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RUSSIA’S DESTABILIZATION OF UKRAINE

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

MAY 8, 2014

Serial No. 113–176

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Victoria Nuland, Assistant Secretary, Bureau of European 

and Eurasian Affairs, U.S. Department of State .............................................. 7

The Honorable Daniel Glaser, Assistant Secretary, Office of Terrorism and 

Financial Intelligence, U.S. Department of the Treasury ................................ 16

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Victoria Nuland: Prepared statement .......................................... 11

The Honorable Daniel Glaser: Prepared statement .............................................. 19

APPENDIX 

Hearing notice .......................................................................................................... 64

Hearing minutes ...................................................................................................... 65

Written responses from the Honorable Victoria Nuland to questions submitted 

for the record by: 

The Honorable Steve Stockman, a Representative in Congress from the 

State of Texas ................................................................................................... 67

The Honorable Brad Sherman, a Representative in Congress from the State 

of California ...................................................................................................... 70

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 72

(1)

RUSSIA’S DESTABILIZATION OF UKRAINE 

THURSDAY, MAY 8, 2014

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:10 a.m., in room 

2172 Rayburn House Office Building, Hon. Edward Royce (chairman of the committee) presiding. 

Chairman ROYCE. This committee will come to order. Despite the 

warnings issued and despite the sanctions imposed by the U.S. and 

our allies, we continue to see aggression against Ukraine. This is 

a crisis with violence intensifying. The presence of heavy weapons 

and the downing of Ukrainian helicopters betray the Kremlin’s 

claim that it is not behind the unrest. Unfortunately, President 

Vladimir Putin appears to have calculated that the price will be 

bearable and this has to change. 

The ranking member and I led a delegation to Ukraine last 

month where we heard loud and clear the desire for strong American leadership. 

Fortunately, we have something to work with. 

The Russian economy is weakening due to the Ukraine crisis. 

Russia’s own Central Bank has said that $63.7 billion in capital 

has fled the country in the first quarter, a figure that the IMF predicts will reach $100 billion by the end of this year. 

The Russian stock market, since the beginning of the year, has 

dropped 16 percent of its value and the ruble has also lost much 

of its value as interest rates have risen. 

The World Bank has warned that Russia’s growth rate this year 

could become negative. Much of this economic weakness is driven 

by the political risk of doing business in Russia. 

Investors hate risk. We should do more to increase their risk perception if the Russian Government attempts to undermine the election on May 25th. That is a very important election. 

We spent time in the eastern most part of Ukraine and the information that we received from talking to every group that we could 

access was that they were looking forward to the election. They felt 

the election would pull the country together. 

I think there will be a big turnout on May 25th as long as it is 

not destabilized. We must stop reacting to Putin’s moves while 

waiting patiently for the Europeans to join us. 

Instead, we must adopt a proactive strategy that will convince 

President Putin that his aggression will have a significant and lastVerDate 0ct 09 2002 15:34 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\050814\87837 SHIRL
2

ing cost to the Russian economy and ultimately to his rule should 

he intervene in that election. 

We must also undermine Russia’s ability to use its oil and gas 

exports to offset its economic weakness. Oil and gas make up over 

half of Russia’s national budget. It is 52 percent of the support for 

the military and the government there. It is 70 percent of the exports. 

President Putin understands that he is vulnerable to even small 

reductions in energy revenues. 

To accomplish this longer-term goal of leverage, we must enhance energy efficiency in Ukraine and other countries that have 

traditionally depended on subsidized Russian energy exports in 

Eastern Europe. 

We must assist European countries in developing their own energy resources. When we were there, we talked at length with the 

government in Ukraine about the ability to develop shale gas in 

the western part of that country and to bring new sources of energy 

to the European market, including through expediting the approval 

of LNG export facilities and ending the U.S. ban on crude oil exports. 

Both in Poland and in Lithuania they are working on bringing 

online a receipt station for LNG by the end of the year and the reality is that they are very desirous, since we have a glut on our 

market, of having exports come from the United States into Eastern Europe. As you know, the Poles can directly flow that gas into 

Ukraine. 

By allowing abundant U.S. energy resources to flow to Europe, 

we can help end energy dependency on Russia, helping to weaken 

Moscow’s economic and political grip on its neighbors. 

We must also expand and sharpen our international broadcasting 

to Russia and to Ukraine and others in the region in order to 

counter the propaganda that Moscow is peddling to spread instability and fear that it can then exploit. One of the most important 

things that can happen here is if we get back up on our feet with 

the type of effective broadcasting Radio Free Europe and Radio 

Liberty used to do into that part of the world. This committee just 

passed and the President signed legislation to improve broadcasting into Ukraine. We are in an information war and we are 

looking to see what else is needed in this effort to have surrogate 

radio bring real news in real time in terms of what is actually happening in the eastern part of the country and in Russia into that 

region. 

It is essential that the U.S. reinforce our defense commitment to 

our NATO allies such as Poland and Lithuania, Latvia and Estonia 

to ensure that President Putin does not miscalculate and initiate 

a far more serious confrontation. But our NATO allies must take 

long overdue steps to increase their defense spending to 3 percent 

of GDP. 

I feel that there are some real challenges here and I fear that 

our failure to match our warnings with equally strong action has 

undermined our credibility in some ways. It is my hope that we can 

restore our credibility by convincing President Putin that he is indeed risking his future in pursuit of objectives that are unworthy 

of a great nation. 

3

I now turn to the ranking member, Mr. Eliot Engel of New York, 

for his remarks. 

Mr. ENGEL. Well, thank you, Chairman Royce, for calling this 

hearing. The situation in Ukraine is one of the most urgent issues 

for American foreign policy. Madame Assistant Secretary and Mr. 

Assistant Secretary, thank you both for appearing before the committee today and thank you for your hard work in support of 

Ukraine. 

I also want to acknowledge the presence here this morning of 

Ukrainian Ambassador Motsyk, who is in the audience. Welcome, 

Mr. Ambassador. 

Right now, Ukrainian troops are battling separatists in Eastern 

Ukraine. The people of Odessa, the vibrant multi-cultural birthplace of one of my grandparents, are mourning those killed last 

weekend. 

Tensions are high and there is a danger of further escalation in 

certain parts of the country. I want to express my condolences to 

the families of those who were killed. 

It is clear that President Putin is responsible for this crisis. He 

has trampled on Ukraine’s sovereignty. He has illegally seized Crimea, the first annexation in Europe since the end of World War II. 

He has tried to instigate separatism and destabilize the country. 

He has massed his troops on Ukraine’s border, promoted discord 

and conflict, and set individuals, families and peoples against one 

another. 

Meanwhile, the people of Ukraine are trying to chart a new 

course for their country’s future. The interim government in Kiev 

has done all it can to maintain stability and the Presidential election scheduled for May 25th gives Ukraine a path forward for a 

democratic return to political and economic health. 

Chairman Royce and I, along with several other colleagues on 

this committee, recently visited Kiev. We heard the same thing 

over and over again. Ukrainians do not want Russian interference 

and they resent Russian attempts to tear their country apart. 

The people of Ukraine are looking to us and our allies to ensure 

Putin’s attempts to weaken their country do not succeed. The reality hit home for me when we visited a synagogue in Eastern 

Ukraine. 

Two older men approached me to talk about the crisis. They had 

seen it all. They fought against Hitler’s army in World War II to 

stop the spread of tyranny, only to find themselves living under the 

yoke of Soviet dictatorship for the next half century. 

They saw the Wall crumble and felt the breeze of freedom and 

democracy blow across Eastern Europe and there, wearing the 

medals they had earned on the Ukrainian front, they were looking 

toward the east and seeing an all too familiar threat on the horizon. 

‘‘Don’t abandon us,’’ one of them said. Like so many others, those 

men want Ukraine to thrive in peace and prosperity. We need to 

have their backs. So President Putin must understand that his actions have consequences. 

The White House did right by imposing targeted sanctions 

against individuals and companies associated with Putin and yesterday withdrawing Russia as a GSP beneficiary. 

4

But if Russia continues to threaten and destabilize Ukraine we 

need to ratchet up the pressure further. We need stronger sanctions. I also call on our European partners and others around the 

world to work with us in imposing sanctions. 

But sanctions will only be effective if they are part of a broader 

strategy on Ukraine and Russia. First, the best answer to Russian 

aggression is for Ukraine to become a fully democratic prosperous 

state. Wouldn’t it be nice if Putin’s aggression accelerated the process of democratization of Ukraine and made Ukraine look westward rather than eastward? 

That is why I support robust international assistance including 

the U.S. and EU and centered on the IMF agreement to address 

Ukraine’s immediate economic crisis. 

Next, serious reform efforts—we should help Ukraine address 

structural economic weaknesses, combat corruption, secure its borders, rebuild its military, strengthen rule of law, and increase its 

energy security. 

Secondly, to answer future threats from Russia, we need to focus 

on the role of a 21st century NATO. Even as NATO addresses challenges around the world, the alliance has to remain the guarantor 

of peace and security in Europe. 

NATO allies, especially those on the eastern side of the alliance, 

must be confident that Article 5 guarantees remain in force. NATO 

needs to ramp up cooperative activities in Central Europe. We need 

to take a hard look at NATO’s force posture and defensive assets 

in the region. 

And most importantly, all 28 NATO allies need to live up to their 

responsibilities. Right now, only four countries devote at least 2 

percent of their budgets to defense as they have committed to do 

by being a member of NATO. 

If we increase NATO defense spending while joining in a coordinated embargo on all arms sales to Russia, including halting the 

sale of two French-built Mistral amphibious ships, it will send a 

clear message to Putin that he will not be allowed to trample on 

the rights of his neighbors. 

On that note, I think the U.S. and our allies should work with 

Paris to find a way for NATO to purchase or lease these advanced 

warships to expand our capabilities while preventing their delivery 

to Moscow. 

Third, in addition to helping Ukraine increase its energy security, we must urgently work with our European allies and others 

to reduce Europe’s energy dependence on Russia. 

And finally, we need to help ensure that the May 25th elections 

in Ukraine are safe, free and fair, and reflect the will of the people 

of Ukraine. 

We hope that Ukraine’s new President will begin the process of 

reconciliation by making clear that he or she represents all Ukrainians regardless of their regional, ethnic or religious identity. 

Ukrainians need to work together to build a tolerant, pluralistic 

society. The new Ukrainian Government must be truly inclusive, 

support minority rights, and condemn all forms of intolerance. 

As I heard repeatedly while in Ukraine, there is strong support 

for constitutional reforms and decentralization to give greater powers to regional and municipal authorities. 

5

I want to emphasize that Ukraine’s future is for Ukrainians 

alone to decide. At the same time, a lasting solution ensuring the 

stability of Ukraine requires Russia’s cooperation. 

So we must continue to talk with Russia and facilitate direct 

talks between Moscow and Kiev, including through international 

and regional fora such as the U.N. and OSCE. 

I would like to close by again thanking our witnesses and the administration for all the work over the past several months to support democracy in Ukraine. 

This is a very difficult time for Ukraine and it is important that 

its people know they have a friend in the United States. We support their country’s sovereignty and territorial integrity and we 

support the aspirations of Ukrainians to build a better future for 

their country. 

Thank you, Mr. Chairman. 

Chairman ROYCE. Well, thank you, Mr. Engel. I do want to, 

again, thank Eliot Engel for his assistance on this CODEL and 

some of our other colleagues here as well—Lois Frankel, Alan 

Lowenthal, Judge Ted Poe, Mike Quigley, Jim Gerlach, David 

Cicilline. We appreciate the members of this committee and some 

of our other colleagues in the House for their engagement. 

I now go for 2 minutes to Mr. Rohrabacher, chair of the Europe 

and Eurasia Subcommittee. 

Mr. ROHRABACHER. Thank you, Mr. Chairman. I just happen to 

be chairman of this subcommittee at this particular moment in history. How interesting. 

I think that we should all understand that the situation in 

Ukraine is much murkier than what is being presented by the 

rhetoric that we hear every day. This is not simply a case of Russian aggression. 

This all began—when did this crisis begin? When did the chaos 

that we see begin? It began when an elected President of Ukraine, 

who was probably elected in the fairest and most honest election 

Ukraine has ever had, when that President, Yanukovych, was 

forced out of office by street violence. That is when this chaos started. 

So let us not say, ‘‘Oh, my goodness, the Russians are responsible 

for this problem that is going on.’’ The fact is it started before there 

was any Russian intervention at all when an elected President was 

thrown out and, my gosh, the United States didn’t seem to be concerned that this elected person in a free election was being kicked 

out by what basically was based on street violence that created 

chaotic—a chaotic situation in which, of course, we ended up with 

what? And when was that street violence? 

When did it start? It started when the elected President decided, 

as he rightfully was elected to do, to make an economic agreement 

with Russia rather than the EU. 

No, this is much, much murkier than what is being presented. 

One thing is for sure. We should not be jumping into it. We should 

not be borrowing, and I am looking forward to the testimony of our 

witnesses today to find out exactly how much this is costing the 

American taxpayer. 

When we are going into debt by hundreds of billions of dollars 

a year, for us to borrow more money in order to give it to Ukraine 

6

in situations like this doesn’t make much sense. But I am anxious 

to hear what our witnesses have to say about how much this is 

costing the United States. 

So with that, I thank the chairman for holding this hearing. I am 

interested in learning as much as I can and thank you very much, 

Mr. Chairman. 

Chairman ROYCE. Thank you, Mr. Rohrabacher. 

We now go for 2 minutes to Mr. Keating, the ranking member 

of the Europe, Eurasia, and Emerging Threats Subcommittee. 

Mr. KEATING. Thank you, Mr. Chairman, and I would like to 

begin by thanking Assistant Secretary Nuland and Assistant Secretary Glaser for appearing today. 

I have seen first hand, both in Europe and back home, how they 

and their teams of experts have been working overtime for the past 

6 months to respond quickly and constantly to the changing situation in Ukraine. 

Ambassador Pyatt and his team at the Embassy in Kiev merit 

special recognition for their heroic efforts. I am looking forward to 

hearing our witnesses’ assessment of Russia’s efforts to destabilize 

Ukraine’s interim government and the effectiveness to date of U.S. 

sanctions. 

Despite its April 17th pledge to help de-escalate the crisis in 

Ukraine, Russia has done exactly the opposite. There is nothing 

murky about that. It is clear as can be. 

The role that Russian Special Services have played in destabilizing Eastern Ukraine is indisputable in supporting so-called 

separatists, coordinated armed attacks on government buildings, 

orchestrating kidnappings, and violence against local politicians, 

reporters, and even OSCE monitors. 

Russian disinformation campaigns have only made matters 

worse and I echo the sentiments of the chairman of this committee 

as this committee has moved forward in a bipartisan effort to increase international broadcasting. 

Russian forces’ use of masked warfare and other covert tactics 

seems to signal a strategic shift in its approach to the region and 

to European security. 

It is essential that the United States and NATO allies respond. 

I support the administration’s decision to impose sanctions on individuals and entities closely linked to the Russian leadership’s inner 

circle. 

I also welcome the decision to impose export restrictions on key 

Russian companies and the additional restrictive measures on defense exports. The goal of these targeted sanctions is to send a 

clear signal that Russian aggression against Ukraine comes at a 

price. 

I share the President’s hope that these measures will persuade 

President Putin to reverse course. While President Putin’s statement today is a hopeful sign, his true intentions remain unclear. 

I am troubled by separatists’ insistence that they move ahead 

with a referendum this weekend and I therefore fully support the 

administration’s readiness to impose additional penalties if Russia 

continues to press forward, including targeted sanctions against 

specific sectors of the Russian economy. 

7

As the United States moves forward, it is imperative that we do 

so in coordination with our European allies and I look forward to 

hearing about the status of the administration’s ongoing discussions with the EU as well as efforts within NATO to counter Russian aggression and reassure our Central European and Baltic allies. 

With that, I yield back, Mr. Chairman. 

Chairman ROYCE. I thank the gentleman. This morning we are 

pleased to be joined by representatives of the Department of State 

and the Department of the Treasury. 

