it in my statement, I do not think it is our job to remake Iraq. It is the job of Iraqis to rebuild their society. What I think we ought to aim at is putting them on a certain path so that they can sustain the progress that is going to come; in other words, I do not think we have to stay there forever. I think our job is to launch them, to help create conditions of security, to train them to take on these functions and to turn over the ultimate responsibility.

    Now, we may stay there in some form for a certain period. I would not venture to predict what that period would be, but I think we should state our own mission with some precision, which is to launch them on a certain path to create basic conditions in which they can then takeover the responsibility to build their own institutions.
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    Mr. SKELTON. So we in Congress will have some idea, and I know it is somewhat difficult, but you are on top of this, and you study it, and you live with it every day. In your judgment, how long will this take to bring about freedom, peace and prosperity to that country, which is our mission?

    Secretary RODMAN. Well, I think I share Secretary Rumsfeld's general allergy about making predictions.

    Mr. SKELTON. I understand.

    Secretary RODMAN. We do not know.

    Mr. SKELTON. I am not asking for predictions, I am asking for your best judgment.

    Secretary RODMAN. I really hesitate to make a judgment. Ambassador Bremer, who sees the condition on the ground—I respect his assessment, but I would not want to——

    Mr. SKELTON. You would not disagree with Ambassador Bremer, then, four to five years?

    Secretary RODMAN. I respect his judgment as the man who is out there on the scene.
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    Mr. SKELTON. Thank you.

    The CHAIRMAN. I thank the gentleman.

    The gentleman from New Jersey, Mr. Saxton.

    Mr. SAXTON. Dr. Hamre, thank you for being here this morning. Thank all of you for being here.

    Dr. Hamre, in your opening statement, you alluded to something that I think is really important, and I know that the chairman's ready cash concern is important. I know that we are all concerned with how much money this is going to cost us and how long we are going to have to stay and all those things.

    But, Dr. Hamre, you put your finger on what I think is the basis of my concerns, which is the willingness of the American people and their government to stick with this. This is a huge—this is the—this is the basis for everything else, and I think—I think we—we ought to spend some time talking with the American people about how important this is, because the American people view this, as their government does, in the context of what our experience has been with military conflict. And our experience with military conflict, if you look at modern history—and Ike Skelton can walk through a lot better than I can because he is the real historian here. But to go back to World War I, there was a beginning and an end. You move to World War II, there was a beginning and an end. Korea, there was a beginning and an end. The end was different, but there was an end. And in more recent conflicts, Panama, there was a beginning and an end. Haiti, there was a beginning and an end. And it wasn't until we got to Bosnia when there was a beginning and a seemingly no end, or at least a very slow-to-arrive end. And today in Afghanistan, in Iraq, the American people are not accustomed, nor is their government, to a beginning with no end in sight. So that is how we view this as a culture, as a society, as a people, and as a government.
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    At the same time, our enemies have a different vision, and this is important to understand, too. The vision of our enemies has to be that they know that they cannot defeat us militarily. They do not have the resources, they do not have the firepower, they do not have the numbers. They cannot defeat us, but they are a pretty determined lot, and they want to defeat us, so if they look at our pattern of beginnings and ends and decide how to defeat us, there are some lessons that they can look at.

    One is Somalia. In Somalia there was a beginning and an end, but it was a very destructive end in terms of setting a pattern of activity for others to look at. In Iraq One, there was a beginning and an end. We didn't finish the job in Iraq One, in my opinion. This is all hindsight, and I am not criticizing anybody, but there was a beginning and an end, and it was unsatisfactory. From the standpoint of our enemy, we went away, just as we did in Somalia. And in Lebanon, in Beirut, it was a set of activities destructive to us, and we went away. And in Vietnam we didn't finish the job, either. The American people got weary of it, and we went away.

    So if I were an Islamist fundamentalist fighter or leader, I would look at these two sets of facts and say, the American people are used to a beginning and an end, and if we can keep them from getting to an end, pretty soon they will go away.

    Now, if you would—if you would just add your vision to it, am I right? And how do we—how do we as Americans look at this so that we do not have to see that immediate—the immediacy of the end that we are used to seeing?

    Mr. HAMRE. Mr. Saxton, I think you are completely right, that their strategy is clearly to confound us long enough for public opinion to erode to the point where we are not willing to take it any longer.
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    Now, how do we deal with that? Well, the first thing, we have to develop a much stronger consensus for why we are going in in the first place, and a durable consensus. And I think this is why I think they are not able to find weapons of mass destruction—has been a problem, because too much of the rationale in the public's mind of why we went in was tied in to weapons of mass destruction. I was surprised we didn't find it, frankly. I don't think that is a reason now to get out prematurely. I mean, we have got to stay and we have got to make sure this situation is right. We have got to build the right consensus and then we have got to sustain that consensus by clearly communicating that we have got a plan. And I think that the sense that people have had for the last several months is that the administration has a vision but doesn't have a strategy.

    Well, I think they do have a strategy now and we are seeing it. We are starting to see the fruits of that. But it has been a confusing time during the summer, and frankly a lot of damage was done in the public perception about how things were going in Iraq. And, too much of the constant drumbeat of only the attacks is now what is shaping people's perceptions, not enough perception about what is going that is positive and constructive. That is why I think this hearing is very important.

    Now, sir, we are not particularly good as a government at helping reconstruct civil society after wars. We have learned that. That is how I actually was asked to do this, was because when I went to CSIS after leaving DOD I said, we can't get out of places like Kosovo or Bosnia if we can't get civil society started again. I mean, what is our way of getting out if we are not good at recreating it? So we, along with the Association of the U.S. Army, studied every one of the conflict situations over the last 54 years, and we have had about 50 of them, and tried to figure out what works and what doesn't work. And it is on the basis of that, then, that the Secretary asked us to go over and to look at the situation and offer some suggestions for Iraq.
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    We have to now be on a path that we demonstrate progress. We can rebuild this consensus in America, I believe. It has to start with you. We have to convince you that we have got a plan. If we can convince you that we have got a plan, you are going to turn around and share that with constituents. But we have got to have the stamina to stay through and see this done right.

    Mr. SAXTON. Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentleman.

    Mr. Taylor.

    Mr. TAYLOR. Thank you, Mr. Chairman. I want to thank our panel for being here. I agree with just about everything I have heard thus far.

    Dr. Hamre, I think what troubles me—and I looked at your comments about the historical corruption in Iraq. I have got to think that that fed a lot of cynicism amongst the average Iraqi in their view toward government. And I have got to tell you, it is not unique to Iraqis. A lot of Americans are cynical about the money that is about, in all probability, to be spent there. I think the cynicism was fed, quite honestly, by some people, including the former head of the Federal Emergency Management Agency (FEMA) and the former campaign manager for the President who said, ''And I can help you get that money. I am going to help you get that money.''

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    So, what troubles me as someone who wants to support this is the apparent lack of transparency as to how this money is going to be spent, the apparent accountability of how it is going to be spent. I come from a state where, if a city wants to spend, our county wants to spend $10,000 for something, they have got to put it out for bid. So you can imagine when we are talking $20 billion of, apparently, things that are going to go to sole source contracts, out of sight, out of the mind of the American people, I think it is only going to take a couple of horror stories of that money being misspent to have the American public as cynical about our attentions there as the Iraqi public.

    So my question to you as someone who has been through this, how do we get the transparency we need? How do we get the accountability we need? How do we see to it that every one of these dollars is really put out and it is being done for the benefit of the Iraqi people and not some contractor looking for a sweetheart deal or a job for his brother-in-law who can't find a job elsewhere? How do we do that?

    Mr. HAMRE. Well, sir, I really do think I should ask Mr. Oliver to speak to this question, as well. But let me say, in general terms—and I can only speak from my personal experience—when you develop an estimate for a highly fluid situation, where you really don't have a lot of certainty, you first have to just be as transparent as possible about every assumption you made to try to build a number and argue about it. I mean, say here is why I did it, here is how I did it, here is the assumptions I made. And then, just be completely open about it, so that you say, if you don't agree with me, I will do another assumption. If it is more logical, I will, of course, adopt that assumption. But share everything you can.

    And as I said in my statement, and briefly, there has been a tension between the administration and the Congress over defense budget issues, frankly, for the last year or two. And I think that is a backdrop of——
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    Mr. TAYLOR. Dr. Hamre, I don't think the argument anywhere is over the defense portion of this supplemental. I think—because there is some transparency to that. I know my concerns are the apparent lack of transparency for the 20 billion going toward helping the Iraqis.

    Mr. HAMRE. And then to that part of it, I think that you should delineate, along with the administration as you approve this, the conditions of transparency that you insist on. Who do you want to be looking at and what kind of reports do you want? You know, Dave Oliver is going to understand that. He is going to be here telling you. He told me everything he knew, and he told me, well, here it is, the constraints. Here is what I don't know; here is what I hope we are going to get from this.

    So I think you have a right to ask that. Now, you have also blended a second issue, which is the contracting side of the house. And there have been some challenges on the contracting side of the house. I think those are being worked out. Maybe not adequately. That is an issue for you to explore further with people who are actually doing the work. You have a right to ask for transparency because you are being asked to appropriate the money, and you ought to establish the conditions. But please do it in a dialogue with the administration first and see if you are satisfied that way. And, if necessary, then put it into the law. But I think it is possible to work it out.

    Mr. TAYLOR. Dave, let me ask you to join in.

    Mr. OLIVER. Congressman, I am trying to make this as transparent as possible. And it wasn't as good in the beginning, because I got involved in just doing too much and not recognizing how important that was. But I put every contract that Ambassador Bremer has approved on the Internet and every expenditure. It is on cpa-iraq.org. I think there are 420 items he has approved, of money. So every one of them is on the Internet. And we do a meeting that I chair twice a week, once a week in which we have members of the Coalition, the senior ambassadors, all present along with other people; and then I put the minutes of those meetings on the Internet, too, so that where they talk about decisions made, et cetera, because I am trying to be as transparent.
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    We put the Iraqi budget on the Internet, also, and that is at the same site in Arabic and English, as will be the 2004 budget when it comes out this week. So we are trying to make these transparent.

    Mr. TAYLOR. Mr. Chairman, may I go about 30 seconds over, with your permission?

    Mr. Oliver, one of the things that absolutely appalled me after the first Gulf War was a statement by one of our uniformed officers who said, now—and I was part of a very large delegation that went to Kuwait. This is almost verbatim:

    Many of you are here because you represent businesses back home who want to do business to rebuild Kuwait. This is how you will do it. You will hire a member of the Kuwaiti Royal family, and he will do absolutely nothing for you. But unless his name appears on the letterhead—you will pay him 10 percent of the cost of the contract—and unless his name appears on the letterhead, you won't get any business.

    Now, that is almost verbatim. That is how matter of fact it was. I have got to tell you, I was appalled. We call that kickback, we call that corrupt in America. But what is going to happen to keep that Governing Council from becoming that?

    Mr. OLIVER. Yes, sir. First of all, the Ambassador has set up a special office and we have selected the person that I happen to think is the best person contracting in D.C. I recruited her from the White House when I was at the Office of Secretary of Defense to be head of contracting, a woman named Deidra Lee, who is going to be head of that. She is absolutely above-board. We are—I am terribly alert that if I hear anything like that, I have an investigation started out there. I mean, I dumped every one of my contracts, every one, and severed all my business relationships completely before I went out there so there wouldn't be a question of conflict of interest.
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    And we are going to be very alert to that, Congressman, absolutely, because we cannot have that, for the reason that I can't come back to you and the American people and ask for support if you hear that that sort of thing is going on. So, we are not going to let it happen.

    The CHAIRMAN. If the gentleman would yield for a second. What is the manner in which the contracts are awarded?

    Mr. OLIVER. It is going to be a complete and open bidding, sir, just like Ambassador Bremer said. And we are going to put in—for example, I was talking to the people that I talk to, Dave Nash and Dee Lee, yesterday because what we are going to do is put in the request for proposals. Part of the grading criteria is going to be how many Iraqis they are employing; and, two, making goals on time so we don't end up dragging this out.

    The CHAIRMAN. And who makes the cut on who wins?

    Mr. OLIVER. It depends on who—it is going to be an American group. It is either going to be the Army Corps of Engineers; the State Department has different organizations. But essentially, whoever does the contracting will do a fair and open competition, and do it the same way you do all American contracts that you guys appropriate through the State Department and Defense.

    The CHAIRMAN. So part of the answer to Mr. Taylor's question is, this is different from an award that is being conducted by the nationals of another country in that an American entity will make the decision as to who wins these contracts.
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    Mr. OLIVER. Yes, sir.

    The CHAIRMAN. Okay. Go ahead.

    Mr. TAYLOR. No. Thank you. I yield.

    The CHAIRMAN. I thank the gentleman for his line of questions.

    The gentleman from Colorado, Mr. Hefley.

    Mr. HEFLEY. Thank you, Mr. Chairman. And first of all, I apologize; I had to step out to speak from a group from Corpus Christi for Solomon Ortiz, and right in the middle of your talk, Dr. Hamre. Welcome back. You are back at your old stand, and I have missed you. I think all of us have. And we are delighted to have you here today, as well as the rest of you. And I don't want to plow a ground that has already been plowed; so, if it has been, just say, no, we have already answered that, and we will go on.

    In looking at the budget, the 20 billion part of the budget for the rebuilding, there are some things there that make an awful lot of sense to me. You know, we need to get the electrical grid up, we need to get the water service and the service and the highway infrastructure and some of those things. We need to make sure that those are put back together. But then there were a lot of things in there that didn't make any sense to me, things like buying garbage trucks for them. Well, they may need garbage trucks; but doggone it, can't they buy their own? I mean, they are not a poor nation. Can't they buy their own garbage trucks?
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    Management training, at a very expensive figure a pop, bothered me in there. And there were a number of other things like this that had nothing to do with really rebuilding Iraq. They were kind of like a wish list, it looked to me like, of things that if you had all the money in the world, why, this is what we would do. And, of course, the United States has all the money in the world, so let us ask for these things.

    Would you respond to this? I may be misinterpreting it, that everything may be absolutely essential. And I don't know who is to respond to it.

    Mr. OLIVER. Congressman, we don't have all the money in the world, as you know. And, in fact, this is their balanced budget for 2004 that they are reviewing right now, and I expect Ambassador Bremer and the Governing Council to Ambassador Bremer to approve.

