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35–408 PDF 2007

H.R. 180, THE DARFUR ACCOUNTABILITY

AND DIVESTMENT ACT OF 2007

HEARING

BEFORE THE

SUBCOMMITTEE ON 

DOMESTIC AND INTERNATIONAL 

MONETARY POLICY, TRADE, AND TECHNOLOGY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 20, 2007

Printed for the use of the Committee on Financial Services

Serial No. 110–16

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

ALBIO SIRES, New Jersey 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

ROBERT WEXLER, Florida 

JIM MARSHALL, Georgia 

DAN BOREN, Oklahoma 

SPENCER BACHUS, Alabama 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

PAUL E. GILLMOR, Ohio 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

KENNY MARCHANT, Texas 

THADDEUS G. McCOTTER, Michigan

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III)

SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY POLICY, TRADE, AND

TECHNOLOGY

LUIS V. GUTIERREZ, Illinois, Chairman

CAROLYN B. MALONEY, New York 

MAXINE WATERS, California 

PAUL E. KANJORSKI, Pennsylvania 

BRAD SHERMAN, California 

GWEN MOORE, Wisconsin 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

WM. LACY CLAY, Missouri 

KEITH ELLISON, Minnesota 

CHARLES A. WILSON, Ohio 

ROBERT WEXLER, Florida 

JIM MARSHALL, Georgia 

DAN BOREN, Oklahoma 

RON PAUL, Texas 

MICHAEL N. CASTLE, Delaware 

FRANK D. LUCAS, Oklahoma 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JEB HENSARLING, Texas 

TOM PRICE, Georgia 

PATRICK T. MCHENRY, North Carolina 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

KENNY MARCHANT, Texas 

(IV)

C O N T E N T S 

Page 

Hearing held on: 

March 20, 2007 ................................................................................................. 1

Appendix: 

March 20, 2007 ................................................................................................. 43

WITNESSES 

TUESDAY, MARCH 20, 2007

Bacon, Kenneth H., President, Refugees International ........................................ 24

Brownback, Hon. Sam, a U.S. Senator from the State of Kansas ....................... 8

Ismail, Omer, Fellow, Kennedy School of Government at Harvard’s Carr 

Center for Human Rights Policy ......................................................................... 19

Lee, Hon. Barbara, a Representative in Congress from the State of California 2

Morrison, J. Stephen, Director, Africa Program, Center for Strategic & International Studies ................................................................................................... 28

Payne, Hon. Donald M., a Representative in Congress from the State of 

New Jersey ........................................................................................................... 6

Prendergast, John, Senior Advisor, International Crisis Group .......................... 21

Sterling, Adam, Director, Sudan Divestment Task Force .................................... 26

Williams, Michael L., Commissioner, Railroad Commission of Texas ................ 22

Wolf, Hon. Frank, a Representative in Congress from the State of Virginia ..... 5

APPENDIX 

Prepared statements: 

Bacon, Kenneth H. ........................................................................................... 44

Ismail, Omer ..................................................................................................... 48

Morrison, J. Stephen ........................................................................................ 53

Prendergast, John ............................................................................................ 59

Sterling, Adam .................................................................................................. 64

Williams, Michael L. ........................................................................................ 68

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Sherman, Hon. Brad: 

Statement of the Armenian Assembly of America ......................................... 79

(1)

H.R. 180, THE DARFUR ACCOUNTABILITY 

AND DIVESTMENT ACT OF 2007

Tuesday, March 20, 2007

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON DOMESTIC AND

INTERNATIONAL MONETARY POLICY, TRADE, AND TECHNOLOGY, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. 

The subcommittee met, pursuant to notice, at 1:05 p.m., in room 

2128, Rayburn House Office Building, Hon. Luis Gutierrez [chairman of the subcommittee] presiding. 

Present: Representatives Gutierrez, Maloney, Sherman, Meeks, 

Moore of Kansas, Clay; Paul, Castle, and Roskam. 

Chairman GUTIERREZ. Good afternoon. The Subcommittee on Domestic and International Monetary Policy, Trade, and Technology 

of the Committee on Financial Services will come to order. 

Today’s hearing is a legislative hearing on H.R. 180, the Darfur 

Accountability and Divestment Act of 2007, introduced by Representative Barbara Lee. In this hearing, the subcommittee will 

closely examine divestment strategies for the region and hopefully 

help this committee and the House in to determine the best way 

forward. 

With violence and atrocities in Darfur getting worse on a daily 

basis, it is important that we explore all of the available options 

we have at our disposal to put a stop to the barbaric slaughter of 

innocent men, women, and children. In my opinion, H.R. 180 

should be an integral part of our overall strategy to put an end to 

genocide in Darfur, and I commend Congresswoman Lee for her efforts on this legislation. 

Before I go to our first panel, I ask unanimous consent that all 

members of the Committee on Financial Services who are not members of this subcommittee be permitted to participate in today’s 

subcommittee hearing. Per committee rules, we have agreed to 

limit opening statements to 10 minutes per side, but without objection, all members may submit written statements. 

I am going to introduce the members of our first panel first, and 

then we will go back to opening statements, if there is no objection. 

Hearing no objection, that’s what we will do. 

We could not ask for a more distinguished panel on this issue 

than our first panel today. Joining us we have Congresswoman 

Barbara Lee, a relentless advocate on Darfur issues, and the author of the Darfur Accountability and Divestment Act of 2007. 

Thank you, Congresswoman Lee, for all of your work on this issue. 

2

We are also joined by Congressman Frank Wolf, a tireless and 

widely respected advocate for human rights around the globe. He 

is a senior member of the House Appropriations Committee, where 

he serves as ranking member of the State Foreign Operations Subcommittee, which has oversight of the State Department and other 

international programs and organizations including the Peace 

Corps. 

Congressman Wolf is also co-chairman of the Congressional 

Human Rights Caucus, a bipartisan organization of over 200 House 

Members that identifies and works to alleviate human rights 

abuses worldwide. I welcome you both, and I recognize Congresswoman Lee for her testimony. 

STATEMENT OF THE HONORABLE BARBARA LEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. LEE. Thank you very much, Mr. Chairman, and let me thank 

you and the ranking member and Chairman Frank for holding this 

very important hearing today, and also for your leadership. 

As a former member of this very subcommittee, it is truly an 

honor to come before you today to testify on my bill, H.R. 180, the 

Darfur Accountability and Divestment Act, better known as DADA. 

I also want to thank Congressman Wolf for his steadfast leadership, and for helping to make sure that the world knows that—

here, at least, in the House of Representatives—this is a bipartisan 

issue. Genocide knows no party line, and we have worked together 

on many, many issues relating to Darfur and genocide. So thank 

you, Congressman Wolf, and I would also like to thank all of the 

panelists who will be here shortly. 

Twelve years ago, Mr. Chairman, the world stood by as nearly 

one million people were slaughtered in the genocide in Rwanda. 

The best our country could do then was, after the fact, to apologize 

for our failure to act. Many of us swore that another Rwanda would 

never happen again on our watch. But today, Mr. Chairman, it is 

happening again. 

Nearly 3 years ago, on July 22, 2004, Congress formally declared 

that the ongoing atrocities in Darfur constituted genocide. Again, 

this was a bipartisan initiative. Congressman Payne led the way 

with many Republicans, and we were able to finally do this monumental pronouncement, which—it still, unfortunately, is a genocide 

that we are witnessing. 

Since the start of the conflict, it is estimated that nearly 450,000 

people have been killed, and 2.5 million innocent civilians have 

been displaced. I witnessed this ongoing tragedy firsthand in January of 2005, when I visited the refugee camps in Chad, and went 

into Darfur with two great humanitarian leaders, Don Cheadle, the 

brilliant Academy Award nominee, star of Hotel Rwanda, and Paul 

Rusesabagina, whose courage in Rwanda saved many lives. That 

delegation was led by Chairman Ed Royce of California. It was a 

bipartisan delegation. And, again, we all witnessed the horrific acts 

of genocide, and the results of those acts of genocide in the camps. 

In February of 2006, under the very bold leadership of House 

Speaker Nancy Pelosi, I visited the refugee camps again in another 

region of Darfur, and we saw all of the suffering around us. It had 

3

not gotten any better. We heard from people who had witnessed, 

and fled from, the ongoing genocide. 

I can remember going into one of the camps where children had 

drawn pictures of airplanes bombing the refugee camps, of men on 

horseback with machetes and rifles, and of village huts blowing up 

in smoke, and in flames. And these kids, of course, were traumatized. The men and women were also traumatized by what they 

had seen. And I was convinced, then, that these children did not 

lie. They told the truth. The Khartoum government was coordinating, with the Janjaweed, to conduct the rape and the slaughter 

that was taking place in these camps. 

Although a tentative peace agreement was signed in May of last 

year, it was not accepted by all parties. Rather than following 

through on this obligation, the Khartoum government has remained defiant—quite defiant—to this day. Meanwhile, the killings 

continue, the rapes, the starvation, the dislocation, they all continue. 

The genocide is real, and it is happening on our watch. The 

credibility of the United States is on the line. We have to be about 

action, not just talk. We must use all of the tools that we have 

available to end this genocide. And I believe, at this point, that we 

have to hit Khartoum where it hurts, and that’s in their pocketbooks. 

As many of you know, divestment was a successful tool in ending 

apartheid in South Africa. It put our country on the right side of 

history when we finally, after many, many years, imposed sanctions on the apartheid regime in South Africa. My predecessor, 

Congressman Dellums, led that fight, and I believe the bill was introduced for at least 12 years before the Congress overrode President Reagan’s veto in the early 1980’s. 

Today, State legislatures, colleges, and universities are all leading targeted divestment campaigns against companies doing business with the Khartoum regime. State legislatures in California, 

Vermont, Oregon, New Jersey, Maine, Connecticut, and of course, 

your State, Illinois—which I believe was the first State, or Mr. 

Payne’s State, great competition there; we were a little slow, but 

California did come, finally—we have all passed legislation mandating divestment of State funds from companies that conduct 

business in Sudan. And many more States are starting to follow in 

their lead. 

Divestment campaigns are ongoing in over 17 other States. Additionally, students, young people, such as Students Taking Action 

Now: Darfur, better known as STAND, are driving their respective 

colleges and universities to divest from companies doing business 

with investments in the Sudan from Harvard University and Yale, 

to the University of California, my alma mater, and Stanford University, and many schools have all divested their funds from—or 

placed restrictions on investments of their funds in—certain companies that conduct business in the Sudan. 

In April 2006, the House passed H.R. 3127, the Darfur Peace and 

Accountability Act, by a near unanimous vote of 416 to 3. And I 

have to commend Congressman Payne for working so diligently and 

effectively, in a bipartisan way, to make sure that this did pass and 

become the law of the land. 

4

Among a number of important provisions, the House went on 

record in support of specific language that I added in section 11 of 

the bill, which empowered States to enact divestment legislation 

targeted at the Sudan, without fear of being pre-empted by Federal 

laws. 

Unfortunately, Mr. Chairman, a single Senator in the other body 

objected specifically to this language, and in the interest of passing 

the larger bill, we compromised and pulled it out. Now there are 

signs that the divestment movement at the States may be in trouble, and may need our help. And so, this bill, the DADA bill, seeks 

to rectify this problem by including language that protects State divestment efforts from being pre-empted by Federal law. 

My bill takes the divestment movement to the next logical step, 

and that is, of course, the Federal Government. This bill requires 

the Securities and Exchange Commission to take steps to identify 

companies listing securities on the U.S. capital markets that are 

also doing business in the Sudan, and to require these companies 

to declare the nature of their business operations. 

If these companies are propping up the Khartoum government in 

any way, or if they are engaging in the sale of military equipment 

or dual-use technology, like radar systems, then my bill would prohibit the Federal Government from entering into new contracts or 

renewing any existing contracts with those companies. 

Already, just the introduction of my bill alone has convinced two 

companies, Siemens AG and ABB, to suspend their business operations in the Sudan because of this contracting requirement, which 

is a positive step in the right direction. 

Let me be very clear, though. Companies that do not support the 

government of Sudan or the government-backed militias, or that 

are working for peace and security, or providing humanitarian assistance in Darfur, will be exempted from this requirement. We 

want to get at those who are the worst offenders in the Sudan—

by and large, those companies that are engaged in, of course, the 

petrochemical and natural resource extraction industries, and who 

rely on government complicity to allow them to operate. 

My bill would also charge the Government Accountability Office 

with investigating the investments made by the Federal Retirement Thrift Investment Board, which manages a pension plan for 

3.6 million people with over $186 billion in assets. I don’t believe 

the American people, especially Federal employees, want their 

blood on the hands of those who are getting killed in Darfur. 

Think about the potential impact that $186 billion could have on 

the marketplace. That would be a huge accomplishment, and would 

guarantee to all of our Federal Government employees that their 

savings and their pension funds will not be used to fund genocide. 

We have a moral obligation to do everything in our priority in the 

genocide in Darfur, and we have a fiduciary responsibility, also. 

And this is not a partisan issue. Currently, we have over 80 cosponsors on the DADA bill, and I am willing to work with the committee, Mr. Chairman, and members on both sides of the aisle, to 

move this legislation forward. I am open to— 

Chairman GUTIERREZ. Thank you. 

Ms. LEE.—any suggestions to strengthen it. The bottom line is 

that we must keep up the pressure on the Khartoum government 

5

in any way we can. We must insist on real political settlement, a 

peace agreement that goes far beyond the May 6th agreement, and 

we must ensure that Darfurians can return home to their villages 

and reclaim their lives. We must bring the perpetrators of the 

state-sponsored genocide to justice. 

Thank you, Mr. Chairman. I look forward to answering any questions. 

Chairman GUTIERREZ. Thank you. And now we have our distinguished and dear friend, Congressman Frank Wolf. 

STATEMENT OF THE HONORABLE FRANK WOLF, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA 

Mr. WOLF. Thank you, Mr. Chairman. I also want to thank Congresswoman Lee and Congressman Payne for their efforts on this. 