Ms. Victoria Nuland. Before assuming her position as Assistant 

Secretary for the Bureau of European and Eurasian Affairs at the 

Department of State, she served as the Department of State’s 

spokesperson. 

She also served as the United States Permanent Representative 

to the North Atlantic Treaty Organization from 2005 to 2008, focusing heavily on NATO-Russia issues, among other distinguished 

roles. 

Mr. Daniel Glaser. Prior to his confirmation as Assistant Secretary for Terrorist Financing in the Office of Terrorism and Financial Intelligence in the Department of the Treasury, he served as 

the first director of the Treasury’s Executive Office of Terrorist Financing and Financial Crimes and was an attorney for the U.S. Secret Service. We worked with Mr. Glaser some years ago because 

he was heavily involved in U.S. efforts to target North Korea with 

financial sanctions when he caught them in the act of counterfeiting $100 bills in Macao. 

Macao was laundering the bills from North Korea into the financial system and the sanctions put on that bank and 10 other banks 

until they were lifted by the Department of State were particularly 

effective in stopping hard currency flows into North Korea. 

Without objection, the witnesses’ full prepared statement will be 

made part of the record. Members will have 5 calendar days to submit statements and questions, extraneous materials for the record 

if you wish. 

And Ambassador Nuland, if you would, please summarize your 

remarks to 5 minutes and then we will go to Mr. Glaser and then 

to questions. 

STATEMENT OF THE HONORABLE VICTORIA NULAND, ASSISTANT SECRETARY, BUREAU OF EUROPEAN AND EURASIAN 

AFFAIRS, U.S. DEPARTMENT OF STATE 

Ms. NULAND. Thank you, Chairman Royce, Ranking Member 

Engel, members of this committee for inviting us today. As you 

said, Mr. Chairman, I have submitted a far more detailed statement for the record. 

Let me begin by expressing my gratitude for the strong bipartisan engagement of this committee in support of Ukraine and its 

people. Your passage of the U.S. loan guarantee legislation demonstrated the American people’s commitment to help Ukraine at 

this critical time, and your visits to Kiev and to Dnipropetrovsk reinforce America’s solidarity with Ukrainian people and made an 

enormous impact on the ground. So thank you to all of you who 

travelled and to the bipartisan leadership of this committee. 

8

Today, I want to outline four pillars of U.S. policy to address the 

challenges that we face in Ukraine. First, the United States is supporting Ukraine with financial, technical, and non-lethal security 

assistance as it prepares for the democratic Presidential elections 

on May 25th and we agree with you, Mr. Chairman, these are absolutely the most vital elections Ukraine has had in recent history. 

Second, we are working with Ukraine and our European partners 

to leave the door open for diplomatic de-escalation should Russia 

change course and make a serious effort to implement its April 17 

Geneva commitments. 

Third, we are steadily raising the economic costs for Russia’s occupation and illegal annexation of Crimea and any continuing efforts to destabilize eastern and southern Ukraine. 

And fourth, we are stepping up our efforts to reassure our NATO 

allies. So let me go through them quickly. First, in addition to the $1 billion loan guarantee approved on April 1st, the United States is providing $178 million in Fiscal 

Year ’13 and ’14 State and AID funds, plus an additional $50 million in technical assistance to support programs to maintain macroeconomic stability, to advance anti-corruption reform, to mitigate 

the vulnerability of Ukraine to outside economic pressure, especially from Russia, and especially in the energy sector, and to support energy efficiency, and to recover stolen assets of the Ukrainian 

state and the Ukrainian people. We are also providing more than $18 million in non-lethal security assistance to the Ukrainian armed forces and the state border 

guard service. Our $11 million in electoral assistance supports efforts at voter education and civic participation. 

It assists the Central Electoral Commission to administer the 

elections effectively and transparently. It supports election security, which will be absolutely essential, and it guarantees a diverse, 

balanced, and policy-focused media. 

We are also supporting 255 long-term local observers and over 

3,300 short-term observers. In addition, we are working with the 

OSCE’s Office of Democratic Institutions and Human Rights, 

ODIHR, as they prepare to deploy 1,000 observers throughout the 

country monitoring the elections, the largest monitoring effort in 

ODIHR’s history. 

Second, along with our allies and the international community 

we remain committed to a diplomatic de-escalation should that be 

possible. As you know, on April 17th in Geneva the United States, 

Ukraine, Russia and the EU came together to develop a blueprint 

for such de-escalation. 

At its core, the Geneva joint statement was and remains a grand 

bargain that offered amnesty for those who vacate seized buildings 

plus deep, broad decentralization of power to Ukraine’s regions 

through national dialogue and constitutional reform in parallel 

with an end to violence, intimidation, and the seizure of buildings 

and weapons. 

As you know, the Ukrainian Government began implementing its 

part of the Geneva agreement even before the ink was dry on the 

text. The day after the Ukrainian Government sent a draft amnesty bill to the Rada. Within a week, Ukrainian authorities had 

dismantled barricades in Kiev and opened streets. 

9

On April 14th, 29th, and just yesterday, the Constitutional Reform Commission has held broad public conferences with all the regions and Ukrainian security forces instituted an Easter pause in 

their operations and sent senior officials out with the OSCE teams 

to Donetsk and Slovyansk and Luhansk and other embattled cities 

to try to talk separatists into pursuing their aims politically, rather 

than through violence. 

And you will have seen the trip of Prime Minister Yatsenyuk to 

the most embattled area of the east Slovyansk yesterday on a mission of political reconciliation. 

In contrast, Russia has fulfilled none of its commitments. The 

separatists in Donetsk and Luhansk told OSCE observers that they 

hadn’t even received any messages at all from Russia urging them 

to stand down. 

Yesterday was in fact the first time we heard President Putin 

call for the illegally armed groups to stand down. Instead, since 

April 17th all of the efforts of Ukraine and the OSCE have been 

met with more violence, more mayhem, kidnappings, torture and 

death. 

As Secretary Kerry has stated, we continue to have high confidence that Russia’s hand is behind this instability. And yet Russia can still step back from supporting separatism and violence. 

Today, we are working closely with the Government of Ukraine, 

with the OSCE, with key European governments including Germany, to once again support a diplomatic path forward—a rejuvenation, if you will, of the Geneva commitments. 

We do consider it a positive step that President Putin yesterday 

spoke out in opposition to the proposed May 11th separatist referendum in Donetsk and Luhansk. 

Now what we hope to see is Moscow completely end its support 

for separatists altogether and actively encourage an end to building 

occupations, disarmament of illegal groups, and the healing of 

Ukraine through the political process. That means Presidential 

elections, national dialogue on broad constitutional reform through 

decentralization. 

This is the peaceful path forward, and we will judge Russia’s sincerity by its actions in the coming days, not by its words. 

This brings me to the third pillar of our strategy. In response to 

Russia’s continued occupation of Crimea and its aggressive acts in 

east and south Ukraine, the United States has imposed significant 

costs on Russia. 

Just last week we enacted new sanctions on seven Russian Government officials including two members of Putin’s inner circle and 

17 entities. 

Assistant Secretary Glaser will go into the details, and as the 

President made clear last week we are prepared to exact a higher 

cost if Russia takes further steps to destabilize Ukraine, including 

disrupting the May 25th elections, and we are working now with 

our European and global partners on a package of sectoral sanctions that will bite quite deeply into the Russian economy, if we 

have to use them. 

The Russian economy, as you said, Mr. Chairman, is already 

buckling under the pressure of these internationally imposed sanctions. Its credit ratings are hovering just above junk status. 

10

Fifty one billion in capital has fled Russia since the beginning of 

the year, which is close to the $60 billion they lost in all of 2013. 

Russian bonds are trading at higher yields than any debt in Europe and as the ruble has fallen, the Central Bank has raised interest rates twice and has spent close to $30 billion from its reserves 

since early March to try to prop up the ruble. 

And finally, our fourth pillar—we are working intensively with 

our NATO allies to provide visible reassurance on land, on sea, and 

in the air that Article 5 of the NATO treaty means what it says. 

Our message to Russia is clear: NATO territory is inviolable. We 

will defend every piece of it and we are mounting a visible deterrent to any Russian efforts to test that. 

The United States, as you know, has increased our own contribution to NATO Baltic air policing. We have bolstered the U.S.-Poland aviation detachment at Lask Air Force Base and we have 

maintained a steady U.S. naval presence in the Black Sea. We 

have also deployed a total of 750 U.S. ground troops to Estonia, 

Latvia, Lithuania, Poland and Romania. 

We are now heartened that more than half of the other NATO 

allies have also offered visible reassurance contributions to the 

NATO mission to support the front line states, including increased 

air and land reassurances by the U.K., France, Canada and Germany and reassurances at sea from Norway, Belgium, the Netherlands and Estonia. 

Taken together, these four pillars of our policy—support for 

Ukraine, costs for Russia, an open door for de-escalation through 

diplomacy, and allied reassurance—are the foundation of the work 

we are doing together and with this committee and with the Congress. 

In this effort, we appreciate your bipartisan support and your bipartisan contribution and we hope to continue to work closely with 

you. 

Thank you. 

[The prepared statement of Ms. Nuland follows:]

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Chairman ROYCE. Mr. Glaser. 

STATEMENT OF THE HONORABLE DANIEL GLASER, ASSISTANT SECRETARY, OFFICE OF TERRORISM AND FINANCIAL 

INTELLIGENCE, U.S. DEPARTMENT OF THE TREASURY 

Mr. GLASER. Thank you, Chairman Royce, and thank you for 

that kind introduction. I am going to go off script just for a second 

to thank you for calling the work that we did together in 2005, 

2006, 2007, that really was the proof of concept that it is possible 

to apply targeted financial measures in a strategic way against a 

target and we learned a lot from that and we have really taken off 

since then and it was a pleasure working with you back then. I 

look forward——

Chairman ROYCE. I just wish we had done it again, Mr. Glaser. 

Mr. GLASER. Well, we are doing our best, Mr. Chairman. But to 

my remarks, Chairman Royce, Ranking Member Engel, distinguished members of the committee, thank you for inviting me to 

speak today about the U.S. Government’s response to Russia’s illegal annexation of Crimea and its continued provocative actions in 

Ukraine. 

The Department of the Treasury is designing and implementing 

a strategy that uses targeted financial measures to raise the costs 

to Russia of its actions. 

Our approach is calibrated to impose immediate costs on Russia 

and to create conditions that will make Russia increasingly vulnerable to sanctions as the situation in Ukraine escalates. 

To this end, Treasury has targeted not only corrupt former 

Ukrainian officials, Crimean separatists and their backers in the 

Russian Government, but individuals in President Putin’s inner 

circle who have important interests and holdings throughout the 

Russian economy. 

Russia is already feeling the impact of our measures. In my remarks today, I will describe Treasury’s sanctions tools and how we 

are deploying them. I will also discuss the important measures we 

are taking to buttress the Ukrainian economy. 

By pursuing these dual tracks, the Treasury Department is using 

the tools at our disposal to contribute to the development of a 

strong and sovereign Ukraine. 

President Obama has signed three Executive orders that provide 

the Secretary of the Treasury with expanded authority to sanction 

individuals responsible for the continuation of the crisis in Ukraine 

as well as entities under their control. In total, we have designated 

45 individuals and 19 entities over four traunches of designations. 

The most important of these targets include those in Putin’s 

inner circle and the companies they control or own. These include 

Igor Sechin, the chairman of the state-run oil company Rosneft, 

Sergei Chemezov, the CEO of the Russian weapons and metals conglomerate Rostec, and Gennady Timchenko, who runs Gunvor, one 

of the world’s largest commodity trading firms. 

We have also targeted Russian officials directing the annexation 

of Crimea as well as Crimean separatists and former Ukrainian 

Government officials. 

We have a range of options we can deploy should Russia’s leadership continue to destabilize Ukraine. For example, Treasury has 

17

additional authority authorized by President Obama under Executive Order 13662 to significantly enhance Russia’s economic costs 

in isolation. 

This Executive order authorizes the targeting of entities operating in broad sectors of the Russian economy such as defense, 

metals, mining, finance, engineering, and energy. 

I should note the importance of coordination with our international partners, particularly those in the European Union and 

the G–7. To be clear, the United States always stands ready to 

take actions we deem necessary to safeguard our national security 

and to safeguard international security. 

We do, however, recognize that our financial measures are more 

powerful and effective when done in a multilateral framework. 

Our partners have taken sanctions measures of their own and 

they have started to prepare to do more. We are working to ensure 

that our international partners continue and expand their measures, and that we move forward together to address Russia’s aggression. 

For example, this week Under Secretary David Cohen is leading 

an interagency delegation in Europe to coordinate precisely this, 

going to stops such as London, Paris and Berlin. 

But even as we lay the groundwork for expanded measures if 

necessary, our sanctions are having an impact on Russia’s already 

weak economy, and actually Chairman Royce rattled off most of the 

numbers that I have to rattle off. 

But I will do it again because I do think they bear repeating. As 

sanctions increase, the costs to Russia will not only increase but 

their ability to mitigate the costs that they incur will diminish. 

Already market analysts are forecasting significant continued 

outflows of both foreign and domestic capital and a further weakening of growth prospects for the year. The Russian stock market 

has declined over 13 percent and the Russian currency has depreciated by almost 8 percent since the beginning of the year, the 

worst numbers within the group of emerging markets. 

The IMF has downgraded Russia’s growth outlook to .2 percent 

this year. That is the second downgrade within a month and they 

have suggested that a recession is not out of the question. 

This stands in stark contrast to previous IMF forecasts, which as 

recently as February were projecting 2 percent growth for Russia. 

The IMF also indicated that they expect as much as $100 billion 

in capital flight from Russia this year, which has caused rating 

agencies such as Standard & Poors to downgrade Russia’s sovereign credit rating to just above junk status. 

In addition to our measures that isolate the Russian economy, 

the Department of the Treasury is working with the international 

community to support the Ukrainian Government in returning the 

country’s economy to solid footing. 

As an important first step, Ukraine received the first traunch of 

$3 billion from the IMF—from the IMF’s 2-year $17 billion reform 

package with an additional $3 billion expected to be disbursed by 

the end of May. 

Treasury is also offering its expertise in identifying, tracking, 

and recovering stolen Ukrainian assets in support of Department 

of Justice efforts. Expert Treasury advisers have also been deVerDate 0ct 09 2002 15:34 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\050814\87837 SHIRL
18

ployed to Kiev to help the Ukrainian authorities stabilize the financial sector and implement reforms. 

As the United States and our international partners continue to 

confront Russia’s illegal actions in Ukraine, we stand ready to further employ our arsenal of financial measures as the situation escalates. 

A diplomatic resolution of the crisis remains our goal, but if Russia chooses to continue its illegal and destabilizing actions in 

Ukraine, we can impose substantial costs on and expand the isolation of an already weak Russian economy. 

Thank you for the opportunity to speak today and I will be happy 

to answer your questions. 

[The prepared statement of Mr. Glaser follows:]

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Chairman ROYCE. Thank you, Mr. Glaser. 

From our standpoint and I think—I think it is pretty clear to the 

members here that our goal is to get a resolution to this thing as 

quickly as possible, to get some measure of reconciliation. 

The Presidential candidates that are running on May 25th, they 

are mature candidates. They are going to push for the use of both 

Ukrainian and Russian. If we can get to the May 25th election, I 

think you have got a chance there for a huge turnout. 

When we were in Dnipropetrovsk, when we were meeting with 

these Russian-speaking associations, representatives of women’s 

groups, representatives of the Jewish community, and other minority communities, the uniform position, especially the different NGO 

groups, was that they were manning these ballot box stations to 

make certain that there was security for those who go to the polls. 

Now, if you get the kind of turnout that at least we see in polling 

as anticipated, and you have this Presidential election followed by 

the election of local representatives from every district, I think we 

are on our way, potentially, to a system where we can begin to deescalate this. 

We have one big problem for the attempt by journalists to cover 

this story in the east and that is the disappearance of these journalists. We have got several journalists who have been disappeared 

by Russian separatists, taking them into custody. The campaign of 

intimidation, of course, is intended to shutter all indigenous outlets 

for uncensored news and information. 

