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Hearing of the State, Foreign Operations and Related Programs Subcommittee of the House Appropriations Committee - The Emergency Supplemental Request for Iraq and Afghanistan

Location: Washington, DC


REP. STEVEN ROTHMAN (D-NJ): Thank you, Madame Chairman.

Mr. Secretary, a pleasure to see you again, and thank you so much for your many years of distinguished and honorable service to our nation.

I'd like to associate myself with the remarks of my colleagues who have already demonstrated their support for our chairlady's -- our chairwoman's hold on funding for West Bank and Gaza, and I thank her for her leadership in this and so many other areas. And I do support her views on that subject wholeheartedly.

Mr. Secretary, I do want to commend the administration, believe it or not, for something, and that is for taking against four Iranian state-owned banks. It has had an effect on the willingness of some major international banks to continue to do business with these Iranian banks. However, I'm concerned that the central bank in Iran, Bank Markazi, is a bank that other business people and entities use to transact business with the government of Iran.

Will the United States, therefore, take action against Bank Markazi if it is acting on behalf of entities designated as terrorists and weapons proliferators?

MR. NEGROPONTE: First of all, let me say in reply, Congressman, that I know that we have taken actions with respect to a couple of the major Iranian banks that we believe to be engaged in either proliferation or terrorist-sponsoring activities, such as the Bank Saderat and the Bank Melli. We also succeeded earlier this week, as you know, or late last week -- I'm forgetting which now; I think it may have been on Saturday or Monday -- we got a unanimous resolution ratchetting up the sanctions against Iran at the Security Council, which I think is a positive development and sends an important signal to Iran about the international community's concern about their uranium enrichment activities.

As to the central bank, I would have to get back to you on that question because I'm not aware of any specific activity directed at the central bank itself.

But I would -- I will happily supply something for the record.

REP. ROTHMAN: I appreciate -- thank you. I appreciate that very much.

With regards to China and their association and relationship with Iran -- you were recently in China, Mr. Secretary. In your view, what will it take to get China to take meaningful steps to curb its business with Iran, acknowledging, of course, that they supported the recent effort in the Security Council, but in terms of their bilateral relations with Iran?

MR. NEGROPONTE: Right. Maybe if I could link that question with an observation that was made earlier about China and Darfur, these are the kinds of issues that I discussed with my counterpart in China, in our so-called senior dialogue with China, where we put a lot of issues on the table for discussion, compare notes, try to compare positions. We use that forum as an opportunity to encourage, for example, China to be helpful in the Darfur situation. And as you may know, they are sending an engineering unit there.

With respect to Iran, of course they did ultimately support this Security Council resolution, which I think is a good thing. We've -- I think, have a meeting of the minds with the Chinese. When it comes to uranium enrichment, I think they do not wish to see Iran proceed with uranium enrichment, and they're concerned about Iran, Iran's nuclear aspirations.

But where I'd say that there's still some daylight between us has to do with the economic relationships, and we have tried to discourage them, for example, from considering or going forward with investments in Iran, and particularly in their energy sector.

REP. ROTHMAN: Mr. Secretary, I'm -- only have a few seconds.


REP. ROTHMAN: So forgive me for interrupting. But Mr. Secretary, do you believe that they see any connection or effect that economic relations have in persuading Iran to be more transparent about its nuclear objectives or to change its policy with regards -- Iran's policy with regards to nuclear weapons?

MR. NEGROPONTE: I think they do. I think they do. But I don't think they see it to the point of being willing to forego entirely their economic relationship with Iran.

REP. ROTHMAN: Well, I wouldn't look for -- it's not an all-or- nothing proposition, as we all know.


REP. ROTHMAN: But as long as we keep reminding them -- and I know you just made that trip and made this -- presumably this opposition known very clearly -- that economic sanctions of a bilateral nature are a tool in getting this job done with the Iranians. And we expect the Chinese, as our partners in this endeavor and in others, to use that tool, so we can achieve this common -- commonly agreed-upon objective.

MR. NEGROPONTE: And I would add that we really -- we rarely -- we don't miss an opportunity --


MR. NEGROPONTE: -- to draw to China's attention the importance we attach to the Iran issue. I would say that it's right up near the top of the list or high on that priority list of issues that we discuss with China on a constant basis.

REP. ROTHMAN: I appreciate that, because they are -- Iran is the number-one threat to the world, I believe.


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