I have been to the Sudan five times. Sam Brownback and I led 

the first group that went in there, back in the summer of 2004. I 

think everything that Congresswoman Lee said—there is not much 

more that you can say. 

These people have been living in camps, sometimes for almost 4 

years, on 900 or 1,000 calories a day, with no medicine, and human 

feces and animal feces all over the place. And this institution that 

we’re all honored to be part of has talked a lot about this. 

But, really, fundamentally—and I can get into it on everything 

from the helicopters coming in, the bombers bombing, the 

Janjaweed outside, coming in and shouting and hollering, and they 

hang around the camps all morning, early in the morning. When 

the women go out to the camps, they rape the women. And the 

U.N. has done fundamentally nothing. China has blocked the security council, so I’m not even going to read my statement. 

What she says is true. It’s the only thing that made the difference with regard to South Africa. You ought to report this bill 

out, get it on the Floor, bring it up under suspension, and anyone 

prepared to vote no, let them vote no, and get it over to the Senate. 

But we have really done a lot of talk. 

It was 3 years ago that Congress called it genocide, Secretary 

Powell called it genocide, President Bush called it genocide. And in 

reality, life is no better, and in some respects even worse, because 

if you’ve been in a camp for 3- to 31⁄2 years, your system is down, 

your children haven’t had any education, and you have had death 

and everything else. 

So, I think the sanction issue is the only issue. The diplomatic 

efforts have pretty much failed. President Bush has appointed Andrew Natsios, and Andrew is doing a good job, working his heart 

out trying, but overall, diplomacy has failed. And other than Barbara Lee’s idea, there is nothing facing this Congress that will really bring this thing to a conclusion. 

So, I will submit my statement, and I support the passage of the 

bill quickly, because again, it’s been going on now for 4 years. 

Chairman GUTIERREZ. Thank you so much, Congressman Wolf. 

Congressman Donald Payne is a recognized expert on African 

issues, and a distinguished member of the House Committee on 

Foreign Affairs, where he is now chairman of the Subcommittee on 

Africa and Global Health. Mr. Payne was a driving force behind the 

passage of a resolution declaring genocide in Darfur, and we ask 

6

him to please give us his statement. We are so happy to have him 

here this afternoon. 

STATEMENT OF THE HONORABLE DONALD M. PAYNE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PAYNE. Thank you, Mr. Chairman and Ranking Member 

Paul. It’s a pleasure to be here before your subcommittee, and I appreciate the opportunity to have some comments on this very timely and very important issue of the divestment of public funds from 

entities doing business with Sudan. 

Let me begin by commending Representative Lee for this legislation. She was a very valued member of the Africa subcommittee 

until her ascension, I guess, to the Appropriations Committee, and 

we do appreciate the work that she continues to do. 

Of course, there is no greater champion on Sudan than Congressman Wolf. He has been fighting the battle of Sudan since before 

I even came to Congress. He worked on the north/south situation, 

where for 21 years, it was a civil war where 2 million people died, 

and 4 million people were displaced, but Congressman Wolf was 

there the entire time, pushing for what finally became the comprehensive peace agreement. There is no person who has done 

more over the period of time than he has. 

And he has current legislation that will have an institute on agriculture named after the late Dr. John Garang, who actually 

fought for 21 years to have Sudan recognize the rights of the people 

of the south, fought for 21 years, and was killed in a helicopter 

crash, mysteriously, 21 days after the agreement was signed, and 

the new government went into effect. 

So, we have a lot of tragedy in the story of Sudan, but we have 

to continue. in 2004, I, along with others, introduced a resolution 

calling the violence in Darfur by its rightful name, genocide. And 

calling on the international community to take action to stop it, 

Congresswoman Barbara Lee must certainly be commended for her 

work on divestment. Her bill, the Darfur Accountability and Divestment Act of 2007, is critical to the fight to end genocide in 

Darfur. 

Included in the bill is language which would protect States who 

divest from legal action. State senator Jackie Collins championed 

divestment legislation in Illinois, which has been mentioned. However, the National Foreign Trade Council, a Chicago-based group, 

Mr. Chairman, filed suit against the State of Illinois, and actually 

won their case earlier this month. Many States would face the 

same fate, without the lead bill. 

I believe that there are a number of things the Bush Administration can and should do to end genocide, including enforcing, along 

with our allies, a no-fly zone over Darfur, which I have asked for 

in a bill that had several hundred sponsors. But then, formerChairman Hyde had my bill tabled, and a new bill came out that 

took out the no-fly zone. I think if that legislation would have been 

able to go through, we would have seen different results in Sudan 

now. But that’s the past, and we have to move forward. 

We need to continue to push sending U.N. and NATO troops to 

help the Africa union. Just yesterday, Bashir said he wants to reVerDate 0ct 09 2002 15:24 Jul 20, 2007 Jkt 035408 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 K:\DOCS\35408.TXT HFIN PsN: TERRIE
7

negotiate the agreement in which he first said that U.N. troops 

could come in. He said then that it had to be a hybrid force, and 

now he is saying we have to renegotiate, and maybe there will be 

no force at all. 

And so, we need to continue to push the United Nations to impose international sanctions on leaders of the National Congress 

Party. I shared these points with President Bush last month, when 

the Congressional Black Caucus met with him, and he indicated a 

strong interest in trying to move forward on these issues. 

At the same time that we pursue military and diplomatic options 

to address the crisis in Darfur, we should apply economic pressure 

on the regime in Khartoum. In 2005, as Ms. Lee mentioned, New 

Jersey became the first State in the union to introduce legislation, 

actually offered by my brother, State assemblyman William Payne, 

which requires New Jersey companies with an equity tie in Sudan 

to redeem, sell, divest, or withdraw their investments. 

New Jersey was really the second State to enact the legislation, 

but our legislation said in 3 months. And all money, pension funds 

in New Jersey, and companies doing business with Sudan—17 foreign corporations, $2.16 billion—have been identified, and equity 

ties have been severed completely in 3 months—90 days. So it can 

happen. 

Six other States have enacted similar legislation, and there are 

campaigns in 20 more States to do this. Why? Because history has 

shown that economic pressure helps change policies. You should 

know that in 1985, New Jersey was the first State in the union to 

divest from South Africa, divesting over $4 billion in State pension 

funds from private companies. And as Congressman Wolf mentioned, that really hit where it hurt, in South Africa. 

This proved to be a watershed event, as States and universities 

across the United States also divested. The action, in conjunction 

with the Congress’s—Ron Dellum’s Comprehensive Anti-Apartheid 

Act, the CAAA was widely credited with helping to bring an end 

to apartheid in South Africa—not only did economic pressure bring 

change in South Africa, it has caused the Sudanese government to 

change its behavior. 

In 1997, when President Clinton enacted sanctions by executive 

order due to Sudan’s complicity with terrorists, the Sudanese actually took action, shutting down terrorist camps. We are told that 

the government continues to cooperate with the U.S. 

counterterrorist effort, though I fear that the counterterrorist assistance is inflated, and our government has grown too close to 

Khartoum. I think they’re telling us what they want to tell us to 

make us feel they are really cooperating, but I doubt very seriously 

if that government can tell the truth on anything. 

I should mention that the president—that President Omar alBashir and the National Congress Party in Khartoum, Sudan, 

which was formerly known as the National Islamic Front, came to 

power in a military coup in 1989, and from 1991 to 1996, this regime gave safe haven to Osama bin Laden. So these are some very 

horrible people we’re dealing with, as I conclude, since our Senator 

is here. 

In addition to what I have stated about divestment, the divestment campaign has helped discourage international companies 

8

from investing in Sudan. As Ms. Lee said, I understand that Siemens, a well-known German company, decided to halt its operations in Sudan, and others are questioning going in. 

One factor that led to the decision was the effort that doing business in a country against which there is an active divestment campaign had a reputation that was a stain on the company. And so, 

less investments mean less revenue for the National Congress 

Party. Less revenue means fewer resources from which they can 

buy weapons for their military and the murderous Janjaweed militia. 

On the issue of weapons, China is a major supplier of weapons 

to the regime in Khartoum, and the largest oil developer in Sudan. 

The Congressional Black Caucus has met with the Chinese ambassador, and we will meet with him again after the break to, once 

again, insist that China stop their holding up of actions in Sudan. 

As I conclude, Mr. Chairman, Congress cannot do less in the face 

of genocide than State governments have done. We must take similar action, and soon. It has been 4 years and 400,000 deaths since 

the tragedy in Darfur began. It is long past time that decisive action is taken. While we all recognize that divestment will not resolve the conflict by itself, it is important that we keep the pressure on. 

I am expecting a call in an hour from Sol Vikir, who is working 

with, now, the rebel groups, because they have no single leader, 

and he is trying to bring them together, so that they can negotiate 

as a unit. That’s another issue that we have to get moving. But 

with that, I appreciate the opportunity, and I yield back. Thank 

you. 

Chairman GUTIERREZ. Thank you very much. Quickly, to Congressman Wolf, this issue of priority—and I know I speak for the 

chairman of the full committee—we will act on this quickly. I assure you, your comment to us, and your encouragement, was well 

taken. 

I would like to now introduce a colleague from the other body—

I don’t know why we can’t say ‘‘the Senate,’’ but anyway, Senator 

Sam Brownback. 

Senator Brownback, also a long-time advocate on this issue, has 

recently called on State pensions to divest in Darfur, and as a cosponsor of the Darfur divestment legislation, Senate 831, the 

Sudan Divestment Authorization Act of 2007, a bill introduced by 

Senator Durbin, that would authorize States and local governments 

to prohibit investment of a State’s assets in any company that has 

a business relationship with Sudan. 

And with that, we are happy to have you, Senator. Thank you 

so much. Please. 

STATEMENT OF THE HONORABLE SAM BROWNBACK, A 

UNITED STATES SENATOR FROM THE STATE OF KANSAS 

Senator BROWNBACK. Thank you, Chairman Gutierrez, it is good 

to see you. Both Congressmen Wolf and Payne and I have traveled 

together to the Sudan, and these are the lead individuals who 

know this topic better than anybody else, and I think probably are 

more frustrated than anybody else in the entire Congress, and possibly the entire country, about how long this has gone on. 

9

And this is the second genocide; it’s not the first one. We didn’t 

call it that in the south, but there were two million people killed 

by the same murderous government that is in Khartoum, that is 

doing this now in the west, in Darfur. 

So, this just keeps going on. And the frustration level keeps 

building, and the inaction continues. And now you see that the government in Khartoum is saying, ‘‘Well, we’re not going to allow 

U.N. troops in this time. We said we would, we said we would work 

with people, and now we’re not going to do it.’’ 

I think this is a simple proposition, this particular bill on divestment, that says, as one of the other people said—and perhaps it 

has already been quoted—‘‘Not on our watch, not on our dime.’’ We 

are not going to continue to fund this government in its second 

genocide off of money and resources from the United States, period. 

And we should move these forward aggressively. 

And the States—and I applaud New Jersey for leading in this 

area. My State is—now the State senate has voted to divest, and 

the house is considering it. We need to make sure it’s clear that 

they can do this. I think these are bills intended to clear up any 

sort of questionable category, if there really is. I don’t know that 

there particularly is, but this is something we need to clear up, and 

we need to make a clear statement on it. 

And if we can get a wave of States doing this, and then encourage private individuals to do the same with the statements that the 

States are doing, individuals to look at their own resources and see 

if they are investing in any companies that are doing business in 

Sudan. And if this government continues to desire to have a genocide conducted, it’s not going to be with our money, period. I think 

we have to be very clear and very strong about that. 

I don’t think that, in and of itself, is sufficient. I met with my 

colleague from Illinois last week, twice. Senator Durbin, who—he 

and I have traveled to Africa, not to the Sudan—but to talk about 

what else could we put together of action items for as far as supporting of peace-keeping troops, as far as reviewing other possible 

options of no-fly zones, and looking at other sanctions that we can 

do of individuals traveling in and out of Sudan, or key individuals. 

And I would hope that we could start pulling together a list of 

these items that we could do together, like Congressmen Payne and 

Wolf, in particular, in the past have been very successful at getting 

us pulled together around a series of items that we can and should 

do, and then let’s start hitting it. 

Every minute we waste, somebody else gets killed. More people 

die, and more people are left in the carnage that has been caused 

by this government. We’re not powerless. There are things we can 

do, even if the Khartoum government doesn’t agree with the troops 

being there, there are things we can do. 

And I just—I hope we find the will and the gumption and the 

time, because that’s generally what it is, more than anything, is us 

just finding the time to get together to figure out what it is we 

want to do. Because once we do, we can move it, and it can happen. 

And I just—I pledge my own effort and time to do that, because 

each minute is somebody else getting killed in a place, a region in 

the world where it shouldn’t happen, and it shouldn’t happen on 

10

our watch, and it shouldn’t happen on our dime. Thank you, Mr. 

Chairman. 

Chairman GUTIERREZ. Thank you, very much. I will yield myself 

5 minutes for questions of the panel, but I will yield the first 

minute to my friend, Congressman Moore. 

Mr. MOORE OF KANSAS. Thank you, Mr. Chairman, and thank 

you to the four witnesses who are testifying today. I think the 

American people would be proud to see this, to see two Republicans 

and two Democrats sitting at this table, all in agreement about 

what’s happening, as far as genocide, and people being killed in 

Darfur. And I am very proud of all four of you. 

I say to the senior Senator from Kansas, we have many political 

differences, but I have told him before that I am very proud of the 

position he has taken on human rights violations, and he has been 

a consistent supporter of trying to stop human rights violations, 

and especially genocide, in places around the world. 

And the same to Congressman Wolf, to Congresswoman Lee, and 

to Congressman Payne. Thank you very, very much for what you 

are doing here, and I want to support you. 

Chairman GUTIERREZ. Thank you. Let me, first of all, say to the 

four of you how proud I am to be a member of this institution, 

being able to see the four of you, the diversity, you know, East 

Coast, West Coast, middle of the country, and to see all of you 

come together on this issue of Darfur. 