You have already got the seizure of the local broadcasting systems. So it suddenly becomes very, very important to support journalists going in to cover this election and also to counter Russian 

propaganda and that takes me to an issue I wanted to talk to Ambassador Nuland about. 

The propaganda that you hear coming out of that part of the 

world is really in overdrive. Our committee recently passed legislation that is now signed into law, directing U.S. international broadcasts to be ramped up. 

We are working on legislation to revamp and cut the bureaucracy 

over the top of Radio Free Europe and other surrogate broadcasters 

so that they can do the type of job they have done in the past. 

And I was going to ask you, Ambassador, how do you assess our 

efforts in this information battle? How important do you think this 

is in terms of being able to get a flow of information into eastern 

Ukraine especially, so that people have the coverage going up to 

the election? 

Because I think once the election occurs—and the other thing I 

will ask you to comment on: President Putin said in reference to 

the May election as you—as you quoted him—that he does not 

want to go forward with a referendum on the 11th. That is very 

good news, okay. But he also said he thinks the Presidential election on May 25th is a step in the right direction. 

If we can build on this statement to get a huge turnout I think 

it increases the leverage for those in the country, in the east and 

the west, who want to see a reconciliation. 

Ms. NULAND. Well, thank you, Mr. Chairman. We couldn’t agree 

with you more that what is most important if you want to hear 

what the people of Ukraine have to say about their future is to let 

26

them vote. Let them vote across the country and most especially 

in the east and south of Ukraine. 

I can talk at some length about how the OSCE assesses the electoral environment, which is surprisingly good with the exception of 

Crimea, of course, where people will have to be offered a place outside Crimea to vote and the Ukrainians are working on that, and 

a few of the most dangerous parts of Donetsk, including Slovyansk. 

But the Ukrainians—in fact, Secretary Kerry spoke this morning 

to Prime Minister Yatsenyuk just before I came over here and one 

of the things that the Ukrainians are very focused on now is a ‘‘get 

out the vote’’ campaign across the country. 

That speaks to the second part of your question, which is about 

free media. Would that Russia allowed it, would that the separatists allowed it, this would be the freest media environment Ukraine 

has ever enjoyed for an election. 

But as you know, it is precisely that free media environment that 

is threatening to this illegally-armed movement and that is why 

some of the sites of occupation have included TV towers in 

Donetsk, Oblast, and in Luhansk. 

The government has made a good effort to try to reclaim some 

of those, but when separatists seize TV towers they close out a plurality of voices and the Russian propaganda megaphone is the only 

thing that can be heard. 

So we are very grateful to this committee. We are very grateful 

to the Congress for the support that you are showing for the programming we are helping the Ukrainians support. 

We recently increased by $1.5 million our support to Ukrainian 

Government efforts to help prepare for the election and get truth 

out across. We are also, as you know, running and working on a 

very intensive effort with our allies and partners to support those 

voices trying to correct Russia’s false narratives. 

I think you have probably seen our United for Ukraine campaign, which is now only 5 percent government content. The other 

95 percent is taken up by global supporters of Ukraine. 

So these efforts are very important, but we are going to have to 

do more if this—if we are now back to the future and in a propaganda environment where truth is not an obstacle. 

Chairman ROYCE. You gave us some numbers on the number of 

election observers that were being fielded-out by NGO groups in 

the U.S. and there are several thousand coming from Europe. 

Do you have any estimate of how many NGOs or how many volunteers, election observers we are going to have on the ground in 

eastern Ukraine in order to try to monitor? And in southern 

Ukraine? 

Ms. NULAND. I don’t yet have a breakdown from the OSCE on 

their monitor posture, but I think it will be distributed across the 

country with 1,000 OSCE across the country. We would expect at 

least 500 of those in the south and the east. But that is the OSCE 

alone. 

As I said, we are supporting some 3,300 indigenous Ukrainian 

NGO observers and they will be spread across the country, and 

that is before you get to what IRI, NDI and like institutions across 

Europe and from other countries will send. 

27

So as I said, we expect this to be the best observed election in 

the transatlantic space since the end of the Cold War, per capita. 

Chairman ROYCE. Thank you, Ambassador Nuland. My time has 

expired. We will go to Mr. Engel. 

Mr. ENGEL. Thank you, Mr. Chairman, and once again thanks to 

both of you for the very, very fine work that you both are doing. 

The equation for NATO since the fall of the Soviet Union has essentially been looking at Russia as a—as a partner, at least some 

kind of a partner. If this is no longer the case and Russia is now 

an adversary, not a partner, it changes the whole equation. 

When we speak to the representatives of countries like Moldova, 

Georgia, Romania, Latvia, and Lithuania, they are all scared to 

death, and Russia has been pressuring them and we can only expect this pressure to increase in the coming months, particularly 

in Moldova and Georgia. 

So what are we doing to support the rights of the people in these 

states in the region to choose their own futures and build democratic states? Because I really believe that if we don’t step up to 

the plate on this you can almost kiss NATO goodbye because if we 

are not going to back up what we say we stand for then I think 

Putin will have won. 

So I just think it is absolutely imperative that we reassure the 

other countries in the surrounding region who all come to see all 

of us and tell us that they have terrible fears of being collateral 

damage in this whole process. 

Ms. NULAND. Thank you, Mr. Ranking Member. First, as I said, 

with regard to those countries who are members of the alliance, 

from the Baltic all the way down to the Black Sea, NATO is 

scoping and already deploying a massive reassurance mission on 

land, air, and sea. 

I gave some details of that in my opening statement. We expect 

that mission to continue through the end of 2014 and we expect 

heads of state and government when they meet in Wales to review 

whether it needs to continue beyond that. 

So Article 5—the traditional Article 5 reassurance of NATO is 

now going to be at a co-equal pillar yet again at the summit. With 

regard to the states who are partners of NATO—Moldova, Georgia, 

Ukraine itself—as you know, we have greatly increased our economic, our energy support to countries like Moldova who are most 

vulnerable to Russian pressure. 

I have been out there twice. Secretary Kerry has been out there. 

A number of Members of Congress have been out to support them. 

The Prime Minister of Moldova was received in the White House, 

including by President Obama. 

We are working with them on first diversifying their market 

away from Russia. As you know, the EU has now granted visa-free 

status to Moldova. 

We are working to help them to explain in advance the benefits 

of Europe, including to the people of Transnistria, and we have 

worked a lot on imports of Moldovan wine, on energy interconnectors between Moldova and Romania to help them with reverse flow, 

et cetera, and reduce their energy dependence. 

So those efforts will continue. In Georgia, as well, the new Prime 

Minister was here. We have had repeated visits including my own 

28

out there and those of Members of Congress and we are working 

with them primarily on strengthening rule of law, helping them 

prepare for their association agreement and to really maximize the 

trade and people-to-people benefits of their association with Europe. 

Mr. ENGEL. Thank you. I want to ask you also a question about 

foreign assistance because in recent years it has diminished greatly 

for Central Europe and Eastern Europe. 

There have been some improvements in some countries but in 

others needs have increased and at the same time, you know, the 

budget sequester, which I think was a disaster, there has been excessive budget cutting to these countries as a result. 

So is the United States providing adequate assistance for 

Ukraine and other Eastern European countries now under Russian 

pressure and trying to consolidate their democracies? And if Congress provided more assistance would that help our efforts and 

what would be the effect on U.S. and regional security and what 

types of efforts might expanded assistance provide? 

Ms. NULAND. Thank you, Congressman. As you know, as from 

your own efforts in Europe, once countries join the European Union 

they graduate from U.S. assistance. So at the current moment we 

don’t provide much U.S. bilateral assistance. There are some programs that are active but very few for any of the countries that are 

currently in the European Union. 

So our focus is to the east. It is certainly the case that in my 

budget, in the Bureau of European and Eurasian Affairs, we are 

shaking out the couch cushions and scraping the side of the pot to 

get more support of the kind I discussed for Ukraine in the first 

instance, but also for Moldova, for Georgia, for increasing U.S. 

trade opportunities for countries like Armenia that are feeling increasingly squeezed. With more we could, obviously, do more. 

I want to just briefly mention another threat that I would like 

to have more resources to combat and that is the threat of corruption. 

We see a new tool of outside influence, not just in the post-Soviet 

space, but increasingly in Central Europe and the Balkans, which 

is this corrupt oligarchical practices, dirty money flowing into these 

countries, buying politicians, then going into parliaments and dismantling democratic structures, dismantling free media, dismantling protections for NGOs. 

I believe the United States has to do more to help countries 

across the European and Eurasian space resist this pernicious cancer of corruption, which is also a tool of outside influence and a 

threat to sovereignty for many of them. 

Mr. ENGEL. Thank you. Thank you, Madame Chair. 

Ms. ROS-LEHTINEN. Thank you very much, Ranking Member 

Engel. 

The chair recognizes herself for 5 minutes. 

The situation in Ukraine is indeed a powder keg ready to explode 

at any given moment. Putin is an unrepentant thug with an expansionist ideology who has thus far proven that he will not be deterred by the actions that the U.S. has taken in response to his aggressive moves in Ukraine and this is extremely dangerous for the 

stability of Ukraine and, indeed, the entire region. 

29

His actions have been meant to destabilize Ukraine, foment pronationalist and anti-Western sentiments in Russia and manufacture a crisis so that he can play the role of the hero at home. 

By creating this crisis, Putin is trying to mask the ills that he 

faces at home and who better to play his foil than us here in the 

United States? 

With a growing number of Russians dissatisfied with the economy and his policies, the latest news that Putin is now supporting 

the May 25 election must be taken with a grain of salt because 

there are surely ulterior motives at play here. 

I congratulate this committee under the leadership of Chairman 

Royce and Ranking Member Engel for the tough but fair bills that 

we have passed. Our President has issued several Executive orders 

imposing sanctions on Russian officials and that has gained some 

support in the EU. But I wanted to focus on the EU part. 

We have been unable to get the EU on board for stronger, more 

effective sanctions. And so following up on your testimony, what 

more do we need to do to get the EU on board to impose additional 

sanctions? What are the major concerns and obstacles in getting 

the EU’s backing? 

And we had talked about Under Secretary Cohen’s trip. What 

specifically will he—will the Secretary be pushing in his trip to 

Germany, France, and the U.K.? And there clearly has to be a U.S. 

strategy for dealing with Russia and a separate strategy toward 

Ukraine. But they must work together in order for us to be our 

most effective. 

I believe that the administration is not willing to be strong 

enough in the face of Putin’s aggression—doesn’t wish to cause any 

more friction with Moscow. So we will then fall short of what is 

necessary to truly help the people of Ukraine who oppose Russian 

meddling over its sovereignty. 

But perhaps the administration is unwilling to stand up to 

Putin’s aggression because they are worried that we need his support for the chemical weapons program in Syria and our misguided 

negotiations with Iran over the nuclear program. 

And if that is the case, then that just shows the consequences of 

our failed leadership, the fact that we are so desperate to keep a 

bad nuclear deal with Iran alive that we can’t help those who are 

seeking our assistance because we don’t want to upset Moscow too 

much. 

Last month there were reports that our Department of Energy 

informed a Russian state-run nuclear corporation on suspension of 

cooperation projects. Can you provide us with an update on the status of our 123 Agreement with Russia and is there any discussion 

about reexamining our PNTR agreement with Moscow? So EU, 

Under Secretary Cohen’s trip, and 123 and PNTR. Thank you. 

Ms. NULAND. Thank you, Congresswoman. On 123 and PNTR, I 

am going to take the question. I, frankly, am not as briefed as I 

need to be. 

With regard to the EU, why don’t I start and then Assistant Secretary Glaser pick up? As you know, in the rounds of sanctions that 

we have had we have been able to move with the Europeans. 

30

Their legislation, their legal base is somewhat different than 

ours. Their procedures are different. So it has been a matter of constant consultation with them to try to move in lockstep. 

We have had success in the sanctions we have imposed for the 

occupation of Crimea on senior Russian officials responsible for orchestrating that and the violence in the south and east. 

We are working now on encouraging the European Union to 

match the sanctions that the U.S. has put in place on those closest 

to Putin and their organizations because we do believe that those 

sanctions have had a serious impact on the Russian economy and, 

frankly, in destabilizing markets, which, as we both cited statistics, 

are the most impactful aspect. 

And as I said in my testimony, what will have the biggest impact 

is if we move to sectoral sanctions. The President, as Assistant Secretary Glaser has made clear, has given us an Executive order that 

allows us to look at energy, banking, the defense sector, mining. 

So we are now in intense consultations including those that 

David Cohen and Ambassador Dan Fried are engaged in this week 

on how those sectoral sanctions could work because they will be 

far——

Ms. ROS-LEHTINEN. Well, thank you so much. As usual, I have 

talked too much and I ran out of time. So we will give you another 

opportunity. Maybe somebody will bring it up. 

And so pleased to yield to Mr. Meeks of New York for his question and answer. 

Mr. MEEKS. Thank you, Madam Chair, Madam Secretary, Mr. 

Glaser. My line—my first questions were somewhat on the same 

line as Ms. Ileana Ros-Lehtinen but for different reasons. 

I am always—I believe in sanctions when they are multilateral, 

not unilateral, you know, because unilateral sanctions don’t seem 

to work. We don’t—we are not able to really accomplish what our 

goal is when it is just us by ourselves and/or what effects they have 

on our allies who we work very closely with. 

And so I want to make sure of that because I am very concerned 

about the aggression of Russia and I want to make sure that we 

do certain things but we are not isolating ourselves in the long run. 

So it is important to me that we are in fact working with NATO 

and others in the Baltic States and every—because I know, for example, we met with some individuals from Latvia, for example, and 

they are saying it is important to have certain kinds of sanctions 

as opposed to others because it could be devastating to them and 

their country and cause turmoil within their own ranks and will 

end up hurting the very people that we want to help. 

So with that being said, let me—let me ask this question. Do you 

feel that we are having the level of cooperation from our NATO allies, et cetera, as they understand the same vision? Are we on the 

same playing field with the vision of how we have got to fight back 

the aggression that has been moved—you know, as we see with 

Russia moving forward into the East Ukraine and Crimea? 

Ms. NULAND. Thanks, Congressman. I would say that in the 

rounds of sanctions we have done heretofore we have moved largely 

in lockstep with Europe. There are some differences that have to 

do with the legal authorities and we are seeking to close the gaps 

31

that exist, as I said, and particularly with regard to those closest 

to Putin. 

But as we get to sectoral sanctions it does get harder and the 

principles that you outlined are the same ones that we have. Assistant Secretary Glaser can speak to it. But we want to have more 

of an impact on the Russian economy than we have on our own. 

We want to share the pain, if there is to be economic pain, across 

different sectors. That helps keep Europe together but it also ensures that one sector of our economy isn’t hit harder than another. 

We want to use a scalpel and not a—not a sledgehammer. We 

want to talk primarily about forward investment opportunities. 

Mr. MEEKS. And as you have testified, of course, already having 

the door open because I am also a firm believer in diplomatic solutions. I don’t think that anybody—I don’t think really that a military solution, as some have hinted at, or giving of military equipment is the answer here. 

I think that we have to try to figure out a way to do it through 

joint sanctions as well as with, you know, with our NATO allies, 

and then try to—hopefully that the Russians will end up coming 

to the diplomatic table and we can resolve this crisis on a diplomatic basis because—my next question would be—there are other 

serious issues that we still have to deal with Russia. 

Last week, Principal Deputy Assistant Secretary of State Anita 

Friedt testified before this committee and I asked her about U.S.-

Russian cooperation still because there were a lot of other things 

that we were doing with Russia. 

And she informed me that despite the ongoing crisis in the 

Ukraine that the U.S. is still cooperating with Russia on certain 

matters such as nuclear arms agreements—that that’s still going. 

So I was wondering also, you know, in regards to Iran—dealing 

with Iran with the P5+1, could you tell us more specifically what 

is the status of our cooperation with Russia on other issues that 

are very important to us, for example, military cooperation and development and economic and anti-piracy and so on in dealing with 

Syria? Where are we with—are we still working in accord in those 

regards? 

