Mr. Pellp:treau. Yes, we are.
Mr. Schumer. Give us your prognostication of the Arab League
dropping as a unit, either the entire boycott, which would be clear-
ly preferable, or at the very least, the secondary and tertiary boy-
Mr. Pelletreau. I think it is going to be somewhat harder to get
formal Arab League action because, first of all, Syria will object
within the forum. A number of other states will want to include is-
sues of importance to them, Libya and Iraq, for example, are both
members of the Arab League. And it is going to be more com-
plicated within the forum itself
Mr. Schumer. I don't know how it works.
Do you need a unanimous vote, or do they work by consensus,
that if one or two countries object, they won't do it? How does it
Mr. Pelletreau. On this issue, I have been assured by the Sec-
retary General of the Arab League that it does not need a consen-
sus vote. It can be voted by a majority.
But a number of states will be influenced, I believe, in the formal
sense by Syria's opposition, even though, in their own practices,
they are dismantling different aspects of the boycott every day.
Some of them have in a de facto sense terminated the boycott en-
tirely and begun, as you have seen, dealing directly with Israel and
their businessmen and making deals directly with Israeli business-
men. So the boycott is being eviscerated from within even though
the shell continues to exist, and we will continue our full-court
press to have the boycott eliminated, both in the formal and in the
practical application ways.
Mr. SCHUMER. I would just simply say that particularly in terms
of Syria, this is very important. The Syrians are interested and
eager for trade, more economic relationships with the West. And
secondly, at least flirting with peace with Israel related to the
Golan. To simply hold everything back as a negotiating tool after
a 50-year history of war and enmity isn't going to serve their pur-
pose if their professed goals are their real goals. I would hope that
would be communicated.
Mr. Pelletreau. Yes.
Mr. Schumer. Thank you, Mr. Chairman.
ASSISTANCE TO THE PALESTINIANS
Chairman Hamilton. Mr. Secretary, we pledged $500 million
over 5 years on the assistance to the Palestinians, and we have
used that $75 million for several different purposes. Is that $75
million per year enough money to fund the projects adequately?
Are you concerned
Mr. Pelletreau. No. Mr. Chairman, Palestinian needs greatly
exceed that $75 million. That is a contribution that the United
States felt it could make, along with an additional $25 million in
OPIC lending and guarantees. But that is just our own contribu-
Many States are making contributions to the Palestinian efforts
at self-government. Even with all those efforts, that is not going to
be sufficient. The Palestinians themselves are going to have to take
increasingly the responsibility through their own revenue-raising
mechanisms, both tax-raising mechanisms and calling on the Pal-
estinian community overseas.
Chairman Hamilton. It is obvious that you could use a lot more
money than that to meet the Palestinian needs, but will the $75
million achieve the purposes that we have set out for ourselves,
startup costs, budget support for the Palestinian authority, includ-
ing the police salaries, some high-visibility development projects
designed to have a political impact and some longer-term economic
development projects? I mean, is that $75 million enough for us to
accomplish the goals of our assistance?
Mr. Pelletreau. It is enough for us to make a respectable show-
ing, Mr. Chairman.
Chairman Hamilton. Do you favor increasing the size of the Pal-
estinian aid program?
Mr. Pelletrkau. We could certainly use more money into the
program, but it is a difficult tradeoff to try to determine where we
should best put our funds, and I am confident that this is a con-
tribution that is being well used and making an important impact.
Chairman Hamilton. Well, one of the things that it strikes you
about it when you look at it is that money is being spent for short-
term kind of startup costs. And I am just wondering if that is the
best use of that money?
Mr. Pelletrkau. Over the whole 5-year period, this is probably
not the best use of that money. But as we have seen the difficulties
the Palestinians have had in establishing, and setting up their in-
stitutions and getting their police force operating, we have, I think,
gained a greater appreciation of the importance of startup costs
and contributing to startup costs. And so we have shifted a larger
percentage than we originally thought in the direction of startup
Chairman Hamilton. You are not planning any kind of addi-
tional request or front-loading or anything of that sort, I gather?
Mr. Pelletreau. No specific plans at this time, Mr. Chairman.
Chairman HAMILTON. OK Now I want to go into the settlements
issue with you. I understand as part of the loan guarantees for Is-
rael, we have decided to deduct $311.8 million from the $2 billion
that they are eligible to borrow in fiscal year 1995?
