Transcript, hearing of the Senate Armed Services Committee: "Fiscal Year 2005 National Defense Authorization budget request," April 1, 2004

HEARING OF THE SENATE ARMED SERVICES COMMITTEE
SUBJECT: DEFENSE AUTHORIZATION REQUEST FOR FISCAL YEAR 2005
CHAIRED BY: SENATOR JOHN WARNER (R-VA)
WITNESSES: ADMIRAL THOMAS B. FARGO, COMMANDER, UNITED STATES PACIFIC COMMAND; GENERAL LEON J. LAPORTE, COMMANDER, UNITED NATIONS COMMAND AND REPUBLIC OF KOREA/UNITED STATES COMBINED FORCES COMMAND; GENERAL JAMES T. HILL, COMMANDER, UNITED STATES SOUTHERN COMMAND

106 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C.
9:35 A.M. EST, THURSDAY, APRIL 1, 2004

SEN. WARNER: (Sounds gavel.) Good morning, all. Thank you for weathering a rather difficult day to get here. We're off on schedule.

We meet today to receive the testimony from Admiral Fargo, commander of the Pacific Command; General Hill, commander of the Southern Command; and we have General LaPorte, commander of the forces in Korea. We welcome all of you this morning. We thank you for finding the time to visit with some members of the committee prior to the hearing.

This is the last in a series of hearings by this committee on this year, conducted over the past weeks to receive testimony from our nation's combatant commanders. Gentlemen, you are our warfighters. We welcome your insight on developments in your AOR, as well as your assessment of the '05 defense budget request.

Each of you has a long and distinguished record of service to our nation. I want to thank you on behalf of the committee, and indeed the Congress, for your leadership, dedication and service.

We ask you to convey to the very fine men and women and their families under your commands the gratitude of this committee, and indeed the Congress. The entire nation I think is at an all-time high in supporting and recognizing their sacrifices and their professionalism, their dedication to the cause of freedom.

I continue to view with great concern developments in the Korean Peninsula, particularly developments relating to North Korea's ongoing nuclear program. Over the past year, North Korea has withdrawn from the Nuclear Non-Proliferation Treaty, the NPT, and appears to have resumed reprocessing activities. Resumption of North Korea's nuclear weapons program poses a grave threat to the region, and indeed to international stability. The United States, in conjunction with its allies and friends in that region, are working responsibly to try to resolve this situation through diplomatic means. Hopefully this diplomatic approach will be successful.

I look forward to hearing Admiral Fargo's and General LaPorte's assessment of the situation on the peninsula. I'm particularly interested in any changes you've seen over the past year in North Korea's military posture, as well as your assessment of North Korea's nuclear program, ballistic missile and proliferation activities -- underline the "proliferation activities" -- and the readiness of our forces to deter, and if necessary to respond to, any developments on the peninsula, both now and in the future.

Developments in China are always of concern to this committee. The recent election period in Taiwan was a period of increased tensions across the Taiwan Straits. We're interested in Admiral Fargo's views on the current China-Taiwan relationship, and how concerned we should be about the potential for miscalculation in that situation.

I would also appreciate an update on the U.S.-China military-to- military relationship, which I commend you, Admiral Fargo, you've taken a leadership position.

In the Asia-Pacific region, the global war on terrorism is being waged in Singapore, Malaysia, Thailand and the Philippine, Indonesia and other nations. Through Operation Enduring Freedom, the Philippines, the U.S. military continues to provide training, advice and assistance to the armed forces of the Philippines to improve their capability to deal with terrorist threats. I look forward to hearing your update on your efforts to counter numerous terrorist and transitional threats in your critical AOR, admiral.

As elsewhere in the world, there has been a busy year in SOUTHCOM: detainee operations at Guantanamo -- my distinguished colleague Mr. Levin was down visiting a short time ago; political unrest in Haiti; and continuing efforts to assist the government of Colombia with its struggle of narco-terrorists are but a few of the many issues that General Hill has confronted over the past year.

Recently the president of Colombia came up to visit with the leadership in the Senate, and I was privileged to join in that important meeting.

