U.S. GOVERNMENT PRINTING OFFICE

64–474 CC WASHINGTON : 2000

UNITED STATES-SOUTH AFRICA RELATIONS:

PRESENT AND FUTURE

HEARING

BEFORE THE

SUBCOMMITTEE ON AFRICA

OF THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

Thursday, October 14, 1999

Serial No. 106–101

Printed for the use of the Committee on International Relations

(

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

BILL LUTHER, Minnesota

LINDSEY GRAHAM, South Carolina

ROY BLUNT, Missouri

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE P. RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT E. ANDREWS, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

SUBCOMMITTEE ON AFRICA

EDWARD R. ROYCE, California, Chairman

AMO HOUGHTON, New York

STEVE CHABOT, Ohio

TOM CAMPBELL, California

GEORGE RADANOVICH, California

THOMAS G. TANCREDO, Colorado

DONALD M. PAYNE, New Jersey

ALCEE L. HASTINGS, Florida

GREGORY W. MEEKS, New York

BARBARA LEE, California

TOM SHEEHY, Subcommittee Staff Director

MALIK M. CHAKA, Professional Staff Member

CHARISSE GLASSMAN, Democratic Professional Staff Member

CHARMAINE V. HOUSEMAN, Staff Associate

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C O N T E N T S

Page

WITNESSES

Susan E. Rice, Assistant Secretary, Bureau of African Affairs, U.S. Department of State ........................................................................................................ 8

J. Daniel O’Flaherty, Executive Director, U.S.-South Africa Business Council . 20

Judson Ray, Special Agent, Unit Chief, International Training and Assistance, Federal Bureau of Investigation ............................................................... 22

APPENDIX

Prepared statements:

Chairman Edward Royce ........................................................................................ 32

Chairman Benjamin A. Gilman .............................................................................. 33

Representative Donald Payne ................................................................................. 35

Asst. Secretary Rice ................................................................................................. 36

Mr. Judson Ray ........................................................................................................ 43

Mr. J. Daniel O’Flaherty ......................................................................................... 51

Submissions:

International Republican Institute fact sheet on South Africa ............................ 57

National Democratic Institute fact sheet on South Africa ................................... 58

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UNITED STATES-SOUTH AFRICA RELATIONS:

PRESENT AND FUTURE

Thursday, October 14, 1999

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON AFRICA, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, D.C.

The Subcommittee met, pursuant to notice, at 2 p.m., in room

2200, Rayburn House Office Building, Hon. Edward R. Royce

(Chairman of the Subcommittee) presiding.

Present: Representatives Royce, Campbell, Payne, Hastings,

Meeks, and Lee.

Also present: Representative Gilman.

Mr. ROYCE. Today’s hearing of the Subcommittee on Africa will

now come to order.

Today the Subcommittee will look at the bilateral relationship

between the United States and South Africa, one of the most important relationships our country has in Africa.

Since it made its exceptional transition to a nonracial democracy,

U.S. relations with South Africa have considerably broadened. No

longer dominated by apartheid, the U.S.-South Africa agenda now

tackles issues of security, health, and the environment. With the

U.S. being South Africa’s largest trading partner and South Africa

being the dominant buyer of America’s exports to Africa, economic

issues have a heightened prominence. Needless to say, the new

agenda, while challenging, is most welcome.

The U.S.-South Africa Binational Commission, up and running

for 4 years now, indicates the importance of South Africa to the

United States. South Africa faces many challenges. Its economy is

struggling. It faces a serious crime problem, which we will hear

about. In these areas, it is in the U.S. interest to work with the

new government of Thabo Mbeki through the Binational Commission for a better future in South Africa.

Within Africa, the U.S. has given South Africa exceptional attention. While it is important that this not come at the expense of

other African countries, South Africa’s potential and importance

warrants this attention. Today the Subcommittee will have a

chance to better appreciate the challenges and opportunities of our

important relationship with South Africa.

Before proceeding, I would like to acknowledge the death of Julius Nyerere, the former president of Tanzania. He died last night

in a London hospital. Nyerere is a man who defined his age, who

will be remembered for his opposition to colonialism, and his opposition to apartheid, as well as his modest lifestyle.

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Mwalimu, Swahili for teacher, which he was commonly called, remained active in public life after leaving office in 1985. At the time

of his death, he was working to resolve the conflict in Burundi. Our

condolences go to the Nyerere family and to the Tanzanian people.

I will now recognize the ranking member of the Subcommittee

for an opening statement.

Mr. Payne?

[The prepared statement of Mr. Royce appears in the appendix.]

Mr. PAYNE. Thank you very much, Mr. Chairman, for calling this

very important hearing on South Africa. I, too, would like to mention former president of Tanzania, Julius Nyerere, the father of the

independence movement. Today Africa has lost a great man. Commonly referred to as ‘‘The Conscience and Teacher of Africa,’’ President Nyerere was one of the leaders who led the drive to end the

white minority rule in South Africa and Rhodesia and to stop

apartheid.

In 1979, he defied the OAU and sent troops to Uganda in outrage

of Idi Amin’s policies in Uganda. He has been at the forefront of

helping countries in this region and has used diplomatic skills to

end the war in Burundi and in the Congo. President Nyerere was

among only a handful of African presidents to voluntarily leave office. I had the privilege of meeting President Nyerere for the first

time in 1972 and have been a long admirer of his ever since.

Like former president Nyerere, President Nelson Mandela is also

universally regarded not as a hero but almost a saint. His refusal

to enact vengeance on those who mistreated him goes beyond the

tight-lipped resentment of a statesman. He, as you know, invited

his jailor to his inauguration.

Black South Africans had no democratic rights, no possibility of

bringing about any peaceful change. They didn’t even have basic

human rights, as was made very obvious by the appalling massacre

at Sharpeville in March 1960. The police fired indiscriminantly into

an African crowd, killing 67 and wounding another 186, most of

them shot in the back.

Far from being repentant about this atrocity, the South African

government became more repressive and declared the ANC to be

illegal. After 5 years that culminated with the 1994 elections, the

ANC, under the leadership of President Nelson Mandela, and now

under the presidency of Mr. Mbeki, is moving South Africa from an

oppressive apartheid regime to give birth to a new democratic

movement.

South Africa has a diversified and productive economy and functioning democracy. Nevertheless, the legacy of racial inequality is

still a problem. Let me share with you for a moment this report

by the South African government.

Since 1994, more than 22,700 former liberation fighters and

black homeland soldiers have been integrated into the South African national defense force. Pockets of tension and resentment

clearly remains. In a confidential report that became public last

year, military officials documented troubling disparities in the disciplining of black and white soldiers and the pay of men of the

same rank, which is still unequal.

Moreover, unemployment is between 40 and 68 percent, with

most black South Africans below the poverty line.

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In conclusion, let me say that I am glad to see that several central banks have backed away from the plan to sell gold. When Congressman Campbell and I traveled to Zimbabwe for the funeral of

vice president Joshua Nkomo, and to South Africa, they reiterated

the problem with the gold sales and the IMF.

It has been reported that as many as 15 people are dependent

on one South African gold miner. A possible layoff of 20- to 25,000

miners, would impact hundreds of thousands of people.

So, Mr. Chairman, once again, let me thank you for calling this

very important hearing.

Mr. ROYCE. Thank you. I thank you, Mr. Payne.

Any other members wish to make an opening statement?

Mr. CAMPBELL. I do.

Mr. ROYCE. Mr. Campbell?

Mr. CAMPBELL. We are joined by the Chairman of the Full Committee. I will certainly yield if he has to speak first, but don’t forget

me.

Mr. GILMAN. I do have an opening statement, Mr. Chairman.

Mr. ROYCE. Mr. Chairman, if you would like to make a statement

at this time. We will hear from Mr. Gilman of New York, Chairman of the full International Relations Committee.

Mr. GILMAN. Thank you, Chairman Royce, and I appreciate your

Subcommittee’s ongoing diligence and the wisdom of holding this

hearing. There is a natural tendency for us to focus on the crisis

of the day, and, regrettably, Africa seems to host a number of crises daily. This Subcommittee has not shied away from addressing

the complex emergency situations in Congo, in Sudan, in Sierra

Leone, Ethiopia, and Eritrea, among others.

But it would be a mistake to neglect crucial countries like South

Africa simply because chaos does not currently reign there. It was

not very long ago when South Africa was itself in political crisis.

Hearing after hearing was held on the South African regime, and

most analysts predicted that the end of apartheid would come only

through bloodshed.

I remember when it became apparent that South Africa had developed nuclear weapons, and I shudder to consider what might

have been. However, our relief at the positive developments in

South Africa should not blind us to the serious challenges facing

that nation and this region.

Unemployment continues to be a major problem there. Nearly everyone in South Africa works, but only half the working population

has a regular job. The rest eke out a marginal living from 1 day

to the next. The infection rate of HIV/AIDS is shocking, and it appears to be growing. The murder rate in South Africa remains 10

times as high as our own unacceptably high rate.

As if all of these challenges were not enough, it is now obvious

that a rainbow coalition of transnational criminal organizations has

set up shop in South Africa, threatening the very institutions of its

hard-won democracy. I would like to focus for a moment on that

topic.