Mr. Pelletreau. That is correct.
Chairman Hamilton. And that figure represents the
nonsecurity-related government expenditures in the West Bank
Mr. Pelletreau. Yes.
Chairman Hamilton. What does nonsecurity mean there?
Mr. Pelletreau. Well, it means government settlement activity
or activity that supports settlements or supports nonsecurity-relat-
Chairman Hamilton. All right, now do we have agreement with
the Israelis on the expenditures in the territories?
Mr. Pelletreau. We don't have an agreement. We asked the Is-
raelis to provide us their best calculation of what they have spent
in this regard, and we also used the information that we ourselves
have gathered in coming up with the figure, which in this case was
the figure you cited.
Chairman Hamilton. I have just been told that Mr. Ackerman
has an appointment at noon today, and I am going to interrupt my
Mr. Ackerman, you are recognized.
Mr. Ackerman. That is very kind of you. Thank you very much,
HUMAN RIGHTS ABUSES IN IRAN
I just have a couple of questions concerning our Iranian policy,
Mr. Secretary, if I might. There are certain aspects of the policy
that I am having difficulty understanding. From the reports that
I have been reading, the human rights abuses in Iran seem to go
on basically unabated and the trend in that particular area does
not seem to be moving in a positive direction at all. My basic ques-
tion is why do we continue to pursue a policy that suggests that
the regime in power is a regime of moderates or one with whom
we can easily deal?
Mr. Pelletreau. I don't believe we intend to make any sugges-
tion whatsoever. We have pointed out, and I have pointed out ear-
lier in this testimony today, the very substantial differences we
have with the Government of Iran over their support for terrorism,
their violations of human rights, their repression of their own peo-
ple, their opposition to Arab-Israeli peace, their subversion of other
friendly states. There is a great deal that we point to in way of Ira-
nian policy and conduct that we disagree with completely.
OPPOSITION GROUPS IN IRAN
Mr. AcKERMAN. Why is it then we find them more worthy to deal
with than we do the opposition? The opposition seems to have at
least recognized the rights of women and they have committed
themselves to the virtual Declaration of Human Rights. Why is it
that we are not speaking to them?
Mr. Pelletreau. There are a good many groups that are in op-
position. We are in touch with a number of them. If you are refer-
ring specifically to the Mojahedin-e-Khalq, we are committed to
providing the Congress a report on that group and we intend to
provide that report. We intend to provide it in a detailed way. We
have considerable information on this organization, partially
through its own published materials, and we will provide you a
comprehensive and factual report.
[The report was subsequently submitted in a letter dated October
28, 1994 from the Department of State. It appears in the appen-
Mr. Ackerman. Are you suggesting that there is specific reasons
that you want to exclude dealing with this particular opposition
group? Are they not the largest opposition group?
Mr. Pelletreau. No, they are not the largest opposition group.
I don't want to prejudge what we say in our report, which we will
try to make as factual and objective as possible.
We have not dealt with the Mojahedin-e-Khalq up to this point
because the Mojahedin-e-Khalq has claimed the responsibility for
the murder of American citizens. The families of these citizens are
uncompensated. They do not have any claim that justice has been
served. The Mojahedin-e-Khalq supported the taking of American
hostages and holding American hostages in Iran for how many
days, we all remember, 500
Mr. Ackerman. 444.
Mr. Pelletreau. Exactly. When we finally negotiated the release
of those hostages, Mojahedin-e-Khalq protested against the release
of those hostages saying that was premature and the government
had accepted a bad deal.
Mr. Ackerman. Was it they who held the hostages or was it the
Mr. Pelletreau. They participated at that time. They were part
of the same group. At that time, they were participating.
Now, today, the primary location of the Moiahedin-e-Khalq is
Baghdad. Their primary supporter is somebody named Saddam
Hussein. These are the reasons why we have not dealt with them
up to this point. We do not feel that with that background they
have a very wide base of support: in Iran.
I admit they have made a considerable effort over the past year
to try to cultivate the Members of the U.S. Congress and other
Western parliaments, and to say that they have changed their
spots, they are a leopard that has changed its spots. But we have
not dealt with them up to this time for the reasons that I have laid
out. They have killed Americans in Iran. They have admitted re-
sponsibility for that. They participated in the hostage taking and
they supported it completely. And their primary base of operations
today is in Iraq with the support, sponsorship and umbrella protec-
tion of Saddam Hussein.