Ms. NULAND. Thank you, Congressman. We have, as you know, 

curtailed most of our bilateral economic work with Russia, most of 

our bilateral military-to-military. 

But on all of the global issues that you mentioned, whether it is 

Iran, Syria, the arms control commitments that we have to each 

other, we have largely maintained these conversations. We don’t do 

that as a favor to Russia. 

Russia participates because it is in their interest to keep Iran 

from getting a nuclear weapon, et cetera. So those have largely continued. 

Mr. MEEKS. And lastly—I have got 11 seconds, I don’t know if 

I am going to get it in—I was wondering, do you think that the 

sanctions that are in place are affecting at all our cooperation with 

Russia? 

Are they trying to push back saying, ‘‘Oh, if you don’t stop these 

sanctions we are going to’’—are they threatening us at all in that 

regard—threatening to stop cooperating on these international 

events? 

32

Ms. NULAND. Again, heretofore the assessment holds that Russia 

cooperates in these issues not as a favor to us either, but because 

they judge them to be in their interest and that cooperation has 

continued. 

Chairman ROYCE. Would the gentleman yield for 1 minute? One 

thing I did want to clarify and that is, Mr. Meeks, I have never 

heard anyone argue for a military solution. And as a matter of fact, 

in our conversations with the President of Ukraine and the Prime 

Minister of Ukraine, both made clear to us that they didn’t expect 

any U.S. military involvement. 

So I just did want to clarify that comment that you alluded to 

because I just, in the Senate or House, haven’t seen any member——

Mr. MEEKS. I just heard several—some of our colleagues say that 

we should be giving some arms to the Ukraine or arming them in 

that regard and so that tells me——

Chairman ROYCE. That was the second half of your statement. 

But the first part went to a military solution. I just wanted to clear 

the record on that. 

Let us go now to Mr. Chris Smith of New Jersey. 

Mr. SMITH. Thank you so much, Mr. Chairman, and thank you 

to our two distinguished witnesses today for their work. I do have 

a couple of questions. 

You know, the recent IRI poll suggested an overwhelming 84 percent of Ukrainian citizens said they will definitely or are likely to 

vote in the elections, including a substantial majority in the two regions in which the militants are very active. So that is a tremendous sign of ownership of their future. 

And I do have a couple of questions. As co-chair of the Commission on Security and Cooperation in Europe, Ben Cardin and I will 

co-lead a delegation on the 25th of May to be election observers, 

and if any members here are interested please see me and, you 

know, perhaps you could join us in that effort. 

But I do have some questions about the Ukrainian preparations 

for the elections, your thoughts on how well they are progressing, 

a breakdown of what voters-distant third. 

But it did trigger a runoff. You know, we didn’t get the winner. 

It was Yanukovych and it was judged to be a free and, you know, 

a true election with some discrepancy but largely free and fair. 

The 2012 elections had more problems on the parliamentary 

level. So I am just wondering if enough safeguards are in place to 

ensure that this ballot even though there are 20 people running it 

probably is a two-way race between Poroshenko and Tymoshenko, 

although it may be a single winner because she is trailing significantly in the teens right now. 

So I am just wondering if, you know, again, integrity of the ballot, people who vote, particularly in disputed areas, what precautions are being put into place to ensure their safety. 

Ms. NULAND. Thanks, Congressman, and we are enormously 

grateful that you are going to lead an election observer team with 

Senator Cardin and we encourage anybody who has an interest to 

go because the more observers the better an election we will have. 

First of all, just on what ODIHR, OSCE—ODIHR’s findings are 

as of the middle of April—the Central Election Commission has 

33

met all of its legal deadlines, that it has registered 23 candidates, 

that there is a sound framework for free media, that there are 35.9 

million registered voters—they have all registered online—that 

election commissions have been formed in virtually every one of the 

225 districts. 

There are 32,000 Presidential precinct election commissions. All 

of them, with the exception of those in Crimea and some locations 

in Donetsk, notably Slovyansk, are fully on schedule to prepare for 

these elections, including with regard to preparation of lists and all 

of those things. 

Obviously, security leading up to the elections and on election 

day at polling places for election materials, et cetera, will be paramount. As I said, Secretary Kerry spoke to Prime Minister 

Yatsenyuk this morning. 

The prime minster made clear that they are focused like a laser 

on this as they are on getting out the vote. They are also talking 

about—I think they are working with the OSCE now on alternative 

sites for Crimeans to exercise their right to vote if they choose and 

for places like Slovyansk where it may be too violent to vote. 

But just to underscore where you started, the polling is indicating almost 70 percent of folks in the east of Ukraine are excited 

about casting their ballot, and that is the most—the best guarantee 

of political stability in Ukraine. 

Mr. SMITH. Thank you. I appreciate that. Assistant Secretary 

Glaser, can you describe in more detail the sanctions that have 

been taken by our European allies? How effective do you think they 

have been in light of their financial, economic integration with Russia, particularly in the area of the energy sector? 

Mr. GLASER. Yes, sure. I would be happy to try to answer that 

question. The European Union so far has focused its targeting on 

specific individuals that have been involved with the violation of 

the sovereignty of Ukraine and the incursion into Crimea. 

That, in combination—I think it is—I think you can’t really 

break out the impact of the European measures from the impact 

of the U.S. measures. I think you have to look at the situation in 

total and when you look at the—at the situation in total, again, 

Chairman Royce and I both rattled off some numbers as to what 

the impact has been to date in terms of impact on the Russian 

economy. 

I think equally as important as that, although not quite as quantifiable as that, has been the market uncertainty that it creates—

the chilling effect on further business dealings with Russia, on further investments in Russia. And what that does is it sets a framework—it sort of sets the table for us all to collectively take more 

significant action. 

When Chancellor Merkel was here in Washington last week, she 

and President Obama made clear, as has Ambassador Nuland just 

now, that the next step in that would very likely be sanctions that 

target entities within sectors of the Russian economy. But there 

has been a lot of discussion about the financial sector or the energy 

sector, things like that. 

That is precisely, and this gets to a question that was asked earlier, precisely what Under Secretary Cohen and Ambassador Fried 

are in Europe and in London, Paris, Berlin this week talking about 

34

because I do think that the U.S., even acting on our own, can exact 

costs on Russia. 

I think we have demonstrated that. But, certainly, given the economic, financial, energy integration between Russia and Europe, 

anything that we do is going to be so much more effective in a multilateral context, both from an actual financial economic point of 

view and certainly from a political messaging point of view. 

And what they are doing right now is sitting down with our European counterparts and going through, you know, concepts on how 

do we do this—how do we and Europe work together to have a very 

effective targeted set of actions against sectors of the Russian economy that, as Ambassador Nuland articulated, maximize the impact 

to Russia—on Russia while minimizing the impact on our own 

businesses and our own economies. 

We understand that there are going to be costs to these actions. 

We understand that. But if we do it in a smart strategic way, we 

think we could have the impact that we are looking for and I am 

quite certain the that the Russians understand that very well. 

Mr. SMITH. Thank you both. 

Chairman ROYCE. Mr. Albio Sires of New Jersey. 

Mr. SIRES. Thank you, Mr. Chairman, and thank you for being 

here. You know, along the same line as my colleague from New 

Jersey, these sanctions—I would think that in order for them to 

really be effective, the people of Russia have to feel it. 

Do we have any evidence that the actual people, not just Putin’s 

friends or the people in leadership, are impacted but this but the 

actual Russian people? Because it seems that his numbers keep 

going up as more popular and more popular as he makes these 

moves. 

Mr. GLASER. Yes. I mean, it certainly sometimes takes time for 

damage to an economy to reflect in opinion polls with respect to 

leadership. But it is certainly the case that Russia is feeling on a 

very, very broad level the impact of the measures we have taken. 

As we said, as recently as February, the IMF was forecasting a 

2-percent growth for Russia. That is for Russia. That is not for 

Putin’s inner circle. That is for Russia, and now it is forecasting 

near 0 percent and speculating that it might, in fact, be a recession. That is a recession for Russia as a whole. 

So I think that the Russian leadership has to understand that 

the health of the Russian economy is very much at stake with respect to the measures we have taken and these are the initial 

measures that we have taken. 

As we have said, we are in very, very intense consultations and 

discussions with Europeans on taking measures that would have 

an even greater impact on the Russian economy. 

And as I said, I think that, even in and of itself, has created a 

level of market uncertainty that is continuing to damage the Russian economy quite broadly. 

Mr. SIRES. Because it seems to me that these sanctions are directed at his friends, not necessarily the people of Russia. Is that 

accurate? I mean the people are the ones that are going to speak 

and say, ‘‘Hey, let us stop this.’’

Ms. NULAND. We have—as you know, sanction not only people in 

leadership, but also those close to Putin but what——

35

Mr. SIRES. Right. 

Ms. NULAND [continuing]. But the effect has been general market 

uncertainty, which is affecting the whole economy. 

For example, the cost of borrowing inside Russia is going up and 

up and up. Inflation is going up and up and up. I was in Europe 

last week talking to——

Mr. SIRES. Well, these are—these are what people are feeling. 

Ms. NULAND. That people will begin to feel it. I was about to say 

that I was talking to a number of European business folks on a trip 

I took around allied capitals last week, including on sanctions, and 

business folks were reporting that Europeans are not making new 

investments, that the cost of their products exported to Russia are 

going up because of inflation, that they are not getting the orders 

for luxury goods because Russians are biding their time and waiting to see what happens. 

So there is a lot of impact already. But our goal is not to hurt 

the Russian people per se. Our goal is to get Putin to change 

course. 

Mr. SIRES. Well, you know, obviously, our goal is not to hurt the 

Russian people, but the Russian people are the ones that are going 

to speak to make sure that the leadership changes the course that 

they have taken. 

Can you talk to me a little bit about this Russian colonial federalization, that they want the proposed amendment to the Constitution? What is this federalization? What does it mean? What 

are they talking about? 

Ms. NULAND. Well, obviously, if I was still at the spokesperson’s 

podium I would refer you to Russia as to what they are talking 

about. 

But the original concept appeared to be such a broad decentralization of power that regions would have the right to independently vote to secede, attach themselves to Russia, et cetera, which, 

obviously, under nobody’s Constitution, is the right way to go. 

What the Ukrainian Government and what the Constitutional 

Reform Commission are offering, however, is very, very broad decentralization of authority and budgeting to local regions. Ukraine 

has been too centralized a state and that has been part of the problem. 

But when Prime Minister Yatsenyuk was here, he gave a speech 

at the Atlantic Council in which he talked about devolving authority for everything except defense, foreign affairs, and some judicial 

functions to the regions—keep their own tax money, administer it 

themselves, education, language as well as electing their own officials. 

So there is a really heavily decentralized future for Ukraine, but 

it needs to be achieved politically and not at the barrel of a gun. 

Mr. SIRES. Thank you very much. 

Chairman ROYCE. We go now to Mr. Dana Rohrabacher of California. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. 

Ambassador Nuland, so what is the bottom line for the cost of 

all of this to the United States? 

Ms. NULAND. As I—I gave some numbers, I believe, in my opening——

36

Mr. ROHRABACHER. Yes, you did. 

Ms. NULAND [continuing]. With regard to Fiscal Year ’13 and ’14, so we are at $187 million, which is about where we have been in 

support for Ukraine over the last 5 years. We have increased it by another $50 million in the loan guarantee. 

Mr. ROHRABACHER. Well, that is just one program. But with all 

of the election observers—that includes the election observers and 

every——

Ms. NULAND. That includes the U.S. participation in the OSCE 

election observers. 

Mr. ROHRABACHER. So it was $187 million? 

Ms. NULAND. $187 million plus $50 million——

Mr. ROHRABACHER. Plus $50 million. 

Ms. NULAND [continuing]. Which was appropriated on April 1st. 

Mr. ROHRABACHER. Okay. 

Ms. NULAND. $18 million from the Defense Budget for support 

for security services and border guards. But it is not that much 

more with the exception of the $50 million than what we have been 

spending in Ukraine over the years. 

Mr. ROHRABACHER. Okay. Have we signed on into something 

with World Bank guaranteeing any loans, for example? 

Ms. NULAND. So the—as you know, you have appropriated the— you have authorized the $1 billion loan guarantee, which scores at 

$400 million for the Treasury. With regard to the World Bank, they 

are just at the beginning of what they might be able to do to support. So I am not aware of any new loans that they have executed. 

I think they are going to wait and see how the elections go. 

Mr. ROHRABACHER. Okay. So we are—we have spent about $200 

million and we have got $400 million that we have scored for the 

guaranteeing of that loan. 

Ms. NULAND. Which will come back to the U.S. Treasury when 

the loan is paid back, as you know. 

Mr. ROHRABACHER. Right. When the loan is paid back. 

Ms. NULAND. With interest. 

Mr. ROHRABACHER. Right. Shall we all hold our breath for that? 

So do we have preferential payback then? Does that mean that all 

the other bills that the Ukrainian Government owes, they are going 

to have to pay us that $400 million first? 

Ms. NULAND. Congressman, we will have to get you the details 

on exactly what the terms of this are. 

Mr. ROHRABACHER. Yes. Okay. 

Ms. NULAND. I think it is with the Treasury to do that. 

Mr. ROHRABACHER. I think that that—we know what the answer 

to that is, but I would be happy to get it officially. Let me ask you 

this. When we were talking about the election—the best observed 

election—Yanukovych, of course, was the one who was elected the 

last time—a very well observed election, I might add. 

Matter of fact, Chris Smith was there observing that election and 

gave that election a very big plus. Yanukovych was elected so he 

does represent a significant point of view in that country. 

Is there someone from his party who is going to be on the ballot? 

Ms. NULAND. In fact, his party, the Party of Regions, is fielding 

four of the 23 candidates who are registered. Communists are also 

37

there. Every single color of the political spectrum in Ukraine and 

every region is represented among the 23 candidates. So there is 

somebody for everybody to vote for. 

Mr. ROHRABACHER. So it is better—it is more than just the best 

observed election. It is a legitimate election. 

Ms. NULAND. That is what the OSCE assesses. 

Mr. ROHRABACHER. Right. Well, we did have an election. We did 

have a legitimate election before and the elected President was removed after we had major street violence and reaction to his decision of going with an economic agreement with Russia rather than 

the EU. 

About that street violence that happened that led to this—Mr. 

Yanukovych’s removal, there were pictures that people—people 

were running around with these—that were, we were told, were 

neo-Nazis. Is that—were there neo-Nazis in those effort—street violence that led to Mr. Yanukovych’s removal? 

Ms. NULAND. First of all, the vast majority of those who participated on the Maidan were peaceful protestors. If you had a chance 

to see the pictures—many of us visited, including many members 

here—there were mothers and grandmothers and veterans and 

every——

Mr. ROHRABACHER. Yes. Let me note that I have——

Ms. NULAND. However——

Mr. ROHRABACHER. Before you go on, I saw those pictures as 

well. I also saw a lot of pictures of people throwing fire bombs at 

groups of policemen who were huddled in the—over in a corner. 

There were people shooting into the ranks of police. So yes, there 

were mothers with flowers, but there were also very dangerous 

street fighters who were engaged in those demonstrations. The 

question is were there neo-Nazi groups involved in that? 

Ms. NULAND. There were—as I said, almost every color of 

Ukraine was represented including some—including some ugly colors. 

Mr. ROHRABACHER. So the answer is—the answer is yes then. 

Ms. NULAND. But if I could say that with regard to the violence, 

all of those incidents are subject to investigation, notably including 

the deadly sniper incident in February, and there is good evidence 

to believe that there were outside agitators involved in that. 

Mr. ROHRABACHER. Was there any indication that there were 

guns being involved with the anti-government demonstrators at 

that time? 

Ms. NULAND. There is no question that as the protests became 

more and more virulent, and as the response of Yanukovych’s police became more and more brutal, the tensions and the potential 

for use of weapons escalated on both sides——

Mr. ROHRABACHER. On both sides. 

Ms. NULAND [continuing]. Which was why we were——

Mr. ROHRABACHER. That is correct. 

Ms. NULAND [continuing]. So intent on a political settlement in 

February. 