I think I echo the comments of my friend from Kansas—and I 

say that sincerely—Congressman Moore, to see the four of you 

working together, I just know we can get this done. 

I have a question for Representative Barbara Lee. You know, it’s 

fairly widely acknowledged that divestment and economic sanctions 

generally do not work, as they are many times intended. Our embargo against Cuba and sanctions against Burma are two examples 

that come to mind. We can point to success against white rule in 

South Africa in the 1980’s, but even in that instance, one byproduct 

was greater hardship for black South Africans. 

Why is this situation different? Why do you believe that divestment will work in Darfur, Congresswoman Lee? 

Ms. LEE. Sure. First, thank you very much, again, for this hearing, Mr. Chairman. And I think divestment will work. It has 

worked. You cited examples where it hasn’t worked, but it has 

worked throughout the world, really. 

When it came to South Africa, I think that is probably the best 

example of how it did work, and it’s very similar to the strategies 

that we are mounting here. The first States—I believe California 

was the State to divest of its pension fund holdings in South Africa—then States followed the California model. Subsequent to that, 

the United States Congress imposed sanctions against South Africa, and this was a long-term process, but it did work. 

With regard to Sudan, first of all, there are many foreign-owned 

companies that are heavily invested because of the petrochemical 

and resource extraction industries in the Sudan, and many of these 

companies are considered the worst offenders. We want to find out, 

first of all, we want to know who they are. I mean, I think—and 

what we have seen already, with two companies, just with the bill 

11

being introduced, Siemens and ABB having said, ‘‘No more,’’ they 

know that this is going to happen. 

I think genocide is taking place, which again, is a big difference, 

in terms of other divestment efforts. We have 450,000 people who 

have been killed, and we have major companies that need to be—

we need them listed, and the SEC is responsible for listing these 

companies. 

And so, the first step under this bill is just to know who these 

companies are, first of all, and then, to make sure that they are 

not afforded Federal contracting opportunities. I think those two 

factors: one, that genocide is taking place, 450,000 people have 

been killed; and two, that there are companies that are in these 

two industries that need to be squeezed, because the Khartoum 

government is relying on these investments, because of their industrial base. And I think that this is a strategy that will work. 

Chairman GUTIERREZ. Thank you. Let me just end with saying 

this. I have been a Member here for 14 years, this is my 15th year, 

and I have to say that I will never see Congressman Frank Wolf 

or Senator Brownback in the same way, after listening and learning a lot more and preparing for this hearing, about what you have 

done. 

That may be a shame of me, and a shame on our lack of relationship, but I just thought I should share that with you. So, if anything else, I think these hearings—like-minded people come together on the situations they might not otherwise. Yes, Congressman Payne? 

Mr. PAYNE. Yes, just on the point, as Congresswoman Lee mentioned, you know, you need a number of tools when you come to 

a complicated situation like we have in Sudan, and no one tool is 

really going to work. That’s why divestment—and it did, it wasn’t 

divestment alone, it was then the boycotts and the isolation from 

the Olympics—in South Africa—it was a number of issues, and 

then it started an internal debate with South Africans. They were 

an island unto themselves. They couldn’t participate in international organizations, still, with the divestment going on. 

You know what investment does. Taiwan, Korea—people invested in them, and they became strong and robust. So, therefore, 

the whole question of investment and divestment definitely has its 

place. If we can hold back investment to slow down and retard the 

economic growth and development, I think that it’s very good. 

The question about the poor people suffering, in South Africa we 

asked South Africans, just like we have asked Sudanese, and they 

said they’re suffering anyway, they’re dying anyway. And so, to 

have a little more pain that indirectly falls on them, they’re willing 

to suffer a little more, because if it means regime change, or weakening their government up in their capitals, whichever country it 

was, they support that. And so— 

Chairman GUTIERREZ. Thank you. 

Mr. PAYNE. That’s what I would like to say. 

Chairman GUTIERREZ. I would now like to recognize my acting 

ranking member, and my good friend, Mr. Castle, Congressman 

Castle, please, for questions. 

Mr. CASTLE. Well, thank you, Mr. Chairman. Let me—I am also 

impressed by the knowledge that the four of you have about this, 

12

and I think it’s very helpful to know that there are Members of 

Congress who have taken this kind of interest. I think all four of 

you deserve tremendous credit for dealing with a very difficult 

problem. 

I would like, Congressman Wolf, to ask you this. You indicated 

that the U.N. has done nothing, and I think back on Iraq, when 

the U.N. didn’t do much, and various other circumstances. I was 

wondering if you could expand on that, in terms of if—and I’m assuming your statement is correct, and we are all generally familiar 

with the problems of Sudan. 

But if they have done nothing, why have they done nothing? Is 

it a lack of will, or a lack of enforcement mechanism? And then you 

went on to say that diplomacy has failed, as well, and you might 

comment on that, as well. Based on what’s happening there, I assume these statements are absolutely correct. But I am wondering 

why, when it was such an obvious problem, something hasn’t happened before now. 

Mr. WOLF. The powerful really just don’t hear the powerless, at 

times. The very reality is when—if you read Samantha Power’s 

book, ‘‘A Problem from Hell,’’ it’s an—and I will have my office call 

your office to give you the title, and make sure I have it right—

you will see that the U.N. stood by. And Kofi Annan was head of 

peacekeeping when the Serbs were standing there, and the Muslims were marched out, and they did nothing. And the fact is, the 

U.N. forces actually pulled back. 

In Rwanda, the cables were coming back and forth to the State 

Department, and also the U.N., with regard to the genocide taking 

place. In Rwanda, the U.N. peacekeeper wanted to do something 

and was told to back off. And as a result of that, we lost 700,000 

to 800,000 people. 

In Sudan, the U.N. pretty much stood by when the north/south—

as Senator Brownback said, this is the second genocide. There were 

2.1 million—mainly Christians, but a large number of Muslims—

who were killed in a north/south war. And as Congressman Payne 

said, bin Laden lived in Sudan from 1991 to 1996. And like the old 

Simon and Garfunkel song, ‘‘The Boxer,’’: ‘‘The man hears what he 

wants to hear, and disregards the rest.’’ 

The way the U.N. is set up, the Chinese have an absolute veto. 

When you go to Khartoum, the largest embassy in Khartoum is the 

Chinese embassy. There are Chinese government officials all over 

the place. They’re getting roughly 6 percent of their oil coming out 

of Khartoum. They are using that money to buy the Soviet helicopters, the bombers. 

So, the U.N. has been just locked up, if you will. When Senator 

Brownback and I were there, the first call we made when we got 

back was to ask Kofi Annan to go. He then went, went back again, 

but still, the security council is set up in such a way that no one 

wants to take on the Chinese government. 

And, quite frankly, this Congress has not been particularly courageous in taking on the Chinese government. The violation of 

human rights in China is unbelievable. I mean, it is beyond—conditions are worse today in China than they were when they got 

MFN, and yet the world just doesn’t want to go against them. 

13

So, the U.N. is tied up in that way. Security council has a veto. 

For a long period of time, the Russians weren’t cooperating. Now 

they are beginning to participate. 

But read Samantha Power’s book, ‘‘A Problem from Hell.’’ This 

genocide, and types of activities like this, have gone on for a long, 

long period of time—and ethnic cleansing—until it kind of reaches 

a consensus. And we have a museum down on the mall that says, 

‘‘Never again,’’ and yet during that period of time, it has taken 

place over and over and over. And when Sudan and other governments see that nothing really happens to the people, it emboldens 

others to do it. But I will call your office, Mike, and make sure that 

you get a copy of the book. 

Well, I was going to ask something else, but that leads me to another question, and that is the relationship of China and Sudan. 

I understand that China is one of their biggest customers, one of 

their biggest economic factors. What is our relationship, in terms 

of dealing with China, vis a vis Sudan? Are we engaged in that, 

ourselves? 

Mr. WOLF. Andrew Natsios has spoken to the Chinese. If you recall, President Hu—and maybe Don will have the exact date—was 

in Sudan about a month or a month-and-a-half ago, and announced—the big announcement was not that they were going to 

deal with the issue of genocide, but that they were going to build 

him a new palace. You remember that? 

Mr. PAYNE. Yes. 

Mr. WOLF. That China is building Bashir a new palace. Parade 

Magazine did a piece a month ago, saying the number one dictator 

in the world is President Bashir, and China’s activity was that 

they’re going to build him a palace. So they just really haven’t really done very much. They get a lot of oil from them. 

Mr. CASTLE. Congresswoman Lee? 

Ms. LEE. Thank you very much for that question, because I think 

that is a very key question, and a key policy perspective we have 

to have, in terms of our foreign policy. I always remind my colleagues and others that we did grant most favored nation status, 

and there are many trade preferences that we provide, and there 

are many economic preferences and relationships we have with 

China. I believe we need to call in a chit, and I don’t know why 

the Administration doesn’t use its leverage to call in this chit, 

when 450,000 people have been killed. 

I think we need to up the ante on the Administration, as well 

as the Chinese government, because the United States should be, 

given what we have done with regard to China, we should be in 

the driver’s seat. 

Senator BROWNBACK. If I could just respond, part of this divestment—not a part of it—a big part of this divestment effort is aimed 

right at the Chinese. Because this is the leverage point, this is 

the—the investment is being done primarily by Chinese companies, 

not exclusively, but primarily by Chinese companies, and sometimes, or a lot of the time, with Western resources. 

That’s where the pressure point is, and that’s what we need to 

hit, and the Chinese have no hesitancy whatsoever—indeed, it 

seems as if part of their business model is to associate increasingly 

with somewhat rogue regimes, where perhaps you can get better 

14

business arrangements, because the rest of the world won’t deal 

with them. 

I think we should make them pay a price for their business plan 

model. This is part of it, and it’s something we need to do soon. We 

need to do it now. 

Mr. PAYNE. And they are absolutely right. You know, Talisman 

Oil Company, from Canada, was a part of the oil movement in 

Sudan. We started divesting from our State pensions—once again, 

in New Jersey, we do this sort of thing—so we pulled pension funds 

out of Talisman, sent the word up to Talisman that we were going 

to get this moving. Talisman sold. They said, ‘‘We’re out of here.’’ 

Of course there was someone to buy it. 

But that is a clear example of how pressure really works. And 

as Ms. Lee said, you know, we had this MFNS, the most favored 

nation status, which sounded too nice, because we knew China was 

evil, so they changed the name to PTR, I mean, what is it, permanent trade relations. That doesn’t sound so nice, you know. And we 

have a way of doing that with words, you know. 

But we have this relationship with China. The militaries are getting too strong, they send up satellites. But our big corporate entities can’t get to China fast enough. They’re waiting for that 380, 

I guess, that holds 500 people, so they could put all the businessmen on the rush to China to get the good deal. On the other hand, 

China is fueling the worst dictators in the world. 

And so, another instance of how this country needs to come up 

with a policy. Where do we stand? Do we love them or hate them? 

Is it Defense that hates them and the business that loves them? 

I mean, we can’t have a national position on China. So they are on 

the security council, they have threatened any time a strong resolution would come up, they say, ‘‘We’re going to veto it. So, water it 

down, and we may let it go through.’’ That’s what has been happening in the security council, those five permanent members. 

Chairman GUTIERREZ. Thank you, Mr. Castle. I want to go quickly to Congressman Roskam, a freshman member from Illinois, for 

questions, please. 

Mr. ROSKAM. Thank you, Mr. Chairman. The—I was pleased to 

hear State senator, Jackie Collins, mentioned, from Illinois, who 

really led the charge in the Illinois general assembly, and I was 

pleased, when I served with her, to co-sponsor that measure. 

Just a question to all of you, who have a lot more depth and 

background on this—anybody who can just answer a couple of 

questions. How is this distinguished from the South African effort? 

It seems to me that this bill does two things: number one, it requires disclosure to the Securities and Exchange Commission for 

those publicly-traded companies that are doing work; and number 

two, it says that the U.S. Government is not going to contract with 

any of those companies. 

Is that all we did in South Africa? Or was the South African 

sanction actually a broader sanction, which was an actual prohibition against other companies from doing business in South Africa? 

Do you understand my question? 

In other words, is this incremental? Is this a baby step? Sort of 

junior varsity sanctions, to put it that way? Or is this as good as 

it gets? 

15

Mr. PAYNE. In my opinion, this is as good as it gets. It deals with 

what we have authority over. As you know, because of the 1997 

sanctions, U.S. companies can’t do business with Sudan, anyway. 

Mr. ROSKAM. Okay, that’s the piece that I am missing. 

Mr. PAYNE. Yes, so— 

Mr. ROSKAM. Can you just explain that a little more in detail to 

me? 

Mr. PAYNE. Well, during the Clinton Administration, there was 

a strike, you recall, on the drug factory. And because Sudan was 

violating laws, the Executive Branch put sanctions on the government of Sudan. So, that is why there are no U.S. companies in 

Sudan. Don’t you know they would be running around there, too, 

if it wasn’t for our sanctions. 

Now, the—so the United States had sanctions on U.S. companies. 

Also, Charlie Rangel had legislation, a double taxation, that anybody who was in South Africa had to pay double taxes. It was a 

quiet thing that was there, in addition to the Comprehensive AntiApartheid Act, which was another thing, so it was a combination 

of different sanction bills. 

But this is, I believe—and I’m not, you know, a financial guy—

but I think this is about as much as we can do, saying that our 

public pension monies cannot be invested in any of those companies 

doing business in Sudan. U.S. companies are restricted anyway, 

so—and one other thing that we have done. 

I have been working on language which I am going to introduce, 

because we have to figure out different ways that would block oil 

tankers who dock at the port of Sudan from entering U.S. ports. 

That’s where they come. 

So, I would like to talk to you about some—yes, language 

where—it was in our—it was in 1434 last time, last session, which 

didn’t go through. But this would primarily hurt China, because of 

course, they’re off-loading the oil in Sudan, and coming into U.S. 

ports. 