Mr. AcKERMAN. Well, I — not to take more of the committee's
time, Mr. Chairman, but Mr. Secretary, I would like the oppor-
tunity to discuss and pursue this matter a little bit more fully with
you, especially whether a leopard can change its spots.
It seems that the position of the government historically has
been well known, and if the tiger can change its stripes, I see no
reason why a leopard may not be able to change its spots, and in-
deed if suddenly changes in historical trends make it in vogue to
deal with people who are in the IRA, and people who have been
in the PJ-.0, then certainly other groups and other organizations
have the same right to do the kinds of things that we have been
urging them to do historically over the years. And I would welcome
the opportunity to discuss that further with vou.
Mr. Pelletreau. Fine. I would suggest that we produce our re-
port, which is due before the end of the month, and then that
would be a basis on which we could discuss it further.
[The report appears in the appendix.]
Mr. AcKERMAN. Thank you, Mr. Secretary.
Chairman Hamilton. Mr. Oilman.
Mr. Oilman. Thank you, Mr. Chairman.
I want to welcome Assistant Secretary Robert Pelletreau this
morning for what I guess will be our last subcommittee meeting of
this session on this subject. I suspect that the smile on the Sec-
retary's face is welcome — it is welcome news.
Before we go into any specifics, I would like to take the oppor-
tunity to commend the State Department for what I know is a
great deal of pushing on their part, regarding lifting of the second-
ary and tertiary boycott, and that is welcome news, I think, for the
entire region. Just a few days before that announcement, I had met
with the Secretary Oeneral of the OCC, and strongly urged that
they do just that. I am pleased that this is the first step in that
I am also pleased at the news of the establishment of economic
relations between Israel and Tunisia and hope that that quickly
leads to higher level diplomatic relations and also pleased to learn
that the administration will credit Israel the $95 million when cal-
culating the deductibility of the loan guarantees for Israel's costs
in implementing risks for peace associated with the Declaration of
Principles. So there is a lot of good news and of course there are
still a lot of problems out there, as we have already heard this
ARAB LEAGUE BOYCOTT OF GUATEMALA
Let me ask our Secretary, last week, Guatemala announced its
decision to move its embassy in Israel from Tel Aviv to Jerusalem.
Subsequently, the Arab League announced a boycott of Guate-
malan cardamom added to coffee in the Arab world, and that boy-
cott represents a substantial part of the Guatemalan economy.
What are the ramifications that this boycott holds for other nations
attempting to enhance their diplomatic relations and did we make
any statement with regard to the boycott on Guatemalan car-
Mr. Pelletreau. We have not made such a statement up to this
point. It is not sure at this point that States of the Arab League
are going to institute any kind of a boycott of Guatemala. But I
think it would be an appropriate subject for us to raise with the
Arab League, and I will undertake to do so, Mr. Gilman.
Mr. Gilman. I appreciate that and I hope you would pursue that.
Otherwise, it could deter further enhancement of the trade rela-
JORDANIAN ANTI-JEWISH PROHIBITIONS
Although we are quite aware that unlike Syria, Egypt, Lebanon,
or even Iran or Iraq, no Jewish community exists in Jordan, it is
my understanding that Jordanian law contains a number of prohi-
bitions against Jews.
Are you aware of any of these prohibitions, and do you believe
the Hashemite Kingdom could amend those anti-Jewish provisions
in our discussions with them?
Mr. Pelletreau. I am not personally aware of those provisions.
I think that would be a subject for direct Jordanian-Israeli discus-
For example, in the agreement yesterday, it was announced the
two countries would establish a free tourism zone in Aqaba, where
each other's citizens could travel back and forth freely. And that is,
I think, symbolic of the new relationship which the two countries
are trying to develop. And obviously such laws would be inconsist-
ent, it seems to me, with that kind of a relationship.
Mr. Gilman. I would hope that we could encourage more open-
ness by the Jordanian Kingdom.