    Let us take an example. The purpose of the supplemental is to establish the security environment so that the private economy can grow to set up the conditions inherent in that. When you talk to the business leaders—and I spend a lot of time talking to them—what they recognize is they have been isolated since Saddam came in to power since 1979. And so what they have missed is about three or four business cycles of how to do good business. They are good people, they are very smart people, well educated, sir, but they have been completely isolated for 20-plus years. So what they need and know they need in order to be effective so that they can quickly establish effective businesses, because we are essentially—they want to go and we believe they should go from a central to a market-based economy, which is a difficult path. They need to be able, they need to know what is going on in business. Because if you think of the way business was done in the 1970's as opposed to the way it is done now, it has just been a whole bunch of things learned. And you do not appreciate how conditions are there until you go into an office and realize that the largest pad on a guy's desk is carbon paper, and that he is writing out orders or writing out thoughts in longhand, using carbon paper to transmit them.
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    So what they asked for and what they have talked to Ambassador Bremer and several of us about is what they need. They need some people to come in—and they don't want them to stay and run things. They want people to come in and give them advice, or they want to go places and give them advice. And that is what that money is for. That is what the management is for. And it is a whole concept, and it is tied to this concept of, let us do the security and let us provide—let us teach them how to fish. And I don't mean teach them how to fish, because they will teach themselves. But let us provide them the tools so that they can learn how to fish, because we want that economy to grow.

    Mr. HEFLEY. Thank you.

    The CHAIRMAN. I thank the gentleman. Mr. Meehan.

    Mr. MEEHAN. Thank you, Mr. Chairman.

    Secretary Rodman, I heard you in response to Congressman Skelton's question, avoid being pinned down on the notion of a four to five year commitment. And Mr. Skelton has tried to get a better grasp from people who have come and testified before this committee as to how long of a commitment this really is. Obviously, there are estimates from five to ten years. There are some people who suggest that if this goes—if this doesn't go well, that we will just abandon it and get out before the next election. So I think a lot of the questions are really important as we deal with this supplemental budget request.

    But it is interesting to me that you go to great pains and lengths to say, look, our mission is to get the Iraqi people up there as soon as we can. We are making enormous progress. Yet today it is reported that after only two weeks from the President's speech at the United Nations, it appears that we are going to draw back and forget about trying to get a vote there, and it appears that we are not going to get a U.N. Security Council resolution which would give us the commitment that we need.
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    And I heard you loud and clear. First, we had 25 countries, then we had 30; today I heard 45 countries. But we are still paying over 90 percent of this effort. And it seems to me that if the sticking point is, why we can't get a U.N. Security Council resolution, that the other countries of the U.N. Security Council believe that we don't have a plan to put the Iraqis up and governing soon enough, I don't get the disconnect there. Why is it that we can't get other countries of the world to participate with us in this effort? I understand we have 45 countries, but there isn't one witness that has come before this committee since we got involved in this that has argued with me that we are paying at least 90 percent, that we only paid a fraction of the expense in Bosnia or in Kosovo, only 50 percent in Afghanistan.

    This would all be easier on the American people if there was a sense that this was really a shared responsibility and that we are going to the United Nations and getting that kind of a commitment for troops and for resources. And I am just—why is that disconnect? We can't seem to get a commitment of how long we are going to be there. We say that we want the Iraqis up and governing for us, but we can't get a U.N. Security Council resolution.

    Secretary RODMAN. Well, you have raised a number of issues. We absolutely agree that this ought to be an international effort. In fact, the world community has a huge stake in Iraq, because Iraq is an important country. And, in fact, I do see a convergence of countries and of opinion that understands that we are not the only ones with a stake in Iraq. A Security Council resolution is only one piece of this. It would be good if there were a new resolution. I think it would help, it might help stimulate some effort. But I think whether there is one or not, we are continuing to mobilize international support. There is a donor's conference in Madrid later this month where we expect a lot of countries to come, and that effort is independent of what happens in New York. And we are making a major effort to remind other countries of the huge stake that the world has in the stability of the Middle East and of Iraq.
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    We also think, by the way, that we have a better chance of encouraging international contributions in Madrid if they see that the United States is continuing to make a firm commitment of its own. And that is how it relates to the supplemental request.

    Mr. MEEHAN. Mr. Secretary, you wouldn't dispute my 90 percent figure, that at least 90 percent of this restructuring and the cost of our operation in Iraq in the foreseeable future, whether it is 4 years, 5 years, or 10 years, that you wouldn't dispute the fact that we are going to pay at least 90 percent of it, which is significantly higher than anyplace else.

    Secretary RODMAN. Well, I don't have an exact figure. It is obvious that we are now carrying a lot of load. And the purpose of this conference in Madrid is to slice and broaden it, and we expect a lot of other major countries to be there and to help out—Arab countries, countries in Asia and Europe. I mean, we expect this to be a—we expect it to succeed in broadening the base of support. That is the purpose of it, and in the security field, as well. It would be good to have a Security Council resolution, but a number of countries that—you saw the Turkish Parliament voting yesterday, so even there we are talking to a number of countries about contributions in the security field.

    And just again on the issue of a Security Council resolution, I think it is incorrect to say that we have abandoned it. I mean, when I talked to my colleagues at the State Department yesterday, we haven't abandoned that at all. We are just looking at the situation, and we will make a decision at some point about how to proceed in New York.

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    Mr. MEEHAN. Mr. Secretary, would you say in the last two weeks we have made progress toward getting a resolution, or would you say that we have maybe gone backwards?

    Secretary RODMAN. I think what you see in the press is about right. It is not moving forward, but I think we have certainly not made a decision to abandon that. And we think there is a degree of consensus, and it would be good to capture that in a resolution. So we have not abandoned that at all.

    Mr. MEEHAN. Mr. Chairman, can I ask Dr. Hamre just one quick?

    The President announced yesterday that he is giving Condoleezza Rice, our National Security Adviser, authority to manage postwar Iraq and the rebuilding of Afghanistan. And I noticed in your statement that you submitted—it sounded like while you, in theory, would agree with the notion of the Defense Department running this operation, as a practical matter it hasn't worked very well. Is that accurate?

    Mr. HAMRE. Yes, that is my view. I think that when it was a logical thing to do, to give the postconflict mission to the Defense Department because it wasn't going to be a transitional environment for some time, I don't disagree with that at all. I think the patterns of coordination inside the administration have been a bit creaky, and I think that this is definitely going to help. I think there has been coordination in the National Security Council (NSC), but I think they have raised the profile of the people who will be doing coordination. I think that is a good thing.

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    Mr. MEEHAN. I think it has been creaky, and it is even more so, because it appears from comments yesterday that Secretary Rumsfeld wasn't told either by the President or by the National Security Council of this new restructuring to handle power. And I was just wondering whether that is accurate or not.

    Secretary RODMAN. I would like to answer that and to make a number of points. First of all, you have heard a consensus between Dr. Hamre and the rest of us here that the situation is making progress. I mean, Dr. Hamre said it is dramatically better than it was in June and July, and in his report he said there was significant progress then. So, I think there is a cartoonish quality to some of the commentary in describing the situation as it is.

    Second, this has been an interagency effort from the beginning in this government. CPA is staffed heavily by not only Defense Department, but many other agencies. And I mentioned that we are eager to expand the participation by other civilian departments, as well. I think what has happened, the new memorandum that we have read about—I haven't had a chance to speak with Secretary Rumsfeld, he is out of town. I think he was reacting, in my assessment, that he is reacting somewhat to how it has been portrayed in the media. The idea of interagency involvement is essential, but I have seen the memorandum, and the memorandum talks explicitly in support of the Department of Defense and of Ambassador Bremer. So that is perfectly appropriate. And it is a new arrangement that at a certain level provides some additional coordination; it may add additional responsiveness in support of what the Department is doing. So this is not a big issue of having interagency involvement.

    But, there is a principle of unity of leadership, unity of effort. I think it makes sense to have coherence in implementation, and the President made that decision early on and he has not changed that decision, assigned to the Department of Defense the leadership role in the sense of making sure there is coherence.
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    Mr. MEEHAN. Thank you, Mr. Secretary.

    Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentleman.

    Mr. Thornberry.

    Mr. THORNBERRY. Thank you, Mr. Chairman.

    Admiral Oliver, I just want to, I guess, express a little of the concern that you have heard already from the Chairman and from Mr. Taylor. I am a little concerned about how this desire for complete and open bidding creates a tension with the need to get the money out fast where it does the most good. And, you know, I am for free and open bidding, too, but I also want to make sure that the results on the ground happen quickly. But I also believe that a few horror stories will damage the whole effort. And I guess a lot of it rides on your day-to-day operation and distribution of money and overseeing the contracting process. And I know you understand that, too. I do think a lot rides on how that comes out.

    Dr. Hamre, I want to ask briefly, a major point in your report and in your testimony is expectations. And I worry about that. You make the comment that, okay, for the people, Saddam Hussein is gone. Now, the sky is the limit, and they want it yesterday. You know, it is challenging for us to manage popular expectations with all of the media and political system that we have developed over the last 200 years. How is that going to work, or—and I guess I am grasping for what tools we have. I mean, having a pollster in the headquarters, you know, is of limited value. I don't know that mass psychology is of particular value. But how can we deal with this expectation? Even if we do good things, if the expectations are higher, people are going to be disappointed and that has real consequences. How do we deal with this problem?
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    Mr. HAMRE. Well, sir, I think that we—and I don't mean this in a critical way. But we have probably not done as good a job on public communication in Iraq as we should have early on. I think that would have helped a great deal. And, again, I don't think we needed to compete with al Jazeera. What we should be competing with is C-SPAN. I mean, I think just putting up a camera and broadcasting what the Baghdad city council is doing would help create the perception of reality when, in the absence of good communication, people imagine an all-powerful America that can do anything. And they tend to have an impression that we are not giving them electricity because we don't like them, because that is what Saddam did. When Saddam got mad with the community, he would cut off the juice just to punish them for a while. Well, now when the electricity goes out, they think we are mad at them. Well, the reality is, is that some jackass blew up a transformer. And we ought to say that. We ought to show a picture of it. We ought to tell them, this is why you don't have electricity today, and here is what we are doing to get it back.

    I think it is really just good basic communication. And I think that—again, I have been away for three months, so I don't want to say this a problem today. It was, I think, a problem when I was there, and I think we are making progress on it.

    Mr. THORNBERRY. Well, I tend to believe that it is a problem for us worldwide to some extent, that our government is not very good at mass communication or that sort of a battle of ideas. And that needs to be updated along with a number of other things.

    Secretary Rodman, let me ask you to briefly comment on Turkey and their decision, how you see that fitting in, and what difference it makes.
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    Secretary RODMAN. Well, we consider this a very positive development, yesterday; that not only the Turkish Government, but now the Turkish Parliament, has made a positive decision about sending forces, contributing forces to stability. You remember on March 1st, the government made such an attempt and it failed. And now there is obviously a consensus in Turkey to do this. And it is a delicate matter because of the reaction of particularly the Kurdish Iraqis, but we think that is manageable. I think there was some misleading reports that the Governing Council had said no to this Turkish involvement, but that is not quite the case. The Kurds, the Kurds in Iraq are our friends. We have worked with them for many years. The Turks, of course, are an ally. So we believe we can manage this. A Turkish force would not be in the north of Iraq, we are smart enough to figure that out. But we managed it during the war itself. I remember when the war began, there was fear that the Turks might intervene, that the Kurds would end up fighting the Turks rather than fighting Saddam, but we managed it. So we think this is soluble, and, again, we think this is a very significant development yesterday.

    Mr. THORNBERRY. Okay. Thank you.

    The CHAIRMAN. I thank the gentleman.

    The gentleman from Texas, Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman.

    And, gentlemen, welcome. I have got a couple of different areas that I would like for you to comment on. The first one I guess is on the issue of establishment of a judicial system and what kind of progress, what kind of priority we are placing on it, and the way it interacts with the continuing standing up of a police force. And I realize that we have a very large task that we are facing on many different fronts that we have to address.
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    Before I ask you to comment on the judicial system and how it interacts with the police force, I think it is important that I note that when, Dr. Hamre, you talk about convincing Congress that there is a plan and that this is an inherently important issue for us nationally and internationally as we look at our leadership role in the world, I don't think it is helpful when we have the Deputy Secretary of Defense come here and tell us that we don't get it. I think there has got to be less of a confrontational attitude on the part of DOD toward Congress, and I think it is important that they try to convince us by reaching out rather than by telling us we don't get it. And that just happened a week or so ago in a hearing here.

    So if you can each comment on the issue of a judicial system and how it is going to interact with the establishment of a police force.

    Secretary RODMAN. Let me start off, first of all, just describing the police. I mentioned before that we are very pleased at the rapid progress we have made in creating a new police force on a new basis. The old—one reason we have had to reconstitute this is that the old Iraqi police had a different view of what the job of being police was; you know, breaking down doors in the middle of the night. So we have had to train people. And we—the number I have is about almost 55,000 Iraqi police now on duty and carrying out the function in the manner that we would expect.

    There is now an independent judiciary. Prestigious judges are appointed who are trusted and free of Baathist connections. There is a council of judges that was just set up to supervise the system, the prosecutorial system, the court system. I don't have other details except that perhaps Admiral Oliver knows a little bit more, but I can certainly submit some more facts for the record. But this is something that we think is going well. The courts are in session. Trials are being held. We have staffed a judiciary. And this is, I think, a real success story because it is brand new. But they are capable people in that country, and we think it is making significant progress.
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    Mr. HAMRE. Mr. Reyes, when we were there we spent some time with Major General Don Campbell, who is the American senior individual who is the adviser to the judiciary. A very talented man. He is a former Judge Advocate General (JAG) officer, commander in Army JAG in years past, an appellate court judge professionally. And he had gone through the process of interviewing all of the judges and the prosecutors in Iraq, and he told us that he was pleasantly surprised it was pretty good. You know, Saddam didn't trust his judiciary so he didn't really use them. He created a cut-out rump judiciary and put it inside the Interior Ministry just to give him guaranteed execution orders. He didn't really use this judiciary. So it turned out about half of them were really pretty good, and a good starting point. There was a bar association. It had been fairly inactive. They tried to politicize it; it really wasn't too bad. They went through the process of selecting a new bar leadership, and they have gone through an interview. They have weeded out, they have selected a new—as Dr. Rodman said, new courts that are up and running.