So, if we continue to get the word out—I mean, people never 

thought about diamonds until blood diamonds, and that whole 

question about Kimberley Process, and now people are saying, 

‘‘Well, we want to make sure that these diamonds are real.’’ So, believe me, to bring attention, economic pressure is about the only 

thing we could do. 

I would like to see a force go in, you know, but that is—no one 

is going to do that. 

Mr. ROSKAM. Anybody else, in terms of an observation on that? 

Yes, ma’am. 

Ms. LEE. Yes. Let me say—I was very involved, as a student, in 

the anti-apartheid movement, and an additional measure in California that we mounted was prohibiting the unloading of cargo 

through our ports from South Africa. I’m not sure if that became 

a national effort, but that certainly occurred in California. 

Also, with regard to the preemption provision of this legislation—

and I will get back to you with regard to how—what the law was 

at that point—because now, what we’re finding is there are lawsuits being—and, you know, that are challenging the States in 

their divestment efforts. I don’t recall those challenges during the 

anti-apartheid movement. But we decided in this bill that we would 

16

definitely put a provision in that would allow States to do what 

they need to do. 

Finally, Mr. Chairman, let me just say with regard to the bill, 

I wanted to make this general statement. I think I said earlier, this 

is going after the bad actors, the companies that are perpetrating 

genocide, or using their investments, which allow the Khartoum 

government to perpetrate genocide in the Sudan. 

We have a section of the bill on pages 10 and 11 that does allow 

for some exceptions, and that is for those companies that are not 

doing this, but also those companies that are working to implement 

the Darfur peace and accountability—Darfur peace agreement in 

May of 2006. Also, those companies that are providing humanitarian assistance, that are working with the people in the south. 

And so, this is a bill that is very narrowly crafted to go after the 

bad actors, the most egregious companies that are allowing, either 

by design or not, or through their investments, you know, the genocide to continue to be perpetrated. 

Chairman GUTIERREZ. Thank you— 

Mr. PAYNE. One last point on that. 

Chairman GUTIERREZ. Oh, sure. 

Mr. PAYNE. We had capital market sanctions pass. Congressman 

Tancredo, Congressman Wolf, all of us supported capital market 

sanctions, which meant that if you did business on Wall Street, you 

couldn’t—if you did business in Sudan and went to Wall Street, you 

were out. Now, that was really—that was the hammer. Greenspan 

came up and met with the Senators and said, ‘‘You just can’t let 

this go on. It will just disrupt—it’s just too—it’s not our place.’’ 

And our capital market sanctions, which we passed—we passed 

it in the House. Like I said, one of my biggest supporters on that 

bill was Congressman Tancredo, who stood up and fought—you remember, Frank? And we passed it. It took Greenspan from—Wall 

Street sent him here to say, ‘‘Kill that bill that Payne and Tancredo 

and those guys are pushing.’’ 

So, you know, we have a lot of business people that just— 

Chairman GUTIERREZ. Thank you. 

Mr. PAYNE.—feel that they have to move on. 

Chairman GUTIERREZ. We have about 7 minutes left before the 

next vote on our side. I want to say thank you to Senator 

Brownback for being here, to Congressmen Payne and Wolf, and 

my good friend, Barbara Lee, for introducing the bill. We are going 

to get this done. 

We will recess, and 5 minutes after the last vote, we will reconvene for the second panel. 

[Recess] 

Chairman GUTIERREZ. Let me—the subcommittee will come to 

order. I want to thank the witnesses for their patience, as we get 

about voting here, in the House of Representatives. And we will 

proceed with opening statements by members of the subcommittee 

before turning to the second panel for their comments. 

I would like to yield to the ranking member, Dr. Paul, for any 

opening statement he might have. 

Dr. PAUL. Thank you, Mr. Chairman. I have just a brief statement that I would like to make. 

17

Mr. Chairman, H.R. 180 is premised on the assumption that government-mandated divestment, sanctions, and other punitive measures are always effective in influencing repressive regimes when in 

fact this has not been proven. 

Proponents of such methods fail to remember that where goods 

and services don’t cross borders too often, the troops will. Sanctions 

against Cuba, Iraq, and numerous other countries failed to topple 

their governments. Rather than weakening dictators, these sanctions strengthened their hold on power, and led to more suffering 

on the part of the Cuban and Iraqi people. 

So, to the extent that divestment effected changes in South Africa, it was brought about by private individuals working through 

the market to influence others. No one denies that the humanitarian situation in Darfur is dire. But the United States Government has no business entangling itself in this situation, nor forcing 

divestment on unwilling parties. 

Our witnesses should be commended on their actions to date in 

publicizing the horrendous situation in Darfur, and influencing 

people around the world to divest themselves of investment in 

Sudan. Any further divestment action, however, should be undertaken through voluntary means, and not by government force. 

H.R. 180 is an interventionist piece of legislation which will extend the power of the Federal Government over American businesses, force this country into yet another foreign policy debacle, 

and do nothing to alleviate the suffering of the residents of Darfur. 

The exceptions made for contracting with companies that provide 

arms to NGOs, and with companies operating in the oil-rich Abyei 

province, would result in the exact opposite of the bill’s intended 

effect. 

The regime in Khartoum would see no loss of oil revenues, and 

the civil conflict would eventually flare up again. 

The unintended consequences of this bill on American workers, 

investors, and companies needs to be considered as well. Cutting 

American citizens off from any involvement with companies who 

may be only tangentially related to supporting the Sudanese government could have serious economic repercussions which need to 

be taken into account. 

And that concludes my statement, and I yield back. 

Chairman GUTIERREZ. Thank you to my ranking member. And 

now, our second panel is comprised of some of the most recognized 

experts on Africa, genocide, and the Darfur region. 

Looking down the list of witnesses, I am pleased by the diverse 

backgrounds our witnesses will bring to this issue, and I look forward to a vibrant debate. I will briefly introduce all of our witnesses now, and then we can proceed to their testimony, uninterrupted. 

First, we have Omer Ismail, who was born in the Darfur region 

of Sudan, and has spent over 20 years working both independently, 

and with international organizations on relief efforts. Omer fled 

Sudan in 1989, as a result of his political views. He then helped 

found the Sudan Democratic Forum, a think tank of Sudanese intellectuals, working for the advancement of democracy in Sudan, as 

well as co-founding the Darfur Peace and Development organization, to raise awareness about the crisis in his troubled region. 

18

He currently works as policy advisor to several agencies, working 

in crisis management and conflict resolution in Africa. He is a fellow at the Kennedy School of Government at Harvard University’s 

Carr Center for Human Rights Policy. 

Next, we have John Prendergast, senior adviser to the International Crisis Group, and co-founder of the Enough Campaign. 

Previously, John worked at the White House and the State Department during the Clinton Administration, where he was involved in 

a number of peace processes throughout Africa. 

John has also worked for Members of Congress, the United Nations, human rights organizations, and think tanks. He has co-authored eight books on Africa, the latest of which he co-authored 

with actor/activist Don Cheadle, entitled, ‘‘Not on Our Watch.’’ 

John travels regularly to Africa’s war zones on fact-finding missions, peace-making initiatives, and awareness-raising trips, involving network news programs, celebrities, and politicians. 

Next, we are joined by Michael L. Williams, chair of the Texas 

Railroad Commission. Commissioner Williams was appointed by 

former Governor George W. Bush, in December 1998, to serve the 

unexpired term of Carole Keeton Rylander, and he was elected by 

his fellow commissioners in September 1999 to chair the Commission. 

In November 2000, the people of Texas elected him to complete 

the term expiring in the year 2002, and in November 2002, they 

re-affirmed their support by electing him to a term expiring in 

2008. He is the first African American in Texas history to hold an 

executive statewide elective post, and is the highest ranking African American in Texas State government. 

Our next witness is Kenneth Bacon, president of Refugees International. An expert in international affairs and security issues, Mr. 

Bacon has concentrated on expanding refugees’ international capacity to promote more effective ways for the international community 

to meet the needs of refugees and displaced people. 

Mr. Bacon is co-chairman of the Partnership for Effective Peace 

Operation, and he serves on the boards of the American University 

in Cairo, Population Action International and Interaction. He is an 

emeritus trustee of Amherst College, and Folger Shakespeare Library, and a member of the Council on Foreign Relations and 

International Institute for Strategic Studies. 

Mr. Bacon also serves as Assistant Secretary, Public Affairs, at 

the United States Department of Defense, and served as Pentagon 

spokesman from 1994 to 2001. 

Next, we have Adam Sterling, the director of the Sudan Divestment Task Force, a project of the Genocide Intervention Network. 

As the coordinating entity for the Sudan divestment movement, the 

Sudan Divestment Task Force is actively involved in dozens of successful and developing targeted Sudan divestment campaigns 

around the world, at the university, asset manager, city, State, and 

national levels. 

Adam is a recent graduate of the University of California, Los 

Angeles, with degrees in African American studies and political 

science. Adam has received a number of humanitarian awards, and 

serves as an advisor on Sudan engagement issues to numerous 

State pension, State legislators, and Federal representatives. 

19

Finally, we have J. Stephen Morrison, director of the African program at the Center for Strategic & International Studies at CSIS. 

Mr. Morrison has overseen the revitalization of the Africa program. 

In his role as director of the Africa program, he has co-chaired two 

recent CSIS working groups that examine the United States’ rising 

energy states in Africa, and the implications for U.S. foreign policy. 

Since late 2001, he has also directed CSIS’s task force on HIV 

Aids, a multi-year project co-chaired by former Senator, Bill Frisk, 

and Senator Russell Feingold. Currently, he is leading the establishment of CSIS Nigeria, launching a project on China and Africa, 

and carrying on CSIS work on the Sudan. Please, Mr. Ismail? 

STATEMENT OF OMER ISMAIL, FELLOW, KENNEDY SCHOOL OF 

GOVERNMENT AT HARVARD’S CARR CENTER FOR HUMAN 

RIGHTS POLICY 

Mr. ISMAIL. Thank you, Mr. Chairman, and Ranking Member 

Paul, for this opportunity. I was born and raised in Al Fashir, the 

capital of greater Darfur. My personal memories of Darfur are in 

sharp contrast with the Darfur of today that has been turned into 

killing fields by the government of Sudan and its proxy militia, 

known as the Janjaweed. 

I grew up in a region that was a picture of tolerance and peaceful 

co-existence. It is true that environmental degradation and the 

competition over meager resources has been the cause of clashes 

between the different communities in the region. These clashes, 

however, were limited in their scope, and their impact is less destructive than what we have seen today, and in recent years. 

Furthermore, the local communities have their own organic 

mechanism that dealt with the conflicts without extensive intervention. As if the historical neglect of the region by the successive national governments and the lack of meaningful investment and delivery of services were not enough, the current government has applied policies since the mid-1990’s that deepen the rift between the 

Darfurian communities, resulting in the catastrophe that is unfolding there today. 

The pressure imposed by the international community on the 

government of Sudan resulted in the signing of the comprehensive 

peace agreement between the government of Sudan and the SPLM 

that has stopped war in the south and the Nuba Mountains. Yet, 

Darfur is still a gaping wound, and a theater to what is rightly 

called by this honorable institution, genocide. If left to its own devices, this conflict will not only destroy Darfur, it will threaten the 

CPA and, hence, the future of the country as a whole. 

The current situation in Darfur is like this. Today, killing of civilians, rape, and sexual violence are widespread and systematic. 

Torture continues, arbitrary arrest and detention are common, as 

is repression of political dissent and arbitrary restrictions on political freedoms. Mechanisms of justice and accountability, where 

they exist, are under-resourced, politically compromised, and ineffective. 

Since May of last year, I have taken five trips to several countries neighboring Sudan. I met with refugees fleeing the devastated 

region who spoke of the continuation of the horrors of war and 

abuse of human rights. I have met with aid workers, human rights 

20

observers, African officials, and rebel leaders. They all agree that 

the level of violence has increased, and the protection of the refugees and the internally displaced people has become almost impossible. 

With access to the victims becoming more and more difficult, and 

the attacks on the aid workers increasing, as many as 400 of the 

1,300 international aid workers in Darfur have been either evacuated or relocated, putting more pressure on an already tenuous situation. 

What can we do? And faced with all this? I urge the United 

States, as the only superpower in the world today, and with the interest that it has in the security and stability of the world, to do 

the following. 

One, to work urgently with the Security Council to ensure the 

implementation of the three-phased package agreed upon by the 

government of Sudan and Mr. Kofi Annan in November of last year 

in Addis Ababa, Ethiopia. The deployment of the United Nations 

and AU peacekeeping or protection force is essential to provide security to the citizens of Darfur, and the aid workers assisting them. 

And two, to consider the—considering the instrumental role of 

the United States in the outcome of the DPA—that is, the Darfur 

Peace Agreement—signed in May of last year, the United States 

should also lead an international effort towards the expansion of 

the DPA, to include the non-signatory rebel groups, in addition to 

the representatives of civil society and other stakeholders in the region. 

And according to the reports of several human rights groups, the 

United States has information that will be useful in bringing those 

who have committed horrendous crimes in Darfur to justice. With 

the utmost respect, and full understanding of the position of the 

United States government, vis a vis the ICC, as a Darfurian, who 

strives for justice for my people, I urge the United States to avail 

that information to the ICC, should that information in question be 

in the custody of the United States. 

There is no question that divestment also is an effective tool in 

bringing pressure on the Sudanese government and cutting off the 

funding that feeds the genocide. Many believe that the campaign 

against Talisman Energy in 2001 accelerated the signing of the 

2003 comprehensive peace agreement with the south. 

Mr. Chairman, finally, I thank this committee and I thank this 

institution. And I believe the freedom and security that are enjoyed 

by the citizens of this country are universal principles for dignity 

and the pursuit of happiness. With the help of this body, and the 

representatives of the people of the United States, I dream that one 

day the people of Sudan will enjoy the same. Thank you. 

[The prepared statement of Mr. Ismail can be found on page 48 

of the appendix.] 