Of particular interest to the committee is the current situation again in Colombia. There are indications that the president of Colombia has made considerable progress in defeating the drug-funded terrorist insurgency in his country, and that a modest increase in support from the U.S. could be decisive. We look forward to General Hill's assessment of the situation, as well as the update on operations in Haiti and an overview of the challenges and priorities in this important region.

The committee is very interested in the plans of the department to restructure the basing of U.S. military forces worldwide. I ask all of you to comment on the global footprint and its impact on your respective AORs.

And yesterday, admiral, we had a particularly interesting discussion -- Senator Levin joined us for awhile -- on the subject of how understandably so much of our attention is focused on the situation in Iraq and Afghanistan, but at the same time the threats primarily in your AOR cover the entire spectrum of types of challenges to the military. I mean, for example, fortunately there are no submarines involved in the conflicts that I've just enumerated; whereas there are some 250 you said different types of submarines operated by different nations in your AOR. That's very significant.

So we look forward to your testimony, and I hope that you'll touch on how as we address these situations in Iraq and Afghanistan with tremendous emphasis we have to keep -- be mindful of the entire spectrum of threats as you have different types of military equipment.

Senator Levin.

SEN. CARL LEVIN (D-MI): Thank you, Mr. Chairman. And let me first join you in welcoming our three distinguished witnesses here this morning. We've asked each of these commanders to share with us a threat assessment in their area of responsibility, a report on current military operations under their command, an assessment of how adequately the budget request for fiscal year '05 and beyond meets their operational readiness and quality of life requirements.

In Asia we face on the Korean Peninsula the most serious nuclear crisis since 1994; in South and Southeast Asia, another breeding ground in the area of operations in the war on terrorism; in the Taiwan Straits, political-military tensions; and on the South Asian continent, two nuclear rivals, India and Pakistan, in an uneasy truce.

Last October the North Koreans declared that they had reprocessed all 8,000 plutonium fuel rods that had been canned and frozen for seven years under the agreed framework, from 1994 to 2003. This came after North Korea had expelled the IAEA inspectors, withdrawn from the Non-Proliferation Treaty, and stated that it had restarted its five- megawatt nuclear reactor.

In January the North Koreans demonstrated to the U.S. delegation that they have removed the plutonium fuel rods from storage and that they have restarted their reactor.

On March 2nd, Assistant Secretary of State for East Asia and Pacific Affairs James Kelly testified that it was, in his words "quite possible" that North Korea had reprocessed all of the fuel. He subsequently told the media that the intelligence estimate had not changed and that, quote, "the operative phrase I use is 'we don't know for sure.'"

According to a report released in January by the International Institute for Strategic Studies, if they processed all the fuel, the North Koreans could have as many as seven nuclear weapons. Meanwhile, the report adds, the five-megawatt reactor could provide enough plutonium for about another bomb this year. So that by the end of 2004 we could be confronted with a situation where North Korea in just the last year has added six new nuclear weapons to their arsenal. If the North Koreans completed construction on two larger reactors, 50- and 200-megawatts respectively, the picture could be exponentially worse.

Meanwhile, the third round of talks in the last year concluded with only an agreement to establish working groups for technical discussions and a commitment to meet again before the end of June. The administration insists that the North Koreans must agree to a complete, verifiable and irreversible dismantlement of their nuclear weapons before we negotiate with them. The administration should also be putting forward a package that addresses their core demands. That doesn't mean meet their demands; it means address their core demands -- respond to them.

The North Koreans appear to have used the last year and a half to further their nuclear ambitions. Serious negotiations are the only hope of ending their nuclear programs and potential nuclear proliferation.

I hope that Admiral Fargo and General LaPorte can tell us more about their assessment of North Korea's nuclear, missile and conventional capabilities, their drug-related activities and the quality of our intelligence regarding North Korea. The North Korean threat derives some of its potentially deadliest features from the specter of proliferation to terrorists. The war on terrorism in Asia, the Western Hemisphere and elsewhere is a race to neutralize the terrorist leaders and to prevent their replacement and new recruits to these networks of death.