I am very grateful to the Subcommittee for inviting Special

Agent Jud Ray of the FBI’s International Training and Assistance

Unit to testify today. Agent Ray provided me with an excellent

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briefing on the transnational crime situation in South Africa 2

years ago.

At that time, we discussed the value of establishing in Africa an

international law enforcement academy, ILEA, modeled after the

highly successful program in Budapest, Hungary. Sophisticated

international criminal organizations cannot be fought without cooperation among national law enforcement agencies. But as with

NATO armies, those crime fighting agencies must share a common

understanding and approaches in order to cooperate effectively.

That cannot happen overnight, and it cannot happen without some

capacity building.

This Committee has urged the Department of State on numerous

occasions to move forward with an ILEA Program before the Russian, Nigerian, Columbian, Italian, and Chinese mafias, all of

whom are present in South Africa at this moment, become deeply

entrenched.

I know that Assistant Secretary Rice recognizes the value of that

program. We thank her for being here today. I know that she and

the African Affairs Bureau at the State Department have been calling for this program, and I am now hopeful that it will soon become

a reality. But why it has taken so long I, frankly, cannot understand. I hope that Secretary Rice and Agent Ray may be able to

shed some light on this matter and be able to help us move along

this project.

As one additional indication of the congressional support for this

endeavor, I have offered language in a State Department reauthorization bill that directs the Secretary of State, in consultation with

our Attorney General and our Treasury Department, to provide our

Committee with a detailed operational plan for an African ILEA

within 6 months.

Mr. Royce, Chairman Royce, members of the Subcommittee, distinguished witnesses, I thank you for your efforts here today. If I

must depart before the completion of the hearing—I do have another hearing—I would ask that you allow me to submit additional

questions for the record.

Thank you, Mr. Chairman.

Mr. ROYCE. Thank you, Chairman Gilman.

We will now go to Mr. Hastings of Florida for a brief opening

statement.

Mr. HASTINGS. Mr. Chairman, thank you very much for holding

this hearing. I would like to thank the witnesses who are appearing before us and with particular emphasis on Assistant Secretary

for the Bureau of African Affairs, Secretary Rice, our good friend,

who has done an extraordinary amount of work.

Sometimes hearings of this nature don’t permit us to gain insight

to the extraordinary information that she and the staff and others

that work with her have gathered. Hopefully members will take advantage of opportunities to speak with Secretary Rice personally,

who is an extremely accessible person, regarding matters ongoing.

Mr. Chairman, I have a specific interest today, and the Chairman of the Full Committee has alluded to it, as has my colleague,

the ranking member of this Subcommittee, and that is the major

problem of HIV/AIDS. I know that there are numerous issues of necessity we must address our concerns for.

5

I can’t imagine any issue in South Africa, the whole continent of

Africa, indeed, in the world, as pertinent as the issue of HIV/AIDS.

I will be particularly interested in Secretary Rice’s views in that regard once the questioning period begins.

I feel, Mr. Chairman, as true leaders of democracy, the United

States must continue to encourage the new South Africa to remain

committed to its current direction and continue in the areas of economic liberalization. We must continue to work with South Africa

and build a nation which truly belongs to all.

I do urge that we be mindful, that in the period of time that I

have been here we have continuously hammered the budget as it

pertains to the continent of Africa. The DFA has usually $700 million—$513 million this year—but that doesn’t include all of the

moneys. But if we keep cutting, we are not going to look very good

in the eyes of those who have the greatest need.

Thank you, Mr. Chairman.

Mr. ROYCE. Thank you, Mr. Hastings.

Mr. Campbell of California.

Mr. CAMPBELL. Mr. Chairman, I thank you for holding this meeting. I thank you for authorizing the travel that has allowed me and

Congressman Payne in particular to visit Julius Nyerere, and I just

wanted to have a few comments about him to start.

My thanks also go to the Chairman of the Full Committee, Mr.

Gilman, who has authorized such travel and who has shown such

a great interest in Africa, for which I am personally grateful.

Mr. Payne was unavoidably detained, and I do want to just put

into the record that I did sing his praises at the earlier part of our

hearing today in the markup. He is the original co-sponsor of both

resolutions that passed, one dealing with Eritrea and Ethiopia, the

other dealing with Somaliland, or the area of Somalia north, which

formerly was called Somaliland. I give him tremendous credit for

helping in that—in those two resolutions and teaching me so much

about Africa.

My thoughts about Julius Nyerere are very short but from my

heart. He welcomed us to our home. He had one title and that was

‘‘Mwalimu’’—teacher. That was the title that mattered most to him,

not president, not maximum leader, or any other military title. It

was ‘‘Mwalimu,’’ teacher.

He taught us—I think he taught Africa—commitment to human

rights and a commitment to panafricanism, not that I or any of us

agree with every aspect of his policy. The point is he cared to teach;

he did not care to hold on to power. He succeeded in what he set

out to do. So God rest his soul, and I yield back.

Mr. ROYCE. Thank you.

Mr. Meeks of New York.

Mr. MEEKS. Thank you, Mr. Chairman. Let me thank you for

holding this hearing, and I want to join my colleague and friend,

Mr. Hastings, in thanking the witnesses that are here to testify

today, but, in particular, Secretary Rice, because I have found that

she has always brought forth some very pertinent and formative information each time that we conduct these hearings. I want to say

thank you to her.

Since the election of Nelson Mandela in 1994, we have seen

South Africa blossom into an economic and political force. Yet, as

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is the case with every new and emerging country, there comes

growing pains, and South Africa proves to be no different under the

new democratic republican regime that is now there in South Africa.

While she benefits from a billion dollar economy, yet she struggles with high unemployment and an unskilled labor force. After

prevailing over apartheid for 40 years, South Africa is succumbing

to one of the fastest-growing number of AIDS cases in the world,

which threatens to wipe out some six million people over the next

10 years.

South Africa serves as a mediator across the continent of Africa.

She is combatting a surge of high crime and corruption in her own

backyard, and some of those similarities at times I draw to our own

country.

Mr. Chairman, although we say that that looks grim, with the

reference to the high crime and the unskilled labor force and unemployment, I believe that South Africa has a bright, bright future.

Under the leadership and direction of President Mbeki, South Africa will and has taken giant steps in securing her economic future

by signing a trade development and cooperation accord with the

European Union.

I feel that the bill that we recently passed here in Washington

with the African Growth in Opportunity Acts will also provide

some additional strength for South Africa.

Second, additionally, South Africa has taken the aggressive and

often controversial position of dealing with pharmaceutical companies in obtaining inexpensive, preventive drug treatment and medicines to combat the spread of AIDS. I think that we have an obligation to help them in that mission, so that they can get the kind of

drugs that are necessary to prevent the spread of AIDS.

Not only does South Africa serve as a role model for other African nations, she continues to lead the Southern African Development Community (SADC) toward economic prosperity. We have an

opportunity here in America to do the right thing toward South Africa. South Africa serves as a beacon of hope, a stabilizing force,

to a war-torn and conflict-ridden continent.

As we enter the 21st century, the U.S. policy needs to reflect a

more progressive and proactive role in strengthening and fostering

economic opportunities and political partnerships so that South Africa continues on course toward global prosperity.

Again, Mr. Chairman, I thank you for conducting this hearing.

I think that we will be able to go a long way.

Mr. ROYCE. Thank you, Mr. Meeks.

Ms. Lee of California?

Ms. LEE. Thank you, Mr. Chairman, and I would like to also

thank you and our ranking member for calling this hearing.

I, too, am saddened today by the death of Julius Nyerere. As a

very young student, I was deeply influenced by his leadership and

his intellect, and I hope that all of us will remember him as we

move forward in our overall development of our U.S. policy toward

Africa, which I think is moving along in a very productive and positive fashion, thanks to Honorable Susan Rice and all of those who

are helping us do this.

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Like so many in this country, I have a long history of involvement with South Africa, primarily as an anti-apartheid activist

during the height of the anti-apartheid movement. I was actually

working for Congressman Ron Dellums, and, as we know, Ron

played a pivotal role in bringing sanctions against the apartheid regime of South Africa, putting the United States, I would say, on

the right side of history.

In 1994, as an international poll observer in South Africa, I had

the humbling and incredible experience to witness the first free,

peaceful, democratic elections in the country. It was really an opportunity for which I will always be grateful.

Now, of course, in the 106th Congress, we have all been engaged

in debate on creating a comprehensive national trade policy with

Africa. I believe that that time is long overdue, and I am pleased

that as a part of our hearing today we will address U.S.-South Africa economic partnerships.

I also want to mention—and I mention this with pride—when I

was in the California legislature, after many years of hard work

and long hours, my home state of California opened the California

Trade and Investment Office in South Africa, which is really the

first state to do so subsequent to the end of apartheid.

The investment of California businesses in South Africa continues to expand. We continue to take trade delegations, friendship

delegations, to South Africa, which are incredible successes.

Finally, let me just say in terms of our priorities, and in terms

of economic partnerships, we must address, as my colleagues have

said, in a substantial and comprehensive manner the pandemic of

HIV and AIDS. We know that in South Africa there are 1,500 new

recorded cases of HIV and AIDS each and every day. I had the

privilege to travel to South Africa with the White House this year

to look at the impact of HIV and AIDS on orphans. It is staggering

what we found out.