Mr. CLAY. [presiding] Thank you very much for your testimony, 

Mr. Ismail. Mr. Prendergast, you may proceed. 

21

STATEMENT OF JOHN PRENDERGAST, SENIOR ADVISOR, 

INTERNATIONAL CRISIS GROUP 

Mr. PRENDERGAST. Thank you very much, Mr. Chairman, and all 

the members of the subcommittee, for taking time out of your 

schedules to look at this incredibly important issue. 

News flash. After 4 years of unrelenting failure on the part of 

this Administration’s policy towards Darfur, President Bush has finally decided that the present course of U.S. policy is inadequate, 

and must be buttressed by more robust measures. The heads of 

U.S. agencies, the principles committee has met 6 times in the last 

3 months, and no decisions have been announced yet, though we 

have been told that targeted sanctions are going to be expanded 

against a few members of the Sudanese government and rebel and 

militia—Janjaweed militia leaders and a few companies linked to 

the Khartoum regime. 

Consideration is also being given to how to restrict Sudanese oil 

transactions, using U.S. dollars, which could add some economic 

pressure on the regime. However, without significant will and resources to expand and enforce such measures, and without rapid 

follow-up with European and other allies to prevent the Sudanese 

regime from switching to the Euro or Yen in their transactions, 

these measures may prove to be relatively fruitless. 

In addition to divestment, I think there are three main economic 

instruments that the United States and the broader international 

community have at their disposal, but are not yet utilizing. 

Like divestment, none of these is likely, on its own, to actually 

have a major economic impact. But the objective of these sanctions 

is not only economic, it’s political. These measures would place a 

scarlet letter on the shirts of senior officials who are responsible for 

atrocities, and are undermining peace efforts, and hit them where 

it counts, in their wallets. 

The bet, based on empirical evidence from past efforts, is that 

calculations of regime officials will change with the introduction of 

real economic costs, combined with increased isolation, globally. 

This isn’t the Taliban. The Khartoum regime wants to play ball 

internationally, and it doesn’t want to be an international pariah. 

So, the regime’s economic base won’t collapse with the introduction of these measures, but their political will to continue will collapse, instead. 

Beyond divestment, I think that the United States could lead on 

three separate tracks. First, the United States can lead on increasing, ramping up targeted sanctions against a number of senior officials in Khartoum through the United Nations Security Council, 

not just the small handful that the United States is currently considering. 

Second, the United States could take the lead in passing a Security Council resolution establishing a panel of experts to quickly ascertain where the assets of the largest Sudanese companies owned 

by the ruling party officials are located, and quickly move to freeze 

those assets. 

Third, the United States could work with other countries to develop a coalition that would notify certain banking institutions that 

if they choose to continue conducting business with the government 

of Sudan, or companies affiliated with the ruling party, they will 

22

be cut off from the financial systems of participating countries by 

a pre-determined date. 

The United States recently imposed similar unilateral measures 

on banks doing business with the regimes in Iran, and they have 

had a direct impact. I think even more of an impact would happen 

in the case of Sudan, if it was multi-lateral. 

Finally, the central paradigm shift in U.S. policy must be to 

move away from the current policy of constructive engagement 

without any real leverage, to a more muscular policy focused on 

walking softly and using a much bigger stick. Unfulfilled threats 

and appeals should be replaced quickly with punitive measures and 

policies that support a robust peace and protection initiative. 

Ultimately, with the right policies and increased levels of engagement regarding Darfur, there is potential for the region to be stabilized within a year. If not, it is almost a foregone conclusion—and 

Omer and I have traveled together a number of times in rebel-held 

areas of Darfur—it is a foregone conclusion that if present trends 

continue with the restriction of humanitarian access and increased 

insecurity, hundreds of thousands more Darfurians will perish in 

2007 on our watch. Thank you. 

[The prepared statement of Mr. Prendergast can be found on 

page 59 of the appendix.] 

Mr. CLAY. Thank you for that chilling testimony. Mr. Williams, 

you may proceed. 

STATEMENT OF MICHAEL L. WILLIAMS, COMMISSIONER, 

RAILROAD COMMISSION OF TEXAS 

Mr. WILLIAMS. Mr. Chairman, Congressman Paul, it is good to 

see you again. It is always good to be in this city and see another 

Texan. 

Thank you for this opportunity to address you and I am grateful 

that you are considering this most important issue. As you have 

just mentioned, my name is Michael Williams, for the record. 

And back in 1998, as was mentioned in the introduction, my good 

friend, then the Governor of Texas, George W. Bush, appointed me 

to a vacancy on the Railroad Commission of Texas. Since that time, 

I have been elected statewide by the people of Texas, both in 2000 

for—to complete the unexpired term of my predecessor, and then 

in 2002, for the full 6-year term. 

And despite our name—and it’s probably important to say on the 

record that the Texas Railroad Commission has absolutely nothing 

to do with railroads. Since 1981, the Texas Railroad Commission 

has been, for the State of Texas, the principal oil, natural gas, 

chemicals, and mining regulatory agency in the State. And it’s because of oil and gas, it’s because of energy that brings me to this 

issue. 

I have been concerned about what has been happening in Sudan 

dating back to the beginning of this decade, when I began hearing 

the heart-wrenching stories of—regarding the decades-long civil 

war between the government of Khartoum and the southern rebels. 

That continued with conversations with Sudanese who were living 

in Texas, regarding their experience either back home, or what 

they were hearing from home, and continued with the conversations with Dr. John Garang, who obviously is now departed. 

23

And hearing about those, and recognizing that in large part what 

was fueling the devastation in Sudan was oil, obviously each and 

every day that I get up I have the opportunity to make sure that 

Texas and this country has abundant supplies of affordable, clean, 

and reliable energy—primarily, in large part, coming from crude. 

But in Sudan, crude is not used for those purposes; crude is used 

for the propagation of devastation. 

And what I would like to do in the short time that I have is to 

talk about what is happening in Texas today, beginning with the 

leadership of the Governor of the State of Texas, who, both in his 

state of the state address and his inaugural address, came out in 

support of Texas joining a half-dozen other States that have already moved to pass divestment legislation across this country, and 

almost two-plus dozen States who are now considering similar legislation. 

I will also say that just today, as I have been here with you, the 

Texas senate has taken up senate 247, the Texas divestment bill, 

and it passed out of the Texas senate 29 to 0. We have one senator 

who is ill, and who has not been able to join the members of the 

Texas senate. We have another that I understand was out of the 

city. So, it unanimously passed the Texas senate. 

And I think what it says is that it is extremely important to Texans that we be on the right side in this issue. The Texas divestment legislation impacts two of our large public pension funds, the 

Teacher Retirement System of Texas—by its name, obviously, all of 

our State teachers—the Employment Retirement System of Texas, 

and together, it is estimated there may be some $500 million to 

$600 million that might be covered there. 

And I think it’s also important to recognize that this is a narrowly tailored bill that is designed to deal with only the active direct holdings that are in the Texas—those two Texas retirement 

funds. It does not impact mutual funds, it does not impact the individual accounts that individual Texans have with their 401(k)s, or 

their 457 plans. 

But it is specifically directed at two areas that you heard discussed earlier in your earlier panel, and even thus far in this one. 

For all contracts, companies that have contracts with the government of Sudan, or companies that have an equity interest with the 

government of Sudan. 

And I think, notably, the Texas divestment statute says that a 

company that, in terms of its Sudanese activity, is receiving 10 percent or more of its revenue from all activity, and less than 75 percent of its activity is with the southern Sudanese, or the marginal 

peoples of Sudan, that is a company that would be identified and 

targeted. Similar, if more than 10 percent of its power generation 

was with the government of Sudan, and less than 75 percent of the 

benefit of the generation of that electricity is benefitting the people, 

marginalized peoples, whether they be in Darfur, southern Sudan, 

or elsewhere in the country. 

The other thing that I think is notable about the Texas legislation is that social development companies, those that have provided 

humanitarian aid, whether it be medical supplies, or education, or 

building orphanages are not covered here. 

24

And I think, finally, because we recognize that the construct and 

the deployment of foreign policy is the priority and the privilege of 

the national government and not for State government, there are 

certain exclusions. And one exclusion of coverage would be for any 

company. The Federal Government affirmatively exempts from its 

Federal sanctions, from your Federal sanctions. 

And, secondly, the law would expire if the President or the Congress were to declare that the genocide has ended for 12 months, 

or that the United States invokes its sanctions on Sudan. 

Mr. CLAY. Excuse me. The gentleman’s time has expired. 

Mr. WILLIAMS. I look forward to answering your questions. 

[The prepared statement of Mr. Williams can be found on page 

68 of the appendix.] 

Mr. CLAY. Thank you so much, Mr. Williams. Thank you for that 

testimony. 

Mr. Bacon, please. 

STATEMENT OF KENNETH H. BACON, PRESIDENT, REFUGEES 

INTERNATIONAL 

Mr. BACON. Thank you very much, Mr. Chairman, Mr. Clay, and 

Mr. Paul, for holding this hearing. Ever since the United States, 

led by the House in 2004, declared the government of Sudan guilty 

of genocide, the world has been waiting for the United States to 

act. 

Article 1 of the 1948 genocide convention says, ‘‘The contracting 

parties confirm that genocide is a crime,’’ which they undertake to 

prevent and punish. The Darfur Accountability and Divestment Act 

of 2007 is a small step in that direction. In light of the continuing 

death and displacement in Darfur, the subcommittee may want to 

consider other, more painful, financial interventions. 

In September 2004, Secretary Powell accused the government of 

Sudan of genocide, but he said that U.S. policy would not change, 

meaning that the United States would take no military action to 

stop the genocide. Instead, we have relied on diplomacy and economic sanctions. So far, our policies have failed. 

What message has our inaction sent? Earlier this year, Roger 

Winter, who advised the State Department on Sudan, told the 

House subcommittee that impotent reactions to genocide by the 

United States, the U.N., and Europe had no impact on Sudan’s 

leaders. Talk alone does not work, he said. Only credible threats 

that cripple their agenda, or deprive them personally of their power 

and ill-gotten riches will work. 

In his classic book, ‘‘The Roots of Evil,’’ Ervin Staub, a professor 

at the University of Massachusetts, says of the Holocaust, ‘‘The inaction of other countries, and their unwillingness to help Jews confirmed the Nazis in the rightness of what they were doing.’’ 

The United States was silent and inactive in the face of genocide 

in Rwanda in 1994. General Romeo Dallaire, the commander of the 

U.N. force there, asked for authority to take action to prevent the 

killing. On April 21st, after an estimated 100,000 people had been 

butchered in Rwanda, Dallaire said that with a force of 5,000 wellarmed, well-trained soldiers, and a clear mandate to act, he could 

stop the genocide. 

25

But on that same day, April 21st, the U.N. Security Council 

voted to cut the U.N. assistance mission in Rwanda from 2,500 to 

270. Even this was too large a force for then-United States Secretary of State Warren Christopher. He instructed our ambassador 

to the U.N. to vote for a full and orderly withdrawal of all U.N. 

forces as soon as possible. 

After Rwanda, a Senator said that if just two people in every 

congressional district had told their elected representatives that 

the United States should help stop the genocide, U.S. policy might 

have been different. Yet, there was silence. 

At about the same time, the United States was also averting its 

gaze to genocide in the Balkans, where 200,000 Muslims were murdered by Serb forces between 1992 and mid-1995. Throughout 

1993, confident that the U.N., the United States, and the European 

community would take no military action, Serbs in Bosnia freely 

committed genocide against Muslims, according to the United 

Human Rights Campaign. 

It was not until Serb forces systematically slaughtered 7,000 

Muslim men and boys in Srebrenica that the United States and its 

NATO allies employed decisive military force to end the war. 

We know today what is happening in Darfur. The estimated 

number of people dead of war-related causes ranges from 200,000 

to 500,000. There were 232,000 refugees from Darfur in Chad, and 

2.2 million Darfurians have fled to camps within Sudan. Many of 

the displaced are Africans, whose villages have been attacked by 

primarily Arab government and militia forces. The destabilizing 

impact of the war is spreading to Chad, and the central African republic. 

In the last several months, the violence in Darfur has worsened 

dramatically. Displacement is increasing, not decreasing. Humanitarian workers are facing more attacks and harassment from government forces, allied militias, rebel groups, and bandits. Both the 

U.N. and major relief agencies have warned that rising danger to 

their workers and operations may force them to pull out of Darfur. 

Every action by Sudan shows that it believes it can get away 

with murder—and, in fact, it is. It is time to make clear that 

Sudan will pay a price for the continued death and displacement. 

H.R. 180 moves in that direction. 

However, the subcommittee may also want to explore the possibility of legislation that would directly or indirectly bar banks used 

by Sudan and its leaders from access to the U.S. financial system. 

That would sharply increase the cost and risk of financial transactions by the government of Sudan or its top officials. 

History shows that we can’t leave genocide unanswered, so I encourage the subcommittee to take the strongest possible measures 

against Sudan as soon as possible. 

[The prepared statement of Mr. Bacon can be found on page 44 

of the appendix.] 

Mr. CLAY. Thank you, Mr. Bacon, for that testimony. 

And, Mr. Sterling, your turn. 

26

STATEMENT OF ADAM STERLING, DIRECTOR, SUDAN 

DIVESTMENT TASK FORCE 

Mr. STERLING. Thank you, Mr. Chairman, and members of the 

subcommittee. My name is Adam Sterling, and I am director of the 

Sudan Divestment Task Force, a project of the Genocide Intervention Network. 

The Sudan Divestment Task Force has developed a unique approach, focusing its efforts on the most egregiously offending companies in Sudan. This approach, termed ‘‘targeted divestment,’’ 

helps to maximize impact on the Sudanese government, while minimizing potential harm to both innocent Sudanese civilians, and investment returns here in the United States. 

I would like to first recognize Congressman Sherman, whom I 

see here today. He was one of the first members to endorse targeted divestment, not only at the University of California, which 

became the first public school to divest from Sudan in March of last 

year, but also one of the first members to endorse targeted divestment for the entire State of California. 