Secretary Rumsfeld reportedly asked, in an internal memo last October, the following: "Are we capturing, killing or deterring and dissuading more terrorists every day than the madrasas and the radical clerics are recruiting, training and deploying against us?"

I hope that Admiral Fargo and General Hill will answer that question with respect to their respective areas of responsibility.

In the Western Hemisphere, the threat comes primarily from narco- terrorists and from failing states. The work of our military in supporting the Colombian government's fight against narco-terrorists is bearing fruit, as the government increases its control over its territory, captures or kills the top terrorist leaders, eradicates increasing hectares of coca, and moves towards negotiations with the paramilitaries. Much remains to be done, and most of it is hard political-economic work.

I hope General Hill will also update us on the U.S. military involvement in Haiti, the prospects for restoring stability in that unfortunate country, and any plans for U.S. participation in the multinational force.

Finally, I would note that the military operations in Iraq, Afghanistan, Haiti, in the Horn of Africa and elsewhere have put enormous strains on our military forces, both active and reserve. And as the chairman also requested, I would ask each of our witnesses to assess the impact of this high operational tempo on the forces assigned to or earmarked for their area and the challenges that would result if conflict broke out in their area of responsibility.

Thank you, Mr. Chairman.

SEN. WARNER: Thank you, Senator Levin. Senator Reed, do you have a remark or two?

SEN. JACK REED (D-RI): Just to welcome General LaPorte, Admiral Fargo and General Hill, and thank them for their service to the country. Thank you.

SEN. WARNER: Thank you.

Admiral Fargo, please proceed. We will place into today's record your statements in their entirety.

ADM. FARGO: Thank you, Mr. Chairman, Senator Levin, and distinguished members of the committee. Thank you for this opportunity to testify on the posture of the United States Pacific Command. I have the honor to represent thousands of men and women, active, Guard, Reserve and civilians, and, of course, their family members, who are providing superior service to the nation in the Asia- Pacific region, and indeed around the world.

Their high readiness and effectiveness can be directly attributed to the generous support of this esteemed body and of the American people as a whole.

Today I'd like to survey our primary security concerns in the region, and then I look forward to answering your questions. And I appreciate you placing my statement into the record, Mr. Chairman.

Dramatic events in Southwest Asia, for which the Pacific Command continues to be a primary force provider, have not eclipsed the importance of the Asian-Pacific threats to global security, nor our attention to them.

First and foremost, we are keenly focused on the Korean Peninsula. General LaPorte and I carefully monitor indications of North Korean military readiness. And frankly, I don't think that war is any more likely today than it was 18 months or 24 months ago, but clearly the stakes would be very high if war occurred on the peninsula. Millions of South Koreans live within range of North Korea's artillery. And the stakes, of course, would be even higher if North Korea continues to pursue a nuclear capability.

But North Korea's ability to threaten peace is not limited to the peninsula. The world's largest proliferator of ballistic missiles already has demonstrated the ability to deliver missile payloads beyond even Japan. And the reach of its illicit activities, such as narcotics, extends as far as Australia, as was demonstrated just last summer.

Now, of course, North Korea's highly-enriched uranium program, along with its plutonium reprocessing program, raise the specter of nuclear weapons either in armed conflict or proliferated into the hands of terrorist groups, perhaps our biggest fear, and one that clearly would threaten all nations.

President Bush repeatedly has stated our commitment to a peaceful resolution of the North Korean nuclear issue. A diplomatic initiative is moving forward to the six-party talks, and our role at the Pacific Command has been to ensure that diplomacy is backed by a viable military capability. And we continue to do just that, posturing our forces not to provoke but to deter conflict.

Next we worry about miscalculation resulting in conflict between India and Pakistan or in the Taiwan Strait. Recent constructive dialogue between India and Pakistan and the relaxation in tensions are positive signs. The Taiwan Strait is another place where miscalculation could result in terrible destruction and poses the possibility of expanding into a wider regional conflict. The Taiwan issue remains the largest friction point in the relationship between China and the United States.

President Bush has stated our support for the one-China policy and the three communiques. It should be equally clear that our national leadership and the Pacific Command are prepared and committed to meet our obligations under the Taiwan Relations Act. We continue to watch closely the developments associated with the recent Taiwan election. To date we have seen no indication of imminent military crisis.