Mr. ROHRABACHER. I have one last question before my time is totally up and that is were those—the neo-Nazi groups that we are 

talking about here, which, again, were not dominating this. 

38

There were very many, very good people, like you say, out demonstrating against this deal with Russia. They wanted to go with 

more of a European country than a pro-Russian country. 

But those people who were not the good guys, but were part of 

that effort to push that country in that direction, were any of those 

neo-Nazi groups affiliated with any other Nazi groups in other 

countries? 

Ms. NULAND. Congressman, what I can tell you—I don’t know 

what the answer to that specific question with regard to the early 

period is. 

What I can tell you is that in the violence and separatism that 

we have seen in the recent months, we have also seen recruiting 

on the neo-Nazi and fascist sites in Russia for volunteers to go participate in the seizing of buildings in Eastern Ukraine and the 

Ukrainians report stopping very large numbers of such people at 

the Ukrainian-Russian borders. 

Mr. ROHRABACHER. I am sure. But you haven’t seen that—any 

evidence that there are people in Western Europe—neo-Nazi 

groups that were supporting their brothers in Ukraine? 

Ms. NULAND. I don’t have any information to corroborate that. 

But I would refer you to the Ukrainians as they investigate these 

incidents of violence. 

Mr. ROHRABACHER. Thank you. 

Chairman ROYCE. Brad, did you want to yield for the moment? 

Okay. We go now to Mr. Ted Deutch of Florida. 

Mr. DEUTCH. Thank you. Thank you, Mr. Chairman, and thank 

you, Mr. Sherman, for yielding. 

I want to thank you, Mr. Chairman, and Ranking Member Engel 

for your continued focus on the crisis in Ukraine. You have acted 

swiftly and with resolve since Russia’s first provocations and because of that the world knows where this Congress stands. 

Ambassador Nuland, Assistant Secretary Glaser, as you are well 

familiar there are many moving parts to this situation. Rightfully, 

the United States has been in the forefront taking aggressive economic action to dissuade the Russian Government from any further 

meddling in the domestic events of another country, providing 

Ukraine with a loan guarantee and non-lethal military aid to bolster their ability to withstand subversive external pressure. 

And we are working closely with our European allies to create 

a unified front against Russian influence in Ukraine. We must sustain this pressure until we are sufficiently reassured and can verify 

that the Russian Government will not continue to stir dissent within Ukraine’s borders or threaten the territorial integrity of any of 

its neighbors. 

But I want to talk about the way we are working with our European allies to achieve that. Ambassador Nuland, you had said earlier that sector-based sanctions may be something we consider if 

needed. 

Now, for all of us who have been so involved in Iran’s sanctions, 

it is the sector-based sanctions that we know are so effective and 

what I would like you to do is explain, one, what those sector-based 

sanctions will look like and, two, given that European trade with 

Russia is 10 times greater than that between the United States 

and Russia, what do we do to bring our European allies firmly on 

39

board, especially at a time when there are some in Europe—some 

former government officials who were deeply involved in the Russian economy? 

What do we do? What should that look like? When will it be necessary and how do we ensure that we can go forward together with 

our European allies? 

Ms. NULAND. Thanks, Congressman, and I would invite Assistant 

Secretary Glaser, who is the sanctions expert, to jump in here. But 

as we develop this sectoral approach, the idea here is, as I said, 

to use a scalpel rather than a hammer, to focus primarily on hightech and other investment where Russia needs us far more than we 

need Russia. 

I don’t want to get into too much detail, but to say that the approach would also involve taking a sectoral slice across a bunch of 

different sectors at the same time such that the pain is shared 

among sectors of the economy and to help keep Europeans together 

because different ones are vulnerable in different sectors. 

But we do think that we can be quite effective. I would note that 

whereas Europe trades 9 percent with Russia, Russia’s trade is 50 

percent based in Europe. 

So they are far more vulnerable and we do believe that they are 

particularly vulnerable in the area of the high-tech imports that 

they need to take their economy to the next stage. I don’t know if 

Assistant Secretary Glaser wants to add. 

Mr. DEUTCH. Mr. Glaser. 

Mr. GLASER. Thank you, Congressman, and thank you—thank 

you for the question. You know, you and I have spoken many, 

many times about strategically applying targeted sanctions. So I 

don’t think I am telling you anything that you don’t already know. 

If you look at the way we have applied targeted measures in the 

past in a strategic way—it has been pursuant to an escalation, 

which, as you say in certain cases, culminated in broad targeting 

of sectors. 

When that happened in the case of Iran, it happened well into 

the escalation and into the strategy and then it also happened, if 

you will recall, in that same summer in the context of Europe taking significant action to target virtually every bank that the United 

States was targeting and that is—all that together is why it was 

so effective. 

Now, in this case, I understand that we are operating on a much 

more compressed time frame. There is much more urgency with respect to acting quickly on that and that is why you see us taking 

similar sorts of measures on a somewhat sort of compressed time 

frame. 

We have started off by targeting individuals. We have targeted 

individuals, which have significant holdings throughout their Russian financial economic sector. I think we have already significantly weakened it and now we are in conversations with our European colleagues on how to, in a very smart way, do exactly what 

you want us to do, which is target sectors more broadly. 

Mr. DEUTCH. I appreciate that. Just in my final seconds, I wanted to follow up on something that was in the New York Times on 

Monday. At the end of a report it said that Ukrainian security 

40

forces stopped the transport of contraband uranium that originated 

in Transnistria. 

It is alarming that any amount of radioactive material would be 

in the hands of non-state actors, both for Ukraine’s defenses and 

for regional security and stability. Can you comment on that report? We have not seen it widely reported. How concerned should 

we be? Where does this come from? 

Ms. NULAND. Well, it just—it speaks to the lawlessness on borders and the fact that we are going to have to continue to help the 

Ukrainians going forward with border security. We are involved in 

supporting them in this incident. 

Mr. DEUTCH. Right. Thank you, and thank you. I will yield back 

to the chairman. Thank you again, Mr. Sherman. But I—but I yield 

to Mr. Chabot. 

Mr. CHABOT. Thank you. I appreciate the chairman yielding. 

Madam Ambassador, let me start out with, first of all, relative 

to Crimea, there seems to be often in the stories that we read and 

the attitude and the statements that are made relative to Crimea 

that it is more or less a fait accompli now. 

It has occurred. Russia won. It has now been annexed. Crimea 

is now part of Russia, which I certainly don’t share that attitude, 

and I would like to hear what the administration has to say about 

that. 

It is almost like we are completely focused now on, you know, 

Eastern Ukraine and we have to make sure that Putin doesn’t do 

the same thing there he did in Crimea, but Crimea is gone, and 

I am very concerned about that attitude. Could you address that, 

please? 

Ms. NULAND. We are concerned, too, Congressman. That is why 

in the most recent round of sanctions that we did, not the round 

a week ago but 2 weeks ago, we deepened and broadened the sanctions on those who have taken up illegal posts in Crimea. 

We sanctioned all of the leaders of the illegal Crimean Government. We also sanctioned a major gas entity that had been expropriated by Russia and we are continuing to look at more targets 

in Crimea and more targets in Russia associated with Crimea and 

we will do that. 

I would just take this opportunity to say that we are also gravely 

concerned about the deteriorating human rights situation inside 

Crimea where there appears to be a mirroring of some of the practices that Russia exercises at home. 

Mr. CHABOT. Thank you. I would just urge the administration in 

both their statements and their interactions with Russia especially, 

but with our allies and everybody else not to fall into that trap 

where we just sort of, even without acknowledging that it is a fait 

accompli, and therefore let us move on and try to keep them from 

going even further because I do not think that we ought to consider 

Crimea to be an unalterable part of Russia at this point on. 

Let me move on. In your statement, you had quoted President 

Obama, his March 20th statement, which I will quote again here: 

‘‘America’s support for our NATO allies is unwavering. We are 

bound together by our profound Article 5 commitment to defend 

one another,’’ and that is our NATO allies. 

41

Now, of course, Ukraine is not a member of NATO and so I just 

want to make sure here, is that unwavering commitment of our 

support or how wavering or unwavering is it for the Ukraine since 

they are not a part of NATO? Although the Clinton administration, 

of course, signed the Budapest Memorandum which, after Ukraine 

gave up their nukes basically—you can interpret it different ways 

but many would interpret it that the Brits and us and Russia more 

or less guaranteed or ensured the sovereignty of Ukraine, which 

has clearly been violated by Russia’s actions here. Could you comment on just how unwavering our commitment to Ukraine is? 

Ms. NULAND. Thanks, Congressman. The President’s statement 

referred to our solemn treaty commitment ratified by the Senate to 

mutual defensive NATO allies. As you know, Ukraine is not a 

member of NATO and therefore is not covered by the U.S. security 

guarantee. 

That said, we have had a long and deep 20-year security relationship with Ukraine and this Congress has authorized significant 

support for our military-to-military relationship, including helping 

Ukraine deploy with us to Afghanistan, to Kosovo. 

We believe that some of the support we have given to the 

Ukrainian military over the years, including miliary education, 

contributed to their refusal to fire on their own people when 

Yanukovych wanted them to. 

And then, as you know, in recent months, we have contributed 

$18 million in non-lethal assistance to Ukrainian security forces 

and to the border guards. As we mentioned, border guard—border 

defense is absolutely essential to keep separatists and thugs out of 

Ukraine. 

Mr. CHABOT. Thank you. I have only got about 30 seconds left 

so I will be real quick on this final question. What is the administration and our allies doing to counter the Russian propaganda in 

the Ukraine and what is being done by the West and by the U.S., 

in particular, to assist Ukraine in disbursing the truth out there, 

particularly prior to an election? 

We, obviously, don’t want to get involved in who wins but what 

are we doing to get the truth out there? 

Ms. NULAND. We have a very sizeable public diplomacy program 

in Ukraine. We also have mounted in the last couple of months, 

under Under Secretary for Public Diplomacy Rick Stengel’s authority, an all-of-government effort to counteract Putin’s lies. It includes our ‘‘United for Ukraine’’ Twitter campaign, which now has 

totally outstripped government. 

Only 5 percent of the content is government. It is 95 percent now 

a public conversation. We put out a regular product twice a week 

to all of our Embassies, to all of our contacts in the media around 

the world and particularly in Europe, counteracting falsehoods and 

putting out truths. 

We have recently increased the support we give to the Ukrainian 

Government for its own media center. But as we talked about at 

the beginning of the hearing, among the difficulties we face is this 

massive Russian propaganda campaign that includes separatists 

dismantling TV towers in the east of Ukraine to ensure that only 

Russian programming gets through. But also that there are no 

42

journalistic standards, including the standard of truth in what is 

being pumped out. 

So it is very important and we are very grateful that you are continuing to look at how to get us back to the kinds of tools that we 

used to have for this kind of—this kind of an effort. 

Mr. CHABOT. Thank you. Yield back. 

Mr. ROHRABACHER. Yes. Mr. Brad Sherman. 

Mr. SHERMAN. One of the thorniest issues in foreign policy is 

self-determination versus territorial integrity. We supported the 

independence of South Sudan and accepted the independence of 

Eritrea. 

In Europe, we supported the independence of each of the republics of the Union of Soviet Socialist Republics. We supported the 

independence of each of the republics of the Federation of Yugoslavia. We created the independence of Kosovo. 

On the other hand, we oppose the independence of Northern 

Kosovo. We oppose the independence of the Krajina region of Croatia, which was inhabited by Serbs. We oppose the independence 

of Abkhazia in South Ossetia and we, of course, oppose the independence or any other action with Crimea. 

Seems kind of haphazard. In Moscow, they note, that although 

I have identified, like, 30 different decisions we have had to make 

in Europe that seem haphazard every single one of those decisions 

is the anti-Moscow decision. 

What are our policies? When are we in favor of territorial integrity? When are we in favor of self-determination? When are we 

cheering on the people of South Sudan or Croatia? When are we 

opposed—why do we oppose the independence of Northern Kosovo? 

Is there—is it haphazard, Ambassador? 

Ms. NULAND. Congressman, thanks for the opportunity to remind, that in keeping with the U.N. Charter, the United States 

and our European allies and most civilized nations on the planet 

oppose the changing of borders by force, and that is what happened 

in Crimea or that was the effort in Crimea. With regard to 

Kosovo——

Mr. SHERMAN. Are you saying that Northern Kosovo is not—well, 

that Kosovo was in force, South Sudan was in force? 

Ms. NULAND. Kosovo was, first and foremost, a victim of a marauding military operation of ethnic cleansing by Milosevic, which, 

as you know, the international community spent more than a decade trying to pacify——

Mr. SHERMAN. Well, there was certainly force in the——

Ms. NULAND [continuing]. And the decision on independence was 

the result of a referendum of the people. 

Mr. SHERMAN. The independence of several of the Yugoslav republics was achieved by force. There are—it is not like every time 

we have supported independence it was some clean, bloodless operation. 

But I will agree with you the people of Kosovo had—survived 

some terrible onslaughts that caused for change. Let me shift to 

another issue. Has the Right Sector militia been disarmed and has 

Kiev tried very hard to disarm them? 

Ms. NULAND. The Government of Ukraine has made a massive 

effort to disarm the Pravy Sector—to lock up those leaders who 

43

have been found to use violence. They are also putting them on 

trial. They have also offered a weapons buy-back program and they 

are working very intensively in the——

Mr. SHERMAN. How successful has that effort been? 

Ms. NULAND. They have made significant progress and there is 

more progress to make. 

Mr. SHERMAN. The Language Law of 2012 in the Ukraine gave 

special treatment or security to those who speak Russian. There 

was an attempt to repeal that law. I believe that repeal was vetoed. 

Has the—have the leaders of the Ukraine committed to their own 

people or committed to the world that they are willing to keep that 

law in force or are we in the United States in a situation where 

we may suffer costs and disruption and danger because Kiev wants 

to repeal a language law? 

Ms. NULAND. Well, as you said, Congressman, that effort to repeal the law was vetoed by Acting President Turchynov. The 

Ukrainian Constitutional Commission and the current government 

have made broad statements to the effect that language rights will 

be protected in the constitutional reform process. 

You know that Ukraine currently has one of the most liberal language regimes in the world where, if you have 10 percent local population they can study, they can have local services in their local 

language. 

So the expectation is that that will be continued, but it is a matter for the Ukrainian people to decide——

Mr. SHERMAN. Let me——

Ms. NULAND [continuing]. In the constitutional reform process. 

Mr. SHERMAN. Will you squeeze in one more question? Some 

have proposed that we export natural gas to the Ukraine. The 

Ukraines can’t afford to buy that natural gas for $10 a unit from 

Russia. 

The Japanese bid $15 or $16 per unit for natural gas that they 

purchase on the world market, which means anybody exporting 

natural gas from the United States would sell it to the—for the 

world market price. 

Do you know of a pot of money that would allow us to subsidize 

Ukrainian natural gas purchases that came from us and from our 

private companies? Do you got tens of billions of dollars lying 

around to do that? 

Ms. NULAND. Congressman, it is not—it is not actually going to 

go that way. What we are working on to help Ukraine with its energy independence are a number of things. The fastest short-term 

step is to help with reverse flows of gas from the European market 

into Ukraine. 

We have worked intensively with the EU, with Slovakia, with 

Ukraine to get that reverse flow going. It is also coming now from 

Poland, from Hungary. 

Mr. SHERMAN. And but——

Ms. NULAND. But over the longer term it goes to Ukraine’s own 

resources——

Mr. SHERMAN. Ambassador, you have—here in Congress we are 

all talking about exporting U.S. gas to the Ukraine. So that was 

the question, but we will have to go on to someone else. 

44

Mr. ROHRABACHER. Thank you very much. Next we have Judge 

Poe. 

Mr. POE. I thank the chairman. Thank you for being here. I 

share my friend’s frustration with U.S. foreign policy because even 

though I thought he asked the question very well about when do 

we support self-determination and when do we support a current 

government, sorry, I didn’t get an answer. 

I don’t know what our policy is. It seems to me like a decision 

is made at the time and I am not sure whose interest it is made 

in. 