I would also like to recognize Congresswoman Lee for her continuing efforts to support and encourage the divestment movement. 

My organization supports H.R. 180, which authorizes but does not 

mandate States and local entities to adopt divestment programs, 

which requires further disclosure from companies operating in 

Sudan, and then would prohibit U.S. contracts only to those companies identified as being worst offenders. 

With my testimony today, I would like to briefly address two 

issues. First, what is the current status of the Sudan divestment 

movement? And, second, will Sudan divestment be effective in 

changing the behavior of the Khartoum government? In closing, I 

would like to highlight aspects of H.R. 180 that I believe require 

additional attention, and would help address the issues brought out 

by Congressman Paul. 

First, what is the status of the Sudan divestment movement? 

The States of New Jersey, Illinois, Oregon, Maine, California, and 

Vermont have all approved divestment plans. North Carolina State 

treasury and the Kentucky State teachers’ retirement system have 

independently divested a selection of Sudan-related holdings. Many 

of these States have left open the option of subsequent divestment. 

Additionally, over 20 States now have active divestment movements, with varying levels of involvement from State officials. A 

large number of these have already begun consideration of divestment in this year’s legislative session. 

Religious international campaigns have also gathered steam, including an examination of the issue by Canadian universities and 

provinces, and other active campaigns in Europe. Cities and municipalities have begun consideration of divestment, as well. 

At the university level, over 30 institutions have enacted restrictions on their Sudan investments. At the company level, engagement and divestment campaigns targeting fidelity in Berkshire and 

Hathaway have been initiated. Finally, several Sudan-free mutual 

funds have also recently been introduced. 

Second, is divestment from Sudan effective? The Sudanese government has a long history of susceptibility to economic pressure, 

with a foreign debt nearly as large as its GDP. More than U.S. diVerDate 0ct 09 2002 15:24 Jul 20, 2007 Jkt 035408 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 K:\DOCS\35408.TXT HFIN PsN: TERRIE
27

plomacy, the country has responded to U.S. economic pressure in 

the past. 

Despite this historical responsiveness, the regime has faced little 

in the way of economic consequences for its perpetuation of genocide in Darfur, heavily protected by a small set of international 

protectors, whose commercial interests in Sudan are very strong. 

Indeed, while the regime has been brutal towards its own citizens, it has been a shrewd attractor of foreign investment. It currently ranks in the top 20 countries in the world in attracting foreign investment dollars as a percentage of its GDP, and it holds 

international investor conferences, even as the genocide is ongoing. 

This is a government acutely attuned to the country’s finances, 

but facing little challenge from the international community. As if 

to emphasize this point, Sudan’s president, Omar Al-Bashir recently stated to the international press, ‘‘When countries gave us 

sanctions, God gave us oil.’’ 

Ironically, the number of countries propping up this genocidal regime is relatively limited. While there are over 500 multi-nationals 

operating in Sudan, only a few dozen play a truly detrimental role 

in the country. Moreover, the companies that fiduciaries are beginning to choose as replacements may very well perform better than 

the offending companies, since over 20 U.S. States are currently 

considering divestment from those very companies. 

For example, one of the top targets of the divestment campaign, 

PetroChina, is down 19 percent for the year. The emerging Sudan 

divestment movement has already caught the eye of the Sudanese 

government, which has spent considerable time and energy attacking the campaign, even going so far as to purchase a six-page ad 

for more than $1 million in the New York Times to counteract the 

divestment movement. 

Several major companies operating in Sudan have also recently 

altered their business practices, largely in response to the divestment movement. 

Chairman GUTIERREZ. Mr. Sterling, you have 30 seconds left. 

Mr. STERLING. Okay. While we strongly support the intention of 

H.R. 180, we believe it would benefit from further attention to the 

targeting of companies so that the worst offenders are subject to 

punitive measures, and those companies without any substantive 

business relationship with the government of Sudan, and companies that may actually be providing tangible benefits to Sudan’s 

underserved periphery, are exempt from them. The companies I 

have in mind are those already exempted from existing U.S. sanctions by the Office of Foreign Asset Control. 

We believe that H.R. 180 can effectively support the growing divestment movement and create important disincentives for companies contemplating or currently engaged in problematic operations 

in Sudan. Thank you again for the opportunity to address you 

today. 

[The prepared statement of Mr. Sterling can be found on page 64 

of the appendix.] 

Chairman GUTIERREZ. Thank you, Mr. Sterling. 

Mr. Morrison, please. 

28

STATEMENT OF J. STEPHEN MORRISON, DIRECTOR, AFRICA 

PROGRAM, CENTER FOR STRATEGIC & INTERNATIONAL 

STUDIES 

Mr. MORRISON. Thank you, Mr. Chairman, Mr. Paul, Mr. Sherman. Thank you for the opportunity to be here today. My remarks 

are going to be focused on China and its economic stakes, and the 

approach it has taken, diplomatically, with respect to Sudan, and 

the question of the U.S. dialogue with China on Sudan. 

In terms of the economic stakes, in our estimation, Sudan’s contribution to China’s total energy needs is important, but not strategic. It represents about 5 to 7 percent of China’s oil consumption, 

which translates into about—one of its oil imports—which translates into about 1 percent of its total consumption, total energy consumption. Its oil fields are modest. There have not been major new 

discoveries. Its oil fields will decline fairly rapidly in the next decade. 

China’s accumulated economic stakes in Sudan are significant, but not strategic. About $8 billion of sunken investment, about $3 

billion in annual 2-way trade—that’s in a context in which Africa 

represents, last year, about $50 billion in 2-way trade, growing 

very rapidly up to about $100 billion by 2010. 

As far as China’s evolving approach, the fundamental approach 

has been one of pretty strong, staunch adherence to the principle 

of national sovereignty and non-interference, which is fundamental 

to China’s foreign policy globally, and has been the basis for China’s tough opposition to U.N. sanctions against the Sudan. And 

that became most obvious in the Security Council debates, and intensified in the beginning of mid-2004. 

What we have seen, though, is stress upon China’s adherence to 

that principle, and that stress has come from several sources. One 

is internal. There is an internal policy debate that has been ongoing within China over the merits of this, and that is fed by Chinese 

think tanks, academics, and global business enterprises who are 

questioning why is it in China’s national interests to be an uncritical supporter of Khartoum while China is attempting to establish 

itself as an ethical global leader, global power? 

The current minister of foreign affairs, Li Zhaoxing, former ambassador to the United States, has been very much in the lead, internally, in attempting to air these critical opinions. 

Second is the sensitivity and awareness of the power of the—

within the United States and northern Europe of many of the representatives here today of the campaigns that they have launched, 

and the fact that they have voiced allies in Congress, access to 

media, internal organization, in pressure for sanctions and other 

measures. This could extend, potentially, to the 2008 Beijing Olympics. 

A third factor is simply the opposition that China faces within 

Africa itself. You have powerful African states—most notably, 

South Africa, Rwanda, and Nigeria—with troops on the ground in 

Darfur under AU mandate. They are blocked from converting to 

more sustainable operations because of Khartoum’s intransigence. 

Most recently, you have had the appointment of U.S. special 

envoy Andrew Natsios who has opened a high-level dialogue with 

the Chinese that did result in a shift in November towards support 

29

of the Annan plan, the three-step phased plan which has shown 

some minor progress, but more recently been blocked. 

We have seen, in this most recent period, an intensification of 

dialogue around what might be done next. In this regard, we have 

seen some modest steps taken by the Chinese, most importantly 

the statement issued after—issued by the Chinese ambassador to 

the U.N., Wang Guangya, after Bashir’s letter was sent to the U.N. 

Secretary General, backing away from the commitments made in 

November. 

Our—in closing, our view is that there is an important consensus 

that has taken place as to what needs to happen next with respect 

to Darfur. That is full implementation of the Annan plan, full deployment of the UN/AU hybrid force, a stable cease fire, and effective political negotiations. 

International sanctions that are on the table take many different 

forms, and could have different impacts, both on Chinese calculations and on the status of the U.S. collaboration with China in trying to bring about greater pressures upon Khartoum. We can go 

into the different forms of those sanctions. Some are less threatening, and others are more threatening to the Chinese stake. 

There are immediate steps that we should be pushing the Chinese on, one of which is to press them to move forward in putting 

on the table deployment of specialized military units for deployment into Darfur under the AU—in support of the AU/U.N. force, 

using its public voice in the Security Council to hold Khartoum to 

account, and adjusting its own economic policies and instruments 

to distance itself, as it has most recently in one of the downgrading 

steps it took on the access to credit. Thank you very much. 

[The prepared statement of Mr. Morrison can be found on page 

53 of the appendix.] 

Chairman GUTIERREZ. Thank you very much. I would like to recognize the gentleman from California for unanimous consent, and 

share with my ranking member, Mr. Paul, that we haven’t used 

any of our 10-minute opening statements, so I would yield to him 

5 minutes of opening statements for the majority side. 

Mr. SHERMAN. Thank you, Mr. Chairman. First, I would like 

unanimous consent that the written testimony of the Armenian assembly be entered into the record of today’s hearing. 

Chairman GUTIERREZ. Without objection, so ordered. 

Mr. SHERMAN. Thank you, Mr. Chairman, for allowing me to 

make an opening statement. 

First, putting our country in perspective, there have been three 

genocides aimed at Muslims in the last decade. They are in Bosnia, 

Kosovo, and now Darfur. In each case, you can say that America 

didn’t do as much as we should have. But in every one of those 

cases, we did more than anyone else. And those around the world 

who claim that America has an anti-Muslim bias will have to explain why, in focusing on Darfur, a Muslim population subject to 

genocide, other countries aren’t doing even more than the United 

States. 

Looking at H.R. 180, we should look at this current draft as a 

floor, not a ceiling. I look forward to having similar legislation with 

regard to Iran, and perhaps companies doing business with any of 

30

the countries identified on the State Department list of terroristsupporting states. 

But I will not encumber H.R. 180 with any amendment dealing 

with any country other than Sudan. We ought to pass this bill as 

quickly as possible, and then use it as a model, and again, as a 

floor, not a ceiling, for what we do with other states that are supporting terrorism, genocide, or other terrible acts around the country or around the world. 

This bill has two immediately effective provisions: naming and 

shaming; and a ban on Federal contracts. We can do far more to 

facilitate individuals who don’t want to see their money invested in 

companies that are investing in Sudan. 

With TSP, this bill requires a study. We could, at minimum, do 

more and say TSP must create a mirror image fund. So, for those 

Federal employees who want to invest in the S&P 495—that is to 

say the 500 minus those—and I don’t know if it will be 5 or some 

other number, but whichever S&P 500 companies don’t invest in 

Sudan—that they have an opportunity to do so, rather than waiting until some other mandatory decision is made. 

Now, I wish TSP simply stopped investing in these companies, 

and imposed that on all Federal employees and their pension plans. 

But until that happens, at least those of us who want to take an 

affirmative action to stop this ought to be given the opportunity, 

while still investing in roughly 490 major American companies. 

We ought to allow all private pension plans and trust funds to 

divest, and to do so, we ought to, at the Federal level, indicate that 

the fiduciary duty that a trustee has to beneficiaries, or to pension 

plan participants, does not limit that fiduciary in divesting from 

those who do business. Doing the right thing is not something that 

you should be subject to a lawsuit for. 

We ought to perhaps require private pension plans to create a 

mirror image fund. So if they don’t take all their money out of offending companies, at least where employees are given an option 

there is a choice between the S&P 500 and what I am calling the 

S&P 495. 

We should change our tax law—I realize that’s outside the scope 

of this committee, by far—but there should not be a capital gains 

tax if you move money from an offending company into an equivalent investment in a non-offending company, or move money from 

an S&P 500 fund to what I am calling an S&P 495 fund. We 

shouldn’t tax people for doing the right thing. 

We should allow public entities—namely, State and local governments—to not contract with those companies doing business in 

Sudan, just as we mandate the Federal Government do that, we 

should at least allow—perhaps require—State and local governments do the same. 

Going beyond the voluntary, there are a couple of very strong 

measures we could take. We could delist any offending company, 

and not allow them to get any capital from Wall Street, and we 

could prevent our banks from doing—especially the Federal Reserve Board of New York—from doing dollar business with banks 

doing business with Sudan, particularly banks based in Sudan. 

One thing you can do in China—because we’re not going to act 

on China any time soon—is identify for interested Americans a 

31

particular Chinese company or companies, or a particular Chinese 

product—you’re not going to get Americans to boycott everything 

made in China. But if you decide to focus on one thing, we can 

get—you know, if the way to stop genocide is to get the tennis 

shoes made in Indonesia, rather than the ones made in China, my 

feet will do whatever you want them to do. 

Finally, if sanctions don’t work in changing the Sudanese government’s policy, or they’re not allowed to work, because they’re not 

tried on an effective basis, we may be in a position where we either 

have to allow continued genocide, or we have to consider such military actions as a no-fly zone, or even more extreme, to arm the 

rebels. Both of those things are things I would want to avoid, but 

I hope no one in Khartoum believes that they are impossible. They 

ought to be negotiating, knowing that those two possible violent actions, or non-peaceful actions are on the table, and they ought to 

come to the table and stop the genocide. Thank you. 

Chairman GUTIERREZ. Thank you very much. Dr. Paul, please? 

Dr. PAUL. Thank you, Mr. Chairman. In my opening statement, 

I expressed some lack of enthusiasm for sanctions. I like the idea 

of voluntary sanctions, and I know you are willing to work that 

way, and that is good. 

And one of the reasons is there is not absolute proof that they 

work. Some of the individuals in the Congress who are strongly 

supportive of the sanctions under these circumstances in Darfur 

don’t like it for Cuba, and they didn’t like it for Iraq. So it is not 

an on-again, off-again. 

I sort of think that the consistent position is that we shouldn’t 

do it. But I don’t want to debate that issue as much as the type 

of things, and what I see as a problem, because in supporting certain groups we make a decision, and I think they tend to come 

back to haunt us. There was a time, of course, when we were allies 

with Osama bin Laden and Saddam Hussein, and all these things 

come back to haunt us. 