Asia-Pacific nations face a number of transnational threats to regional stability, most significant of which is terrorism. The war on terrorism is our highest priority at the Pacific Command. Regional and local terror groups with ties to al Qaeda continue to pose serious threats to U.S. and friendly interests, especially in Southeast Asia. This region is a crucial front in the war on terrorism. Destabilization of the governments of this region, which are moderate, secular and legitimately elected, and with large Muslim populations, would result in decades of danger and chaos.

The Jemaah Islamiyah, or JI, directly targets the region for instability through terrorism, supporting its goal of pan-Islamic states in Southeast Asia. The JI followed up its October 2002 Bali bombing with a deadly attack on the J.W. Marriott Hotel in Jakarta just last August.

I'm pleased to report that the nations of the region are cooperating well against these threats. Singapore, Malaysia, Thailand, the Philippines have thwarted a number of attacks and have detained or arrested over 200 members of the JI.

Indonesia, too, has been particularly effective in the arrest and prosecution of some 34 JI members who participated in the Bali bombing, most of whom have now been sentenced for their crimes. And Australia, of course, plays an active role facilitating bilateral counterterrorist efforts throughout the Pacific.

But the JI is resilient and pervasive. Other key leaders remain at large, and new terrorist generations are being trained. And we're learning more about the degree of JI involvement in terror operations in southern Thailand and in the southern Philippines.

It's against this backdrop of challenges that we reach my final priority, and that's transformation. Specifically, we call it operationalizing the Asian-Pacific defense strategy. We're examining new ways of commanding, supporting and employing our forces.

First, we're updating operational plans to incorporate not only our improvements in speed and precision and lethality and knowledge, but also the lessons learned from operations in Iraq and Afghanistan.

Second, we're strengthening our command-and-control constructs to execute those plans responsibly, leveraging joint and inter-agency arrangements. We're also working hard to develop expeditionary capabilities for immediate employment, both in the Pacific and anywhere else they might be needed, and to integrate those capabilities into new operating patterns and concepts.

You've already provided us major improvements, like the Striker armored vehicle and the C-17 aircraft. And you're well aware of two critical transformational efforts designed to improve our global force posture and footprint. Our global posture review aims to arrange our forces most effectively to assure friends and allies while deterring and, if necessary, defeating our adversaries.

The Base Realignment & Closure -- BRAC -- Commission, scheduled for 2005, supports posture improvements by eliminating unneeded facilities and infrastructure that absorb dollars needed elsewhere.

In sum, we're looking for ways to effectively array combat power as appropriate for uncertain threats of the future while reducing the burden we place on friends and allies in the region. Our goal is an enduring posture and footprint that demonstrates our commitment and is sustained for the long term.

Finally, we're looking for access to logistic pre-positioning opportunities throughout the theater that minimize lift requirements and increase responsiveness whenever and wherever we're threatened.

You should all know -- and I'm sure you do, Mr. Chairman and members of the committee -- that I'm proud to represent the men and women of the U.S. Pacific Command. And I sincerely thank you for the opportunity to testify today, and I look forward to your questions.

SEN. WARNER: Thank you for a very good statement, Admiral. We're very proud of you and your distinguished career of service to this nation.

ADM. FARGO: Thank you.

SEN. WARNER: You fulfill your role with a great deal of enthusiasm and wisdom. Thank you.

ADM. FARGO: Thank you, sir.

SEN. WARNER: We'll now listen to General LaPorte.

GEN. LAPORTE: Senator Warner, Senator Levin and distinguished committee members, I'm honored to appear before the committee to update you on the current situation in the Republic of Korea.

I want to extend the thanks of all the soldiers, sailors, airmen and Marines and the Department of Defense civilians that serve in Korea. Your unwavering support provides these dedicated men and women with the resources to maintain the readiness that underpins peninsula security and regional stability. You can be justifiably proud of your service members and the Department of Defense civilians serving in Korea.