So we have been working very closely with the Embassy of South

Africa to understand the scope of this crisis in South Africa and to

support creative courses of action to really help combat this disease.

I want to thank the Embassy of South Africa for supporting legislation, which is really the first country to support legislation that

I have introduced, H.R. 2765, the Aids Marshall Plan for Africa.

For this, again, I am thankful and grateful, and I think all of us

here remain committed to fight the HIV and AIDS epidemic in

South Africa.

Thank you, Mr. Chairman. Thank you, Mr. Payne, for this hearing. I think the future success of South Africa depends on so many

interconnected factors, among them the health and security of the

people of South Africa.

Thank you.

Mr. ROYCE. Thank you, Congresswoman Lee.

We will go to our first panel. We have Assistant Secretary of

State for African Affairs, Susan Rice, who previously served at the

White House as Special Assistant to the President and Senior Director for African Affairs.

Dr. Rice earned a master’s and a Ph.D. in international affairs

from Oxford University. She recently was invited to return to deVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
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liver the 1999 Braham Fisher Memorial lecture on America’s Africa

policy there.

Welcome, Dr. Rice. If you would keep your remarks to five to 10

minutes, we will put the full remarks in the record, but that way

we will have more time for questions. Dr. Rice, thank you so much

for joining us today.

STATEMENT OF HONORABLE SUSAN E. RICE, ASSISTANT SECRETARY, BUREAU OF AFRICAN AFFAIRS, U.S. DEPARTMENT

OF STATE

Ms. RICE. Thank you very much, Mr. Chairman, members of the

Committee. It is always a privilege and an honor to appear before

this Subcommittee.

I would like to begin, if I might, by joining you in expressing our

deep condolences and sadness at the loss of a tremendous international statesman today, former president Julius Nyerere. We will

all miss his leadership tremendously. It was leadership that he

never tired of giving to the international community up until his

very last months. I want to pay particular tribute to his most recent contribution to regional peace and security, his efforts to bring

about a lasting peace in Burundi.

The White House will be sending a high-level Presidential delegation to his funeral, the composition of which is still to be determined, but we intend to be well-represented on behalf of the

United States, to share their sorrow.

I will try to keep my remarks as brief as I can. If I might just

thank you for the opportunity to testify on South Africa. It is a nation whose remarkable transformation continues to command the

world’s attention and admiration. Five years ago, South Africa

stood at the threshold of a new era when its people went to the

polls to elect their first democratic parliament. It in turn, of course,

chose Nelson Mandela to lead a government of national unity.

Now South Africa has entered a new and equally critical phase,

and its resilient people again have put their best foot forward. The

country’s second democratic election on June 2nd marked a smooth

and routine transfer of power, a critical indication of sustained

progress in South Africa.

Our stake in South Africa’s success is significant. For the United

States, South Africa’s leadership as a pluralistic, market-oriented

democracy is critical to the achievement of our goals in Africa, especially integrating Africa into the global economy and combating

transnational threats to our mutual security.

A half-decade after the end of apartheid there is general recognition, both inside and outside of South Africa, that the government

of President Nelson Mandela and Deputy President Thabo Mbeki

performed extremely well. The ANC-led government has fostered

the difficult and lengthy process of national reconciliation, laid the

groundwork for long-term democratic tradition, established a sound

economic policy framework, and began to deliver essential social

services to the previously disadvantaged majority.

President Thabo Mbeki’s government now faces the difficult task

of fulfilling his promise to accelerate the pace of the transition.

Since taking office on June 16th, President Mbeki has taken deciVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
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sive steps to address the pressing issues of crime, economic growth,

and job creation.

In public forums, he has taken a tough line against military governments, corruption, and misrule, statements which we, of course,

applaud. At the same time, he stood by the government’s macroeconomic policies embodied in the Growth, Employment, and Redistribution Program, or GEAR, that emphasized fiscal discipline, removal of capital controls, lower tariffs, and privatization of the

parastatal sector.

U.S. policy seeks both to help South Africa consolidate its already remarkable progress and to strengthen our partnership in

key areas of mutual interest. The most important of these key

areas are the following: bolstering democratic institutions and processes, strengthening the institutional capacity of the South African

government to develop socioeconomic policies, create jobs, and provide improved social services, working together diplomatically to

prevent and resolve conflicts, cooperating to prevent the proliferation of weapons of mass destruction, working to open the South African and SADC markets to U.S. products and services, and to increase bilateral trade and to improve the climate for U.S. investment, helping South Africa develop an effective criminal justice

system, supporting South Africa’s pursuit of sustainable development, and, finally, supporting improvements to South Africa’s

health care system to ensure core needs of the majority are met,

and to combat the spread of infectious diseases, particularly HIV/

AIDS.

To help achieve those goals, the full panoply of the U.S. Government has been actively involved in providing support and training.

The largest component of U.S. assistance to South Africa is, of

course, USAID’s efforts. Our current strategy being implemented

under a 10-year, $435 million program, seeks to ensure a sustainable transition.

The United States and South Africa, of course, have much in

common—diverse and open societies, deep respect for democratic

ideals and human rights, and a shared vision of a peaceful and

prospering international community. Regular high-level contacts

have been critical to the process of developing a strong U.S.-South

Africa partnership.

President Mandela’s visit to Washington in October 1994 led to

the establishment of the U.S.-South Africa Binational Commission

(BNC). This Commission has met six times since 1994 and now

comprises nine Committees.

The BNC has been central to the process of renewing and

strengthening our cooperation in many areas. Under its auspices,

we have worked to open our markets, signed a trade and investment framework agreement, and established a Trade and Investment Council. We have negotiated a bilateral tax treaty and new

pacts on civil aviation, extradition, and mutual legal assistance.

Two recently established BNC committees, one on defense and

another on justice and anti-crime cooperation, have led in short

order to rapidly expanding collaboration in these key areas.

Finally, in the area of foreign policy, South Africa has quickly

emerged as one of Africa’s leading political and diplomatic actors.

The global scope of South African foreign policy notwithstanding,

10

much of the government’s focus is closer to home with the Southern

African Development Community (SADC) and the Organization of

African Unity (OAU). South Africa appears determined to make

both SADC and the OAU more relevant and effective. We strongly

support its efforts in this regard.

In conclusion, Mr. Chairman, let me say that we consider our relationship with South Africa to be one of our highest priorities. But

we all must be cognizant of the tremendous challenges still facing

the country and its people. As President Mbeki said at his inauguration, ‘‘South Africa is at the dawn of the dawn, when only the

tips of the horns of cattle can be seen etched against the morning

sky.’’

In many ways, the task of democratic institution building in this

country is only just beginning. Crime, HIV/AIDS, and economic disparity all threaten South Africa, just as our own social problems

and violence threaten U.S. progress in the century to come. We are

committed to supporting not only South Africa’s domestic strides,

but its strong role in the region and its positive contribution worldwide.

We look forward to strengthening and deepening our engagement

with the new South Africa and its people. We believe their strength

will ensure the success of their transition and the emergence of

South Africa as one of the world’s greatest powers and most respected leaders.

Thank you very much.

[The prepared statement of Ms. Rice appears in the appendix.]

Mr. ROYCE. Thank you, Dr. Rice. I appreciate your summarizing

your testimony as well.

Before finishing here, on behalf of the Subcommittee, let me just

say a few words. I would like to wish you and Secretary Albright

a productive visit to Africa next week. In particular, I believe that

the Secretary’s visit to Sierra Leone could be most helpful in helping that war-shattered nation along the road to peace.

As you know, the Subcommittee has taken a strong interest in

Sierra Leone, and we look forward to hearing about your visit.

Again, we thank you for coming here today.

There are a few questions that I would like to ask you, and then

we will turn to other members of the Committee. But the first has

to do with the signing this week of the South Africa-European

Union trade development and cooperation agreement. This agreement will dismantle or reduce tariffs on about 95 percent of South

African exports into Europe, and at the same time South Africa

will scrap its duties on about 86 percent of the EU imports over

12 years.

I believe for South Africa that is a positive development, but concerns have been raised about this agreement disadvantaging American firms in South Africa. Does the administration share these

concerns? And, if so, does it have a proposal to address this?

Ms. RICE. Thank you, Mr. Chairman. We support regional and

bilateral trade agreements that are liberalizing as a matter of principle. But we will be watching implementation of the EU-South Africa free trade agreement very carefully to ensure that it is WTO

consistent and that U.S. exporters and investors are not unfairly

11

disadvantaged. Our initial analysis of this agreement and its effects on U.S. exporters is, at present, underway.

As the President said during his trip to South Africa, we are very

much open to the idea of exploring bilateral trade liberalization efforts with South Africa, including discussing a U.S.-South Africa

free trade agreement at an appropriate juncture.

Mr. ROYCE. Let me ask you also about press reports that

Danelle, a South African government-owned defense contractor,

presently has a delegation in town, is preparing to sell weapons to

Libya. How would such South African weapon sales to Libya, or

other countries considered hostile to U.S. interests, impact our relationship with South Africa?

Ms. RICE. Mr. Chairman, we have seen the same reports that

you have. This is an issue of concern to the United States. I do

want to say that we have no information at present to confirm any

sale by South Africa of such equipment to states that we consider

pariah states. We continue to watch this situation very carefully.