    The thing that General Campbell would say is, his great challenge is actually getting the penal institutions working, because you don't want to take prisoners back to the old torture chambers. I mean, just the image of that is so bad. And so we unfortunately have had to do that in the near-term; but we do need to be building new infrastructure for the penal institutions and, as you say, connect them in a more modern western-style way, the police department to the judiciary. But there is raw material here that is positive.

    Mr. REYES. Yes, sir.

    Mr. OLIVER. No, sir. I just can reiterate just what John and the Secretary have said. And as you know, the supplemental provides about $900 million to continue that work to give the security for the new judges so we can protect them and their families for the one—not the ones making the civil decisions, but the ones making the criminal decisions who are at risk, to protect the courthouses so that we can put this all back on the road, and then to hook it up and get some maximum security prisons so we are not trying to keep murderers in tents.
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    Secretary RODMAN. May I add one point? In addition to that, there is a special tribunal being set up to handle war crimes issues.

    Mr. REYES. Thank you.

    The CHAIRMAN. I thank the gentleman.

    Mr. Schrock.

    Mr. SCHROCK. Thank you, Mr. Chairman.

    And I thank you all for coming here. I don't know when I have heard a panel that I agree with more than I have today. And I say that because I have been privileged to be to Iraq twice. I am going back again in another couple weeks. The first time I went over there, it was pretty grim because it was about a week after Saddam's regime got toppled. And then, the second time I went back, it was like I was in a different country. And the good news is that there is a lot of good news. The trouble is, you are just not getting that on the local news media because good news is no news. They never report that 9,000 planes landed safely every day; but let one crash, and that is big news. And it is. And we just have to make sure that we get as many members over there as possible, because I heard Mr. Reyes say that Paul Wolfowitz came and said we don't get it.

    He gets it; I get it; we went together the first time. But there are Members who haven't gone over there. And that is probably what he was referring to. Once they go over there, they get it. Here, they can't get it. And I think that is probably one of the reasons that comment was made. And clearly, the next 12 months are decisive. Maybe by the end of 2004, by 14 months. If you look at what we did in postwar Germany, some of the things that are already happening successfully in Iraq took anywhere from 14 months to 3 years to accomplish in Germany. And look what happened there. People were successful in bringing that country back.
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    And somebody—one of you and I can't think which one—mentioned we can't cut corners. Man, we cannot. Because if we do, we are going to pay for it in the long-run.

    And Dr. Hamre's comment that a willingness to stay the course is eroding. We have to stay the course. If there is one thing I heard on my second trip from Iraqis was, they know the words cut and run. And they kept saying, please don't cut and run. Because, unfortunately, I think we have a history in the last few years of doing just that, and I think they live in fear that we will do that. But I think, I really believe we are on the course and the administration is on a course to see this thing through. We have to. There is just no question about that.

    Somebody talked about people being with the villagers 90 days and then they are gone, 90 days and then they are gone, and that doesn't build relationships. When I lived in the country of Vietnam for two years we had civil affairs teams. I don't know if you remember those. And I don't know how successful they were there, but it seems to me civil affairs would be a pretty good element to inject in Iraq right now to try to work with the communities and help them recover.

    And the cynicism. Somebody mentioned the cynicism of the Iraqis and the Americans. Well, it is no wonder if they watch the news every night. And one thing I was amazed at when we flew from—we were in a Black Hawk helicopter, which is a great experience for a Navy guy, quite frankly. When we flew from Baghdad to Babylon, I swear to you every little mud hut had a satellite dish on it. I have never, ever seen anything like it, something they were not allowed to do during the Saddam regime. But they are seeing what is reported here, and I think they are probably questioning our resolve based on some—you know, they are probably getting CNN, which as far as I am concerned is too bad, because I think that is the only story they are getting. They need to get Fox News to get fair and balanced things. But that is another story altogether.
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    And you are right. Somebody mentioned we have a failure to communicate. This whole thing is a failure to communicate and we don't do a good enough job of getting our story out there. And, fortunately, the 70 members now who have been to Iraq are coming back and saying, hey, the Iraq I saw up close and personal was not the one we are reading about in the newspaper.

    And I am going to probably embarrass him again, but my colleague, again, Jim Marshall from Georgia, went over there, and he came back and he spoke beautifully about what he saw over there. I don't think anybody in this Congress could have said it any better. So it is coming from both sides of the aisle. And the more people we get over there, the more we understand and see the troops and what a wonderful job they are doing, I think that message will start to get through, and the media will be dragged along kicking and screaming whether they like it or not.

    So I really don't have any questions. I just happen to agree with you, and I pray to God we stay the course. I don't want this to turn into another Vietnam. And if we stay the course we are, I think we will be very successful. Thank you all for being here.

    Secretary RODMAN. May I just make a comment? I certainly appreciate all of those comments. And one thing I would mention is that civil affairs is to this day a very important part of what our military are doing. And in Iraq, it is—they are the first people who go in and, you know, help the people fix things. And there have been an enormous number of projects that have been undertaken by the civil affairs people. And I think, of course, the trick now is to civilianize it, to get institutions working. But this is something that I am very proud of. And we have seen this in both Afghanistan and Iraq.
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    Mr. SCHROCK. My uncle was a famous speaker from Ohio State, and he used to say, ''Don't give them the fish, give them the rod and the bait.'' And that is what we need to do over there. And I think if we do that, I think it will work.

    Thank you very much, Mr. Chairman.

    The CHAIRMAN. I thank the gentleman.

    Dr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman.

    Just to comment about civil affairs. It is my understanding that most of the civil affairs function in the military now is provided by the Guard and Reserve forces, that we don't have enough in the active. And that contributes to part of our need. I think—I talked to former Secretary of Defense Bill Perry, and he thought we ought to be looking at probably an additional 10,000 active civil affairs troops. And I had a conversation with Secretary Rumsfeld about it, too, and I think that is something that will be ongoing.

    Dr. Hamre, you have been a little bit apologetic today about your information being a bit dated. As you know, you refer in your testimony to having testified before Congress but never testified on the House side because you weren't invited to testify here. And I think that was an oversight, and I think it is one of the problems we have on this committee, in my view; we don't bring enough people that have views other than just the Pentagon view. And so, I am pleased to have you here, even though you are late getting here with your information.
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    Secretary Rodman, just a quick question. In your written statement, you refer to the fact that in your opinion, quote, ''Most of the country is secure.'' How do you define that specifically? I mean, if you could just give a brief answer, because I don't have much time. But if I am a U.N. expat employee or an American business person or a Western aid worker, is your definition of ''most of the country is secure''—does that mean that in 70, 80 percent of the country that I should feel free to be able to walk down the street of those areas? Is that your definition of secure?

    Secretary RODMAN. I wouldn't put a percentage on it. But most of the incidents taking place are in a limited area, what we call the Baathist Triangle, where a lot of the die-hard resistance is. But the north of the country, the south of the country are relatively quiet. That doesn't mean there are not incidents once in a while. But even the number of incidents overall—I mean, there are just a dozen or couple of dozen things happening, some of them very minor.

    Dr. SNYDER. If I might interrupt you, because I don't have much time. If I get a call from one of my constituents that says, I am an Arkansas business person looking to go to Iraq and walk around and survey for a contract; or, I have been offered a job with the International Refugee Committee to go to Iraq; or, the United Nations wants me to go and survey that and I look like an Arkansan. In those areas, is it safe for me to go and walk around on my own?

    Secretary RODMAN. I would ask questions about the specific areas. But we heard Dr. Hamre talk about what he has been told, that life is back to normal in much of the society, and I think that is the dominant impression that one gets.
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    Dr. SNYDER. Thank you.

    Dr. Hamre, you talked about trust. By the way, I thought your opening statement was a very eloquent one, both your written and oral one here. We have a problem. You know, I have a different take on what Secretary Wolfowitz said about people just don't get it. I don't think it was just those who go over there versus those who don't go. It is that you did such a good job talking about the need for staying the course and seeing this through, but you don't gloss over the problems. And in the view of some of us, we have had statements, I think, over the last year or so that, in my view, far too often glossed over the challenges and problems, and at some point it got to the point where we felt like we were being spun. And I don't think that that is a good way for a member of this committee to feel.

    But two specific questions I wanted to ask you. In your written statement, you refer to the fact that, to date, there has not been a satisfactory accounting of how funds are being spent. And I am not talking now about the difficulties of estimates for the future, but you are talking about past spending. Mr. Spratt is no longer here, but I just asked him a moment ago—he is our Ranking Member on the budget committee. He has not been able to get the kind of information he wants with regard to how past reconstruction funds have been spent in the military, and I think that is a real problem.

    Any comments you want to make on that? Because that goes to the issue of trust, too. We are asking the American people for $20 billion additionally for reconstruction, and yet elected Representatives can't get the information they want as far as how previous money was spent.
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    Also, in your written statement you refer to ''bureaucratic struggles,'' was your phrase, within the administration. I recently heard from a former Ambassador who was talking about reconstruction over the last decade, and he said Somalia was a disaster as far as reconstruction. Haiti was better than Somalia. Our efforts in Bosnia were better than Haiti. Our efforts in Kosovo were better than Bosnia. His point was that over the last decade there has been a learning that has occurred. The problem is, when the administration made its decision with regard to Afghanistan and Iraq—I am sorry, with regard to Iraq—the decision was made not to use those people who were experienced, but to have the controlling agency be DOD.

    My question is, when we read in the last 24 hours about Condoleezza Rice seeming to take the lead role in a lot of this, is there not a danger if we start having reconstruction programs administered out of the White House as opposed to being administered by those agencies that know what they are doing? And if you would just amplify in your comment about bureaucratic struggles.

    Mr. HAMRE. Well, sir, first of all, my understanding is that there is not going to be administering the reconstruction out of the White House. That it is a coordinating role. I think that is the right role. I don't think you want to be running things out of the NSC. I don't think that Condoleezza Rice wants to run anything out of it. But there does need to be a strong coordinating function someplace in the government.

    Sir, to the question of bureaucratic struggles and the lack of information, I think that, unfortunately, the issue of Iraq, postconflict reconstruction in Iraq, takes place inside the context of general working relationships in Washington on a whole range of issues. And, unfortunately, I think in the last couple of years I have sensed a breakdown on collegiality in working across—both across the departmental boundaries inside the executive branch and, frankly, across the boundaries between the executive branch and the legislative branch. Now, it is normal. There are institutional politics. I don't minimize that. And it is not inherently a bad thing, because each side brings the richness of their own understanding, hopefully, to a process where you get a synthesized better understanding.
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    A lot of what we are experiencing in the lack of communication, I think, on Iraq reconstruction really has been in the context of general difficulties of communication during the last couple of years. That, I think, is a challenge. I think that the magnitude of this problem and the importance of this problem really calls for an exceptional effort on everybody's part. We have to reach out in a much stronger way.

    And, I think, it is a very good sign that Jerry Bremer sent Dave Oliver over here to get the money. Dave, he's been in this town long enough, he knows you are not going to give him the money unless he tells you what it is he plans to do and you trust him. I think that is a good thing. That is exactly the basis for reconnecting with you. Because, ultimately, you know, the President can't communicate the need of this to the American public if you aren't convinced of it. Ultimately, it has to be—collectively Washington has to come together to understand the importance of this. And it just takes reestablishing the normal connective structures of coordination in Washington that have gotten a bit fragile in the last couple of years.

    Secretary RODMAN. May I respond, sir? I have been privileged to serve in five administrations, and I have seen the bureaucratic interaction over many years. And there is nothing unusual going on right now. This is what government is like. It is a participatory process. I don't see anything particularly unusual, and I think there is much more collegiality than one reads about in the newspapers.

    Second, just to elaborate on what I mentioned before about Dr. Rice's memorandum in the newspaper. The memorandum makes clear that this is in support of the Department of Defense and the CPA. So it makes no change in the unity of command, the structure under which this business is conducted in Iraq. What it does do is add another form of interagency coordination, which is fine, because there already is extensive interagency coordination at many other levels. So this is perfectly fine.
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    And, actually, the third point, you mentioned that the people with the expertise aren't there. And I would dispute that, as well. The people with the expertise are out there, because it is an interagency enterprise in Baghdad, the State Department, other Cabinet departments.

    Dr. SNYDER. What I meant to say is not that they weren't there, but they are not in charge. A lot of people felt that the State Department should be in charge of the reconstruction aspects of this, not the Department of Defense.

    Secretary RODMAN. The head of the CPA is Ambassador Bremer. His main colleagues are Ambassador Kennedy, Ambassador McManaway, Ambassador Hume Horan was out there, Ambassador Robin Rafael. There is a large State Department contingent. There are contingents from other departments. The advisors to the different Iraqi ministries are drawn from other Cabinet departments in this government as well as outsiders. It is an interagency effort out there. What there is, given the fact that a war has just taken place there, is a premium on unity of leadership and unity of effort, and the President decided that the Department of Defense, in the present phase of this activity, is the appropriate line or appropriate chain to manage this.

    Dr. SNYDER. Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentleman.

    Mr. Franks.

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    Mr. FRANKS. Thank you, Mr. Chairman.

    Secretary Rodman, Dr. Hamre, Mr. Oliver, you know, I understand that Secretary Powell set out what could possibly be a timetable for putting together a constitutional election perhaps even within six months, and I understand that that has become more flexible. But as I am told that the U.N. will be assisting the National Security Council in drafting a new constitution—and I think that is a profoundly important consideration, because, you know, we can take a page out of history here where we had to deal with a world war situation with Japan that has had a constitution that didn't really require religious liberty. And the same type of misguided religious zealotry that caused young men to fly airplanes into ships have now—you know, I think there are parallels that cause young men to fly airplanes into buildings.

    And sometimes we have to consider the obvious, and that is the reason that we are in Iraq, ultimately—because of the threat of terrorism. And so that we don't doom ourselves to deal with this again in another generation, it seems critically important to me that we have whatever necessary influences in place to make sure that the new Iraqi constitution has a religious liberty clause in it.