The security and stability of the Northeast Asia region is a long-term interest of the United States. Along with our allies and friends, we continue to deter threats to security, promote freedom, and contribute to regional prosperity.

The presence of the United States forces in Northeast Asia signifies our enduring commitment to these goals. The Republic of Korea has long been a key U.S. regional ally and leading democracy in Northeast Asia. In the Republic of Korea, democratic processes continue to govern the nation, demonstrated by the peaceful constitutional processes being used to address allegations against President Roh.

The Republic of Korea-United States military alliance exemplifies cooperation among democratic nations to promote shared, enduring interests. Our alliance remains steadfastly committed to the fundamental purpose: To deter and defend against North Korean threats and to strengthen mutual commitment to regional security and stability.

The combined forces of the Republic of Korea and the United States remain trained and ready to accomplish its security missions. In addition to its predominant role in peninsula defense, the Republic of Korea has demonstrated a sustained commitment to coalition operations in Afghanistan and Iraq. Since 2002, the Republic of Korea has contributed up to 500 rotational medical and engineer troops to Afghanistan, and the Republic of Korea air force and navy and flown and sailed in support of United States forces engaged in the war on terrorism.

Last year, the Republic of Korea deployed a 675-person contingent for stability operations, and pledged 260 million for reconstruction in Iraq. This past February, the national assembly approved the dispatch of up to 3,000 additional troops to Iraq. When this contingent deploys, the Republic of Korea will have the third largest troop contingent in support of the Iraqi coalition.

On the Korean Peninsula, the combined forces of the Republic of Korea and the United States alliance are transforming, guided by the enhance, shape and align construct, which synchronizes our efforts and ensures that the Republic of Korea-United States alliance remains relevant to the security needs of both nations. Together, we are working to enhance our combined military capabilities, to bring state- of-the-art military technologies and operational concepts to the Korean theater, strengthening our combined peninsula and regional deterrence and readiness.

These enhancements include improved armored vehicles, air defense systems, chemical and biological defense, and advanced precision weapons. The advanced concept technology demonstrations programs such as theater effects-based ops, tactical missile system penetrator, and joint blue force situation awareness have demonstrated promising ways to enhance the capabilities of U.S. forces based in Korea. We also will continue to improve individual protective equipment, including interceptor body armor and chemical protective equipment.

United States forces continue to demonstrate the ability to rapidly reinforce the Korean Peninsula with advanced capabilities such as the C-17 aircraft deploying striker-equipped Army units, and high- speed vessels moving Marine expeditionary forces to the peninsula.

We have begun to shape the combined forces by transferring military missions from the United States forces to Republic of Korea forces. These changes acknowledge the growing capabilities of the Republic of Korea military and its predominant role in peninsula defense, while maintaining the firm United States commitment to peninsula security and regional stability.

We continue to align the United States forces into two hubs of enduring installations that support an enduring United States military presence in the Republic of Korea. Consolidating and realigning United States forces, including the Second Infantry Division and units stationed in the Seoul metropolitan area, will increase our operational capabilities while improving readiness and quality of life for United States service members. These enduring hubs, coupled with the pre-positioned equipment provide the strategic flexibility to rapidly reinforce the Korean Peninsula or to promptly respond to regional security concerns.

The realignment of the Second Infantry Division, begun under the 2003 Land Partnership Plan, is a major component of transforming the United States forces Korea to meet future security requirements. The realignment of the Second Infantry Division depends on stable funding to exist in the projects in the future years defense plan.

We are concluding negotiations to relocate the United States forces from Seoul. Yongsan relocation, done at the request and the expense of the Republic of Korea government, will enhance the operational readiness of the alliance, improve facilities and quality of life for United States forces, and return valuable land to the Korean people.

With your continued support, transformation of the United States forces in Korea will result in a more capable and sustainable U.S. military presence in Korea and produce a stronger military alliance.

Improving community relations and quality of life remain top priorities in Korea. Our good neighbor programs, implemented at all command levels, continue to promote positive community relations with our Korean host. These programs, such as English language tutoring, cooperative humanitarian and conservation projects, and local Korean- American friendship associations build mutual understanding and cultural appreciation.