It is also obviously a subject that features regularly at the highest

levels of our bilateral discourse with South Africa.

I would not wish to speculate about the effect of such a sale. We

have a number of laws on the books that govern our relationship

with states that sell such equipment to terrorist list states. Those

laws are well-known to the government of South Africa, and we

continue to look forward to constructive discussions with the government of South Africa aimed at fostering our shared interest in

preventing proliferation of weapons to countries that could well

misuse them.

Mr. ROYCE. Thank you. In your testimony, you mentioned that

President Mbeki is serving as Chair of the Non-Aligned Movement,

or Non-Aligned States. What is the significance of the Non-Aligned

Movement to the United States?

Ms. RICE. I suppose I could go on at some length about that. I

will try to be brief. The Non-Aligned Movement (NAM), historically

has played a prominent role in international affairs. It has long

been the voice of the developing world and countries who have felt

that their political and economic interests have not been fully

taken into account by some in the developed world.

It continues to be an important venue for policymaking and dialogue with the countries of the developing world. South Africa has

taken its role as Chairman of the NAM very seriously, and we have

been grateful for the opportunities we have had to work with South

Africa in its role as Chairman of the NAM to pursue issues of mutual concern.

Mr. ROYCE. OK. Last, let me bring up a question which I have

discussed with you before, which is the view that South Africa and

many other gold-producing countries have with regard to IMF’s

gold sales to fund the highly indebted poor country initiative which

the administration supports. As you know, the opposition comes

from the fact that it would drive down gold prices and harm the

economies that, in theory, it is designed to help.

This Subcommittee held a hearing on debt relief in the spring,

and Treasury Department officials were dismissive of the concerns

raised by the Committee members here at that time. How is the

issue now being viewed by the administration, if I could ask?

12

Ms. RICE. As you well know, providing debt relief to the poorest

countries remains an important priority for the administration.

The IMF has been examining a whole range of options that would

allow it to participate fully in the HIPC initiative. It is partly due

to considerations of gold-producing countries, the United States

and South Africa both being among them, that probably will lead

compromise on the planned sale of 10 million ounces of IMF gold

on the open market.

So, at present, this is being reevaluated has been shelved, and

we look very much to the Treasury Department, of course, to provide specifics on future policy with respect to gold sales. But I don’t

see that as being an immediate concern with respect to funding of

the HIPC initiative.

Mr. ROYCE. Thank you. Thank you, Dr. Rice.

I will go to Mr. Payne.

Mr. PAYNE. Thank you very much, Dr. Rice. I, too, appreciate the

fine work that you have been doing and wish you good luck on your

trip to Africa with the Secretary. I also have a question regarding

Libya, but not as it relates to the sale of weapons.

Although Libya certainly has behaved as a pariah state for decades, and its leader, Mr. Gadhafi, has not been cooperative in

world policies it appears to me that during the last 3 or 4 years

there seems to have been a change in Libya’s interest in moving

back into the world society. South Africa has a relationship with

Libya, and if Libya did show that it sincerely was interested in

changing its ways, since in the past it engagement with many African countries have been not always been constructive, with Charles

Taylor of Libya starting out in Libya etcetera,—but what do you

think would be the prospects of Mr. Mandela having discussions

with Mr. Gadhafi? Does the U.S. at this time feel that its policy

on Libya might be changing?

Ms. RICE. Sir, I appreciate that the Subcommittee has jurisdiction over Libya. I am not the American official responsible for our

policy toward Libya, and I would be remiss if I were to answer that

question directly. I am happy to take it back, if you would be willing to provide it in written form, and ask the Near Eastern Bureau

to provide an answer to it.

Mr. PAYNE. That is great. There is the question of pharmaceuticals, intellectual property, and the question of a conflict between South Africa and the alleged demands from the U.S. regarding that whole situation.

Could you try to clarify what the situation is now between the

U.S. pharmaceuticals and South Africa, and the whole question of

how AIDS victims can be assisted with the fact that the products

that can combat AIDS are very expensive. There are certainly two

sides to this issue, but what officially is the situation now between

South Africa and the pharmaceuticals?

Ms. RICE. Sir, as you perhaps have seen, last month the U.S.

Government and the South African government reached a satisfactory resolution to the dispute over the South African Medicines Act

and pharmaceutical patents protection. This was a welcome development. Many in the administration worked hard with counterparts on the South African side to achieve.

13

The understanding that we have come to commits South Africa

to honor fully its WTO commitments under the treaty respecting

international property, while also affords South Africa the necessary flexibility to respond to its national HIV/AIDS health crisis.

So this an amicable, and we believe very balanced, resolution to the

issue and sets aside this contentious issue. We hope it will never

again play a prominent role on our bilateral trade agenda.

There is a continuing dialogue between the U.S. and South Africa to ensure that the Medicines Act is implemented in a manner

that is consistent with South Africa’s WTO obligations and in a

manner that ensures the safety and the efficacy of patented drugs.

So I think we have good news in that regard. A lot of hard work

has gone into it, and I believe the governments of both the United

States and South Africa are satisfied with the result.

Mr. PAYNE. Thank you. I know President Mbeki was fairly involved in the agreement in the Congo. To your knowledge, is South

Africa continuing to take the leadership in the cease-fire there,

and, to your knowledge, is the cease-fire still holding? I know this

is a little outside South Africa, but indirectly it does involve South

Africa.

Ms. RICE. The South African government has played a highly

constructive role at all stages in the effort to broker a peaceful resolution to the conflict in Congo. It did so under President Candela’s

leadership, and it has been very energetic in recent months under

his leadership.

President Mbeki and his new foreign minister, Mrs. Zuma, have

engaged almost full-time, it might seem to an outside observer, in

shuttle diplomacy and other efforts to bring particularly the rebel

factions to an agreement on the issues that divided them, and to

enable the rebel leadership to finally sign the Lusaka agreement.

Their efforts continue.

South Africa has made an important pledge to financially support the Joint Military Committee, which is an important element

of the Lusaka agreement. It has expressed its willingness to participate in a U.N. peacekeeping effort there. We very much admire

and are grateful for the contributions that South Africa has made

and has promised to continue to make.

Regarding the situation in the Congo, there, of course, have been

some cease-fire violations and some incidents, particularly over the

last 10 days or so, but by and large, to a large extent, since the

agreement was signed back in July, there have not been major violations of the agreement; certainly, none that have been sufficient

for either side or any party to declare its unwillingness to adhere

to the terms of the agreement.

Just earlier this week in Kampala was a very important meeting

of the Joint Military Committee, where the parties to the conflict

came together and made some important decisions that should lead

to swifter implementation of key elements of the Lusaka agreement.

Mr. PAYNE. Thank you very much. I am really glad to hear that.

The third bell has rung, so I have to leave. Someone should be

here in a moment, though, and I don’t think we would have to have

a recess. I ought to just increase aid to Africa by about——

Ms. RICE. Go for it.

14

Mr. PAYNE [continuing]. A couple hundred million dollars. When

the Chairman comes back——

[Recess.]

Mr. ROYCE. Secretary Rice, again, we want to thank you very

much for your testimony here today, we wish you well, you and

Secretary of State Albright well, on your trip to Sierra Leone. That

will conclude our first panel.

Mr. PAYNE. Mr. Chairman, would you yield just for——

Mr. ROYCE. I certainly will yield to the gentleman from New Jersey.

Mr. PAYNE. I just had a quick question regarding the overwhelming issue about crime. Has the South African government

asked the U.S. Government for any assistance in fighting crime?

Or do they have the capacity to do it, investigating and that kind

of work? I know President Mbeki in his inaugural address spent a

great deal of time on the issue of crime. Will that issue come up?

Or have they made any request to us for assistance?

Ms. RICE. The issue of cooperation and countering crime, both domestic and internationally, is an increasingly important item on

our bilateral agenda, so much so that the Vice President and thenDeputy President Mbeki agreed to create a justice and anti-crime

cooperation Committee of the Binational Commission.

That Committee was inaugurated last February when the Attorney General herself went down to South Africa as part of the Binational Commission. She went back again to South Africa in June

to lead the U.S. delegation to President Mbeki’s inaugural, and she

met just last month with her South African ministerial counterpart

here in Washington to conclude two important agreements on cooperation and law enforcement matters.

There have been specific requests to the United States to help

South Africa build capacity and train its police and enhance its law

enforcement capability. A variety of U.S. Government agencies are

on the ground actively pursuing that cooperation and providing assistance and training.

We have much to gain together by cooperating in this regard,

and we look very much forward to it, and we share Chairman Gilman’s interest in the rapid establishment of the international law

enforcement academy in Southern Africa, which will enhance our

ability to cooperate on crime matters not only with the government

of South Africa but with countries in the entire subregion.

Mr. ROYCE. Thank you. We are going to go to Mr. Campbell of

California for his questions.

Mr. CAMPBELL. Obviously, I apologize if they have been asked already, but the votes happen that way. I wanted to ask about ACRI

and where we are on South Africa’s participation in the Africa Crisis Response Initiative. Maybe you could give me an update. I was

particularly interested in knowing if they might be willing to play

a role, if Nigeria is playing a little bit less, maybe in the West Africa region. But if not, where are they on ACRI?