It seems to me that the Russians—and I was in Ukraine with 

some other Members of Congress and saw first hand the people at 

Maidan and also saw the memorial to all that were killed by the 

old government—the civilians. 

The Russians believe in creating a crisis in somebody else’s country, unrest—political unrest—and then the Russians want to go in 

militarily or some other way and solve the unrest. 

It seems like they did that in Georgia. The world got all upset 

about the Russians taking one-third of the Georgian country, but 

the Russian tanks are still there. I saw them not too long ago. And 

now they went into Crimea. The world said that is not nice and 

they are still there. 

It looks to me like they are moving into the eastern part of 

Ukraine. I think we have a map, if we could show this—members 

also have their own personal copy, if we can put this map up, let 

me just know when you are ready—of what the Russian troops look 

like on the Ukrainian border. 

It is a little scary if you live on that side of Ukraine, and I met 

with other countries—Moldova—in Parliament yesterday. They all 

want to talk about we are next—we think the Russians are taking 

us next, and other countries are very concerned that the Russian 

mode of operation is to cause a crisis, go in, solve the crisis, intimidate countries. And I think that is what they want to do with 

Ukraine—intimidate them into ceding some of that land. 

But we shall see. Is the purpose of the sanctions—American 

sanctions—to stop the Russians where they are? Or is the purpose 

of the American sanctions to say you not only can’t go any further, 

you have got to give Crimea back? Which of those two? It has got 

to be one or the other. 

Ms. NULAND. The latter, Congressman. 

Mr. POE. So we want them out of Crimea? 

Ms. NULAND. We do not recognize their occupation of Crimea and 

they need to roll back, and they need to get their 40,000 troops off 

Ukraine’s borders as well. I have talked, as you just did, about the 

arsonist setting the fire and then coming in dressed as the fireman——

Mr. POE. Oh, yes. 

Ms. NULAND [continuing]. And then occupying the building. 

Mr. POE. And the Russian special forces going into Georgia 

dressed like Georgians, if you will, and then they come in to Crimea and now in Eastern Europe and they cause the hostilities. 

There are Russian special forces causing these disturbances, according to some reports. Do you believe those reports, Ambassador? 

45

Ms. NULAND. We have high confidence, I can say, in a setting 

like this of Russian involvement in the planning, financing, and organizing of these efforts to destabilize Eastern Ukraine, including 

the presence of Russian agents. 

Mr. POE. I would say that the purpose of sanctions—I don’t think 

it worked, in all fairness. I don’t think they stopped Russians from 

doing anything. 

But if we impose further sanctions, I hope we are careful that we 

don’t punish American companies. We punish—if we are punishing 

somebody, we punish the Russian economy, if you will, and are 

careful about what we do to American companies. 

I think, you know, as far as the sanctions go I think, to coin a 

phrase, the proof is in the Putin and in this case it hasn’t seemed 

to stop him at all in what he wants to do. 

Here is a map. You have, I think, a small one there in front of 

you. I hope somebody gave you the small one. If you can’t see it 

then we will come back to it before my 5 minutes is up. Supply the 

witnesses with a smaller map. It is not a trick question. 

I just want you to look at it, see if you agree that this might be 

the Russian mode of operation and where the Russians are on 

Eastern Ukraine. 

Georgia, I want to go back to Georgia—their security operation, 

they want to be in NATO. Does the United States—on the upcoming NATO conference—do we support offering Georgia a MAP? We 

support that? 

Ms. NULAND. We have long believed that Georgia has met the 

criteria for MAP. The concern is that we have to have 28 votes in 

the alliance in order to grant them MAP and we don’t have them 

at the moment. 

Mr. POE. Okay. I do believe we ought to help Europe economically, and it is one way we need to—we can help this crisis is if 

we give the Europeans—not just Ukraine but Europeans an alternative to Gazprom. I was in Ukraine when the Russians turned the 

gas off. It was cold. It was dark. They need an alternative. 

We have got an abundance of both natural gas and crude oil. I 

would hope the administration would expedite the sale to Europe 

of those products to give competition to ease the tensions in the 

area. 

I am almost out of time. If I could ask one more question, Mr. 

Chairman. Lok at the map that I just showed you. If I were 

Ukrainian I would be a little nervous about all the Russian movement from Russia up to the border. 

Do you think that is a fair analysis of what the Russians have 

done toward Ukraine? Either one or both of you. That will be my 

last question. 

Ms. NULAND. We do believe that this deployment of troops ringing Ukraine’s border is designed to be intimidational, yes. 

Mr. POE. And they are still there? 

Ms. NULAND. They are. They have been on high alert for some 

3 months. It must be extremely expensive. 

Mr. POE. All right. Thank you both. I yield back, Mr. Chairman. 

Chairman ROYCE. Thank you, sir. The chair will now recognize 

Mr. Keating from Massachusetts. 

46

Mr. KEATING. Thank you, Mr. Chairman. You mentioned briefly 

about the human rights issues in Crimea and I am concerned particularly with the Tatar population that is there. 

In response to peaceful protests, Russian authorities have reportedly beaten some Tatar leaders, forced others into exile. Russian 

authorities have also threatened to shut down Tatar communities’ 

Parliament. 

What is your assessment, particularly of the Tatar population in 

Crimea, and do you expect any tensions in that regard to even 

grow when we get around to May 18th and the 70th anniversary 

of the Soviet Union’s forced deportation of Crimean Tatars? 

Ms. NULAND. Congressman, we are extremely concerned about 

the human rights situation for all Crimeans, but notably for Tatars. I think you know what we know, which is, first and foremost, 

that the Crimean Tatar leader himself, Mustafa Dzhemilev, has 

been banned from Crimea until 2019. 

We had a Euromaidan Crimean activist abducted in Sevastopol 

and tortured. We have had more than 7,000 IDPs come out of—

come out of Crimea in this period. 

The local Crimeans are being told that they have to vacate their 

property, give up their land and, as you say, the 70th anniversary 

is coming. So our grave concern is that Russia is cloning its local 

human rights practices in Crimea now. 

Mr. KEATING. There is one thing I think that is important to underscore to those from the outside looking at today’s hearing and 

that is the fact that when we are talking about our actions and we 

are talking about diplomatic solutions, it is important to really underscore the fact that this isn’t about Russia and the United States 

determining the future of Ukraine, but the Ukraines—the Ukrainian people themselves. 

What can we do to continue to get that message across to the 

rest of the world? You made it clear, I think, here to us that that 

is important, but I think it is an important message to underscore. 

Ms. NULAND. Absolutely, Congressman, and that speaks, first 

and foremost, to ensuring that this election on May 25th, where 

every eligible Ukrainian voter—north, south, east or west—gets a 

chance to express their will about their future from a slate of 23 

candidates, takes place. 

But it also speaks to the great care that we are taking in our diplomatic conversations with Europe, with Russia, with the OSCE. 

Nothing about Ukraine without Ukraine. They must be part of all 

of this. 

Mr. KEATING. Great. An important point, and I yield back, Mr. 

Chairman. 

Mr. CONNOLLY. Would the gentleman yield? 

Mr. KEATING. Yes. The gentleman yields to——

Mr. CONNOLLY. I thank the gentleman, and welcome to both of 

you. Mr. Glaser, you particularly enumerated, as did Ambassador 

Nuland, the economic consequences to Russia, and they are growing. To what extent do we believe that Putin is feeling that pressure from his own business community and is cognizant of the macroeconomic consequences that can ensue, even absent sanctions 

just because of their behavior—his own behavior? 

47

Ms. NULAND. Congressman, one of the parlor games that I have 

found it unlucky to play is to try to get inside the head of President 

Putin and speculate as to what he knows. But the facts and the 

economic statistics are—could only smack any sane person in the 

head. So——

Mr. CONNOLLY. Do you think he calculated that and made a calculated risk when he did what he did in Crimea nonetheless? I 

mean, you just said, ‘‘sane person.’’ Certainly, you don’t think Mr. 

Putin is something other than sane, do you? 

Ms. NULAND. I didn’t mean to make any calculation with regard 

to his mental state. But I do believe that——

Mr. CONNOLLY. Do you want to speculate? 

Ms. NULAND. But I do believe that the degree to which the Russian economy is integrated now into the global economy, which is 

a different situation than the one that he grew up with, causes 

vulnerabilities that may not be well understood by folks who don’t 

work in the business sector day in and day out. 

Mr. CONNOLLY. Yes. And let me just ask one more question real 

quickly. I want to go back to the whole question of our European 

allies. 

There have been some, both in the media and here in Congress, 

who kind of look at our State Department, our approach on possible sanctions—coordinated sanctions as a bit of a feckless enterprise, given the reluctance of the Europeans, frankly, to do anything tough, and perhaps we haven’t been all that tough on them 

to get tough. I wonder if you would comment on that. 

Mr. GLASER. I am happy to try to take that question, Congressman. I think that we have been quite tough to date and I think 

that things are only going to get tougher and tougher for the Russians if the situation continues to escalate. I think the President 

has made that quite clear. 

Mr. CONNOLLY. Mr. Glaser, the question, though, was how tough 

are the Europeans willing to be and how tough are we being on 

them to be so? 

Mr. GLASER. Well, I think last week President Obama and Chairman Merkel stood—Chancellor Merkel stood up together and made 

quite clear that if the May 25th elections were disrupted then the 

United States and Europe were going to take significant actions 

and President Obama made quite clear that very well could include 

sectoral sanctions. 

And on the heels of that, we have a very senior group—Under 

Secretary Cohen, Ambassador Fried—in Europe right now working 

with the Europeans to determine exactly what that would be. 

Europe works sometimes on different processes than we have. 

We have certain advantages in the way our sanctions program 

works. It allows us to be a bit faster and sometimes we are a bit 

stronger and I don’t think we should be shy about that. 

I think the key is that we are both moving in the same direction, 

creating the market uncertainties and I think we are doing that 

and I very much hope that when we—that if things don’t go as we 

want them to go with respect to the elections, we are going to be 

prepared to take very, very significant measures that will have significant impacts on the Russian economy and that would include 

the Europeans as well. 

48

Ms. NULAND. I would just add that in every single diplomatic 

conversation between any European and any American at any level 

over the last 6 weeks the issue of sanctions has been topics one, 

two and three along with our efforts to work with Europe to deescalate the conflict. 

Chairman ROYCE. We are going to go to Mr. Ron——

Mr. CONNOLLY. I thank my friend. 

Chairman ROYCE [continuing]. DeSantis from Florida. 

Mr. CONNOLLY. Yielding. 

Mr. DESANTIS. Thank you, Mr. Chairman. Ambassador Nuland, 

does the administration assess that the actions of Russia may require us to relook at our force posture in Europe and our requirements for future deployments, exercises and training in the region? 

Ms. NULAND. Congressman, I would say that the NATO reassurance mission that you are seeing begin to deploy out and which I 

spoke about at the beginning already constitutes a change in the 

way we are postured, that reassurance in Article 5 have come back 

to the forefront of the alliance’s business. 

With regard to the medium and the long-term, I think it depends 

on what we see from Russia and whether we are able to de-escalate 

this. As you know, the current mission, which has land, air and sea 

reassurance and visible exercising, goes through the end of 2014. 

When we have our NATO summit in Wales in September, we 

will evaluate just the question that you have, whether more needs 

to be done and where and how. 

Mr. DESANTIS. So at this time there is no either commitment or 

plan to have a presence on a more permanent basis in some of the 

region? 

Ms. NULAND. I think that we are open to doing what is—what 

is necessary as we see the situation evolve. But I would simply say 

that it has already caused the Pentagon to look at plans that it had 

about how to posture globally and they are working on that now. 

Mr. DESANTIS. And some of our allies—our NATO allies like Latvia, Estonia, Lithuania, Poland—what have they, if anything, 

asked of us in this regard? 

Ms. NULAND. We have fulfilled—the U.S. has fulfilled all of the 

asks that we have had, which were primarily for increased air policing and for ground troops. As I said at the outset, we have 750 

U.S. troops now, including deployments in all of the Baltic States, 

and that has been very reassuring. 

They have also wanted the high-level visits that they have had 

from Members of Congress, from the Vice President, from others. 

We will continue to look at what more might be appropriate. 

As you know, we opened a new base in Estonia or we supported 

use of an Estonian base for NATO missions. So we will keep looking at that. 

Mr. DESANTIS. Now, in light of what has happened with Ukraine, 

Putin has taken this position that well, look, all these people are 

Russians—I am actually saving them by violating Ukrainian sovereignty, and that same argument could obviously be applied to 

Latvia, Estonia, and some of our NATO allies because they have 

ethnic Russian populations. 

49

And so if that kind of pretext were used in some place like Latvia, you would—the administration’s position would be that Article 

5 of NATO would, clearly, be invoked? 

Ms. NULAND. Absolutely. We have a solemn treaty commitment 

to our NATO allies. 

Mr. DESANTIS. And how do you—and maybe this is just news reports, but there have been some reports coming out of Latvia of—

even though we have assured them that we stand shoulder to 

shoulder, there is a lot of fear about what would happen and 

whether we would be willing, if push came to shove, to actually 

stand with them. 

So I am wondering—is that something that you have received 

from folks in Latvia or is that kind of the press puffing this up? 

Ms. NULAND. No. They are very concerned. They are now frontline states, a word I never wanted to use again in my career, but 

we have to use now. So that is why the physical reassurance of 

having American ground troops, having American planes in the air 

and now working with other allies to also join us in the Baltic 

states, in Poland, in Romania, in Bulgaria is so important. 

Mr. DESANTIS. So, but is the fear—of course, there is fear from—

about Russia may do, but is there—is that fear amplified because 

of perhaps not knowing what we may do or do you think that they 

are satisfied that we would be there to support them? 

Ms. NULAND. Again, I think the reassurance mission and the arrival particularly of ground troops has gone a long way toward 

making it clear that we intend to honor our commitments. But we 

have to continue to talk to them and evaluate what they need. 

Mr. DESANTIS. Thank you for that, and I yield back the balance 

of my time. 

Chairman ROYCE. Thank you. We go now to Mr. David Cicilline 

of Rhode Island. 

Mr. CICILLINE. Thank you, Mr. Chairman, and I thank you for 

this hearing and also for leading our delegation recently to 

Ukraine. I thank Ambassador Nuland and Secretary Glaser for 

being here. 

I think it is very clear and I hope this hearing reinforces the notion that there are tremendous consequences, obviously, for the 

Ukrainian people for what is currently happening there, but also 

for the region and, ultimately, significant geopolitical consequences 

for the world, including the national security of our own country. 

So we—I think we are—our assessment is the same as yours, 

that there was significant evidence of Russia’s involvement in planning, organizing and inciting events inside of Ukraine and we were 

also, I think, struck by the overwhelming Ukrainian support for a 

unified democratic country and that includes in Crimea. 

And I think, you know, to build on a question earlier about our 

ability to kind of support a response to this incredibly sophisticated, incredibly well-financed Russian propaganda machine that 

includes taking over television stations and denying access to 

Ukrainian television so they are receiving all of their information 

from Russian television. 

And I was very happy to hear the efforts that you described and 

whatever else you think we can do in the Congress to support that. 

50

I think it is critical. I know it is an important issue the chairman 

raised, but we saw lots of evidence of that. 

Second thing I want to mention is there was a recent report in 

the Sunday New York Times that began to reveal some of the kind 

of wealth that President Putin has accumulated and questioned 

some of the ways in which that has happened, and it would be useful, I think, for the world to understand more about that. 

And to the extent that the State Department and others can 

share that information I think the Russian people have a right to 

know that. Certainly, the Ukrainian people have a right to know 

that. 

What I want to ask you about is specifically, Ambassador 

Nuland, is the NATO and European response. While your fourth 

pillar spoke about the importance of kind of reassuring our NATO 

allies and, obviously, that is critical, but I also hope it is an opportunity for our NATO partners to reexamine their own commitments 

to NATO and to sort of understand that they have maybe, in almost every instance but I think four countries, not met the requirements, and while this is of grave concern to us because of the geopolitical implications, it is on the front door of many of our European allies, and so I would like you to speak to that. 