SECURITY arrangements ON THE GOLAN
Mr. Secretary, when you appeared before the subcommittee back
in June, you stated that if both parties wished the United States
to be part of security arrangements on the Grolan within an inter-
national context, we would consider such action in accordance with
Can you tell us what exactly you understand to be the relevant
constitutional requirements and how would they be implemented in
Mr. Peli^treau. I am not sure we have examined all the legal
ramifications of that, Mr. Gilman. But what I certainly mean is,
first of all, consultation with the Congress.
Mr. Oilman. Does that mean there would be a proper role in
terms of the Congress whether or not to commit U.S. forces for de-
ployment on the Golan?
Mr. Pelletreau. Certainly within that consultation process, we
would want to have the views of the Congress, yes.
SYRIAN PRODUCTION OF SCUD MISSILES
Mr. Oilman. And with regard to Syria, Syria's statements about
its intentions to make peace with Israel, there was a recent article
in Defense News which reported that the Syrian Government will
begin full-scale production of the Scud-C tactical ballistic missile by
mid-1996. Do you have any information with regard to that? And
if that report is accurate, how would that impact our approach to
the peace negotiations with Syria?
Mr. Pelletreau. I believe that report is largely accurate, that
Syria has obtained Scud-C missiles from North Korea. They have
been obtaining the technology at the same time to produce. I don't
have a precise calendar when it might be logical to expect such pro-
duction to actually reach reality. I do not believe that activity is in-
consistent at this time with Syria's desire to reach a peaceful set-
tlement with Israel. From all we have observed, the Syrian leader-
ship is genuine in its participation and engagement in negotiations
and its desire to reach a peaceful settlement.
IRANIAN SUPPORT OF TERRORISM
Mr. Gilman. Mr. Secretary, intelligence agencies believe that the
bombing of Argentina's Jewish community in July of 1994 was car-
ried out by members of Ansarollah, a branch of Hezbollah financed
Do we have any new evidence that supports or contradicts that
contention and has Iran decreased or increased support for
Hezbollah? Has Iran decreased or increased its support for the Pal-
estinian rejectionist groups headquartered in Damascus? HaG Iran
ceased its attacks on the peace process? Can you tell us a little bit
more about Iran on all that?
Mr. Pelletreau. First of all, with respect to the responsibility
for the Argentine bombing, the investigation is ongoing. It appears
to follow a pattern of a previous bombing in which both Hezbollah
and Iran were involved, but the evidence is not complete or decisive
at this time, in my understanding in the current course of this in-
vestigation. Iran is continuing to provide support for Hezbollah.
Iranians and HezboUahees are in frequent activity, and Iran is con-
tinuing its opposition to the peace process.
Mr. Gilman. Did you want to add something?
Mr. Pelletreau. No, I was thinking whether I had any more in-
formation to throw out, but that is about it.
U.S. DLM.OGUE WITH IRAN
Mr. Gilman. Thank you. You seem to indicate that we are
going — we would not object to a U.S. dialogue with Iran. Is that de-
spite all of the violent opposition groups and its violations of
human rights and its quest for new and sophisticated arms and
strong opposition to the peace process? Are we still going to con-
sider naving a dialogue with Iran?
Mr. Pelletreau. We certainly object and publicly and visibly
and morally object to all those Iranian practices. What we have oi-
fered or what we have said is that we would enter a dialogue with
authorized representatives of the Iranian Government to discuss
these differences. The key here is that we are not interested in
doing anything behind anybody's back or under the table. It would
be an authorized dialogue with authorized representatives in which
we would discuss just exactly these differences that you and that
I earlier have pointed out.
IRAQI COMPLIANCE ON WEAPONS OF MASS DESTRUCTION
Mr. Oilman. Mr. Secretary, if we could just take a look at Iraq
for a moment. In a recent address to the Washington institute, our
CIA director, Mr. Woolsey, accused Iraq of holding on to Scud mis-
siles and chemical and biological munitions, despite a U.N. pro-
gram to rid that country of its weapons of mass destruction. Fur-
thermore, Mr. Woolsey stated that Iraq is now building under-
ground shelters and tunnels to produce and store these kind of
How does that report conflict with U.N. claims that Iraq Scud
missiles and chemical weapons have been eliminated? In light of
the Woolsey report, how can the U.N. ensure whether Iraq has
complied with all relevant U.N. resolutions? Specifically, what sort
of safeguards will our Nation pursue and do we require Iraqi rec-
ognition of Kuwait with its newly defined borders as a condition for
removing sanctions against Iraq?