Ms. RICE. South Africa has made it plain that it intends to play

an increasingly important role in international peacekeeping activity. This is a relatively new policy approach coming out of the

white paper that they published in December 1998, and it has alVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
15

ready been manifested in Lesotho, and we look forward to a South

African role in the Congo.

But in terms of the African Crisis Response Initiative, the South

Africans have maintained the position that they prefer that initiatives for training and capacity building in peacekeeping in Africa

be conducted on a multilateral basis under the auspices of the U.N.

or the OAU or SADC.

While we continue to talk at various levels and cooperate with

the South Africans on peacekeeping activities—for example, our

support for the Blue Crane exercise last year, and our bilateral

military cooperation in other spheres—we are not at the stage

where we anticipate a swift decision in South Africa to participate

in the African Crisis Response Initiative.

That is, of course, their prerogative. We continue to discuss ACRI

participation with a number of other governments throughout Africa, including in Southern Africa. Malawi has joined ACRI, and others in Southern Africa may soon take similar decisions——

Mr. CAMPBELL. Who else has——

Ms. RICE [continuing]. We look forward to that.

Mr. CAMPBELL. Pardon me for interrupting. Who else has signed

on in Southern Africa? Is it just Malawi?

Ms. RICE. Malawi is the only one that is actively in the program,

although other countries in Southern Africa have expressed an interest. Our concern is given that our capacity under ACRI is not

infinite, that we work with partners whose ability to make a meaningful contribution at the outset is already well-established.

Mr. CAMPBELL. I refer to notes that our Committee staff prepared in advance, and so it is not of my own knowledge, that President Mandela assured President Clinton during President Clinton’s

visit to South Africa that he ‘‘fully endorsed the African Crisis Response Initiative.’’ And so it is—I take it if that is an accurate description that there has been a cooling. Is that—speak to this.

What do you think it——

Ms. RICE. while the two Presidents talked about ACRI, I don’t

think that is an accurate description or conclusion that, as a result

of that conversation, President Mendella committed South Africa to

ACRI participation.

Mr. CAMPBELL. All right. That is fine.

Apparently, the majority staff of this Subcommittee and President Mandela, I guess.

Second, what happened, or is there an outcome regarding the

patent issue on the parallel imports of the anti-HIV drugs? Where

do we stand on that?

Ms. RICE. Yes. I did respond to that a little bit earlier, and I——

Mr. CAMPBELL. Oh, I am sorry.

Ms. RICE [continuing]. Said quite simply that we were very

pleased that last month the governments of South Africa and the

United States came to an amicable resolution of this issue that we

believe—and I believe the South African government believes—

manages our concerns that any policies and laws in South Africa

be WTO consistent, as well as protect South Africa’s concerns, that

they have the flexibility necessary to provide the majority population with the types of drugs, including those for HIV/AIDS, that

are needed.

16

Mr. CAMPBELL. Let me be specific.

Ms. RICE. At reasonable cost.

Mr. CAMPBELL. Let me be specific. The issue is parallel importing, where the owner of the patent wants to restrict the distribution on a geographical country basis. We call that a vertical restriction in American anti-trust law. It is permitted if an international

owner of a patent chooses to distribute in that manner.

What South Africa was attempting to do was to say, ‘‘Well,

look’’—and Zimbabwe as well—‘‘you are sending the patented items

into other countries at a lower price. We would like to be able to

purchase them in that other price—at that lower price in that

other country.’’ That was where I left the issue, that that was their

request.

At least as I understand it, it is the patent owner’s right to say,

‘‘No, we choose to distribute in this manner.’’ Nevertheless, I voted

with Mr. Meeks on his resolution to say we shouldn’t—that we

should put that secondary to concern about AIDS and the spread

of HIV, and that even if that meant that this rule of distribution

would be impinged upon that there was a greater good.

But I could not deny as a matter of patent and distribution law

as I know it that that was the situation. Do you know enough more

about that to inform me?

Ms. RICE. You are well over my head on the legal issues, but——

Mr. CAMPBELL. Nobody asks me for my anti-trust advice anymore.

Ms. RICE. And you are a lawyer and I am not. But——

Mr. CAMPBELL. I teach at a small college in——

Ms. RICE. Small west coast university——

Mr. CAMPBELL. West coast university.

Ms. RICE [continuing]. To which we both have a great affection.

Mr. CAMPBELL. Yes. Are your alumni dues in arrears?

Ms. RICE. I really ought to defer to my colleagues from

USTR——

Mr. CAMPBELL. No problem.

Ms. RICE [continuing]. On that one.

Mr. CAMPBELL. Mr. Chairman, I have just one quick question, if

I might—the Zulu ANC and the Incatha party’s ANC strife in

Natal. Any news on that? In the regional elections, there was some

concern that the ANC had taken over so many of the local positions

that Incatha might have felt dispossessed or felt out of the opportunity to participate? Is there anything new on that? And if the answer is no, that is fine with me, and I am done.

Ms. RICE. I think that the large picture is that tensions in

KwaZulu-Natal are way down, as they are across the country. The

incidence of political violence is substantially diminished. The IFP

continues to have representation in the government, including important cabinet ministries, and so I think the short answer is that

that situation is a relatively stable one.

Mr. CAMPBELL. And UDF ANC as well? The United Democratic

Front? Or is that a little bit more difficult?

Ms. RICE. A little bit more complicated. There were a couple incidents, as you know, during the election campaign that were a

source of concern. But I think again, the big picture has been one

of remarkable political harmony and opposition and political parVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
17

ties competing peacefully, and there being open political debate in

parliament, and there not being an inordinate number of incidents

of political violence, as we have seen in years past.

Mr. CAMPBELL. Thank you.

Thank you, Mr. Chairman.

Mr. ROYCE. Thank you, Mr. Campbell. If could just respond, Mr.

Campbell. The comment about the concurrence by Mr. Mandela in

his conversation with President Clinton on the ACRI initiative,

that was a press conference in Capetown, and we will willingly provide you that information, as reported in the press, but in point of

fact——

Ms. RICE. You were there, sir. Do you remember?

Mr. ROYCE. I was there. I was there.

In point of fact, there is documentation in the press about Mr.

Mandela responding, about his conversation and responding in support of ACRI. But we will get you that information.

Mr. CAMPBELL. Mr. Chairman, I am informed and grateful for

that. I wonder if it is not impolite to ask, has it been cooling, then,

since then? Is that——

Mr. ROYCE. Is——

Mr. CAMPBELL. Has the South African interest in ACRI been

cooling, in your judgment?

Mr. ROYCE. I understand how you are—I understand your tack

here, but I don’t think we can infer that. But let me just get you

the documentation.

Mr. CAMPBELL. Thank you.

Mr. ROYCE. Just for your own information.

Ms. RICE. I would just say, sir, my sense is that it has been pretty steady state. There have been—there has been interest as well

as concern, and I think for the moment we don’t anticipate any

radical change in the South African posture. They have not come

back to us and said, for example, ‘‘We would like now to actively

participate in the African Crisis Response Initiative.’’

They have indicated that it would be their strong preference that

we work through SADC as a regional organization as we pursue

this approach in the Southern African region. In the meantime, we

have welcomed cooperation, as has the government of South Africa,

on peacekeeping and other regards.

As I mentioned earlier, this Blue Crane operation peacekeeping

exercise that the South Africans hosted last year with the states

of the SADC region, we had—we participated by providing airlift

to countries in the region to be part of that exercise. We had observers there, and we do cooperate on peacekeeping issues in

meaningful ways.

Mr. ROYCE. And let me just add, if I could, I suspect your question to Secretary Rice went to the issue of South African involvement in West Africa. As I understood it or as I heard it. I think

what you are probably going to find is a great deal of interest on

the part of South Africa with respect to Congo or peacekeeping regionally in Southern Africa.

But in terms of West Africa, I am not sure ACRI participation

was ever broached, and so maybe that is the——

Mr. CAMPBELL. I appreciate it, and I will tell you what I had in

mind was simply that if Nigeria’s patience and willingness to conVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
18

tribute is wearing out, then there is a possibility we would look—

that Africa would look elsewhere. But I agree with you, that has

never been the primary focus of South Africa’s involvement in the

multilateral force.

Mr. ROYCE. Right.

Let us go to Ms. Lee of California.

Ms. LEE. Thank you, Mr. Chairman.

Mr. ROYCE. Thank you.

Ms. LEE. Let me ask Madam Secretary, hopefully, a nonlawyer

question with regard to the pharmaceutical issue. I am delighted

that an agreement has been reached, and that now affordable

medicines will be made more available in South Africa. One of the

areas of concern that I am not sure has been resolved or not has

to do with the pharmaceutical manufacturers’ appeal, and has this

appeal been withdrawn? Or, if not, do you know what is going on

and why that appeal is still there, if, in fact, there has been a resolve?

Ms. RICE. The short answer is I am not exactly sure of the status

of the appeal at the moment. I am being told that the court case

has been temporarily suspended, but I think I can get back to you

with the precise details where——

[The prepared Letter appears in the appendix.]

Ms. LEE. Could you please? Because if it has been temporarily

suspended, that is fine. But I think it would help if it is withdrawn.

If it is suspended, I would like to at least know on what basis it

was suspended.

Mr. CAMPBELL. Would the gentlelady yield just for a second?