    And I guess I am a little concerned that with the U.N. influences there that we may become victims of our own decency or, even worse, victims of a U.N. political correctness that would say, well, we just want the Iraqis to write the constitution. And while that may sound good on the surface of it, that is what we said in Japan, and they came back with constitutions that we couldn't abide, and ultimately we were in the position of, having already imposed a war, to have to impose a constitution. And now history has deemed that very, very successful and very important.
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    And I am just wondering, what assurances do we have that we can have a constitution that can redirect some of the religious zealotry to the debate over religious issues within their own country, where everyone has an individual liberty related to their religious persuasion?

    Secretary RODMAN. Well, I am happy to start with that one. As you said, the Iraqis are going to have the ultimate responsibility for designing their own government. But the Iraqis who will do this, we have confidence in. The governing council, which is the body that exists at the moment, is inclusive; it is moderate, it includes all of the decent people and groups and regions that ought to be represented in any future Iraq. So we expect that, however they organize the process of constitution drafting, that they are smart enough to do a decent job. I mean, Dr. Chalabi, who spoke at the U.N. General Assembly the other day, outlined some of the principles that he thought should govern a new constitution. He talked about federalism, he talked about independent judiciary, and checks and balances and so forth.

    And I would add that, in Afghanistan, where there is a similar process, much further advanced, I mean, we have the impression that this is proceeding in a very sensible way and the people who are governing Afghanistan are decent people and they will do it right and they will come out with something that is what we would expect of a decent and moderate modern country.

    So, I mean, you are right, that I guess the international community has a right to ask whether Iraq and Afghanistan, which in the past have been a source of trouble to their neighbors, you know, we would like to see the new countries being a model to others and a source of stability in their regions. But I think we are reasonably confident that that will come out.
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    Mr. FRANKS. Well, just to follow up, Dr. Hamre, it is my understanding that—at least in the case of Afghanistan, the very religious liberty clause that we are putting forth here looks like it may not occur. It looks like that in the Afghan constitution that there may be explicit statements that this will remain an—it is hard to articulate it, but a Muslim nation. And certainly that is going to be true in terms of the individuals that are there. But that may give some of the zealots within the country the leverage that they have so effectively used with the Taliban and others to maintain this being able to gain an unfair—if that is a good word—hold on the mechanisms of government that would allow them to continually use the mechanisms of government to foster the terrorist mentality.

    And I think sometimes this is hard for us to debate in a political environment, but we have to recognize that if we are going to defeat terrorism, we have to do it more than just on a military basis; that we have to deal with the core rationale that spawned it in the first place. And there are certain mechanisms that were in place that allowed it to begin to thrive. And I hope that we consider that carefully and that we make sure that there are mechanisms there to guarantee religious liberty. And for that matter, I don't even know who is on our side that is in charge of drafting or helping to draft that part, making sure that those elements are in place.

    Secretary RODMAN. Well, we are aware of the process as it is going on. And the issue you raise is one of the issues that we are interested in. And I don't want to go into details because this is, again, something that they—you know, we don't write their constitution for them, but I think we have reason to think that it will come out in a humane and decent way that—because the Afghans themselves have even more of an incentive than we do to make sure that their society is not a breeding ground for terrorism ever again.
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    But you are right to raise the issue, and I can just say that we are watching it in the Afghan case. We will watch it in the Iraqi case. But I think there will be decent people making those decisions in Iraq, and—but we will keep an eye on it.

    Mr. FRANKS. Thank you, Mr. Chairman. I just hope we will keep an eye on our historical lessons from Japan. We let them—they were decent people. They had a reason to write religious liberty into theirs, but they had three chances and they didn't, and finally we had to make sure that that was there and history has applauded that.

    The CHAIRMAN. I thank the gentleman.

    And I know we promised Dr. Hamre that you would be able to escape here, Dr. Hamre, at the stroke of noon.

    Secretary RODMAN. I would normally never do this, but I agreed to participate in a celebration for a Defense Department agency that I helped to establish, and I promised I would be there. So I apologize that I have to leave.

    The CHAIRMAN. Not at all. We really appreciate your time. Would it be an imposition to allow Mr. Larsen of Washington to take the last shot at you?

    Mr. RODRIGUEZ. Of course.

    The Chairman. Mr. Larsen, you are recognized. And as soon as you are finished, Dr. Hamre, go ahead and please take leave.
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    The gentleman is recognized.

    Mr. LARSEN OF WASHINGTON. Thank you, Mr. Chairman.

    Just a quick note about what I hear in my district. The people in my district are tending to equate the size of this request, $87 billion request, with the size of some of the miscalculations the administration made about postwar Iraq. It is a sentiment that I tend to agree with. But also, I think that, you know, the successes the administration is trying to portray don't give the full picture. But I also believe that the failures that are occurring over there aren't a complete picture, as well. It is really somewhere in the middle.

    And I agree with your sentiment that there is progress being made, but there is a long way to go. And this is based on 20 hours on the ground in Iraq, which was about 10 days ago. I wasn't there certainly as long as you were. But you know, progress is being made, but there is a long way to go. And I just want to emphasize that I think that that is the better message, a more honest portrayal. Every portrayal is honest, but just a better, rounder picture of what is taking place. And I think the American people—at least folks in my district—would appreciate that, that kind of portrayal.

    I want to ask one question of you and then other questions for the Secretary and Mr. Oliver. It has to do with Iraqi ownership, the Iraqi ownership portion of your discussion. When we were in Kirkuk, we met with the local governing council and one of the main concerns—obviously, there is the Kurdish issue in Kirkuk—but separate from the federalism debate that they want to engage in. To a person, regardless of which faction they came from, they talk about this disconnect between the Iraqi Governing Council and Baghdad and them, the local Governing Council in Kirkuk. And they didn't see a road, if you will, a path at which some point these two groups would be connecting, they will be talking.
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    And I don't know if that is the same sentiment being expressed in other parts of the country, that this Iraqi Governing Council sort of operates separately or we haven't done the job at the CPA to start those connections being made. But did you see that when you were there? What are you hearing now? And is that a potential source of conflict or something that is going to be—that we can easily take care of?

    Mr. HAMRE. Sir, first, I was in Iraq before the Governing Council was announced. It was clearly very far in development, but we were still in the final stages of recruiting people, so we hadn't announced who was on it. It turned out we had met with a number of individuals who ended up being appointed to the Governing Council. So my comments really are a bit dated in that sense.

    Obviously, there is going to be a natural disconnect, because we are creating something that hasn't been organic in Iraqi society for quite a while, which is a government where at varying levels people feel connected. This previously was a top-down centrally directed government. And what we are really creating is democracy at multiple levels. And to do that we need to really start thinking about how we develop the connective tissue between those levels. This is one of the reasons why we felt it was very important that the CPA get CPA regional offices, that it become the backbone of connectiveness over time. At some point we will want to get the governance to have representatives in Baghdad, maybe as unofficial observers, for example, to the Governing Council. I don't know, I haven't thought this through. But, some way we need to start getting a sense of connectedness at those levels, as well.

    Mr. HAMRE. Right now the connectedness is too much through tribal affiliations and religious affiliations and that sort of thing, and we really need to be thinking about that as we are going ahead.
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    I think they are, but this is a case as we are evolving the concept of sovereignty, as we are helping the Iraqis to evolve their concept of sovereignty, I think it is crucial that we build on the base of representative government at the local level. I think we have done a very good job of establishing governing councils at the local level. We now need to find a way to connect them to their headquarters by giving them money so that they can do real things on the ground and then giving a sense of representation from the local level to the Federal level.

    Mr. LARSEN OF WASHINGTON. I think from building-a-democracy perspective, this is probably our best challenge. It is easy to point to a power plant being fixed, it is easy to point to few crimes being committed. It is tougher to point to democracy being developed, and so I think it is the biggest challenge.

    Appreciate that, and I will let you go.

    Mr. HAMRE. If I can help in any way, please.

    Mr. LARSEN OF WASHINGTON. I would like to follow up on some thoughts. I appreciate that.

    Mr. Oliver, you said you had a balanced budget for 04, and they're doing it on a calendar year; is that right?

    Mr. OLIVER. Yes, sir.

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    Mr. LARSEN OF WASHINGTON. How big is the budget for 04?

    Mr. OLIVER. About $13.8 billion, sir.

    Mr. LARSEN OF WASHINGTON. And what were the three major sources of revenue?

    Mr. OLIVER. Oil, which is $12 billion; oil-for-food, unencumbered money that's for the old oil-for-food program, which is about $1.3 billion; and $700 to $900 million in taxes.

    Mr. LARSEN OF WASHINGTON. And this is strictly for the operating budget? This isn't any reconstruction?

    Mr. OLIVER. It actually has about $1.3 billion in reconstruction in it, but mostly it is for the operating budget and salaries, et cetera.

    Mr. LARSEN OF WASHINGTON. And you said $12 billion for oil.

    Mr. OLIVER. Yes, sir.

    Mr. LARSEN OF WASHINGTON. And '05 and '06 we are anticipating.

    Mr. OLIVER. Nineteen billion dollars in oil in '05, and $20 billion in '06.
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    Mr. LARSEN OF WASHINGTON. If I could, Mr. Chairman, just explore that a little bit—the assumptions before the war about oil and our ability or Iraq's ability to reconstruct the country, in my view—saying it kindly—wildly off, the ability to produce the amount of oil needed to help with reconstruction.

    My understanding from Ambassador Bremer's testimony a couple weeks ago was that, if we are at $19 or $20 billion a year, '05 and '06 and beyond, we are looking at about $5 billion of that being actually available for reconstruction, the remainder for the operation of the government; is that correct?

    Mr. OLIVER. That's correct, sir.

    Mr. LARSEN OF WASHINGTON. I guess I'm leading more toward a statement than much of anything. And this is loan versus grant concept and using oil revenues to pay back a loan. I understand where the administration is coming from. I tend to agree generally with the administration on that. It is really tough to, with that small amount of money, to encumber that money when there is so much need on the reconstruction side on Iraq alone, and I know there is this debate going on about that. But I think if we look at the math of oil production out of Iraq, the assumptions made about it are not going to be—before the war—are not going to pan out; and, in fact, the Iraqis probably have to use that oil revenue for reconstruction purposes for the more immediate needs than not. Is that an accurate reflection?

    Mr. OLIVER. Yes, sir, Congressman. I mean, I didn't look at the—what they did before the war. I've been so involved in what's been going on in time.
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    Mr. OLIVER. So what I've been doing is monitoring—first of all, we captured the data which was secret for the last 25 years in their oil production in the fields, and, if you look at that and you draw a parametric curve and you talk to the people, you come out with the estimates that I have come out with. Those we have checked through the World Bank and International Monetary Fund (IMF), who agree with them, and those are the projections we are using; because, given that it is a one economy country at the moment, until we can set up—that is the reason we needed the supplementals, to grow this other private sector. Until then, they are absolutely dependent on these estimates being right.


    Mr. OLIVER. And so, the Iraqis agree with them, we agree with them.

    Mr. LARSEN OF WASHINGTON. And the World Bank and the IMF.

    Mr. OLIVER. And the World Bank and the IMF agree with it, and they are on the Internet. I put them there so that you could see for every month what I thought we were going to sell and what I was estimating for the price, so you could see all that, so I think that is pretty open.

    I would like to say the loan issue is terribly important. Not only are there all sorts of bad reasons that you were talking about; for example, with respect to the fact that the country already has a whole bunch of loans. The more important reason, in my perspective, is that I believe that the President has charged Ambassador Bremer with the responsibility to get the—to accomplish a mission in Iraq and to get the troops home as soon as possible.
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    Therefore, I think you have to give them the tools to do that. If you do a loan and let's say you can find somebody legally in the Iraqi Government to sign it, et cetera, then they are going to have some choice. And their choices may not be the same as Ambassador Bremer's, because their goals may not be the same as Ambassador Bremer's.

    I think you have to give him the right—give him the tools—the primary tool we have to give him is money.

    Mr. LARSEN OF WASHINGTON. Mr. Chairman, thank you very much.

    As a quick concluding remark, I appreciate you outlining the thoughts on the loan but also on oil revenue and the assumptions going into that. I think it is very important that those assumptions continue to be vetted as we move forward, and I appreciate that you have them through some organizations. It is going to be a critical part of moving forward there.

    Mr. OLIVER. Thanks.

    The CHAIRMAN. I thank the gentleman.

    Mr. Wilson.

    Mr. WILSON OF SOUTH CAROLINA. Thank you, Mr. Chairman, and I indeed share the sentiment of Congressman Schrock in the visit that I had to Iraq. It was very eye-opening and it was a wonderful experience to see the progress being made. And in particular, I was very grateful that our chairman, Duncan Hunter, is offering to everyone the opportunity to go and visit the country and learn firsthand. And I had the personal opportunity, being asked by Congressman Ike Skelton, the Ranking Member, to go on his delegation, and it was very eye-opening, very encouraging.
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    The information that really was very reassuring to me in particular, when we were in Mosul, and met with General David Petraeus of the 101st Airborne, he gave an excellent presentation on the civil action projects and how meaningful they were. And it just grieves me that the American people do not see the small but very successful and very meaningful civil action projects. And in particular, I identified, because as a retired Army JAG officer of 31 years, I found out that the JAG officer has a very prominent role in signing off on the projects. And it is reassuring to see the efforts to help the people, but also to avoid fraud, waste, and abuse, to protect the resources of the taxpayers of the United States.

    And I also had the opportunity to see the reopening of the Kisik oil refinery. That was very encouraging, where 300 jobs were created by reopening a refinery that had been closed for 4 years, and we were there with the newly elected, democratically elected Governor of Ninova Province. Things were coming together that I just didn't realize were being done, but I am very grateful.

    One thing I was concerned about, though, and I was happy to see that right after we came back, that the laws are being changed in Iraq in terms of foreign investment. And, of course, you identified it as a Soviet-style economy, a Baath socialist economy, which precluded foreign investment. But then leave out the oil industry, and that concerns me. I would hope that somehow this could be looked at, the experience of Russia, where billions of dollars have been invested in Sakhalin island by Exxon-Mobil.

    Even in China, the exploration rights to Western oil companies, and I know that Luk-oil of Russia itself would like to invest in Iraq.
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    What are the prospects of trying to open up the oil industry to private investment?

    Mr. OLIVER. Sir, the Governing Council made that decision, and they essentially said we think—we think that it is the best thing—we need capital, and we are not sure that—some of the people may not have excess capital inside the country are the people that we would like to invest. And so we need external capital; and so they did, as you suggest, propose the most open and forward-leaning investment environment that we have seen in some time.