Too often, there are other motives, other than genocide. And I 

don’t know whether that is true or not, but I know that we didn’t 

send much help to Rwanda. We didn’t send troops in there to stop 

it, and we didn’t have regime change, but they didn’t have oil, either. So I do want to talk about oil a little bit, and Mr. Williams 

is probably the oil expert here. 

The thing is, in this bill there is an exception that would allow 

the United States to contract with companies that supply arms to 

combatants, and that bothers me. So that means we’re going to 

pick sides. Now, there was a time when we picked sides in Somalia, 

and things went badly. And now, just recently, we’re back in Somalia. We staged a coup there, and we invaded, through our proxy 

army of Ethiopia, and we put in charge, once again, the war lords 

that dragged our men through the streets. And I would like to do 

my best to avoid those kinds of problems. 

And I see this as a potential, because with this military exception—and also there is an exception that allows the government to 

contract with companies that work in the one area, Abyei, in the 

oil rich area. And it was mentioned earlier in the testimony by Mr. 

Morrison that the Chinese are very, very much involved in there, 

so, it seems to me like oil might be a big issue. 

32

There was a writer on this subject, John Laughlin, who wrote a 

couple of years ago, whom I consider an expert in this area. He 

says, ‘‘According to Arab sources quoted by the Turkish paper 

Zaman, ‘Oil is the basis of the crisis in Darfur.’’’ 

And so, there is genocide, but it might have started because of 

oil. We may be going there for oil. And we didn’t get into Rwanda, 

and sometimes we get on the wrong side, and it’s already been indicated that if these sanctions don’t work we have to consider a regime change. Regime change is pretty serious stuff, in my book. I 

mean, that’s what we have been in the business of doing too often. 

So, I would want to be careful. 

Now, if Mr. Williams, or maybe anybody—or Mr. Morrison might 

comment on that, I would like to hear from you. 

Mr. WILLIAMS. Well, Congressman Paul, let me see if I could do 

two things. In terms of the way particularly the Texas statute is 

structured, and I think many of the other State statutes that are 

now going through their legislative processes are structured, there 

is an attempt to draw a fairly—to the extent that one can—a fairly 

bright line as to when we would deploy these kinds of strategies, 

and when we wouldn’t. 

In the Texas statute, it says that when there is a declaration of 

genocide by this body, the Congress, or by the President of the 

United States—as you know, back home we have had conversations 

about divestment for tobacco and pornography and other things. 

But there is an attempt to draw a fairly bright line and say that 

the only time that we will use this kind of mechanism is in the 

genocidal area. 

As it relates to oil, and as it relates to sort of allowing for contracts that are in the southern region of the country, or in Darfur, 

or in other parts of the country, but not with the government of 

Sudan and Khartoum, the idea, quite frankly, I take it, is—sort of 

shared with your opening comments—that one way that we can be 

helpful is, obviously, to encourage investment, but to encourage investment that does not benefit the government of Sudan. 

And so, when it is with the regional government in the south, or 

when it’s with one of the other areas, that does—that would allow 

for those crude revenues to be used for the people of Sudan, not 

for the government of Sudan, in the way that they’re using it in 

order to be warring against the—its own people. That is the way 

we have tried to structure the Texas bill. 

And that is sort of—I think we have to recognize that crude does 

play a role. But we also, I think, have to recognize that there is 

a way to use crude, quite frankly, that is beneficial. And we want 

to allow the beneficial use of crude. 

Mr. MORRISON. Yes, Mr. Paul, just a couple of corrections, I 

think, to the record. I mean, the big oil discoveries were undertaken—Chevron, in the period 1979 to 1983, there was $1 billion 

invested, about 90 exploratory efforts that were—many of which 

were successful, and they were able to prove some modest deposits 

over an area that was a transition zone between the north and the 

south. And this had a big trip wire effect in setting off the north/

south war, which began in 1983. 

The oil sector laid dormant until 1996, 1997. Chevron withdrew. 

It was dormant until the Chinese came in, along with, subseVerDate 0ct 09 2002 15:24 Jul 20, 2007 Jkt 035408 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 K:\DOCS\35408.TXT HFIN PsN: TERRIE
33

quently, the Indians and the Malaysians. There was a Canadian 

private sector involved. Oil began to flow in the fall of 1999 out of 

these deposits. Oil is now up to about half-a-million barrels a day. 

It is not really emanating in any significant degree from Darfur, 

and has not been a factor, directly, in stirring conflict in Darfur. 

It has been a direct factor in stirring the war between the north 

and the south. It went on between 1983 until January of 2005, 

when the north/south peace accord was consummated. 

The continued production of the oil sector, and the wealth sharing agreement under the north/south peace accord, in which there 

is a 50/50 split in earnings, the continued production of oil sustains 

not just players in the north, but the government of southern 

Sudan, which is the direct beneficiary of 50 percent of the oil earnings coming out of that. 

Now, you can argue, as many have, that the implementation of 

that wealth sharing agreement remains very flawed and ambiguous, and needs much further improvement. And as you move towards full implementation, and the possibility of a vote on secession by the south, you are likely to see quite a bit of conflict around 

where the border area is demarcated, and some of the actions 

taken within the three special zones. 

But as with respect to Darfur, it’s not a driving factor. The 

Darfur conflict is not an oil-driven conflict. It’s much more than a 

conflict between the north and the south. 

Dr. PAUL. I just want to make one brief comment, but I still find 

it interesting that the one exception is to allow the government to 

contract with the companies that are in the oil-rich region. It seems 

to me that if we were dealing with only the genocide, we could delete that part, and just deal with that, as a whole, instead of looking like we’re pumping in weapons into an area that we may become obligated to. And I yield back. 

Chairman GUTIERREZ. Thank you, Dr. Paul. Mr. Ismail, first of 

all, I would like to share with you that my grandson, Luisito, I 

asked him where his mom was last week, and he said, ‘‘She is at 

a meeting about Darfur.’’ And I share that with you, because I 

know how important it has been to me and to others, as you fight 

for things, to know that your message is getting out, and that when 

4-year-olds report to their grandparents where their daughters are 

at, and refer to the meeting about Darfur, you know that it’s significant. 

And so, I wanted to share that with you, that your message—

keep working, it’s getting out there. People, 4-year-olds, are talking 

about it. And I think that speaks volumes about where we are 

going with this issue. 

Mr. Ismail, you make several policy suggestions in your testimony, and I want to thank you for being specific in your suggestions. One item you mentioned is having the U.S. State Department develop a list of ‘‘worst offenders.’’ What would the criteria 

be for the list, and would the State Department develop the list on 

its own, or do you recommend requiring the Department to work 

with NGOs, or other outside groups? 

Mr. ISMAIL. Thank you, Mr. Chairman. And the fact that a lot 

of people here and outside of this institution are working on the effort of Darfur is refreshing to see. 

34

However, we all understand what is at stake. There is a genocide 

going on. We hope that this awareness will be translated into policies that are going to stop the genocide. Talking about it is important; doing something to stop it is even more important. And my, 

you know, respect to your family for being part of this. 

Chairman GUTIERREZ. Thank you. 

Mr. ISMAIL. Yes. The worst offenders, as alluded to by Mr. Sterling and others, and in the bill itself, these are the people who are 

doing direct investment or indirect investment with the companies 

that are working with Sudan. And they are the companies that are 

feeding this genocide. 

If we can—because of the name-calling, or the shaming of these 

companies is concerned, if we can have that list out there, and people see that these companies are working there. 

The criteria can be that these are the companies that are working directly with the oil industry in China, for example, because we 

understand, from the presentation by everybody here—Dr. Morrison included—that this oil that is coming out of Sudan, shared 50/

50 between the government of Sudan to the north and the government of the south, they all report that 70 percent of that money 

that is coming out of this is used by the government of Sudan in 

buying arms to kill its own people, and to join in this genocide that 

is going on. 

So, if we can make a direct link between these companies who 

are working in this very, very important sector, and we publish 

that out there, and let the investors see it, and even the public, 

they will know that these are the worst offenders, and then they 

will stop dealing with these companies. And then we will see the 

effect of that. 

The ad that the government of Sudan took in the New York 

Times shows clearly that the government of Sudan is paying attention to this divestment campaign. So if we can make the same 

thing, counter to what the government of Sudan has done, we publish our own information about these companies, I think that will 

be very effective. 

Chairman GUTIERREZ. Let me share with all of the members of 

this panel that Chairman Barney Frank was working on the bill 

on the House Floor on Hurricane Katrina. That’s why he wasn’t 

here, and he wanted me to express his apologies for not being here, 

but stated once again—and he is—Mr. Ismail, mark my words, we 

will work on this quickly. It will be more than—we are gathering 

the information today, important testimony and work today, we 

will work on it quickly here, in this committee. 

Let me ask Commissioner Williams. In your testimony, you discuss broad support in Texas for a State divestment law. We also 

had broad support in my State of Illinois for a Darfur divestment 

law, which was enacted, but in February, was struck down by Federal district court as unconstitutional. Are you concerned that the 

same fate awaits the eventual Texas law, if the Darfur Accountability Divestment Act is not passed by Congress? And if not, why 

not? 

Mr. WILLIAMS. Mr. Chairman, I am not, but for two reasons. 

These are things that have happened since the State of Illinois 

passed its legislation. 

35

The first one is that, obviously, there is a provision in the bill 

that you are now considering that will provide some degree of—

that would remove the cloud over State and local and university divestment programs. So, obviously, we would encourage the passage 

of that. That is one way that the Congress could surely help States 

like Texas, and the others that are considering it. 

The other thing, as I mentioned in the opening remarks, is that 

there are a number of things that we have done in the Texas legislation that we think recognize that the Federal Government has 

the pre-eminent responsibility for foreign policy. And so—and there 

is language in the bill that says that if there is anything in the bill 

that conflicts with the Federal Government’s responsibility to conduct foreign policy, then that provision of the bill is inapplicable. 

And even though I don’t think there is anything in there, we say 

that if the Congress were to remove sanctions, then at that time 

the bill would expire, that if the President or the Congress were 

to declare that the genocide has ended, and it has been more than 

12 months, then the bill would expire. So I think there have been 

safeguards built into the bill. 

Chairman GUTIERREZ. Let me ask Mr. Morrison. So, China. What 

advice do you give us? What do we do with China? Specifically, 

what can the Congress do? What can the Federal Government do? 

What can the President do? What can the executive branch—ideas 

of what we can do, if these investments are strategic? 

I just kind of look at China, and I can’t recall the last time they 

were affirmative about human rights when it came in conflict with 

their quest for raw materials. And so I know you have stated that 

these are—that the oil and the raw materials and the investments 

are small, but it seems as though China is so hungry for steel and 

machinery and technology and oil, and its consumption of all of 

those—and it’s only going to expand—what can we do? How do we 

sit down with the Chinese and reach an agreement? 

Because they seem to be, from everything we have heard here 

today, and everything I have read, a huge impediment to ending 

the genocide in Darfur. Mr. Morrison? 

Mr. MORRISON. I think you need to attempt to intensify the—

from multiple directions, intensify the discomfort around an uncritical embrace of Khartoum’s position. 

I have mentioned that they are vulnerable and sensitive on several fronts. One is the reputational and image damage that has 

been suffered in North America and Europe, and within Africa. A 

second is the discontent that is beginning to surface internally, 

among elite foreign policy circles within China itself. 

You can play on that. You can play on the desire to be seen as 

a rising ethical global power within the Security Council, within 

major institutional institutions, international institutions. You can 

begin to put forward incremental critical tests around whether the 

Chinese are prepared to divert from a rigid adherence to this noninterference respect for sovereignty which has been the sort of 

blockage, or the ideological, or the veil behind which China could 

stand and say, ‘‘Well, this is too far, we don’t want to go there.’’ 

You can test that in some of the ways that I have talked about: 

overt public criticism within the Security Council of the positions 

that have been taken by Bashir and others in defiance of the 

36

Annan plan; bringing it back into focus around the elements of the 

Annan plan; the three-phased deployment of the AU/U.N. force; the 

need for a cease fire; and the need for accelerated political negotiations within Darfur. 

There is a consensus around the way forward, and what needs 

to happen, that is shared by the United States and the Chinese, 

and others, around what the ultimate fix is going to be for Darfur. 

We should be pushing the Chinese to get more vocal around those 

issues, and to begin to use its own internal economic policies and 

instruments to signal to Sudan that its ardor for the opportunities 

that are there is declining, and more can be done along those 

fronts. Thank you. 

Chairman GUTIERREZ. Thank you. For a second round, Dr. Paul? 

Dr. PAUL. I don’t have any questions. 

Chairman GUTIERREZ. Dr. Paul doesn’t have any more questions. 

Mr. Sherman, do you have any further questions, sir? 

Mr. SHERMAN. Oh, yes. Section three of the proposed bill says 

that States and cities that have divested or are in the process of 

divesting State and city funds are recognized and supported by 

Congress. 

Is this enough to eliminate all of the constitutional attacks that 

could come against cities, counties, and school districts, as well as 

State governments who choose to divest? Does this solve the legal 

problem completely, or do we need to make it stronger? 

Mr. STERLING. We would encourage the sponsors of this legislation to meet and connect with the sponsors of the legislation in the 

Senate. Senators Durbin and Cornyn recently introduced the 

Sudan Divestment Authorization Act, which exclusively looks at 

the issue of authorization, and deals with it in a more comprehensive manner. 

Mr. SHERMAN. Okay. 

Mr. STERLING. So I know there has been some— 

Mr. SHERMAN. Going on, what I see is missing here is most of 

these funds that sub-national governments have are pension plans. 

And the trustees of those pension plans—at least one of you may 

be a trustee of the pension plans—have a fiduciary duty to seek the 

highest rate of return. 