Maybe we can ask which court. You are talking about a proceeding

within TWO or——

Ms. LEE. There you go back to a lawyer requesting that.

Ms. RICE. No, South Africa. In South Africa. There was a——

Mr. CAMPBELL. So the court——

Ms. RICE. Yes, the companies——

Mr. CAMPBELL. Sued in South Africa.

Ms. RICE [continuing]. Sued in——

Mr. CAMPBELL. Thank you. Thanks for yielding.

Ms. RICE [continuing]. Sued in South African court.

Mr. CAMPBELL. Since you said it is pending in court, I need instantaneously to know which court.

Ms. LEE. That is our lawyer. OK.

Mr. PAYNE. If the lawyer would yield——

Ms. LEE [continuing]. To the social worker. Thank you very

much.

Mr. CAMPBELL. My clock is running.

Mr. ROYCE. Yes. Mr. Payne?

Mr. PAYNE. I think that——

Ms. RICE. It is not the pharmaceuticals that——

Mr. PAYNE. No. I think that the actual South African courts had

a case in their courts to determine whether the law that was

passed in South Africa would stand up——

Ms. RICE. That is right.

Mr. PAYNE [continuing]. In their Supreme Court.

Ms. RICE. That is right.

19

Mr. PAYNE. So the law was never really the law that everybody

reacted to because it is still under the consideration of the courts

of South Africa whether this legislation that was passed was constitutional.

Ms. RICE. That is right. That is our understanding.

Ms. LEE. OK. So you are going to get back to us with regard to

the whole issue——

Ms. RICE. The actual status is——

Ms. LEE [continuing]. The status.

Ms. RICE. But as I said, it has been suspended. We will let you

know why and any of the further details we can provide.

Ms. LEE. OK. Thank you very much.

Mr. ROYCE. We thank Mr. Payne for clarifying that point. That

is accurate, indeed.

Mr. PAYNE. I am a lawyer, too.

Mr. ROYCE. Ms. Lee?

Ms. LEE. OK. Let me just ask you, with regard to the AIDS

threat in South Africa as really a national emergency, how do you

see it impacting the economic development of South Africa? Because during our discussions and putting together our AIDS marshall plan, we found that several companies now are hiring two individuals for one job, given the fact that the crisis is so devastating

that one of those individuals may or may not live. I am wondering

if we have had a chance to really make that assessment.

Ms. RICE. Yes, and so has the government of South Africa. I

think by any measure, there is great cause for concern about the

potential impact of the HIV/AIDS pandemic in South Africa. South

African statistics, as we understand them, indicate that an estimated 81⁄2 percent of the population at present is HIV positive. In

the 20- to 24-year old age group, it is as high as 25 percent, and

there are estimates that within a little more than 10 years perhaps

as high as 25 percent of the entire population could be HIV positive.

The economic implications of this are enormous in South Africa,

as well as in other parts of the world and other parts of Africa. The

government has taken a series of important steps to draw attention

to the problems that HIV/AIDS poses, to increase education, to

make available, as you well know, as we were just discussing, more

affordable medicines and treatments.

President Mbeki himself has I think done a remarkable job of

shining the spotlight on this problem. I recall when we were in

South Africa in February, then Deputy President Mbeki and Vice

President Gore at their press conference wore badges to draw attention to the HIV/AIDS problem.

So public education, which is the most important part of the

challenge in many respects in the developing world, is something

that the government has taken on with vigor. Much more will have

to be done if this is to be turned around.

Ms. LEE. Mr. Chairman, may I just ask one more question?

Mr. ROYCE. Absolutely.

Ms. LEE. Very quickly, with regard to U.S. companies and investment on behalf of United States corporations. How are we assisting

U.S. companies in terms of their focus and their ability to support

and to help in this pandemic that is transpiring now.

20

Ms. RICE. As you know, back in the summer Vice President Gore

unveiled a new anti-HIV/AIDS initiative called the Life Initiative,

which had two principal components. One is a request that is now

pending before Congress for $100 million in fiscal year 2000 to substantially increase our efforts to do prevention education and research on HIV/AIDS worldwide.

The other part of it is a dialogue that is now well underway with

representatives of the U.S. private sector and a broad cross-section

of the senior-most officials in the administration to try to coordinate strategies overseas for dealing with HIV/AIDS in ways that

our companies can make investments that will benefit the people

at risk as well as their own long-term economic prospects.

Ms. LEE. Good. Thank you very much.

Mr. ROYCE. Thank you.

Thank you, Secretary Rice. We will now go to our next panel.

Ms. RICE. Sure. Thank you very much.

Mr. ROYCE. J. Daniel O’Flaherty has been the Executive Director

of the U.S.-South Africa Business Council since 1993. The Business

Council represents U.S. companies doing business in South Africa.

It serves as the private sector secretariat of the U.S.-South Africa

Binational Commission.

Mr. O’Flaherty has extensive background in trade policy issues

and worked as a professional staff member in both the House and

in the Senate. He has been working on South Africa issues since

the late 1970’s when he was a Senior Associate of the Carnegie Endowment.

Judson Ray is Unit Chief of the FBI’s International Training and

Assistance Unit. He has more than three decades of experience in

law enforcement. He has served with the FBI since 1980. Special

Agent Ray’s extensive experience includes consultative services to

the Department of State as the FBI’s chief representative for international training and work in counterintelligence and in white collar crime.

He was the first law enforcement officer in the Nation to be admitted to the state, Federal, and military courts as an expert in the

profiling of serial killers. Special Agent Ray earned a bachelor’s degree at Columbus College and master’s degrees from Troy State

University and Georgia State University.

We thank you both for making the trip up here to testify today.

Mr. O’Flaherty, if you would like to begin at this time.

STATEMENT OF J. DANIEL O’FLAHERTY, EXECUTIVE

DIRECTOR, U.S.-SOUTH AFRICA BUSINESS COUNCIL

Mr. O’FLAHERTY. Thank you very much, Mr. Chairman, members

of the Committee. I appreciate the opportunity to appear today.

Mr. ROYCE. And we appreciate your summary testimony because

your full testimony will be in the record, so we are going to hold

you to 5 minutes. Thank you, sir.

Mr. O’FLAHERTY. Thank you.

I would like to congratulate the Subcommittee on holding this

hearing on our relationship with South Africa, which is not only Africa’s largest market but is also a country whose peaceful transition to free market democracy is widely admired in this country.

21

Passage by the House of the Africa Growth and Opportunity Act

earlier this year, and the prospect of an early vote in the Senate,

indicates that the Congress is serious about strengthening our commercial ties to all of Africa.

Perhaps I can best contribute to the Subcommittee’s understanding and review of relations with South Africa by describing

the U.S. private sector’s current role in South Africa, how that

country is perceived as an investment destination by U.S. firms,

and what the U.S. and South African governments can do to increase the positive contribution that U.S. business can make to

South Africa’s development.

The perception of the private sector—by the private sector of

South Africa at this point here can best be summarized in three

statements. No. 1, South Africa has chosen and maintained sound

fundamental economic policies, but has so far failed in its efforts

to attract the magnitude of foreign investment its economy requires.

Second, U.S. companies are making a significant contribution to

the social, as well as the economic, development of South Africa.

Third, South Africa is a challenging business environment for

American companies, especially in sectors that may be affected by

South Africa’s free trade agreement with the European Union, and

those dependent on government procurement contracts for profitability.

Now, economic growth in the past year in South Africa has been

just above zero, although the likelihood is that for this year it will

be between 11⁄2 and 2 percent. The South African government’s economic management has been very prudent. It has conformed to

international standards that are desired by world—by the international financial institutions and by international businesses.

But the fact is that growth in South Africa is too low to absorb

the enormous rate of unemployment, which is between 35 and 40

percent, depending on how you count the informal sector. In addition, 100,000 jobs a year have been lost since 1994 due to

globalization and integration of South Africa into the world economy.

So given the natural increase of population, combined with immigration from neighboring countries, the country is falling behind.

Now, my second point relates to the contribution that U.S. companies are making both in terms of investment and noneconomic

activity. Our company’s presence has returned to pre-sanctions levels of the mid-1980’s, but this isn’t the mid-1980’s and the world

has changed. Companies no longer need to invest in countries

where they want to market.

They export to them more easily, and as a result there has been

some disappointment in the amount of direct investment—that is,

investment in plant facilities that directly employs people—by

South Africans, in particular, who wanted to see the status quo

ante come back into place.

We do have an investment stock in the country right now of

about $31⁄2 billion. Employment of South African workers has risen

back up to the pre-sanctions level of around 80,000. In 1998, the

United States was the largest foreign direct investor in South AfriVerDate 11-SEP-98 11:36 May 23, 2000 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 64474.TXT HINTREL1 PsN: HINTREL1
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ca, as an individual country but not as large as that of the combined European Union nations.

The business environment—and this is my third and final

point—in South Africa is a challenging one, which is to say that

it has negative aspects to it. The South African government is in

many respects best understood as a labor government. It has not,

consequently, adopted the investment incentives common in many

other parts of the world trying to attract investment. It must reconcile its labor political base with the prudent economic policies expected by the international investing community.

U.S. companies operating in South Africa have to balance global

competitiveness with this local labor and black empowerment considerations that have political resonance. That is the central tension which our companies face in South Africa, and from which a

lot of other issues derive that you will find in my written testimony.