    At the same time, they said, well, we are not in control of the oil, and I believe Ambassador Bremer left it up to them because it is their country and their oil field and it is just like if they ask us. They said, how much money will it take to increase the oil outflow, and we had done—we had looked at it because we wanted to get a feel for it. And what Ambassador Bremer said to them was, you ought to get your own experts and make your own decisions. That is your oil. That is your future, and you need to make those decisions.

    Mr. WILSON OF SOUTH CAROLINA. And I indeed understand it should be their decisions. But I would hope that, looking at the example around the world of the benefits of foreign investment in their local economy, they would modernize; companies would have a great interest, obviously, in providing security that would open that up. But how sad it would be to have the second largest oil reserves in the world underground and you sit on them in a level of poverty.

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    Mr. OLIVER. I think they intend to do it, but as you know, it takes several years.

    Mr. WILSON OF SOUTH CAROLINA. And I know the mentality needs to be dispelled, too. And we cannot tell them, but I hope that a lot of cheerleaders, as you are doing, will make that point.

    Mr. OLIVER. Yes, sir, Congressman.

    Mr. WILSON OF SOUTH CAROLINA. Thank you for what you have done.

    Thank you, Mr. Chairman.

    The CHAIRMAN. Thank the gentleman.

    Mr. Cooper.

    Mr. COOPER. Thank you, Mr. Chairman.

    Mr. Oliver, it is my impression that you are the primary architect of the $20 billion that Congress is being asked to pass in the supplemental appropriations bill in aid to Iraq; is that correct?

    Mr. OLIVER. Well, Ambassador Bremer set up the policy and I put it together with the assistance of the Iraqis and members of the team, yes, sir.
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    Mr. COOPER. Your official status today? You are a private contractor for DOD?

    Mr. OLIVER. My official status as OSD made me a member of the Senior Executive Service.

    Mr. COOPER. What is your compensation, annual compensation in your current rank?

    Mr. OLIVER. An SES–4, Senior Executive Service 4, sir.

    Mr. COOPER. Could you translate that into dollar terms for me?

    Mr. OLIVER. I think it is 142,000 a year.

    Mr. COOPER. What is your prior experience in nation-building?

    Mr. OLIVER. I have no prior experience in nation-building, sir.

    Mr. COOPER. What is your prior experience in having lived in a Muslim country?

    Mr. OLIVER. I have none, sir.

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    Mr. COOPER. What qualified you—I noted in your earlier comments you were in favor of open and competitive biddings for contracts—what qualified you to take on this major responsibility, which amounts to almost doubling the annual U.S. foreign aid budget?

    Mr. OLIVER. Yes, sir. As you know, I am the Director of Management and Budget in Iraq, and I was the Navy—in charge of the Navy—was admiral in charge of the Navy programming which prepares the $90 billion Navy budget for four years. And then after that, you know, I have written two books on management which have been published on amazon.com; if you care to buy them, that will raise my level. And I served in the last administration as the number five person of the Defense Department in charge of Acquisition, Development and Technology, so——

    Mr. COOPER. But those were all military duties, as opposed to nation-building duties.

    Mr. OLIVER. No, those were civilian jobs, sir. In the last one, I was a civilian.

    What I am saying is management, I am in charge of management and budget in Iraq, and I am saying I am qualified in those areas, because putting the budgets together and understanding management are the same.

    Now, with respect to nation-building, with respect to the economics, et cetera, for example, which were run by Peter McPherson, who is the president of Michigan State, the previous Director of the U.S. Agency for International Development (U.S.AID), and is in charge of all these economics things; and it turns out we happen to be grand friends and work together in the same office, and so I know exactly what happened with the investment issues.
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    Mr. COOPER. Is our nation building on the experience that we should have gained in the last ten years, because it is my understanding we have been involved in nation building in some five Muslim countries. It seems like we have a little bit of a policy disconnect here, when at least Ambassador Dobbins has written a book for the Rand Institute basically demonstrating how we are not building on our prior experience. And granted, we made multiple mistakes in the past, but it seems we are almost relying on beginner's luck as a policy here due to your lack of experience in nation building and in dealing with Muslim countries.

    I will grant you, you probably got great management experience in general, but there are a lot of U.S. businessmen who have great management experience. That would not make them necessarily qualified to be lead nation builders in Iraq at this crucial time.

    Mr. OLIVER. Yes. And what I said was, because I am doing the budgets and I have done bigger budgets than probably anybody else, I think it is a great fit to use my skills in that area, sir.

    Mr. COOPER. So you are qualified in advising this committee and others that we should spend $50,000 per bed to build a new prison in Iraq? We need to spend 900 million, what, to import oil products into that oil-rich country? That is within your expertise?

    Mr. OLIVER. Yes, sir. As you—you may not know, but the price of the bed is one—it is less than a quarter of what it is in California for maximum security prison. It is less than half of what it takes to build the average bed in the United—or the average cell in the United States for max security prison. And the way we are getting that is because we have cheap labor in Iraq, because it is less expensive.
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    At the same time, we have got conditions that make it difficult with respect to—since the electricity, we have not yet—we are at about 3,900 megawatts of power, right now. We need 6,000 in order to run the economy and provide 24-hour service. So, of the seven electrical plants or the seven concrete plants which use a great deal of electricity, only six of them are operating. The price of cement is high. We are also having to import the rebars, et cetera. And so we looked at the estimates and said, labor is going to be low, the price is going to be high, we think we can do this for about a third of the price in the United States. So, yes, I think those are good estimates.

    Mr. COOPER. Who were you working with from the State Department and other agencies who had direct nation-building experience in Kosovo or Afghanistan or one of the other Muslim countries that we have been helping to rebuild in the last decade?

    Mr. OLIVER. Yes, sir. I think you should address that to Secretary Rodman, sir; because I mean, as he said, the key people are Paul Bremer, Clay McManaway, Pat Kennedy, Scott Carpenter, Sarah Johnson. All those are Ambassadors from the State Department in charge of—I mean, the top three are the only people in the front office.

    Scott Carpenter is in charge of the governor's committee; Susan Johnson is in charge of foreign affairs. I mean, there is a significant State Department drive in that whole—people driving that whole thing.

    Mr. COOPER. So you feel you have learned the lessons that we should have learned from Kosovo and Afghanistan and other countries? Ambassador Dobbins was here this morning basically saying we have not as a nation. We are trying to reinvent the wheel. We are doing it all over again.
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    Mr. OLIVER. Yes, sir. I am only talking about my area, sir, which is the area of management and budget.

    Mr. COOPER. I see that my time has expired, Mr. Chairman.

    The CHAIRMAN. I thank the gentleman.

    Incidentally, my friend, Mr. Cooper, has used the term, ''nation building.'' as I understand that, that encompasses government building. That is, the development of the government.

    You're not involved in that, are you?

    Mr. OLIVER. No, sir.

    The CHAIRMAN. Okay. I think that as I just said to my friend from Tennessee, I think that is the point that Mr. Oliver was making, is that he is involved in procurement and money but not in developing the governments, either local or national.

    Are you involved in any of that?

    Mr. OLIVER. I am also serving as the senior adviser to the Finance Minister, but that is because they do not have an office of management and budget, so we are helping them set up some computer systems so he can manage his budget better, sir, but not in the context. That is really run by the Governance Committee out of—Scott Carpenter.
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    Mr. COOPER. Mr. Chairman?

    The CHAIRMAN. Certainly.

    Mr. COOPER. Didn't we hear earlier in the hearing a statement about handing out $5 million sums to particular military commanders so that they could ease the process of establishing local control, local security, and local governments? It is my impression that these are fundamental decisions and one of the reasons we are being asked to support the $20 billion request, and I am inclined to go along with that. I just want to know that we have the best-qualified people in this country making these recommendations.

    The CHAIRMAN. Well, let me just make a point on that, Mr. Cooper. You have got military leaders in these various communities, like General Odierno in Kirkuk, who is commander of the 4th Infantry Division, who has been involved as a—as a government builder, if you will, in that community. They took 300 leaders from that community and had them through the democratic process, some of which I think was televised here. I think we saw pieces of it here, elect council members, city council members, and deputies and a mayor.

    My point is that these local leaders have problems in their city. They have water lines that are breaking, they have electrical lines that need to be put up. They have lots of local problems that need to be fixed, and that one way that we can empower these new leaders in the communities in Iraq is to help them with their projects.

    Now, that would involve necessarily hundreds and hundreds of small projects, whether it is fixing a 4-inch pipeline that is broken in the east suburb, or rehooking up an electrical line that was damaged by a bomb blast, and, so, giving to our military leaders—and the British, incidentally, have this. They have a fairly effective way of dispersing through their battalion commanders and above, money to get local projects done. That, I think, is a necessity.
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    If we are going to put people in a position of power to give to them the ability to get their potholes fixed—and, incidentally, along that line, there is a fund that has been requested, as I understand, in the emergency supplemental, or in this supplemental, which is a commander's emergency fund, and I believe it is $180 million; is that right, Mr. Oliver?

    Mr. OLIVER. Yes, sir. It is in the OSD portion. That is right; yes, sir.

    The CHAIRMAN. Well, I do not think you can expect—if we expect there to be an order from Baghdad every time we have a four inch waterline break in a city, we are going to be in real trouble in terms of getting things done.

    Mr. COOPER. Mr. Chairman, I agree with you on the waterline break, but will there be accountability for the other expenditures, or is this going to be a local slush fund?

    The CHAIRMAN. Here is what I would say, Mr. Cooper. You have got a military officer—officers—who are through their entire careers held to a strong standard of accountability. They have to report precisely on what has been expended. They have to use their judgment. But on the other hand, somebody has got to do it, and I think rather than look on them as a weak link where you are not going to have accountability and money is going to go out, I think you should look at them as an asset. You have hundreds of military leaders who have been trained all their lives in terms of integrity and leadership and judgment and accountability, and they write reports on where this money goes, and so they are—their mission is to respond to these communities which are lacking in potable water.
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    When we were at Kirkuk, for example, General Odierno was treating the water supply so that the children wouldn't have an outbreak of cholera during the summer months.

    Now, if he has to go submit a report that is going to be acted on in 120 days in Baghdad to get chlorine into the water to save these kids, it is not going to work. As it was, he was able to respond, to react quickly, and they were treating that water while we were there. So I think you do have to give some—give some authority, along with the accountability that these folks have. And I would say a military officer who has the lives of thousands of our young people in his hands is certainly going to be—certainly meets a level of responsibility for hooking up water and electrical supplies.

    Mr. COOPER. Mr. Chairman, as you well know, one of the things that we hope will be in this emergency supplemental is proper body armor for the 40,000 of our troops that currently lack it.

    The CHAIRMAN. And that is designated in there.

    Mr. COOPER. I just wish that some of our commanders had access to these funds, had used the funds to buy proper bulletproof vests for our troops.

    The CHAIRMAN. Yes.

    Mr. COOPER. Jammers, things like that, that our troops are apparently lacking today.
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    The CHAIRMAN. I do say to my colleague that those items are in this area.

    Incidentally, our committee, our input in this bill pursuant to our hearings and the concern on both sides of the aisle, have in fact inserted a good sum for body armor and for some of the other things that need to be talked about on a classified basis.

    Secretary RODMAN. Mr. Chairman?

    The CHAIRMAN. Yes, sir.

    Secretary RODMAN. May I make a comment?

    The CHAIRMAN. Yes, sir.

    Secretary RODMAN. I want to first of all come to the defense of Admiral Oliver, who is one of the most exceptional public servants who I have had the privilege to know. He has been invited to Baghdad to do this job because he has exceptional expertise in an area where expertise is sorely needed; first of all, by CPA to organize its activities and to be able to prepare budgets and to come before Congress to defend the budget; and second, to prepare Iraqis for technical functions which they need to prepare themselves better to carry out if we are ever to be able to turn responsibility over to the Iraqis.

    Now, there are—I am sure there are many people in CPA who have Middle East expertise, who have expertise on other subjects.
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    Now, as for Kosovo experience, I do not know the resumes of all of the civilians in Baghdad, but I know that the three division commanders that we have there have experience in Kosovo, and their testimony is that we are far ahead in Iraq, far ahead of where we were in Kosovo at a comparable time. So, I think, again, I think certainly Admiral Oliver is owed our thanks for the job he is doing, and I also think the way CPA is handling its business is good.

    The CHAIRMAN. Well, I would simply say I think that I know Admiral Oliver well; I have known him over the years, and know of his reputation for being a practical, pragmatic guy who looks at details and analyzes things and has pretty good judgment. In the end, what we have to have is people with good judgment.

    And, similarly, I appreciate the judgment of Dr. Hamre, Mr. Secretary, and yourself, and I think—go back to this point Mr. Cooper and I were talking about. I think these military leaders that we have in these positions, that we are paying so much money to maintain with this military presence, are a real asset.

    You know, when I went through all the things that General Odierno had done in that visit we made to Kirkuk, he just met with the clerks, asked them what they needed to try to accommodate a number of their concerns. He stood up this government, and he had just met a Baathist element of some 75 fighters and defeated them, and he had a bunch of his people out purifying the water supply so that kids wouldn't get cholera. He was juggling a lot of balls and doing an excellent job. And in my mind's eye, I kind of compared that to some guy driving up from the United Nations, pardon me, saying where do I park my Mercedes? And these guys that we raise up come from all corners of our country and go through our system, do have good leadership and do have good judgment; and in the end, you have got to give the ball to them and let them carry it. And I guess my point is they have got to be able to do this on the local level, because if everything has got to be cleared through Baghdad, you are going to see as much frustration as you see in Congress when we are waiting for Washington to clear something that we think our local community or state should be able to do.
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    Mr. COOPER. Mr. Chairman.

    The CHAIRMAN. Mr. Cooper wants to comment.

    Yes, sir.

    Mr. COOPER. Very quick points.

    From what I am reading in the press, General Petraeus has had to accomplish his goals in spite of the CPA. He has had to rely on his own means and his own military training to get the job done in Iraq, despite the job done in CPA.

    Second, the Washington Times reported a few days ago that we are relying on mercenary American military contractors. One company is named, by the way, Custer's Battles, to supply private sector troops. So I like the military as much as you do, Mr. Chairman, but I am worried that our military is being frustrated by this bureaucracy.