Mr. Pelletreau. There is a ongoing dialogue between us and
UNSCOM about how much of the total Iraqi arsenal has been un-
covered and discovered. And that will continue. There are some dis-
crepancies in our respective analyses. And we are continuing that
discussion as the monitoring regime is being put in place.
We believe that today Iraq is not in compliance with any of the
Security Council resolutions. And certainly first and foremost
among those is that Iraq has not recognized the border with Ku-
wait or Kuwaiti sovereignty. And that is the reason the inter-
national community went to war with Iraq, to restore international
legitimacy and to liberate Kuwait. So that is a very essential part
of the U.N. Security Council resolutions, on which we would expect
to see Iraqi full compliance.
Mr. Oilman. Well, we hope we are going to keep a close eye on
both Iraq and Iran, trouble spots in the entire attempt to build
peace in that region.
Thank you for appearing before us, Mr. Secretary.
Mr. Pelletreau. Thank you.
deduction for settlements
Chairman Hamilton. Mr. Secretary, I want to pick up where I
left off. We had started to talk about the settlement issue and I
had mentioned that the administration had decided to deduct the
$311.8 million from the $2 billion that Israel was eligible to receive
this fiscal year, 1995. I was informed last week that the adminis-
tration intended to offset a portion of that $311 million loan guar-
antee deduction in order to help Israel meet some of its costs asso-
ciated with the implementation of the Declaration of Principles.
Now, how much of that $311 million deduction is being offset?
Mr. Pp:lletreau. Roughly $95 million.
Chairman Hamilton. OK. So what then is the total amount
being deducted from the loan guarantees?
Mr. Pklletreau. With the waiver of $95 million, the final
amount to be deducted for Israel's fiscal year 1995 loan guarantee
authority, would be $216.5 million.
Chairman Hamilton. How did you get that figure?
Mr. Pellktreau. That was derived from our examination of the
special Israeli expenses in connection with their redeployment, and
also the fact that we recognized that Israel has had to bear a spe-
cial burden as it carried out the Declaration of Principles and the
Gaza-Jericho Agreement, and we wanted to recognize that special
burden, just as we have gone to the international donor community
to secure help for the Palestinians. And this was deemed a way
that we could do it.
Chairman HAMILTON. Now, as I understand, the loan guarantee
legislation that was put into effect by President Bush in 1991,
1992, and it was designed to help Israel absorb the massive migra-
tion basically from the former Soviet Union, and I think also from
Ethiopia. Are they still experiencing that massive immigration?
Mr. Pelletreau. No, the immigration figures have gone down
more recently. They are still having some absorption challenges.
Chairman Hamilton. So the rationale for the loan guarantees is
shifting; is that correct? I mean in effect
Mr. Pelletreau. The basic rationale was still there. And the
basic way that the loan guarantees are still being used is to pro-
vide support for both Israeli infrastructure and Israeli private sec-
tor development that could absorb and provide employment for the
Chairman HAMILTON. These loans provide a low interest source
of hard currency for Israel, in effect, don't they?
Mr. Pelletreau. Yes, that is true.
Chairman Hamilton. Now, the loan guarantee legislation re-
quires the President to deduct from the guarantees an amount
equal to all Israeli Gk)vernment nonsecurity-related expenditures.
Mr. Pelletreau. In the occupied territories, yes.
Chairman Hamilton. In the occupied territories. And the pur-
pose of that deduction is to discourage Israeli settlement activity?
Mr. Pelletreau. Certainly that is the message that the deduc-
tion sent, and the fact that Israeli expenditures have gone down is
an indication that that message is being heard.
Chairman Hamilton. Now, the $95 million offset from the loan
guarantees is a gesture of support for the Rabin policies?
Mr. Pelletreau. Yes, that is correct.
Chairman Hamilton. Does that not have the effect of weakening
further U.S. opposition to Israeli settlement activity?
Mr. Pelletreau. That is not our intention, Mr. Chairman. The
process that we go through and have gone through this year is to
determine the full amount of the Israeli expenditure, nonsecurity-
related expenditure in the occupied territories.
Chairman Hamilton. I understand it is not your intent, but isn't