Mr. Chairman, thank you.

[The prepared statement of Mr. O’Flaherty appears in the appendix.]

Mr. ROYCE. Thank you, Mr. O’Flaherty.

Now we will go to Special Agent Judson Ray.

Mr. Ray?

STATEMENT OF JUDSON RAY, SPECIAL AGENT, UNIT CHIEF,

INTERNATIONAL TRAINING AND ASSISTANCE, FEDERAL BUREAU OF INVESTIGATION

Mr. RAY. Mr. Chairman, members of the Committee, fellow panel

members, I appreciate the opportunity, too, to appear before the

Committee today to discuss U.S.-South African relations, present

and future.

Secretary Rice has already summarized the Binational Commission and the role that that Commission plays in both domestic and

international matters involving both South Africa and the United

States. The Committee which has relevance to my comments, is, of

course, the Subcommittee on Justice and Anti-Crime Cooperation.

As you know, Mr. Chairman, that Committee—that Subcommittee is chaired by the Attorney General, Attorney General

Janet Reno, and she recently traveled to Capetown, South Africa,

in February of this year to chair this first meeting. The Committee

established basic terms of reference for future meetings and came

to the agreement on a wide range of law enforcement issues, including training, technical assistance, and cooperation.

Following that meeting, Attorney General Reno came back to this

country and has put together experts from the Department of Justice, the Department of Treasury, and, of course, the Department

of State, and has developed a comprehensive strategy to consult

and provide assistance to South Africa and other African nations

regarding training and other justice-related issues.

Now, the reason why this is important to the Justice Department, and, of course, to the FBI is somewhat clear to us, but I

would like to explain it here. Because of the global mandate of

many of the FBI and other Federal law enforcement investigative

initiatives, we must make training investments in police systems

of countries where the FBI’s investigative mission is affected.

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In virtually all major FBI investigations for the past 20 years, a

significant international aspect develops. Now, to balance its interest in addressing the international aspects of investigations, with

the requirement to respect host country sovereignty, the FBI and

other U.S. law enforcement agencies must rely on the capabilities

of the host country’s law enforcement community.

It is important to note that due to differences in judicial systems,

or due to absence of appropriate treaties and agreements, the FBI

is unable at times to undertake investigations in foreign countries

and to bring them to successful conclusion.

I need not point out that the FBI is largely dependent upon the

local criminal justice system and the level of police training and judicial training that its members have. The recent bombings in East

Africa, the World Trade bombing, Russian money laundering investigations, the old BCCI investigations, and other high-profile cases

are but a few examples of the increased threat to the United States

caused by international crime.

Now, in order to ensure that such cases are brought to successful

conclusion, the establishment and maintenance of effective liaisons

through training and other cop-to-cop initiatives must be developed

and enhanced.

Now, with respect to the emerging democracies in Eastern Europe, the United States Government’s response to that, from a law

enforcement perspective, was the establishment of an international

law enforcement academy. That academy, as many of the members

of the Committee know, is effectively operated in Budapest, Hungary.

To date, that academy has trained well over 1,000 law enforcement mid-level officials from approximately 23 different countries

in Eastern and Central Europe. Another 4,000 people have been

trained in short courses such as drug interdiction, counterfeiting,

and a host of other crime-specific issues that affect some of the

strategic interest in operations of many of the Federal law enforcement agencies in this country.

I can point to many occasions where we have seen examples of

cooperation between the bordering countries in major cases that

could only have been brought to successful conclusions because of

the relationships established there in that 8-week course in Budapest. There is a sense on the part of many people in Justice that

we think that this simple approach could bear fruits in Southern

Africa.

Two years ago, I, at the request of the State Department, was

invited to conduct an assessment of the state of training in South

Africa. I met with a number of police, judicial, political, community

leaders, and university people in my analyses of the state of police

training in South Africa.

The one thing that I came away with is this, and I think that

we can safely say that in any democracy or emerging democracy,

there is tremendous weight, tremendous responsibility placed on

the shoulders of police officers from day to day. As Mr. Gilman

pointed out, many cops have been killed in South Africa as we

speak probably.

It seems to me that the police in these societies are the only people who are duly constituted often times by the constitution to,

24

based on an intuitive grasp, take the live of a citizen. When I recognized the state of training in South Africa, it had a chilling effect

on me as a police practitioner over the years having policed many

communities in this country. That is an awesome responsibility?

But, more importantly, it struck me that most citizens, as I travel around the world, are tired of investing in bankrupt police systems. They would just rather put their money somewhere else, so

that it is imperative that we find a way to begin to assist this part

of the world in bringing about the kind of changes that needs to

be brought about.

Simply stated, South African police service must find a way to

shift from a confessional-based investigative approach to a forensic

investigative approach to ferreting out crime in that country.

I was recently on a trip led by the Department of State, and I

was reading the paper. Commissioner George Fivaz, who I met the

last time that I was there, stated, ‘‘A quarter of my cops can’t read.

Functional illiteracy is ripe within the police department, making

it difficult for about 30,000 officers to handle even the most basic

task.’’

Commissioner Fivaz went on to state that, ‘‘Considerable

progress has been made in the transformation of the SAPS. Across

the force as a whole, 55 percent are now black, and the rest of the

Department is white.’’ Those figures are not that representative as

you move up the ladder in terms of mid-management and upper

management.

We think that under the Binational Committee and the strategy

that the Attorney General has mandated we see a number of programs now being implemented. Secretary Rice spoke to those

issues. I think critical to that is one of the first initiatives was to

assist the South African police service in developing a civilianbased complaint review. A lot of time and attention was spent on

this. In fact, we assigned a person for a year, working with the Justice Ministry, in order to make that come about.

But looking at the crime picture in this country, there are a

number of things going on there. You see the rise in what would

be commonly referred to as vigilante groups. When institutions

within the government are weak or does not have the capacity to

respond to crime, often times the vacuum is filled by organized

crime elements, and certainly we have seen that.

In the interest of time, I will stop at this moment to entertain

questions from the Subcommittee.

[The prepared statement of Mr. Ray appears in the appendix.]

Mr. ROYCE. All right. Thank you, Mr. Ray. Let me just say that,

is the establishment of a program, of an international law enforcement academy, is it feasible? Then, how do the South Africans respond to the concept? And is it in the administration’s plans to do

that? Let us just have you recap on those three quick questions

quickly.

Mr. RAY. I think in the first instance we recognize, based on at

least my speaking with a number of people in the police service,

that there are already systems in place to move these kinds of

issues forward. The Southern African Police Commissioners Organization is very, very interested, but want to be empowered in any

25

decisions as it relates to the establishment of an ILEA in Southern

Africa.

Because of the alliance that all of these police commissioners

have, we think it prudent to certainly consult, negotiate, empower,

and to ensure that these things are done before we become prescriptive in anything that the USG might do in this area.

Mr. ROYCE. So at this point in time, the establishment of an

ILEA in South Africa is not in the administration’s plan. You have

traveled there twice on this mission in order to assess the viability

of all of this. It is feasible. You are still in negotiation. I am just

trying to get a determination of exactly where we are, or where the

administration is, in terms of pushing the concept.

Mr. RAY. Mr. Chairman, would be something that Ms. Rice

would——

Mr. ROYCE. I see.

Mr. RAY [continuing]. Could answer.

Mr. ROYCE. Right.

Mr. RAY. That is a foreign policy issue dealing with another government——

Mr. ROYCE. Right.

Mr. RAY [continuing]. Our mission was to look at a number of

countries in South Africa to determine the feasibility. That report

is being drafted now by the head of the delegation, which was out

of State, and should be made available to Ms. Reno and Mr. Johnson and to Ryan Beers at State Department.

Mr. ROYCE. Under the definition of ‘‘feasible,’’ the bottom line is

it is feasible.

Mr. RAY. It is feasible to establish an international law enforcement academy in Southern Africa.

Mr. ROYCE. All right. OK. Let me ask you a question about the

bombing of the U.S. Embassy there because I—since we have you

here, and given your expertise, there was a suspect Kalfin Khamus

Mohammed in that bombing, recently apprehended in Capetown.

He was extradited to the United States.

In the summer of 1998, suspected Muslim extremists bombed a

Planet Hollywood Restaurant there in Capetown, and 60 bombs, six

directed against police stations, were set off in the first half of 1999

in South Africa.

In your written testimony, you mentioned that Islamic extremism is a growing threat in South Africa. Do the Muslim extremists in South Africa have links to Osama Bin Ladn, to your knowledge? Or to other international terrorist groups? How great a

threat are their activities to the U.S., in your opinion?

Mr. RAY. Mr. Chairman, I think it is largely known that Mr. Bin

Ladn has a worldwide organization which sells in many parts of

the world. In view of the fact that this is a very sensitive ongoing

investigation, I don’t think it would be——

Mr. ROYCE. I understand.

Mr. RAY [continuing]. Appropriate to comment openly.

Mr. ROYCE. Right. I understand. I concur on that.

OK. Let me turn to Mr. O’Flaherty and ask him, in your testimony you mentioned that South Africa has not adopted the investment incentives common in many parts of the world. What investment incentives might American businesses find attractive if they

26

were offered by the South African government? What particularly

are you referring to there?