    One unnamed military spokesman was quoted in the Washington Times as saying they are basically being forced to hire these U. S. private contractors instead of relying on our own U.S. military personnel. So I am worried there is a different story in Iraq that we are not getting, to be honest with you, from our top Pentagon officials.

    Mr. Chairman, I do not think we have heard from any witness in this committee who hasn't been a top Pentagon official or close buddies with a top Pentagon official. I would like to hear from real troops overseas, colonels and sergeants and privates who have boots on the ground, who know what day-to-day living conditions are like. We are only hearing from the top folks. Let's hear from the real people who are over there.
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    The CHAIRMAN. Mr. Cooper, you have probably got four or five Congressional delegations (CODEL) that are going to be launching out of here in the next several weeks, and I look forward to hearing your report when you travel out there. But, you know, I agree with you in this sense, that there was—what I have gotten back from a number of officers who were in Iraq is that early on they had more flexibility than they have today; that they like the British model. But I think we're talking about the same thing. We are talking about giving discretion and empowerment to folks with good judgment who are on the ground, who are in these local communities with a modicum of bureaucracy. And I think that is always a problem that we have, is that as we start to develop this government and this bureaucracy in Iraq, we have got to make sure that we do not end up delaying important projects on the local level.

    That is the problem we always have up here, and when you have put somebody in a position of authority, as we have, in putting together these—raising these governments from the ground up, these local governments, you have to give them the ability to deliver the necessities of infrastructure to their constituents, and we have to—so, anyway, we are going to pursue that. I think to some degree we are on the same line here.

    I would just say this about Mr. Oliver, is that he is—in my experience, he is a practical guy who likes to go the shortest distance between lines, between points A and B, and get things done quickly in a pragmatic manner, and I have got confidence in him. I think we have got a great folks like that in our government and I think we have taken a lot of time here.

    I think Mr. Gingrey probably has a question here. Gentleman from Georgia.
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    Dr. GINGREY. Thank you, Mr. Chairman.

    Before I get to the question, I do have a question, but I would like to make a comment. And actually, Mr. Chairman, you and Secretary Rodman have already addressed it to some extent, and with all due respect to my colleague from Tennessee, it seemed to me that his line of questioning of Admiral Oliver was designed to impugn your credibility, and indeed maybe even your integrity, and I feel very reassured by the resume which you outlined to us today, and I feel that the $20 billion we are entrusting to you, to your expertise, will be spent in an appropriate and fiscally responsible manner. I just want to make that statement. I feel very, very comfortable with you at the switch in regard to that.

    The CHAIRMAN. Let me just say to my friend, Mr. Cooper asks—he is a pretty tough cross-examiner, but he was asking for the witness to give us his credentials, and he asked the question in the best way—best direct way he knows how, and I think the witness answered it in a good direct way. But I think we got to all stipulate we are trying to get to the same bottom line here and that is to make sure this money is spent right.

    Dr. GINGREY. Mr. Chairman, I do not question anybody's right at all, anybody's right to ask questions, tougher questions. I think that is appropriate. And I just want to say I feel that Admiral Oliver and Secretary Rodman and Dr. Hamre—I wish he were still here—but we appreciate your being here and we appreciate your expertise and I just want to make that comment, Mr. Chairman.

    Mr. COOPER. Dr. Gingrey, since you referred to me personally, may I make one quick comment?
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    The CHAIRMAN. Absolutely, Mr. Cooper.

    Mr. COOPER. You, as a physician, know the value of training and experience. I believe you are an OB/GYN, right?

    Dr. GINGREY. That is correct.

    Mr. COOPER. You would not want even a physician who was not trained as an OB/GYN to make a tough delivery of a baby.

    And our witness, with all his vast credentials and reputation and everything like that, admitted to us he has never been involved in nation building before or lived in a Muslim country. I was just suggesting those might be two helpful types of experience that would have made him an even better administrator than I am sure he is today.

    Dr. GINGREY. And I thank Mr. Cooper.

    And let me go ahead and address my question, and this can either be to Admiral Oliver or to Secretary Rodman. My colleague from Arizona, Mr. Franks, earlier was talking about the constitution, and I thought he would get to the aspect of when that constitution would be up and running and the Iraqi people could literally have an election. And the reason I ask that question, and the reason hopefully you can give us a little bit of a guideline there, is because this question keeps coming up about at least the 20 billion out of the 87 that is going to rebuild and restore our infrastructure in Baghdad and Iraq: Should it be a grant or should it be a loan? And there are strong arguments on both sides.
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    I have discussed this with my staff, and certainly I can see both sides of that issue. I think, obviously, the President, the Secretary of Defense, the administration, has looked at this very carefully and feels very strongly that this should be, indeed, should be a grant for a number of reasons.

    I would like for either one or both of you to tell us why you feel that it should be a grant and not a loan and touch on that earlier question about when do you think that there will be a constitution in a legal government to which a loan could be made if we were considering that.

    Secretary RODMAN. Let me start with the constitution question. This is still under discussion within the Governing Council and in a preparatory committee which was prepared a few months ago. The Iraqis have not yet decided how exactly to constitute what will be a kind of constitutional assembly, constitutional convention. They are debating among themselves how to select the members of this crucial constitution drafting body.

    As to when elections will take place, this, too, you know, depends on how they decide to organize themselves. It may well be that elections—it is logical that elections will take place once the new structure of government is settled and ratified by whatever means they decide, so that—and I cannot give you an exact date. I mean, there are estimates. Secretary Powell thought all this could be done within six months. Historical experience suggests a variety, I mean a range of time periods, but they haven't yet gotten to the first stage of deciding how to organize this constitution drafting body.

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    Mr. OLIVER. Sir, as your staff undoubtedly told you, there are lots of reasons why a grant is preferable to loans in Iraq. There are three primary ones that I think are terribly important, and the most important one is giving Ambassador Bremer, whom the President has identified as a man who is responsible for carrying out—accomplishing the United States mission in Iraq and getting the troops home, giving him the money to get the job done, giving him the tools.

    If you do not do that, if you somehow can identify an Iraqi entity to loan money to, you have not given Ambassador Bremer the tools, while at the same time you have left him the responsibility. I mean, that is in my opinion the most important aspect. And there is no question, everybody, as this body does, has different thoughts; and the problem is relying on that body if you give them that authority to come up with the same priorities as Ambassador Bremer has decided and to meet Ambassador Bremer's plan.

    How can you hold Ambassador Bremer responsible for meeting his plan if you do not give him the tools and give him the money? I just think you lose the unit of commander responsibility. I think that answers the most important issue.

    The second issue, which is a practice one that I deal with because I have done a great deal of managing acquisition before, is you will lose any control—you will lose a significant amount of control over who gets the contracts, because the United States, the State Department, the Defense Department, the Corps of Engineers, will not be awarded any contracts in my opinion. There will be grants to the Iraqi Government, who will then direct it. And I only point out to you that the key—that there are other countries who had a significant involvement in that area before we did, and they are the ones who have people on the ground and companies on the ground and ties, and that is where that money will go.
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    Dr. GINGREY. Thank you, gentleman. I see my time has expired. Mr. Chairman, I thank you.

    The CHAIRMAN. I thank the gentleman.

    The gentleman from Texas, Mr. Turner.

    Mr. TURNER OF TEXAS. Thank you, Mr. Chairman.

    I have tried to look very carefully at the presentation, some 50 pages they have provided on the request that, Mr. Oliver, I guess you put together. And I have noted a great deal of concern, both personally and among my colleagues, about the size of this request, $20 billion.

    I note we have spent about $1–1/2 billion in Afghanistan, a much poorer country, with certainly an equally serious potential threat to be a haven for terrorists. And as you noted in the Washington Post yesterday, even the House Republicans who have looked at this package have found about $1.7 billion that they think should be eliminated.

    Particularly it comes down to the issue of what is our responsibility here, and I think clearly we have a responsibility to provide security to Iraq. But we are talking about a nation that has got the second largest oil reserves in the world, and once they get on their feet can well afford to manage their own country and to build their own infrastructure. And I do not run from the idea that we ought to repair that which was damaged as a result of the conflict, get the water running and the lights back on. And I certainly agree with the Chairman; I think funds in the hands of the commanders is money that could be well spent and will travel a long way.
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    My calculation shows me that your $5 million per week in the hands of our commanders translates to $260 million a year in a country where I understand a dollar might equal about 10 by our standards, like an investment perhaps of $1 billion in our own country. So I have a great deal of concern about the nature of the request in the sense that, obviously, much of it is multiyear. I notice there is $1 billion in there to build thermal power generating facilities that will be constructed over the next 3 years. I notice there is a considerable amount of money for the justice system, $100 million for technical assistance for investigation into crimes against humanity, to hire 500 experts at $200,000 per expert. I could go on and on, but I think you get the gist of my concern.

    And I guess my question for you—I am sure that when you put it together, you listened to all the requests, and it was your job to kind of compile it. I have gone through here and made my effort to try to cut back on some of the requests, basically on the proposition that some of these things should be handled by the Iraqi people, not the American taxpayer, where we already are half a trillion dollars in debt, in deficit, this year alone.

    So, you know, rather than hear the debate that basically says we've got to do this because we've got to provide, you know—we've got to prevail here, I would like to see a proposal that deals with this on a more staged basis, that deals with what the cost would be in the upcoming year, that emphasizes our obligation to provide security and the basic necessities. But you know, there are some numbers in here that just—you know, the proposal that we were going to build seven model cities, $100,000; the proposal we are going to build two maximum security prisons at $400 million, at $50,000 a bed—that is what it costs to build them in Texas—security detail for 400 judges at $50,000 per judge.
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    You want to spend $1.3 million in every courthouse in Iraq to upgrade security. I would love to have $1.3 million on the 17 courthouses in my district to improve them.

    I think that is the concern that many Members of Congress have, and I think that—I guess my question to you is, if you went back and took a different approach, if you looked at it based on what is going to be spent in the next year—I suspect we are going to be significantly reduced in troop strength before the next election, just to talk politics about it, and I think that it is a little bit—just wrong to be asking the American taxpayers to put this money on the table today and borrow this $20 billion, because we are going to borrow it. And number one, it is not going to be spent in the next year; number two, that it is for many things that many people in our country cannot understand why we are going to spend it, and the numbers are big. You know, $600 billion dollars to rehabilitate the Iraqi railroad system; I mean, I know this is somewhat arbitrary, but I mean, I give them some credit for needing some help there; but $600 million?

    Airport improvements in over 120 airports. You know, that is a lot of airports to put $165 million into.

    Establishing a wireless network for the entire country, $73 million. Construction of public buildings, $65 million; $240 million for road and bridge improvements; $400 million for hospital refurbishment; $300,000,000 for medical equipment. We are going to have an international police training force of 1,500, and the request is $800 million for that force, when we already have in your request $200,000,000 to train and equip the Iraqi police force. Appears to me to be excessive and duplication, and I think somebody that took a sharp No. 2 pencil could cut this thing down and we could take this a little slower.
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    How do you respond to that criticism?

    Mr. OLIVER. We started with $39 billion and cut it down, Congressman. It has been very, very detailed. I think it is better—rather than look at each one of those items, it is better to talk philosophically.

    The question is: What is the mission? The mission is to establish the conditions that allow them to go from a central to a market-based economy as soon as possible and establish the security conditions that allow us to get our troops out as soon as possible.

    It is personally important that, no matter how—no matter how we got to the position we are today, we have a unique opportunity to make a difference in the Middle East. To do that, we need to go from a central to a market-based economy. To do that, you have to have security so that people can build micro and small businesses and so that you can get foreign investment in, and you need to have—you need to set the conditions that will facilitate foreign investment.

    Whether or not they are wireless, because it is the cheapest way to approach it when you do not have cable throughout the country, if it is to establish the electricity so that people can sign contracts, because they have—they know that they will have electricity more than three hours out of six, so therefore they can do continuous production and the cement factories can run. If it is to do all of the items in there, screened against those two simple criteria, what is it that we need to establish a security environment? And if you notice, there are funds in there, for example, and part of it I didn't write as clearly as I should have—for example, the $800 million involves training the rest of the police force, up to 77,000, and you happen to hire 1,500 international trainers to do that along the way, but you essentially are going from 90,000 security people to 201,000 within a year, because it is terribly important to make security be on the part of the Iraqis. And the rest of the money which we will get under contract and we will spend, or we will spend or have under contract within a year, is to establish the conditions that will facilitate the development of small business so that it doesn't become an unstable country, dependent on only one economy, so that we have to come back later, but is the stable market-based economy that we need.
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    Mr. TURNER OF TEXAS. I appreciate the fact that you described it as a philosophical difference, because I think you are right. I think it is.

    When I look at the numbers, it makes me—I am going to ask the question: Do we not have the same obligation, then, based on your philosophical vantage point, in Afghanistan?

    I think the issue here comes down to, what should be the rightful obligation of the American taxpayer to a people who are, from all I understand, resourceful, hardworking, intelligent—some were considerably more advanced prior to the conflict than Afghanistan ever has been—and, second, the possessor of the second largest reserves of oil in the world.

    So I think, on balance, my philosophical bent is to provide security and then allow the Iraqi people to rebuild their nation. You know, it does represent a difference of philosophy. You know, I look at the record and what has occurred in Iraq, and see items on here—like you mentioned, the wireless system. They didn't have a wireless system before the conflict. I do not feel an obligation to provide them one after the conflict.

    So I think it is a philosophical difference, and I appreciate your candor and I appreciate your hard work and your expertise that you bring to the job.

    Thank you, Mr. Oliver.

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    The CHAIRMAN. I thank the gentleman.

    The gentleman from Georgia, Mr. Marshall.

    Mr. MARSHALL. Thank you, Mr. Chairman.

    I am one who accepts the principle that we are going to have to have—in order for us to have security, we are going to have to rebuild Iraq somewhat. And I am not going to get into some of the details that my colleague from Texas just got into, and I think they are legitimate questions to ask.

    I do think you have an enormously difficult task. I do not think we will succeed in our objectives if we do not put this kind of money into the effort; but on the other hand, I do not know that we will succeed if we put this money into the effort. We have got these cap expenditures that are going on right now, which seem to me to be wonderful things to be doing.

    I often thought when I was in Vietnam, we could have spent a little bit less on some of the bombs that were missing their mark, and drop refrigerators and televisions, and that that would probably do more good, at least with the villagers that I was seeing. But how you will transition from us providing those resources to a government and an economy that has those resources and uses them appropriately is an enormous challenge.