Service member quality of life in Korea is trending upward. With your support, we continue to improve the operational facilities, housing, and community support facilities through renovation and construction. These improved facilities, along with incentives such as increased family separation pay, cost of living allowances, and assignment incentive pay, have increased retention in Korea. On behalf of those serving in Korea, I want to thank you for your continuing support of these key initiatives, and directly addressing the substandard living and working conditions, thus improving the quality of life in Korea.

The United States force in Korea shares your concern about sexual assaults involving service members. The command treats sexual misconduct in any forms as a serious matter, and we are taking stringent measures to address the issue. We have charged leaders at all levels with personal responsibility for rigorously enforcing policies, and establishing a working group to identify ways to eliminate risk factors that may contribute to sexual assault. Equally important, we have reinvigorated our educational programs, stressing risk factor awareness, prevention, and compassionate victim care. This is clearly a leadership issue, and the leadership in Korea is engaged.

I thank you for the opportunity to appear before this committee and look forward to your questions.

Thank you.

SEN. WARNER: Thank you, General. You, likewise, our relationships the two of us have had these several years you've been in this command, your enthusiasm, your dedication to your assignment come through, and to the welfare of your men and women. It's a difficult post to live in, having had some modest personal experience myself on that peninsula a half-century ago. And I judge from your comments that the conditions have improved. So, we'll hear further.

General Hill, sir.

GENERAL HILL: Thank you, Mr. Chairman. Senator Levin, distinguished members of the committee, I'm honored for this opportunity to appear before you today to provide my assessment of Latin America and the Caribbean and what the United States Southern Command is doing to advance United States interests in this very important region of the world.

And I'm very appreciative of the support of the committee for the United States Southern Command, the soldiers, sailors, airmen, marines, Coast Guardsmen, and civilian personnel who I am so privileged to command. They are fine men and women and are serving our nation admirably.

The security picture in Latin America and the Caribbean has indeed grown more complex over the past year, as events in Haiti, Bolivia, and Venezuela amply illustrate. Deep-seeded frustrations over the failure of democratic and free market reforms to improve the standard of living for all citizens are significantly challenging many of the region's governments. This frustration is exacerbated by endemic corruption and by the insidious impact of society of the threats I addressed last year -- narco-terrorism, urban gangs and other illegal armed groups, arms and human trafficking, and support to international terrorism.

Unfortunately, as a consequence, some leaders in the region are tapping into this frustration to move radical agendas forward and are manipulating democratic processes to diminish rather than to protect individual rights. Our country's focused support is critical to ensuring that the strong democratic tides of the past 25 years do not reverse their flow, but instead are strengthened and reinforced.

Haiti's breakdown of law and order and its rising violence led to the voluntary resignation and departure of former President Aristide, a constitutional transfer of power, and the rapid deployment of the United Nations mandated multinational interim force. Currently in Haiti, the multinational force consists of 2,014 U.S. troops, 838 French, 500 Canadian, 329 Chileans -- deployed with the mission of setting the conditions for the follow-on deployment of a U.N. force in June. We are preparing for that follow-on force by stabilizing the security environment in Haiti, containing migration, and facilitating the provision of humanitarian assistance.

I've been two Haiti twice since the crisis eruption -- erupted. I go back again on Monday. The first time I went was three days after the deployment of our forces, and again just last week. I was impressed by the positive change between my visits. The multinational force is performing well in a difficult and complicated environment. The troops in Haiti are progressively reestablishing the security and stability necessary for the interim government to function.

I am particularly pleased by the seamless cooperation among our multinational force allies. Thanks to the quick response and meaningful contributions of our government, along with those of Chile, France and Canada, our troops are working side-by-side with those other nations, bringing a new spirit of cooperation to the difficult task at hand.

Despite the very complex security situation in the region, much is going well. Although there remains work to be done, our country's significant investment in Plan Colombia is showing substantial results. The Colombian economy is growing. The Colombian government has established a presence in all major municipalities. Major categories of criminal activity are down. Narcotics production is down. Demobilizations by the narco-terrorist organizations are increasing, as are desertions from their ranks. The Colombian military has grown into a professional, competent force that reflects human rights and the rule of law, and has gained the strategic initiative over its narco-terrorist enemies.