Do they understand that? Are they beginning to use this as an 

opportunity to kind of reawaken the importance of NATO and recommit to its role? And then, secondly, if you would just speak to 

the human rights violations in Crimea to the extent that you can. 

I think we should know as much about that as we can. And I want 

to also mention before I forget to thank you for your staff that were 

a part of accommodating our visit. It was a very productive visit 

and the Embassy staff there were outstanding. 

Ms. NULAND. Thank you, Congressman. We are very proud of our 

Embassy in Kiev led by Ambassador Pyatt. First, with regard to 

the new reality that NATO cannot simply be an exporter of security beyond its space, as we had been focusing on throughout the 

past 20 years, but that Article 5 is back as an area of primary focus 

for the alliance, I think it has been a wake-up call for all of us and 

if, as you saw when the President was in Europe in March, and I 

think you will see when he goes back to Europe in June, he is 

availing himself of every opportunity he has with European leaders 

to say it is time now to reverse the slide in European defense 

spending. 

He certainly raised that with Chancellor Merkel. He will raise it 

with everybody else, and we are looking for each ally to do their 

part going forward. And, frankly, this reassurance mission is not 

cheap either so people are having to find budget and find capability. 

With regard to the human rights abuses in Crimea, I don’t know 

if you were in the room when I answered Congressman Keating’s 

question, but I went through some of what we are seeing—first and 

foremost, the Crimean leader himself being blocked from returning 

to Crimea until 2019, 7,200 IDPs, mostly Crimean Tatars, having 

fled from the Crimean Peninsula, concerns that local authorities 

have now announced the Crimean Tatars are going to have to vacate their property, give up their land, particularly if they refuse 

to take Russian citizenship. 

51

So very, very concerned now that the human rights standards of 

Russia have migrated to Crimea. 

Mr. CICILLINE. And just if I could ask one final question. I think 

the chairman mentioned this—from everyone that we spoke to, 

they all see the Presidential elections on May 25th as a very important turning point and all of the efforts of the Russians and particularly President Putin to destabilize Ukraine to try to prevent 

those elections from happening as a key strategy of the sort of aggressive—aggression plan. 

Are there additional things we can be doing or encouraging our 

European partners to do to make sure those elections happen and 

that they are free and fair and that the Ukrainian people get to 

decide who their democratically elected President will be? 

Ms. NULAND. Well, as we have been saying, you are absolutely 

right. This is the opportunity. If you really care what the people 

of the East think, let them vote and let them vote for one of these 

23 candidates. Let them express themselves politically. 

So this speaks to two pieces of the strategy. One is all the effort 

that we and the Europeans are putting into the strongest possible 

OSCE ODIHR monitoring mission in the transatlantic space ever 

and the $11 million the U.S. has given to help ensure free, fair 

elections and training. 

The second piece is what we are talking about in terms of the 

President’s press conference with Chancellor Merkel where he said 

efforts by Russia to destabilize or prevent these elections from happening will result in sectoral sanctions. 

That is why we are working so hard now to prepare these sanctions so that that stick is visible and is real and is well understood, 

because we all have to let the Ukrainian people have their say. 

Mr. CICILLINE. Great. Thank you. Thank you, Mr. Chairman. I 

yield back. 

Chairman ROYCE. Thank you, Mr. Cicilline. We now go to Mr. 

Ted Yoho of Florida. 

Mr. YOHO. Thank you, Mr. Chairman. Thank you both for being 

here. I want to touch on Crimea again because you were talking 

about it and it was one of my questions and you answered most 

of it. What is the atmosphere and environment of the pro-Russian 

people in Crimea? 

You just answered about the human rights violations. What are 

you seeing over there? Are they—do they—are they on edge? Do 

you see the country stabilizing? It doesn’t sound like it, and are 

they accepting the separation? 

Ms. NULAND. You are talking about how do ethnic Russians in 

Crimea feel about what has happened? 

Mr. YOHO. Yes, ma’am. 

Ms. NULAND. I don’t think it is a secret that they are not sad 

about what is happening, but there is a great amount of instability 

and lack of confidence in what comes next, including whether they 

are going to get the enormous investment that Russia has promised 

in their economy. 

Mr. YOHO. All right. Are you seeing a functioning government 

there with the people they have elected? 

Ms. NULAND. Frankly, I am not going to take that one because 

I haven’t looked at it very carefully. 

52

Mr. YOHO. Okay. I want to ask you both about the $1 billion loan 

guarantee that we voted here on, which I voted against, but I 

didn’t get it recorded. 

Have we given guaranteed loan guarantees to Ukraine before? 

Ms. NULAND. It is conceivable that we did a facility similar to 

this in the ’90s. I will have to—we will have to check. 

Mr. YOHO. Okay. I am going to submit that and I would like an 

answer on that. And the reason I bring that up is after that vote 

we had, somebody came to visit our office and they thanked me for 

my vote and I told them I had voted against it and he goes, ‘‘I 

know you did, but we realize that is a gift to the Ukrainian people 

that we will never pay back,’’ and that kind of bothered me and I 

shared that with some other Congressmen and they said they had 

no idea of that. 

So I want to check into that. If we are going to help out a country, I would like to get the money back, especially in these tough 

economic times. 

You had also brought up working with Russia in Syria and the 

work that we have with them—you see that going forward with the 

destruction of the chemical weapons. Seems like we have done a 

pretty good job of getting most of those. Do you see that continuing 

and Russia working with us on that? 

Ms. NULAND. Well, as you know, our cooperation with Russia on 

Syria has been mixed. But in the area of chemical weapons, we 

have largely worked fine together. We have now pulled, I think, 92 

percent of the chemical weapons out. We have a final 8 percent. 

Secretary Kerry, as you know, has had probably three phone 

calls with Foreign Minister Lavrov over the last 2 to 3 weeks to 

try to concert U.S. and Russian efforts together. 

Mr. YOHO. Okay. I just want to make sure that was going that 

way and I hope that continues. And what about future space flights 

and returning our astronauts? Because that one person said that 

we could use a trampoline and, you know, those kind of working 

relationships—do you see those continuing? 

Ms. NULAND. That aspect of our space relationship is expected to 

continue, yes. 

Mr. YOHO. All right. And then——

Ms. NULAND. Because it benefits both Russia and the United 

States. 

Mr. YOHO. Okay. And then you were talking about helping 

Ukraine secure its borders and the amount of money that we have 

given—I think you said $187 million, plus $50 million, plus another 

$18 million. And you said—had alluded that we had given them approximately $750 million over the last 5 years. You said roughly 

$180—$150 to $180 million a year. 

Yet the reports I have read say that the Ukrainian Government 

was wrought with corruption. There were human rights abuses, 

and I even heard reports of human trafficking. 

If they had a functioning government now, to go in there now, 

what is going to make the dynamics different that they are going 

to secure the border and do those things that we wish them to do 

with the money that we are lending them or giving them? Not 

lending, giving. 

Ms. NULAND. Well, first of all——

53

Mr. YOHO. Hard-working American taxpayers’ money. 

Ms. NULAND. Right. The vast majority of money we have given 

to Ukraine over these years has not gone to the government. It has 

gone to support independent efforts and to support the NGO sector 

and to support Chernobyl and those kinds of thing. 

But going forward, among the things that the transitional government has already gotten through is the first real anti-corruption 

legislation that we have seen in Ukraine through all of these years. 

So as part of the IMF program preparation, they supported broad 

public procurement, transparency legislation, changes in the way 

energy is dealt with, the agricultural sector, a lot of these sectors 

that have been rife with corruption. Now, granted, these are setting a legislative bar and they now have to be implemented. 

But it was precisely fighting corruption that was one of the main 

motivators for the Maidan movement in the first place. So the expectation is that there will have to be, whoever is elected, broad 

implementation now to clean up Ukraine. 

Mr. YOHO. Thank you for your answers. I yield back. 

Chairman ROYCE. Thank you, Mr. Yoho. We now go to Dr. Ami 

Bera of California. 

Mr. BERA. Thank you, Mr. Chairman, and thank you, Ambassador Nuland and Mr. Glaser. 

You touched on the propaganda machine that is coming out of 

Russia and Moscow and the control of media and information, 

which, if we look back at history, is critical and particularly history 

in this part of Eastern Europe. 

Going back to World War II, going back to the Cold War, one 

mechanism to control the masses and one mechanism to get people 

fighting against each other was that propaganda machine and that 

control of the free flow of information. 

I was glad to hear that we are helping the Ukrainian people use 

social media. The Twitter account was United Ukraine—the 

hashtag. So what are some other mechanisms that we are doing to 

help the Ukrainian people, empower them and get access to credible information? 

Ms. NULAND. Well, as you mentioned a couple of them. So putting forward our own positive information, helping them to get information translated, not just in Ukrainian, but in Russian out to 

counteract all of this. 

We are supporting the government’s media center so that they 

can get positive decisions on decentralization and constitutional reform out in Russian, in Ukrainian, in English as quickly as possible. 

We are also supporting independent media and particularly digital media because that is harder to take down. We support digital 

media in Russia and in Ukraine and that was very effective during 

the Maidan period in getting instant communications. 

But as I said, at the beginning it is very difficult an environment 

where Russia is taking down the infrastructure. 

Mr. BERA. Right, and so a lot of that infrastructure may not have 

existed in the first place, but in terms of cell phone capability and 

so forth and using hand-held devices, have they taken that infrastructure down as well? 

54

Ms. NULAND. Well, it is primarily the TV capacity, which is 

where the vast majority of Eastern Ukrainians get their—get their 

news. So that has been the problem. 

But the government, in its operations to liberate entities, has put 

a priority on liberating TV towers and they did get two back just 

in the last week. But, as you know, when truth is optional, it is 

difficult. So our truth and their truth is what we need to get out. 

Mr. BERA. So we certainly, under Chairman Royce’s leadership, 

you know, are very supportive of increasing our ability—you know, 

Radio Free Europe and other capabilities, to get information out 

and so forth. 

The other thing that I find disturbing, you know, a month ago, 

you know, again, on this kind of propaganda and turning people 

against each other, I found the anti-Semitic fliers that were distributed incredibly reprehensible and very worrisome, given the history. 

Some of the worst tragedies of the Holocaust occurred in Ukraine 

and to, you know, really look at some of these fliers and they very 

much are reminiscent. You know, asking members of a large and 

vibrant Ukrainian Jewish community to register or face deportation, you know, just rings of some trends that are worrisome. 

I am glad that the administration and Secretary Kerry came out 

very strongly against these, and while we don’t know where they 

came from, it is actions like that that I find worrisome. 

Have we seen other trends against, you know, not just the 

Ukrainian Jewish population, but many folks in my community 

fled Russia, fled Ukraine in search of religious freedoms and settled in the Sacramento area. Are we seeing other forms of propaganda or hate? 

Ms. NULAND. We are, not just in Crimea, against all minority 

communities. I can give you some things here. On April 22nd, the 

Holocaust Memorial in Sevastopol was sprayed with a red hammer 

and sickle. The Slovyansk TV tower that was taken over began 

broadcasting anti-Semitic programming. 

We have had Roma fleeing particularly from Slovyansk, but 

other parts of Eastern Ukraine under threats of intimidation. 

There have been death threats against the chief rabbi of Crimea, 

who has now fled. 

Pro-Russian thugs kidnapped priests of the Ukrainian Greek 

Catholic Church in Crimea, interrogated them. So it is bad. It is 

bad. 

Mr. BERA. So just in the few remaining moments, given the history and some of the tragedy and atrocities that have taken place 

in Ukraine during the Holocaust, you know, we have to be very 

vigilant in standing with this and, you know, I think on behalf of 

this entire body we find those acts reprehensible and unacceptable. 

Ms. NULAND. As do we. 

Chairman ROYCE. We go now to Mr. Adam Kinzinger of Illinois. 

Mr. KINZINGER. Thank you, Mr. Chairman, and thank you both 

for being here and for serving your country in such a capacity. I 

apologize I was not here for most of the hearing so I hope I don’t 

touch on questions that were already asked. 

I want to stress a very important thing that I think gets lost in 

this and that is my concern of this idea that we are not hearing 

55

much of a discussion about Crimea anymore and it is almost a feeling that Crimea is just going to go to Russia, and I understand the 

difficulties that we are dealing with and the nature of this whole 

situation. 

But I would just remind everybody in the—about the situation 

in Ukraine that an agreement was signed by these countries to respect the territorial integrity of a country that is now being torn 

apart by a nation like Russia and this is something that is very 

concerning to me, as I know it is very concerning to you all. 

I would like to stress what was said earlier about the support for 

Radio Free Europe. I think that is also very important and I hope 

in Congress we consider that when we are dealing with our budget 

priorities. 

I also would like to mention just the issue of Georgia and what 

has been going on there and put a plug in for NATO enlargement. 

I think when we deal with the membership action plan for Georgia 

as NATO comes together, I hope they will consider putting Georgia 

in that. 

I don’t think Georgia is asking for, you know, Article 5 protection, but at least to get them on the track of understanding that 

America stands with its friends. 

What I would like to actually really touch on and hopefully I 

won’t take all 5 minutes, in 2011, France agreed to sell Russia two 

amphibious assault warships. It was a deal worth about $1.5 billion. 

In fact, the Russians said that they needed this capacity because, 

quote—I guess, kind of quote, in the war in Georgia they were unable to control the Black Sea like they really wanted to. 

So they signed this deal with the French to buy these ships 

called the Mistrals and it is the first-ever sale of a significant offensive military capability by a NATO member to Russia. 

The first of these ships is scheduled to be delivered at the end 

of this year. In fact, I believe that Russian Marines are going to 

be coming to France to, in fact, train on these in the middle of this 

time, which is actually kind of shocking to me. 

In light of the U.S. decision to suspend exports that could 

strengthen the Russian military, does the U.S. believe that France 

should or will proceed with the delivery of these assault ships? 

Ms. NULAND. Congressman, we have regularly and consistently 

expressed our concerns about this sale even before we had the latest Russian actions and we will continue to do so. 

Mr. KINZINGER. Okay. I think it is important just to mention on 

that that, again, at a time when we are looking at what is happening, I would hope the French—I understand the economic pressure and I am not here to bash the French. 

But I think this is a time when the French could stop that sale 

from happening and send a very strong message to the Russians 

and, in fact, I intend to pursue this issue and continue to bring it 

to the attention of the American people, the administration, everyone else. So thank you for your support on that. 

Mr. Chairman, I don’t have a whole lot else. I am sure much of 

the—many of the issues were touched so I would like to yield back 

the remaining 2 minutes. 

56

Chairman ROYCE. We thank the gentleman from Illinois and we 

go to Lois Frankel of Florida. 

Ms. FRANKEL. Thank you, Mr. Chair, and I was very honored to 

travel with you to Ukraine a couple weeks ago and I want to thank 

the staff for their great work and also our State Department that 

helped us over there. 

I want to—first, I just want to answer some of the—we heard 

some comments from some of our colleagues that somehow we 

forced Mr. Yanukovych out. 

I will tell you what we learned. He was very corrupt. This is a 

man who lied, cheated, and stole from his people and really undermined his government and I think that is one of the reasons I am 

so happy that we have been trying to address this corruption, because that does undermine the confidence of people and sets the 

stage for a bully like Putin to—just to move in. 

I actually, after visiting and really trying to study this, I feel—

I am very appreciative of the position that our President has taken 

and our administration, moving carefully with economic sanctions 

because knowing the—how our European allies, how their economy 

is so interwoven with Russia and also dealing with these elections 

that are coming up, having fair and free elections, dealing—continuing to deal with the ethics and transparency, the corruption in 

Ukraine’s Government and also trying to help them toward some 

type of energy efficiency. 

With all that said, here is what I think is missing, and I know 

we have had some discussion here today about why we are involved 

with Ukraine—why this should matter. I believe it matters after 

being there and after studying this and I think one of our colleagues talked about the assurances we gave to Ukraine when they 

gave up a nuclear arsenal that they would keep their territorial integrity. 

There are some other things that go with it, too—the nervousness of our NATO allies, what would happen if you had a failed 

state and so forth. But I would like to hear from you and I think 

the American public really needs to hear from our administration 

why it is that what is going on in Ukraine, why the Russian aggression is something that we should care about. That is question 

number one. 