    I really have two questions. As I talk with different folks about this issue, one, the subject of loans versus grants, and often somebody says well, they are already burdened horribly by loans. If you add more loans to the existing burden, it is just going to—I have gotten different signals from the country on the question of preexisting debt. To me at least, that preexisting debt is an obligation of a regime that is no longer in power.
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    Those—most of those—who decided to lend to Iraq chose to deal with that regime. Those folks probably need to look to that regime to repay that money.

    I understand that an awful lot of that is owed to France, Germany, Russia—countries that did not support the current effort. And it would seem pretty perverse to me for us to be putting a whole bunch of American money in as grant funds to build up an economy that then repays old debt, Hussein debt, to France, Germany, and Russia. That seems quite odd.

    Now, in conversations with Dr. Rice just this last week, I got mixed signals on what the administration's intent is, whether or not those governments are going to walk away from their debt, or whether or not the Iraqi Government is simply going to say—that is the last government—we are not paying you. I do not know whether the World Bank is involved in this, the IMF is involved in this, and to what extent they would put some pressure on to require these old debts be paid.

    I would just like a comment on that and to be clear as to what the objective is, because it doesn't make sense to me to put a bunch of American money into a project to repay debt to France, Germany, and Russia at the moment.

    The other thing is, as I talk with different folks, just to use a simple example, in one of the Presidential debates recently, a question concerning the supplemental request came up. And one of the candidates, a Democratic candidate, said, ''Well, I support the troops. I do not support Halliburton.'' That was it in a nutshell. And the suggestion is that money spent on reconstruction and some of the 67 that goes to private contractors who were providing services to the military is money that is not being properly spent; that somehow excess profits are being taken; that somehow cronyism is involved, those sorts of things.
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    And it would certainly help me a lot in my conversations, in my attempt to support it—and I do support it; I think we should do it and do it quickly. I am on record as saying that. But, it would certainly help me a lot if there was a simple answer to the repeated questions concerning the relationship between the military and different contractors and the contracts that are here; and it is just a simple ''No, there is no profiteering that is going on; this is the kind of accounting that is going to be done; it is transparent. If it is not transparent now, it will be transparent. People will, in fact, go to jail if those things are not done.'' Those things would be very helpful.

    So two things. Loans, old loans, being repaid by our current grants makes no sense to me. And, two, it would help me a lot if you could help us a little bit on the contracting.

    Secretary RODMAN. Let me start out to say a word on the debt issue. I think one reason you may be getting unclear signals is that a lot of decisions have not been made yet in our government because of the dilemma that you point out. And I think, in addition, the Iraqis will have a voice in this in some form or another, either the Governing Council or successor government, but that is my understanding of the State of affairs.

    Maybe Admiral Oliver——

    Mr. OLIVER. Ambassador Bremer said none of this money would be used to repay debt.

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    In addition, I know that the Council absolutely wants this debt ''renegotiated,'' is the right term, and they want—they are going to press. We are actually—we are saying, let's get through—let's focus on one thing at a time. We wanted to get the '04 budget done, which was this month. We wanted to get the Madrid conference done, which is later on this month. And then I know that Secretary Snow is working with the GC to approach this issue, which is the debt.

    Mr. MARSHALL. But you do appreciate, though, that the money we are sinking into this is going to create productive capacity to pay back their debt? I think it should be a grant, but I am really troubled by it.

    Mr. OLIVER. I am just sure that none of that money is ever going to go back to pay back that debt.

    Mr. MARSHALL. Well, directly or indirectly, not directly, but indirectly, yes, if in fact the debt still exists and we rebuild this country and its oil wealth is then used.

    Mr. OLIVER. I am sure that, indirectly, the problem is going to get solved.

    Mr. MARSHALL. Good. What about——

    Mr. OLIVER. The contracting—there is nothing untoward going on with respect to the Halliburton and Bechtel contracts, period. However, the explanation is too long to serve with constituents, so what we are doing is, both those contracts are being terminated and recompeted, and open and full—a new, open and full. The Halliburton contract with the oil fields is due any minute to be announced, it was due for some months, and we're not putting any more money into them; in other words, terminated the moneys in September, just because it was decided it was too hard to explain. And the Bechtel one is being recompeted and I think it will be announced in December. So I think that is a nicer, quicker answer, but there is nothing untoward going on.
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    Mr. MARSHALL. That is great. And you have said it—I assume it is public, but is that something that is going to be public for some time, that you are going to recompete?

    Mr. OLIVER. It is public, sir.

    The CHAIRMAN. You all set, Jim? You all set?

    Okay. I thank the gentleman.

    Mr. Larson.

    Mr. LARSON OF CONNECTICUT. Thank you, Mr. Chairman, and I thank the patience of our panel here today. I have a question for Dr. Hamre who is not here, but I hope you can—Dr. Hamre, you can get me a written response.

    The CHAIRMAN. We will make a note of that. Mr. Larson, we will make sure he gets whatever question you want him to respond to.

    Mr. LARSON OF CONNECTICUT. Well, I agree with the premise that he comes to the committee with and especially the responsibility that it is our responsibility to convince the people.

    My question to him is, if the Congress cannot get the answers from the administration that it needs before it is asked to vote on a supplemental, would he vote for that supplemental absent the detail? That would be my question to Doctor—to Dr. Hamre.
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    Second, Mr. Skelton asked a question early on, and I again harken back philosophically to what I think is important, which is that the American people understand the gravity of this situation, but for the most part they feel that they are not being leveled with. And the reason that they feel they are not being leveled is because when you ask questions, when you have written letters, in fact, outlining dramatically what the difficulties are going to be in addressing this—not post-Iraq, but predictions-Iraq—and there still are lingering questions that do not get answered, it is pretty tough to get the people to go along with that.

    So, for example, when we ask, how long do you think that we are going to be there, we are told that is not a question that we are willing to make any predictions on. What has so far—so now you are back in front of your hometown, and someone says how long are we going to be there, Congressman? Well, I cannot tell you how long we are going to be there, folks. We can only give you vague guesstimates as to what is happening here.

    Congressman, how about our troops? How about our reservists that are over there? We are told six, then nine, now possibly a year's worth of deployments, and we are stressed.

    Can you tell us credibly when they will be back?

    Can you give us any indication?

    No, I am sorry I cannot answer that, but I do want you to support $87 billion worth of moneys, because it is absolutely necessary for us. We will get back to you on the other issues, but please take it on face value that we need this.
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    How do you—how do you respond to that? Why cannot we get these questions?

    Why cannot there be direct answers?

    How do we garner the public support?

    This lack of credibility that exists out here and, in the terms of Mr. Hamre, the erosion that is taking place, is because we are not giving—we are not able to answer the questions.

    Secretary RODMAN. Well, one reason it is hard to give a fixed answer to those questions is so much depends on what we do. Depends on what we do now. If we do the right thing now, we shorten the period.

    Mr. LARSON OF CONNECTICUT. Should we vote on this before the donor's conference? How much are we going to get from the donors?

    Mr. OLIVER. Of that, I don't know what the estimate is.

    Mr. LARSON OF CONNECTICUT. Is there a ballpark?

     Mr. OLIVER. I personally do not have an answer to that. It may be that the people working on this have an estimate. I think our—well anyway, I do not have an answer for you.
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    Mr. LARSON OF CONNECTICUT. Well, that is what I mean. We are in a public setting and citizens are saying, how much are we going to pay? Various members on both sides say, well, this looks like it is a 90 percent solution; meaning that the United States is in this for the long-haul and we are going to be bearing 90 percent of the burden all the way down the line. Is that a fair estimate?

    Secretary RODMAN. Our calculation is that we maximize our chances at getting international contributions if the other countries see that we are——

    Mr. LARSON OF CONNECTICUT. You mean other countries haven't seen our contribution to date?

    Let me ask you this: Why haven't we been able to get other countries to participate in this effort?

    Mr. LARSON OF CONNECTICUT. Is it because of contracts? And I note that it was pointed out that Turkey is involved, but I also note that in the news this morning it said that that is because Turkey has just been awarded, how much money from the United States Government? Is that part of their commitment? In order to get nations to compete or to go in with us, what is it going to take? Does it take them sharing in part of the rebuilding of Iraq? And, if so, what are those plans? Or are we going it alone all the way down the line? We have an obligation to tell the public that if that, in fact, is the way that we are going to go.

    Mr. RODRIGUEZ. Well, I have some figures on what we think is the total cost of building the Iraqi infrastructure. That is estimated to be anywhere between $50 and $75 billion. And so, our supplemental is a fraction of that. It is something like a quarter to 40 percent of that. So we are looking to the international community to, in fact, bear the majority of the cost of this economic reconstruction. That is our—whether we get that, I don't know, but our calculation, our intention, is to have the international community, the lion's share of that——
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    Mr. LARSON OF CONNECTICUT. Absent the international community paying for that, it will be the American taxpayer to pay for it, correct?

    Secretary RODMAN. What we are asking from the Congress is what you have before you.

    Mr. LARSON OF CONNECTICUT. Now, also we are told that we haven't gotten an accountability for the $65 billion—as you heard the question asked before by Mr. Snyder, and Mr. Spratt has asked that question publicly. We are told that it is $87 billion, but 2 days after the President made the announcement, people from the Pentagon were on the Hill saying we are going to need another $55 billion more than that. Which is it?

    Secretary RODMAN. Well, I am here reporting the President's request. That is what we are asking for.

    Mr. LARSON OF CONNECTICUT. So we will need no more money than what is being asked in this request?

    Secretary RODMAN. What we are asking for in this request is what is in the request. I mean, I don't want to venture beyond that. This is what the President assesses is needed to do now and thinks it will help accelerate the time when we can turn over the country to the Iraqis.

    Mr. LARSON OF CONNECTICUT. I think you guys do a great job. Don't get me wrong. You are under a difficult situation. But at the very start of this hearing, we talked about the need to establish amongst the American people the credibility behind us. And I know that you have a job to perform, and I know in many respects you don't have those answers, but surely you can understand, and hopefully the administration understands, that the American people ask the very same questions that Members of Congress do. And when you say, well, I can't—this deals specifically just with this request; everybody in this room knows that we are going to be back for another request. But instead of owning up to the American people and pulling together, it is almost gamesmanship that people despise so much about the whole process.
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    And I am not saying that that is your doing. You know, you are carrying a message to the Congress because that is your job and your responsibility, and you can't answer for things that, in fact, you don't know. Is that——

    Secretary RODMAN. What I can say is what I mentioned before, is that if we do something now at a significant level, we maximize the chances of succeeding in what we undertook. If we try to do it on the cheap or try to cut corners or try to do the minimum right now, we risk prolonging the process. And I think the President made a decision that, if we ask for a big amount knowing that it would be controversial, but if we ask for that big amount, that gives us the best chance of accomplishing what we set out to do and hastening the day when the mission will be accomplished. And he could have asked for a lesser amount and would have known probably that he would have had to come back again later. And I think he asked for what Ambassador Bremer and we all thought was the amount that would do the job, and that is something that is urgent to do.

    Mr. LARSON OF CONNECTICUT. I will bet you dinner we will be back again after this goes through, as well. The paying for this as well as you heard a number of people and Mr. Marshall talking about the debt and other people talking about the difference between loans, et cetera—the real problem, as well, is that we are going to be assuming this debt and responsibility.

    And another question that citizens ask of me all the time—it seems like the only people who we have asked to sacrifice during all of this have been the men and women who wear the uniform, and especially our reservists. We are doling out tax cuts, and our proposal is for even more tax cuts, and we are extending the deployment of our reservists and National Guards and stretching them to the maximum. That is the credibility issue that is here in terms of not the need—nobody wants to cut and run. Everybody understands the responsibility that we have to the men and women who wear the uniform and have performed so valiantly and excelled. But it is caught up in this mishmash of lack of fully understanding what the full measure is going to be required of the American taxpayers and the American citizens.
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    The CHAIRMAN. Will the gentleman yield?

    Mr. LARSON OF CONNECTICUT. I just—my observation on this is this is what it is going to take for the next year; is that correct? Mr. Secretary? Mr. Oliver?

    Mr. OLIVER. Yes, sir.

    The CHAIRMAN. And I don't think anybody is saying we are not going to still have expenses after this next year. But my impression is kind of the opposite of my friend Mr. Larson, because in the past we run these operations, and we have come in with $5 billion, $6 billion, $7 billion appropriations supplementals after we have taken them out of hide, meaning we will pull it out of repair funds, we will pull it out of operations and maintenance (O&M), we will pull it out of maintenance. Then we put these—we basically take it out of the cash register that we use for the operational forces for training and equipping and maintaining, and then we make that back up in bits and pieces in these supplementals.

    This time the administration risked sticker shock. I mean, they came in with $87 billion. So I think that if anybody was going to criticize the way they presented it, it is in being very candid and giving people this very major bill. But I think they made a decision in the administration to be up front with folks. And $87 billion—of course, that is a military piece, and this rebuilding piece is big. You know, I just hope, like my colleagues, that we do this in a very practical manner; and that if there are—for example, if there are prisons that can be utilized with some refurbishing as opposed to new construction, then we might be able to knock those prices down below the 50,000-a-bed that Mr. Oliver referred to and follow that blueprint in other ways.
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    And also, of course, the idea I think that we get this production—if, in fact, the petroleum is going to be the future cornerstone of their economy, getting that production up and running and allowing that to pay for the modernizing, if you will, of this Iraqi economy is preferable to paying for it with U.S. taxpayer dollars.

    So I think this is going to take a lot of great judgment and a lot of good practical wisdom, and I share my colleague's concern that we do this thing right, but I think they have got to be given a pretty good grade for being forthright. I think an $87 billion price tag is a lot of forthrightness that I have not seen in our many past operations.

    Mr. LARSON OF CONNECTICUT. I have never questioned that. What I question is the total amount that is going to be needed, given a lot of information that the Ranking Member on this committee provided in detail and questions that have been asked in terms of what is the long-term commitment. And when you look at this whole process, I mean, the whole concept of having a donors conference and what actually is going to come out of that—I mean, frankly, I just don't think the American public buys that, Duncan. And that is not these gentlemen's fault here, but it also cuts to the heart of, I think, a policy that differs dramatically from, we will say, George Herbert Walker Bush, who was—earlier today someone said, well, geez, I don't think we finished the job here. He did an extraordinary job, and he did it within the parameters, and he did it with multilateral support, where those nations ended up paying for that, for what they should. And now we are in a position where we can't get these countries to pay, and the American taxpayer needs to know this.