Do we need a provision in this bill indicating that fiduciaries, at 

least of governmental pension plans, and perhaps all trusts and all 

pension plans, may divest without being subject to lawsuits or 

other claims for, arguably, receiving a lower rate of return? 

Mr. STERLING. I think it’s definitely something to look at. The 

legislation that is in Texas that we developed and now is currently 

the leading model in the country, has a specific section that excludes the fiduciaries for this specific case from conflict with their 

constitutional fiduciary obligations. 

So, we have dealt with that in the State legislation, but it may—

in other models, it may be something to look at for— 

Mr. SHERMAN. And I do think we have to research whether the 

Federal Government can change the fiduciary duties of trustees of 

trusts which are usually established under State law. I would think 

so, since we do have the constitutional right to create American foreign policy, and that’s what we are doing. 

37

Our goal here is kind of to create a chain reaction. The goal is 

to change the behavior of the government of Sudan by denying it 

certain foreign investment. And then, we are trying to change the 

behavior of corporations and business entities by afflicting them 

with various disadvantages here in the United States if they don’t 

change their behavior in an effort to change the Sudan government’s behavior. 

First, what is the Achilles heel of the Sudanese government? 

What kinds of foreign investment—denial of foreign investments—

would cause them to come to the negotiating table seriously, to not 

only accept, but welcome UN-led troops, and to do the other things 

necessary to stop this genocide? 

If we had to take some type of foreign investment away from 

Sudan, what would it be? 

Mr. PRENDERGAST. I want to make—give you a political argument while my colleagues think of the economic one, because it’s 

a great question, it’s the central question. Where is the leverage, 

and where can we influence change? 

My view is, having negotiated and worked in Sudan, and negotiated with the Sudanese regime in the last Administration directly 

with Bashir and Taha, and the rest of them, is that they don’t 

want to be singled out in the way that some of these economic instruments would single them out, target them, tarnish their image 

internationally, with very specific—particularly, if it’s done through 

the United Nations Security Council. It’s much easier for them to 

dismiss, if it’s only the United States doing these things unilaterally. If we work multi-laterally— 

Mr. SHERMAN. But the things we’re considering in this bill aren’t 

going to pass a U.N. resolution unless we start, I guess, boycotting 

Chinese companies in an effort to get that government to change 

its actions. This bill is focused—its naming and shaming is being 

done by the United States, a country whose naming and shaming 

is laughed off in some quarters. 

Mr. PRENDERGAST. Yes. Some of the instruments that you have 

mentioned in your own first introductory comments were what I 

was referring to. But with respect specifically to divestment, as we 

worked on this 15 years ago, and with respect to South Africa, and 

globalized the divestment movement, I think the kind of—the naming and shaming actually will take on quite substantial portions if 

we’re only talking about divestment. 

Of course, as anyone will tell you, it’s not—this isolated and only 

by itself, divestment will mean very little. But if there is an array 

of instruments— 

Mr. SHERMAN. I will ask whether any of your colleagues have an 

economic answer. Obviously, the— 

Chairman GUTIERREZ. Thirty seconds. 

Mr. SHERMAN.—Sudanese government is going to love this bill, 

because of its political connotations, but economically, what can’t 

they afford to lose? 

Mr. STERLING. I mean, as I mentioned in my testimony, they 

have a debt larger than their GDP. They cannot afford the way oil 

consortiums are established in Sudan. They don’t have the resources or capital to extract, refine, and distribute the revenue on 

the open market, so they need their partners, the Chinese, MalayVerDate 0ct 09 2002 15:24 Jul 20, 2007 Jkt 035408 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 K:\DOCS\35408.TXT HFIN PsN: TERRIE
38

sians, Indians, to establish these consortiums. So they’re definitely 

dependent— 

Mr. SHERMAN. They need cash to be invested in the royal sector. 

And I yield back. 

Mr. STERLING. Correct. 

Chairman GUTIERREZ. Thank you, Mr. Sherman. I want to go 

back to Mr. Bacon, please, for a moment, and especially given your 

unique situation on the panel, having worked on—at the Pentagon 

for 7 or 8 years, during the Clinton Administration. 

In your testimony, in addition to Darfur, you mentioned Rwanda 

and Bosnia. I think it’s appropriate to mention recent instances of 

genocide in other parts of the world, and our inaction or delayed 

actions. Why are we, the United States, the Congress, the White 

House, so reluctant to stop these genocides? Why are we so slow 

to respond? And what can we do to change that? 

Mr. BACON. Well, it’s a very good question, and I think that Mr. 

Sherman—we should give him credit. He framed it in a very interesting way. He said that we didn’t do enough, but we did more 

than anybody else. 

If you look at what happened in the Balkans—we did nothing in 

Rwanda. I don’t think we can give ourselves credit there. But in 

the Balkans, we finally did act, and we acted relatively quickly in 

Kosovo. It took us longer to react to protect the Bosnians. 

I think, you know, the history shows that there is a great inclination to avert our gaze to ugly events taking place in other parts of 

the world, to explain them away as age-old political rivalries, tribal 

rivalries, problems we don’t understand and can’t influence very 

well. And then, before we know it, while we’re looking away, suddenly the death toll mounts very rapidly, and it’s hard to get in. 

Clearly, we are learning. We learned in Somalia, and we 

learned—we are learning today in Iraq, that we shouldn’t use force 

in a casual way. It has to be well thought-out. We have to do it 

with determination, and we have to do it with a fair amount of 

skill. So that—of course, force should not be used casually. It 

should only be used as a last resort. 

I think that what is significant today about Darfur is that there 

is a nationwide movement. If you travel through Washington, D.C., 

or through Austin, Texas, or through parts of Illinois, you will see 

signs outside of synagogues and churches for ‘‘Save Darfur.’’ As you 

pointed out, your grandchild is talking about it, and there are children and college students all around the country talking about it. 

This Administration is the first Administration ever to use the 

term ‘‘genocide’’ to describe a contemporaneous killing—not historical, but contemporaneous. And yet, it has found it very difficult to 

act according to the genocide convention, which obligates signatories to prevent and punish genocide. We haven’t been able to do 

enough. 

These aren’t easy problems. But the one thing that you can count 

on is that they always get worse by waiting, and a quick intervention almost always has a much better chance of succeeding than a 

late intervention. So those are my thoughts on your question, 

which I think is a very good question— 

Chairman GUTIERREZ. Thank you. 

Mr. BACON.—a question that I wish more politicians asked. 

39

Chairman GUTIERREZ. Thank you. Mr. Prendergast, in your testimony you mentioned that economic pressure, through the restriction of Sudanese oil transaction using U.S. dollars will not be effective without follow-up to prevent the Sudanese regime from switching to Euro or Yen transactions. 

Specifically, how would the United States conduct this follow-up, 

and is there any risk that Sudan would switch to the— 

Mr. PRENDERGAST. I think if we’re going to go down this path—

and this appears to be the direction that the plan B threatened escalation part of the Administration is going, which is a set of financial measures that would increase pressure and restrict access for 

Sudanese companies from doing business internationally, I think 

that we are going to have to dedicate a lot more. 

I think the implication from this committee is that there is going 

to have to be more resources committed to implementing these decisions, because OFAC—the Treasury is stretched to capacity to 

oversee and monitor the implementations of the sanctions regimes 

we have against various individuals, terrorist organizations, and 

some of the state-sponsored terrorists. 

So, if we’re going to expand the restriction of businesses, Sudanese businesses or transactions by Sudanese companies doing business with international financial institutions, there is going to have 

to be increased resources to monitor, and we’re going to have to do 

more diplomacy, economic diplomacy, to get other nations to go 

along with the plan, because it’s very simple for the government of 

Sudan, over time, to use other instruments of economic exchange. 

Chairman GUTIERREZ. Mr. Morrison, would you care to comment 

on this? 

Mr. MORRISON. I would like to comment— 

Chairman GUTIERREZ. On the previous question. I’m sorry. 

Mr. MORRISON.—on what Ken was talking about. Just to emphasize that, we have had this remarkable mobilization within American society around Darfur, and around—it seems to be a fairly 

broad consensus that what has happened there constitutes genocide. 

It has been a difficult sell, outside—well, within the United 

States, within the professional human rights community, which 

has not signed on to that notion of genocide, if you look at the careful sort of determinations made by groups like Human Rights 

Watch, Amnesty International—if you look at international organizations, the international criminal court, the U.N. Investigative 

Commission, they refrained from reaching that conclusion, and 

used other language having to do with war crimes, crimes against 

humanity. 

No doubt looking at heinous acts repeated at the instigation of 

the government of Khartoum, but it didn’t push through the 

threshold of becoming genocide, which evokes another level of emotion and response. 

It’s not that—the genocide designation has not been taken up by 

governments within Europe, by the AU, and certainly this has been 

complicated within the Arab world by the hangover effects of the 

Iraq debacle, in which this is played to the advantage of Khartoum 

and its allies in painting this as some sort of regime change proxy. 

40

And so it’s been used as a defense against seeing the realities of 

what has been going on, in terms of the carnage on the ground. 

All of these factors have been very important in dulling the response. And it has called into question, you know, what happens 

when you’re in a situation like this, where there is such a concentrated consensus around genocide within our own borders, but 

it does not extend very effectively outside, even though there is a 

shared consciousness that there is something horrible that has 

been happening. 

Chairman GUTIERREZ. Thank you. 

Mrs. MALONEY. I want to thank the panelists, and I want to 

thank the chairman, and I would just like to ask any of the panelists how effective do you think this approach will be in influencing 

the Sudanese government to change its policies, and how will it directly affect the government’s standing and tenure? 

Mr. BACON. Well, I think it will be a step. It will be one piece 

of pressure that will, I hope, add up with other pieces of pressure. 

I said in my testimony that I think it would be great if the committee would look at stronger measures, maybe add stronger measures to H.R. 180. 

We have just seen, in the last few months, how effective interventions through the banking system and the payment systems 

have been on North Korea, a country that many of us thought was 

beyond influencing. And yet, using section 311 of the Patriot Act, 

we were able to really shut down their work in the international 

financial system, and make trade much more difficult for them. It 

makes all financial transactions much more costly and much 

riskier. 

This would apply not only to the country, but it would apply to 

people in leadership positions, who may have set up bank accounts 

around the world with gains, whether honestly gotten or ill-gotten, 

but it would be a way of increasing pressure dramatically on the 

country and the regime. 

I think we have to look at a galaxy of actions, a constellation of 

actions, not just one. And I think we need to do it relatively quickly, because the situation in Darfur today is getting worse. The displacement is increasing, the inability to deliver humanitarian aid 

is increasing. There are many, many more obstacles to the relief organizations and to the U.N., so, if we don’t act soon, we could be 

looking at a much greater death rate in the future than we have 

seen in the recent past. 

Mrs. MALONEY. Would anyone else like to comment? 

Mr. ISMAIL. I would like to say that none of these measures 

taken, in itself, or any of the recommendations that we make, after 

looking at the reports that are coming from out there, and analyzing them, and talking to the people on the ground almost on a 

daily basis, then we make these recommendations. 

However, isolated from being a package, it is—none of these is 

going to work. So the divestment has to be working with other 

things. It’s a tool in a tool box that we will have to use together, 

in order to be effective. 

And also, people having in the back of their minds that this divestment campaign is only meant to target companies that are 

working with China, or just working in the oil industry, that is not 

41

the whole picture. Because being a Sudanese, and knowing the ties 

of this government with the Arab world, for example, there is a lot 

of Arab money—hard and soft money—that is being invested inside 

Sudan, not only in the oil industry, but for example, in tourism. 

There are two hotels. The best hotels are giving, you know, the 

Sudan—the first five-star hotels, these are built with Libyan and 

monies from the United Arab Emirates. 

There are other monies that are working in the infrastructure, 

on the road system, and telecommunication. This is all money that 

is coming from the other side of the Red Sea. And people don’t see 

that, because it’s the direct kind of investment that is coming from 

across the Red Sea without coming through the bigger financial institutions, or being part of the—of Wall Street, or the—sometimes 

one single sheik who has billions of dollars can just tell the government of Sudan, ‘‘Here is $200 billion. Build the presidential villas’’ 

that they spent millions of dollars, or the yacht that Omar Bashir 

is enjoying today. 

So, that is not part of all this. And we have to look at it in that 

respect, as well. 

Mrs. MALONEY. Now, my time is almost up, but I would also like 

to ask if anyone would like to comment on what are your concerns 

about how divestment would affect the people of Sudan, from an 

economic point of view. 

Do you think it will hurt the people, or—what are your comments on that? 

Mr. ISMAIL. If I may? 

Mrs. MALONEY. Sure. Anyone. 

Mr. ISMAIL. I don’t think—because the investment that the government of Sudan is investing in the rest of the country outside of 

Khartoum is almost meager. If you look at the figures from the 

Bank of Sudan, for example, last year the government of Sudan invested .5 percent in the south, .5 percent. Not even 1 percent in 

southern Sudan. 

So, if you look at the education, if you are looking at the health 

care sector, if you are looking at any other—the infrastructure sector, there is none of that. That has been invested in the rest of the 

country outside of Khartoum, and that is where 80 percent to 90 

percent of the Sudanese are, and these are the lower income 

groups, anyway. 

Mrs. MALONEY. Any other comments? 

Okay. My time is expired. Thank you. 

Chairman GUTIERREZ. I thank the gentlelady for joining us. Let 

me just share that Congresswoman Maxine Waters sends her regrets. Unfortunately, the Financial Services Committee has under 

its charge Katrina, and the bill was marked up and it’s on the 

House Floor today. So there is a lot of conflict between, obviously, 

Darfur and taking care of our own domestic issues in Louisiana 

that we want to—and Mississippi—that we want to—and Louisiana that we want to address today, too. 

I want to thank you all for being here. You have been wonderfully educational to all of us. And on behalf of this subcommittee, 

and everyone on the full committee, thank you so much. And Godspeed to you, Mr. Ismail, and your people. Thank you. 

[Whereupon, at 4:22 p.m., the hearing was adjourned.] 

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A P P E N D I X

March 20, 2007

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