And secondly, I think it would also be important, and I would 

like you to give an opportunity to articulate to the American public, 

why it is that we have not just unilaterally tried to go in with sanctions—why it is so important to be respectful to what the—our European allies—you know, what their concerns are in this matter. 

So I would like to—if you could address those two points. 

Ms. NULAND. Well, apart from our long-time support for democratic peoples and governments and the right of free choice of citizens, this goes to the core of the rules of the road of the global 

world order, that you can’t simply chop off a piece of another country by force and get away with it. 

And this has been how conflicts start the world around. So it is 

about maintaining rule of law, maintaining democratic choice for 

people who want it and have struggled for it and are willing to sacrifice for it, not simply in Ukraine, but it is also about a very imVerDate 0ct 09 2002 15:34 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\050814\87837 SHIRL
57

portant piece of our 20-year project of a Europe whole, free and at 

peace. 

And if Ukraine loses the opportunity to live freely then the borders of the free world in Europe shrink and the borders of opportunity in Europe shrink and that is difficult for us and it is difficult 

for our allies. 

With regard to unilateral sanctions, we are always stronger 

when we work together because then you are sanctioning these entities not simply from the U.S. market but from the European market as well, and Russia depends 50 percent on the European market for all of its trade. 

So if we don’t do things together then not only are you blocking 

U.S. business from access to a market, you are potentially having 

U.S. businesses’ holes backfilled by others so that is both ineffective and unfair. But on the whole, it is a matter of speaking with 

one voice about these rules of the road being inviolable. 

Mr. GLASER. If I could just add to that answer on sanctions, I 

also think it is important to emphasize the U.S. has acted unilaterally and we are always prepared to act under our own authorities 

when we feel we need to. 

President Obama, in this crisis, has signed three Executive orders authorizing sanctions and we have been implementing those 

Executive orders and those—that is under U.S. domestic authorities. 

As Ambassador Nuland points out, as we move forward in this, 

we have been moving in conjunction and in coordination with the 

Europeans, but we are—we are acting under our own authorities 

and taking action as we feel necessary, as Ambassador Nuland 

points out, especially as we move to the next phase of sanctions, 

which could more broadly impact sectors of the Russian economy. 

It is important that we are even more on the same page with our 

European counterparts and that is what we are doing precisely because the economies are so integrated. 

But we are—we are prepared to work with our European allies 

to do exactly what we need to input significant costs on the Russian economy. 

Ms. FRANKEL. Thank you. Mr. Royce, may I just follow up on 

that? 

Chairman ROYCE. Yes, you certainly may, Ms. Frankel. 

Ms. FRANKEL. I would just say and then—and then there were 

none here. You know what I think would also help for us to understand is what are the implications to the European economy with 

these sanctions and why do we have to be careful? 

Ms. NULAND. I would just say broadly and then invite Assistant 

Secretary Glaser, we need—we need to ensure—different European 

economies are more exposed, more vulnerable in different sectors. 

So as we look at sectoral sanctions we are looking at sharing the 

burden across sectors so no one European country is more impacted 

than another. That is one thing. 

And then some of them are vastly energy dependent, some of 

them up to 100 percent, on Russian energy. So they worry about 

retaliation. They worry about other vulnerabilities. 

58

And the last thing is, of course, as you know European economies 

are just starting to grow again after 5 years of recession. So we 

don’t want to throw them back into that. 

Mr. GLASER. I thought that was very well said. I don’t have anything to add. 

Ms. FRANKEL. Thank you, Mr. Chair, and I yield back. 

Chairman ROYCE. Ms. Frankel, thank you. We are going to go 

now to Mr. Scott Perry of Pennsylvania. 

Mr. PERRY. Thank you, Mr. Chairman, and thank you, folks, for 

your testimony. Phase three of the European phased adaptive approach envisions the deployment of the AEGIS Ballistic Missile Defense System and advanced SM–3 Interceptors, which Poland 

agreed to host in 2009 to counter short-, medium- and intermediate-range missile threats. 

Some folks around town here are calling for the deployment of 

this system to be sped up. I am just asking—I want to ask what 

practical challenges are there, if any, to accelerating the deployment of missile defense to Poland, and is this something that the 

administration is pursuing or considering pursuing? 

Ms. NULAND. Again, I would defer to the Missile Defense Agency 

for a technical answer. But my understanding is it would be considerably more expensive and there are technical challenges we 

haven’t overcome if we were to try to accelerate. 

So there would be money that would have to go into technology 

and money that would have to go into speeding up the timetable. 

I think we are comfortable that the phase two and phase three are 

coming online as the threat develops just to remind that is designed not with Russia in mind, but with threats from Iran and 

elsewhere to the south. 

Mr. PERRY. So those technical questions—are they technical between the two countries or technical to the systems themselves, as 

far as you know? 

Ms. NULAND. My understanding and, again, I haven’t wonked out 

on this in a long time—my understanding is that it goes to the 

technical readiness of the system inside the United States. 

Mr. PERRY. Okay. Moving on, I am wondering if exporting LNG 

to Ukraine and Central Europe would be a prudent response to 

what is happening currently and just what your thoughts on it as 

far as America increasing or working to increase or having a policy 

and a policy statement and kind of a public statement in that regard, to what effect that would be and if that is something that the 

administration is interested in pursuing—in pursuing an answer to 

what is currently occurring. 

Ms. NULAND. Well, certainly, as you know, we were already 

working intensively with Europe to energize, if you will, their internal energy market to encourage them to make the investments 

in interconnectors and efficiencies in LNG terminals to allow a 

more dynamic cheaper market where Gazprom has to compete. 

Some of that is taking place through the third energy package. 

In terms of the immediate Ukrainian need, our primary focus is on 

reverse flow energy from Europe, reverse gas into Ukraine. We 

have a new agreement now between brokered—that we helped 

broker between Slovakia and Ukraine that is going to get gas flowing reverse. 

59

Also Poland and Hungary are pushing gas into Ukraine. Over 

the medium-term, we have U.S. companies investing in shale gas 

in Ukraine and that has the potential to make them energy independent as soon as 8 to 10 years. With regard to U.S. exports, 

there is quite a lot of U.S. LNG on the market. 

It is going to Asia, though, because the price is higher. So here, 

again, we have to create more opportunities and more dynamism 

in the European market as the best way for both Ukraine and 

other countries of Europe to resist monopoly pricing by Gazprom. 

Mr. PERRY. So the exports—the American exports that are currently going to Asia because the price is higher would it be—is it 

reasonable to say that if we produce more, exported more that the 

world market would then be able—the price would come down because there is more—you know, supply would be higher and then 

make the viability of Ukraine receiving or Western Europe receiving some American LNG more viable? 

Ms. NULAND. Sorry. The most expedient thing that we could do 

to create a more vibrant LNG market across the Atlantic would be 

to complete work on our transatlantic trade and investment partnership agreement—the U.S. trade agreement with the EU—because once you are a preferential trade partner you have—you go 

to the head of the queue, if you will. 

Mr. PERRY. And I would agree with you on that. But so there is 

no viewpoint from the administration that increasing or setting the 

table from a policy standpoint to increase LNG exports from America is part of that equation, devoid of those other things that we 

already discussed? 

Ms. NULAND. Again, I think the President spoke about this quite 

a bit when he was in Europe and I am also not an LNG wonk. But 

he spoke about the fact that there is currently a lot of LNG coming 

from the U.S. on the world market but we need to continue to look 

at it. 

Chairman ROYCE. If the gentleman would yield. 

Mr. PERRY. Yes, Mr. Chairman. 

Chairman ROYCE. There is some LNG coming on to the market 

from the United States but we have a glut on our market here in 

the United States. 

We have the capacity—at least in speaking to the representative 

of the LNG facility in Louisiana we have the capacity to export into 

the market in Eastern Europe. By the end of the year we will have 

receipt facilities in place in Lithuania and Poland that are currently being built. 

The question is since the shipment of gas into those markets 

would represent additional export of gas and given the attitudes of 

the administration on fossil fuels can we get the administration out 

front on an initiative which is the request by the government in 

Ukraine. The President—Acting President spoke to this issue. The 

Prime Minister spoke to this issue. 

I think most of the Presidential candidates we met with spoke 

to this issue. They are desirous of a commitment by the United 

States to ship gas to Ukraine and it can be done through Poland, 

of course, now that the—now that the pipes have been reverse engineered. The administration seems to be on the other side of this 

argument. 

60

Certainly, we have had the initiative in the Energy and Power 

Subcommittee and then the full committee on this issue that is 

coming before the floor and Congress will probably force this issue, 

just as it has the question of the Keystone pipeline, another example where the administration has stood, because of its position on 

fossil fuels, against importing that asset into the United States. 

So I think what we are seeing is just an opposition to this policy 

based upon opposition to gas being a fossil fuel. We spent an hour 

talking with the Vice President about a number of issues in Kiev. 

One of the ones we raised was trying to solicit his support for 

breaking the opposition and allowing—to breaking the opposition to 

exportive gas and incorporating that into sort of an encompassing 

strategy that includes the very components that Ambassador 

Nuland spoke to but including in that the exportive gas, which is 

the prime interest of the government in Ukraine, the government 

in Ukraine making the point that the reason they are in this situation now is because they were whipsawed on the issue of gas by 

Russia and that was manipulated to create the crisis, in their view 

anyway, inside the country that led to the current situation. 

So their point is when Russia has the monopoly and when the 

United States doesn’t announce a policy to come in and directly 

compete with that and drive down those prices and make this 

available, especially given the cooperation of Poland and Lithuania 

in trying to solve this equation, we are compounding the problem. 

So that was a big element of our discussions there. 

We now go to Mr. Doug Collins of Georgia. 

Mr. COLLINS. Thank you, Mr. Chairman. As, obviously, the last 

participant it looks like here today most of this has been discussed. 

I think one of the concerns is I know in talking to other members 

and the member from Pennsylvania we all share as one who has 

served and look at the issue of why we are here. 

I mean, we can get into the specifics, you know, is sanctions 

working and I do believe that we are being too reactive in this regard, Madam Ambassador, to say that we are reactive and I know 

we have the issues of European nations that are concerned. 

But at the same point, if we continue to back off their reserves 

are not going to stop Russia and Putin from doing this. I think it 

is sort of a false argument here as we look at it. 

So my question is is we have been, I think, frankly, too reactive 

to the situations as a whole and not active enough. We do see them 

working. Iran sanctions work. They got to the table although I 

think they should have been in Kiev. That is not your area. 

Help me out here. What brought us to this in a sense of after 

it has happened and now do you believe we are being too reactive? 

Was it prior policies that have led Russia to given the fact that 

they think they can do this now? 

I would like to hear your just thoughts more on a 30,000 foot 

level and not the—you know, the tactical level. I want to see your 

strategic level about where you believe what brought us to this 

point. 

Ms. NULAND. Well, that would probably be an 8-hour lunch 

which we could—we could have at some point. I think there are a 

lot of factors here including Putin’s own view of lost empire, his 

61

view of opportunity, his need for an external adventure to mask 

problems at home. 

Mr. COLLINS. Madam Ambassador, I don’t mean to interrupt 

here. But you brought up a great point there and like I said if, you 

know, have a discussion over, you know, a cup of—a glass of tea 

would be great. 

But you brought up something. We have known who Mr. Putin 

is. He is not a secret. He never has been a secret in his thoughts, 

his mind set, his whole thoughts. 

And then with us pulling back from missile defense, with us 

doing other things in Eastern Europe, I am wondering—and frankly, I am of the opinion that some of those actually gave—in a reactive way we reacted around the world gave an empowering sense 

to one who does have illusions of the former empire. 

I believe we have just been too reactive here and I know there 

is the concerns of Eastern Europe. There is the concerns of others, 

and I know it is not in your place to say yes, we have been too reactive. 

But in this discussion I think you would at least acknowledge 

that that has to be part of the equation that we have to deal with 

going forward here and should we be as reactive as we are and not 

be proactive because these same countries right now that are 

scared of their—of their gas content and their relationship with 

Russia will be the same ones that turn to us if something else happens. 

Ms. NULAND. Congressman, I think that speaks to exactly the 

kind of deterrent that we have to put forward. That is why in the 

NATO context for the NATO space this reassurance mission where 

we are doubling down on land, sea and air we have to make it absolutely clear we will defend our own space. 

But it also speaks to this issue of agreeing with the Europeans 

as we did last week that if he disrupts these elections sectoral 

sanctions will be triggered as compared to where we were a month 

before which was that sectoral would be triggered by Russian 

forces coming over the border. 

We now see that he doesn’t need to come over the border to 

upset. So we are continuing to re-evaluate. But it also speaks to 

doing the hard work that we are doing now to develop a clear demonstrable sectoral package that he can see, that he knows what 

it triggers as a deterrent and to be ready if we have to use it. 

Mr. COLLINS. I am very concerned though he does not know the 

triggers because what we have done is we have set these sort of 

guidelines for it and then we react. Well, we put sanctions in and 

then we react. 

And even with this agreement, you know, in looking with the 

other European nations if he does this, well, you just said he didn’t 

have to cross the border to cause chaos right now. 

So is that the trigger? I mean, are we—are we making—are we 

setting ourselves up to say well, the trigger is he crossed the border 

instead of saying the trigger is he is causing internal chaos in the 

Ukraine. 

Why is that not the discussion? Why are we limiting ourselves 

to a singular kind of focus instead of saying well, it doesn’t matter 

if you cross the border—you are causing chaos in the country? That 

62

should be the trigger. Why are we, again, still very reactive, in my 

opinion? 

Ms. NULAND. Well, Congressman, as you know, the last round of 

sanctions, which was about a week and a half ago, was precisely 

in response to the fact that we went to Geneva, we had an agreement on everybody supporting de-escalation and the Russians did 

nothing thereafter. 

And therefore we hit seven more people. We hit 17 entities. We 

blocked U.S. export of high technology in the defense sector. So as 

we work to build the sectoral package there is also more head room 

in this category of sanctions that we will continue to use if necessary. 

Mr. COLLINS. Okay. Well, again, thank you all for sitting through 

all of this. It is always, I am sure, fun for you all to come up here 

and discuss and get many questions. 

I appreciate your answers and I would like to see a little more 

aggressiveness in this because, like I said, we are dealing with a 

man who does have—he is not an unknown quantity. It is not like 

he all of a sudden came out of nowhere and went to power. 

We know his background and it is just very concerning to me 

that we are not a little more—because like I said, the Eastern European countries will be the very ones who will turn to us in a 

heartbeat if they are in trouble, irregardless of economic issues. 

So I do appreciate you both. Thank you so much for your time. 

Chairman ROYCE. Thank you. Thank you. And I—let us thank 

both the witnesses here. Ambassador Nuland, Mr. Glaser, thank 

you very much for your testimony. One of the key points that was 

reinforced in this hearing was the central importance of the May 

25th elections. 

Those elections will be a watershed in Ukraine’s history. The 

United States must do all it can to make certain that they are fair, 

they are free and that people can safely get to the ballot box to cast 

their ballot in those elections. 

It is also clear that we need a more active and long-term strategy 

to undermine Russia’s ability to use its oil and gas exports to coerce Ukraine. When they can turn off the gas in the dead of winter, 

when they get that choke hold over a regime—over a government 

in Ukraine, you can—you can see the consequences. 

So that is going to require the administration to end the sanctions that we have imposed upon ourselves. It is one thing to impose sanctions on Iran. It is another thing to impose gas and oil 

sanctions on the U.S. and not allow us, at a time when we have 

got a glut on the gas market, to put forward a strategy that will 

help our balance of payments, help our exports, and undermine 

Russia’s monopoly in Eastern Europe. 

And lastly, I think we must also ramp up our international 

broadcasting efforts to counter Russia’s propaganda. Only when the 

people of Ukraine and the region as a whole have access to objective information will democracy and peace have a chance to flourish there. 

Again, I thank our witnesses and the members, and we stand adjourned. 

[Whereupon, at 12:50 p.m., the committee adjourned.] 

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