    The CHAIRMAN. Well, I would just say to my colleague, we have other places where—I mean, we are going to pay billions of dollars to destroy poison gas facilities in the Soviet Union, and it is going to be a fairly sparsely attended fund-raiser in getting the rest of the Western world, many of whom have put pressure on us to neutralize these facilities. It is going to be the good old American taxpayer who goes to places like Shchuchye and ends up spending the billion-dollar capital investments to get that stuff done.
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    So I am with the gentleman; I don't think that donors conference is going to be wildly popular, and it is going to be the United States trudging along and having to go it alone. On the other hand, that is the real world, and I think the key here is that the administration has tried to project in the best way possible these real costs.

    I think the other factor here that is tough for us is this: The speed with which we hand off this country to the new Iraqi leadership is dependent on the emergence of a new generation of Iraqi leaders. Clearly, Saddam Hussein did away very quickly with anybody who had any initiative in this country, and so the emergence of this new leadership, which is coming along now and emerging everywhere from the city councils to the national bodies, is occurring. But the speed with which that occurs is largely a driver of how fast we can hand off the government and move out, and I think that is something that is just real tough to predict.

    We have had the assassination attempts and indeed assassinations of some of the stars in the Iraqi Government. I am thinking of the councilwoman who was just killed here a couple of weeks ago in Baghdad. That is another factor. You have got a tremendous strain on these new leaders because they are targets. And so, I think that makes it really tough to predict where this thing is going.

    So they tried to give it to us a year at a time. This year has got a pretty big price tag, and it is going to be tough, and this is going to be a major challenge. I pledge to work with the gentleman in terms of the enormous strain that this puts on our reserves and our first structure. We are going to have to work our way through there.

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    Mr. SKELTON. Mr. Chairman.

    The CHAIRMAN. Certainly.

    Mr. SKELTON. I appreciate your comments and the comments of Mr. Larson. Thinking a little bit ahead, the American taxpayer is, of course, as you say, going to feel the sticker shock of $87 billion, but I think there are three criteria that have to be successfully faced, Mr. Rodman.

    The first is the security situation. The Americans will not continue to support this if we keep seeing body bags come back and injuries as we have seen in the hospitals. The security situation has to get straightened out.

    Number two, there is going to be some substantial monetary contributions by our allies. Why they haven't bellied up to the bar, they just haven't.

    The third is there is going to be some substantial contributions of troops to help us with this very thin strain that we have on our young folks.

    I think, if those three criteria are met, the American taxpayer will feel a lot better about this, and the time will come, probably a year or less from now, as to whether this—the American taxpayer will feel this $87 billion was warranted or not based upon those three criteria. And that is your job, to see that that happens. Thank you.

    The CHAIRMAN. And I thank the gentleman.
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    Mr. Larson, are you all set here? Do you have any other questions?

    Mr. LARSON OF CONNECTICUT. No. And I thank the chairman for indulging in what was a lengthy conversation. I just would only add that I hope we have a hearing at some point in the committee, and God only knows, Mr. Chairman, you have been very good at not only holding hearings, but also holding numerous briefings for Members to attend on various aspects. But the situation that we find ourselves in today is largely due to following the tenets of a new doctrine of preemption and unilateralism. In a radical right turn from the doctrine of Caspar Weinberger, the doctrine of General Powell, and finds us in the predicament we are today without having the multinational capability to address some of these concerns that truly are the concerns of the entire world and not just the concerns of the United States.

    The CHAIRMAN. I thank the gentleman.

    And my seatmate from San Diego Mrs. Davis.

    Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman.

    I want to thank you both for hanging in here, as well.

    A number of the concerns that I have have really been asked, but I wonder if we can just go back to a few of them. One in particular—we just talked about the donor conference, and we know how much we would have liked to have had more international troops in our effort. Are you—and I guess this is directed to Mr. Oliver, particularly. There are a number of items that have not been included on the list that we have that we are hoping other countries will support. Have you put together those lists? Is that a combined effort? And my question, particularly, is we have a credibility gap here, clearly. What are we doing to assure other countries that what they would be contributing and what their efforts would be are, number one, very clear, very transparent, and that they would be able to look back on their investments in the future and know, in fact, that they have a very good story to tell for their constituents as well? How are we doing that? And are we sure that we are doing it right?
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    Mr. OLIVER. Let me tell you how I am doing it, and you can make your own evaluation. And what we are doing is, we went out to everybody, went out to all the local councils and the governances, and also went out to the ministries and said, let us identify those things that have to be done. And we put out a form about two months ago, which I put on the Internet in Arabic and English and said, everybody uses forms to identify those items that have to be done. Let us say we want to build a school room or a school as an example, and, in fact, since we have limited money, the Iraqi budget does not fund several areas to the level they should be funded, and one of them is education.

    Mrs. DAVIS OF CALIFORNIA. In fact, I think the perception is that we are not funding much education at all.

    Mr. OLIVER. We are not, because our thought is that was much more prone to attracting donors than prisons were, because nobody likes to see a sign on the side of a prison saying, Contributed by the Government of . . . But they really like to have it on school buildings.

    And so we actually had three things going on at once. We had the supplemental for the logic I described to you; we had the Iraqi budget; and then we said, now, there are other things we can't do, and so we will do those at donors conference.

    When I left 2 weeks ago, I had staff doing this and about 30 people working on the Iraqis and some people from CPA. We had about 12 feet of those 2-page forms done, and they are by areas, and they are by regions, geographical, because some people like to do villages so we need to do it by villages. And there are people out in the road, Merick Belco, that used to be the deputy—he is an ambassador from Poland; he was a deputy finance minister when they changed from a central to market-based economy—is in charge of this. He has been leading the international group of 27 different countries out talking to various countries, saying, here are the types of project——
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    Mrs. DAVIS OF CALIFORNIA. May I interrupt you? About roughly—is there a sense of how many of these may be picked up? Because I think earlier in the discussion today it was mentioned that a lot of this may be in kind, but not necessarily, you know, the dollars or whatever that would be—the dinar, that would be required to actually build the facilities, create the science labs, whatever that may be.

    Mr. OLIVER. John said it was in kind, and I never say John is wrong, except that I have talked to a whole bunch of people, and I think what he meant by in kind was a government will fund their companies to do it. In other words, instead of giving us the cash directly, they will say, we want to have strings in this because—for example, I don't know if you saw in the papers, a couple days ago Japan said they are going to contribute $5 million over 4 years. I would guess that they would like to have—if it involves building roads, et cetera, they may—they are going to hire local people, but they may want to have the management be a Japanese company. That is sort of what I think what John meant by in kind. So I expect to see a lot of that.

    I talked to Dov Zakheim——

    Mrs. DAVIS OF CALIFORNIA. I am sorry, because our time is always so limited. Will we be using the same, I guess, estimates for them that we are also using for the Congress? In other words, it may not be the prison we are asking them to build, but—is it padded? Is it as close as you can——

    Mr. OLIVER. It can't be padded or—I mean, I have come before the Congress many times. Candidly, I can't pad something, because if they ever catch me doing that, you wouldn't trust me again. And so, it is the best estimate we have, and it is the same in both cases. And I hope within the next five days to get all of those onto the World Wide Web so everybody could see it, because what I want is everybody in the world to be able to see it to be open and transparent.
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    Mrs. DAVIS OF CALIFORNIA. And perhaps we need to be sure that we are including everything that they need; I mean, go to our allies who are willing to share that with us. What do they need to have the comfort to actually engage?

    Mr. OLIVER. I agree. And in fact, we have also brought in the IMF and the World Bank and the U.N. to help us put this list together.

    Mrs. DAVIS OF CALIFORNIA. Thank you. I appreciate that.

    And if I could, Mr. Secretary, for having been in Kirkuk about two weeks ago and met with General Abizaid as well as the council, one of the concerns, and it has already been expressed, is that there is no connectiveness with the CPA. And you said earlier that we really don't have a lot of people out there in the communities working with the council. I think that is a great need. What I am wondering is if we haven't had that ability—and I understand it is not money, it is not necessarily mindset, it is most likely the fact that we actually haven't been able to get people there who are willing to serve. Am I correct in that?

    Secretary RODMAN. That is right, we need more people. I mean, we have had people, very dedicated people, doing it, but we need more of them, and that is the current constraint.

    Mr. SKELTON. Mr. Chairman, would he answer that question? She asked the question, are you having difficulty getting people to serve?

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    Secretary RODMAN. We have just initiated another sort of fund drive. Secretary Rumsfeld sent letters to other Cabinet departments just recently to say, now we need to ramp up. And we are doing the same—the CPA in Washington is doing the same thing. They, just in the last couple of weeks, started a major hiring drive. So——

    Mrs. DAVIS OF CALIFORNIA. I think what concerns me is that this should have been predicted. I mean, there were plans out there, I understand, that would have actually had that kind of decentralization. And it just seems to me that we are acting as if this is a surprise, and we need to try and get these folks there, and, in fact, we should have probably known that, because in order for us to take some of that burden away from the military, we really needed to have a civilian on the ground who could provide that kind of support and connectedness.

    Secretary RODMAN. Well, let me say two things. One is the President didn't decide to go to war until he decided shortly before it began. It is sort of hard to hire armies of people, civilians or whatever, just to stand by. I mean, things evolve.

    Second, it is precisely because the military situation is, in our view, stable and the needs of the country are more economic and political that we are looking for more interagency participation and trying to expand the civilian role. It is hard to find people at any point in time, and it would not necessarily have been easier to hire people in February on a hypothetical basis. So, I mean, things——

    Mrs. DAVIS OF CALIFORNIA. Are we seeking out Iraqi Americans here who——

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    Secretary RODMAN. Absolutely. That is one of the constituencies we turned to early on and did our best to—and I think we have got a number of—we did this in an organized way, and there is——

    Mrs. DAVIS OF CALIFORNIA. I happen to have a number of very capable people in my district as well as others. But I just wanted to say—and my time is up. I am sorry, I would love to continue the conversation, but I think the chairman is getting a little anxious.

    I—one thing I came away with being in Iraq was that their greatest resource really is their people, And I think that we need to really value that and to push the money down, as well, and to find ways that we help them in that effort.

    My concern as well in being there is that we also need to reach out to well over 50 percent of the population, which is the women of Iraq, as we look to small businesses, as we look to microbusinesses, as we look to giving them the foundation to be actively engaged in civic life there. I know that there is money in the budget to do that. I would suggest that perhaps it could be more. I don't know whether—we know there are at lot of items that we are not being concerned whether we can spend them in a year, and yet I hear that concern when it comes to the women's issues: Well, we can't probably spend it in a year or a lot more of it. But we need to be certain that we are not—we are not saying that about some other areas, but we are saying that about that area. Any comment?

    Mr. OLIVER. You don't know this, Congresswoman, but my wife graduated from law school with you; and she is insistent that I understand the true priorities.
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    Mrs. DAVIS OF CALIFORNIA. Well, I appreciate that, and I hope everybody goes home to their wives and talks about that. Thank you very much.

    Secretary RODMAN. Dr. Chalabi, when he spoke to the U.N. General Assembly the other day, made a point about this, about the need to empower Iraqi women, and so it is another encouraging sign.

    Mrs. DAVIS OF CALIFORNIA. Thank you.

    Thank you, Mr. Chairman.

    The CHAIRMAN. I thank my seatmate from San Diego.

    And, Ms. Bordallo, you get the last word here.

    Ms. BORDALLO. Thank you, Mr. Chairman. I guess I am the finale. And I want to thank you and Ranking Member Skelton for such staying power here, we have been at it for several hours, and particularly to our witnesses that have been answering questions to the best of their ability.

    I perceive in listening to everything this morning that Congress is more or less committed to granting the President's request, the $87 billion, and in particular the 20 billion for reconstruction. However, I sit here with a heavy heart.

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    And I would like to just tell a very short story, Mr. Chairman.

    I represent Guam, a U.S. territory. Sixty years ago a war was fought in Guam, a U.S. territory, and we were occupied by enemy forces for three long years. Many deaths and atrocities were committed during these three years. We were then liberated by the U.S. forces and were very grateful. And to this day and in subsequent wars we have had more deaths per capita than any other state in the Union.

    Our capital city was totally destroyed during that war, bombed and burned to the ground. The Seabees, the Navy Seabees who were later stationed there, did build one main road, but other than that, we were pretty much on our own.

    Sixty years later our capital city still lies empty, devoid of the beautiful prewar structures that were once there, and we did not receive a single penny to reconstruct from the U.S. Government, although countless requests were made over the years. The U.S. Government did, however, send money to our enemy to reconstruct their cities.

    And I guess what I am saying here is, if this should ever happen again in our own country and our U.S. territories, let us not ever forget the billions that we are pouring into foreign jurisdictions. And I might add, Mr. Chairman, 60 years later this Congress—it was in the last Congress, in fact—got around to set up a war claims commission for Guam to compensate our people for the atrocities that occurred. And I might add that many of them have long since died.

    So I hope this will never happen again, where U.S. citizens will have to wait 60 years for compensation, and a U.S. territory has to wait 60 years to rebuild.
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    Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentlelady.

    And, gentlemen, thank you for being with us. We appreciate it.

    Let me ask one closer here. If you are competing a contract today, let us say for a road, for a piece of construction in Iraq, and there is an American firm and there is a German firm, and the German firm has the low bid, do they win the contract?

    Mr. OLIVER. Ambassador Bremer promised the Congress that the money from the supplemental would go to U.S. contractors.

    The CHAIRMAN. So it is all going to be U.S. contractors?

    Mr. OLIVER. Ambassador Bremer said that several times.

    The CHAIRMAN. Could you check on one thing for us; and that is, the German—at least there is a rumor out that German cement trucks are being purchased by the authority for construction.

    Mr. OLIVER. I will find out, sir.

    The CHAIRMAN. Okay. I appreciate it.
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    Gentlemen, thank you for your service to our country. Thanks for your endurance. Any last words you would like to give us?

    Secretary RODMAN. No. Thank you for your courtesy.

    The CHAIRMAN. Okay. We appreciate you. The hearing is adjourned.

    [Whereupon, at 1:36 p.m., the committee was adjourned.]