Mr. O’FLAHERTY. Many countries, particularly in South Asia or

in East Asia, chose to offer tax breaks, tax holidays, subsidies of

one sort or another, to companies to come in and invest, produce

in those countries. South Africa made an explicit decision in 1994

that it would—those kinds of incentives often attract the wrong

sorts of investors. Investors leave once the incentive runs out.

They don’t contribute to the account. They would prefer to do it

the old-fashioned way, by getting their policies right and attracting

investors that would be there for the long term and make money

and generate incomes and jobs. I happen to believe that is a very

reasonable decision, but the fact is that American companies looking for extra reasons, other than the fundamentals to invest in

South Africa, don’t find them.

Mr. ROYCE. I think I concur with you in terms of the long-term

interests of South Africa probably. Probably stand with good, consistent policies without creating subsidies. But on the policy front,

what policies discourage investment there, if I could ask you?

Mr. O’FLAHERTY. I think it is not accurate to say that their policies have discouraged investment. What you have in South Africa

is a system of government—private sector-government relations left

over from apartheid that has generated huge inefficiencies, enormous distortions, and created relationships where the regulators

were in bed with the regulated and where the government was not

truly an objective force in managing the economy.

We have—that system has broken down. It has been reformed to

a very large extent, but our companies still face problems in getting

procurement. There are challenges in the transparency of the government procurement system which I enumerated at some length.

But in the interest of time, I will just say that there are oddities

about a way business is done in South Africa that sometimes make

it difficult for American companies to enter the market.

Mr. ROYCE. I see.

Mr. O’FLAHERTY. That is entirely independent of the international agreements that we have alluded to before, such as the

EU trade agreement.

Mr. ROYCE. I thank you. Before I turn to Mr. Payne, I should

mention that Chairman Gilman has submitted some questions for

you, and we will provide you with those questions later, if we

could. We are just going to do that for the record. I thank you very

much.

Mr. Payne?

Mr. PAYNE. Mr. Ray, do you think that Africa, in general, would

benefit from the creation of an international law enforcement agency in Africa. Or do you know whether there has ever been any discussion about that? I guess, in addition to that, do you think that

by creating such an institution, there would be some suspicion on

the part of some African leader or heads of state that this might

be a counter-intelligence operation? Going back to the old Cold

War, I guess there are still feelings, remnants of that sort of thing.

Mr. RAY. Yes, sir. These issues came up with the development of

the international law enforcement academy in Budapest, with

some—with our Russian counterparts. At that time, we sat down

27

with all of the governments and reassured them that this academy’s goal was to develop and to professionalize criminal investigators.

On point, we are very candid that we still had our national security interest at heart, and we would never blend those two in that

setting. The Russians were satisfied with that, and to date we have

tried to keep those two separate in that academy.

So in the instance of Africa, while I have not personally heard

that as a concern, in terms of the center being an intelligence center, the Africans are concerned about their sovereignty, and they

are concerned about too much of a U.S. role. But they recognize

that this academy will aid and assist them in developing a professional law enforcement base, and from what I can gather are enthusiastically wanting to pursue this.

Mr. PAYNE. I guess, under apartheid you didn’t have investigations and Miranda rights, and all the things that a just law enforcement operation would have.

Do you think that because of the way that policing was run in

the past where, perhaps the officers were judge and jury, and executioner, too, I guess, that there is a lack of detective work and

that kind of work being done in the South African police department? It seems like there has just been, an explosion of petty

crime, and even not so petty crime, and that perhaps the police department is lacking those kinds of expertise by virtue of the past

when they didn’t have to go through all of that.

Mr. RAY. Yes. I think that many of the leaders in the South African police service recognize that because they operated so long on

this confessional base system that the rules of criminal procedure,

forensic applications, they are just behind in those areas. But I

think that there is a willingness on the part of the people that I

met to recognize that and to look out for donor countries, not only

the U.S. but other countries that are operating.

But to answer your question, yes, the police—the South African

police have a deficit in that area. But they recognize it. I think that

is more—that is very important.

Mr. PAYNE. That is great.

Let me ask Mr. O’Flaherty. There is talk of a lack of investment

in South Africa, but what about the 90-plus percent of the assets

of South Africa that also in the hands of the minority white South

Africans? Have they decided to invest in their country yet? I know

this would unleash much needed investment, but have they found

fit yet to invest in their own country?

Mr. O’FLAHERTY. In fact, they have not been able to invest anywhere else for a very long time because of exchange controls. So

that because of exchange controls there were distortions in the pattern of investment. When you have been to South Africa, you will

have noticed the enormous number of shopping malls that exist.

You will have possibly gone to Sun City or to other of the casino

resorts. Many of these were created by virtue of the absence of normal investment opportunities that people would have taken advantage of abroad. So that exchange controls have kept money in

South Africa.

The question is whether that meant that the money was used in

the most efficient way or in a way that benefited the majority of

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the population, and the answer to those two questions is definitely

no. The money is there. It is a question of where it goes.

Mr. PAYNE. Finally, since my time has run out, and still there

is a question to the FBI that Mr. Gilman would like answered too

I will actually submit that, in writing so that you can respond to

that.

Finally, have any of the sort of programing we had when we

were in an economic downturn, such as the WPA in the 1930’s, and

the CCC camps that President Roosevelt started, public works, and

I know South Africa does not have the—necessarily the capital that

it needs.

But has the project of housing development or road construction

done by the government had any impact on job creation, that is,

in addition to creating better a living environment? Has the government implemented any kind of counter cyclical program to

break the cycle of this unemployment by investing Federal dollars?

Mr. O’FLAHERTY. Congressman, they are in a bind. They are trying to get their government deficit down in order to attract foreign

investment, in order to meet the standards of the world economic

community. In order to do that, they can’t engage in deficit spending. They can’t engage in traditional pump priming, New Deal programs, which would be very attractive to a government in their position.

They have, instead, chosen to engage in training and education

programs. But as far as creating direct government employment of

the sort that you are talking about, there hasn’t been very much

of it. I think it does go back to their need to demonstrate fiscal discipline to the world.

Mr. PAYNE. Thank you very much.

Mr. ROYCE. Thank you.

Ms. Lee?

Ms. LEE. Thank you very much.

Mr. O’Flaherty, let me just ask you briefly about the U.S.-South

Africa Business Council’s involvement and discussions with regard

to the whole HIV/AIDS pandemic. I notice in your testimony you

say all U.S. employers are participating in workplace education,

which I think is great, and I hope that it is all U.S. employers that

are doing that.

Beyond that, I am concerned about the benefit packages that

U.S. employers have for South African workers, as well as clinics,

health care services, access to medicines. Have you had a discussion with regard to strategies on this pandemic?

Mr. O’FLAHERTY. Congresswoman, yes, we have. But I must tell

you that these discussions need to go into much greater depth. This

crisis has—the awareness of the crisis and the sense of real crisis

has only evolved in the last 9 months to a year. South Africa had

a spreading AIDS problem long before it was publicly acknowledged by anybody.

So I think one of the important contributions that an organization like ours can make is to help our companies, along with the

American Chamber of Commerce in South Africa, to cooperate, collaborate, and to focus their efforts in similar ways. Obviously,

workplace education is the place where they can most effectively

operate, but clinics is certainly another. Of course, some companies

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like the pharmaceuticals have special expertise and special resources.

But it is something that affects all American companies and all

South African companies. So we have work to do.

Ms. LEE. Thank you. Let me—we heard Secretary Rice talk

about the discussions now with regard some strategies that are

taking place. Are you involved in those discussions?

Mr. O’FLAHERTY. Yes, absolutely. We have been participating in

discussions with the Vice President’s office now for—since last

summer.

Ms. LEE. Very good. Thank you.

Let me ask Mr. Ray. Just briefly, I don’t know a lot about the

international law enforcement academy, and it has been fascinating to hear your presentation this morning. Following up on

Mr. Payne’s question, with regard to the law enforcement academy

being perceived as a place for investigations or intelligence gathering—is, in fact, that—could that be part of the operation, if, in

fact, we wanted it to be? Are covert actions allowed or not allowed?

Mr. RAY. My personal opinion would go something like this. All

things are possible. But one would have to balance the need for our

desire to correct the criminal investigative process in this country

against the benefits that might be gained by what you have suggested. In that sense, on balance, it just wouldn’t make any sense.

The history here with these academies is that under no circumstances do we allow, at least under leadership of the FBI, to

allow that kind of thing to creep in.

It has never been—it was an issue with the Russians up front.

We came to the table, put the cards on the table. They were satisfied with our position, and I have been involved with this process

probably longer than anybody in the government, and not——

Ms. LEE. Do you coordinate with the CIA?

Mr. RAY. There is no coordination with the CIA on these issues.

Ms. LEE. Thank you very much.

Mr. ROYCE. I thank our witnesses.

Before we adjourn, I would like to recognize one of our interns—

this is her last week with us—Saadia Lababidi is with us, and I

would like her to stand at this time. She is originally from Lagos,

Nigeria. She has resided in Cairo and Colorado, and she has been

of great help to our Subcommittee, and I thank her very much.

I thank you, gentlemen, for making the trip down here to testify

today before our Committee. Thank you so much.

The meeting is now adjourned.

[Whereupon, at 4 p.m., the Subcommittee was adjourned.]

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