As a result of this substantial progress, a window of opportunity has opened in which the Colombian government has the potential to deal a decisive blow to the narco-terrorists. The Colombians have developed a campaign plan which takes them into the heartland of the territory controlled by the illegal armed groups. To provide the maximum amount of support to this effort, the administration has recommended that the congressionally-mandated cap of 400 military and 400 contractors be raised to 800 and 600 respectively.

This increase will allow us to provide the Colombians the greatest possible assistance and maximize their potential for success.

I have worked closely over the past year with President Uribe and the leaders of the Colombian military. I have visited all corners of Colombia. I have seen first-hand the professionalism and increased capabilities of the Colombian military. I have been inspired by the dedication of the Colombian soldiers in their daily fight to defend their democracy against vicious narco-terrorists. It is vitally important that we sustain Plan Colombia's progress. As one of the oldest democracies in this hemisphere, a key trading partner and supplier of oil, a staunch ally, and only three hours from Miami, a stable, secure Colombia is important to our national security interests.

In stark contrast to the situation 25 years ago, democracy is now the accepted model for governments in this hemisphere. However, transnational threats, poverty and corruption are destabilizing governments and impeding the consolidation of democracy. The continued progress as a region of democracy and prosperity is fundamentally important to our national security.

With very few resources and a modest presence, the men and women of Southern Command are working to further that progress, and to ensure our nation's security. We will remain steadfast in our efforts, and look forward to your continued support.

Thank you again for this opportunity to appear before you, and I look forward to your questions.

SEN. WARNER: Thank you, General Hill. Again, I've been privileged to work with you. And your enthusiasm and commitment to this post comes through very clearly.

We'll now proceed to a six-minute round. I'd like to start off again, Admiral Fargo, on the China-Taiwan situation. You're well aware, of course, of Congress's interest in this of long-standing. We have the Taiwan Relations Act, and that potentially aligns us with trying to preserve the integrity of Taiwan as we know it today.

The president has spoken very clearly and precisely on this. And I was struck very positively by your observation -- I believe I've got it in mind -- that the situation you feel is well in hand, and it hasn't really changed in terms of military potential in sometime now. Could you expand on that?

ADM. FARGO: Yes, Mr. Chairman, I certainly can. As you remark, the president has made it very clear that the United States opposes any attempt to by either side to unilaterally change the status quo in the Taiwan Strait. And certainly it is our top goal -- peace and stability in the strait. That's the only way where the region will see the economic prosperity that everybody is looking for.

I think my role is very clearly laid out in the Taiwan Relations Act. I have responsibility to certainly assess and report to the secretary and the president; to help Taiwan develop the capability to defend itself; and then, if so ordered, I have to make sure that our forces are ready and capable to defend Taiwan.

So we are paying very close attention to this. As I mentioned to you yesterday, we don't see any indications -- any indications and warning, any movements, that would cause us to believe that we have an imminent military crisis. They just aren't there right now. The levels of activity are normal -- the kinds of exercises you would normally expect for this time of the year.

We are watching the Chinese military modernization very closely. Their economic success over the last few years -- that growth of seven, eight, nine percent has certainly fueled a military modernization that is bringing to the PLA modern ships and submarines and aircraft.

SEN. WARNER: Thank you. Your answers are very encouraging. Again, I refer back to what I thought a very clear statement by the president indicating our commitment, but I hope the political leadership on both sides down there do not allow the -- understandably the heat of politics, which all of us here on this side of the roster understand very clearly -- to let that develop into some sort of a military confrontation. I thought the president spoke to that very clearly.

General LaPorte, I see that you have with you a distinguished flag officer from the United States Marine Corps who as I understand has had a number of years of service. Would you introduce him to the committee, please?

GEN. LAPORTE: This is Major General Timothy Donovan. He is my C-5. He has served in Korea three years. He's a tremendous asset to me personally, but the command in general. And he is going to assume command of the Marines at Camp Pendleton.

SEN. WARNER: General, we welcome you and look forward to when your promotion I presume comes before this committee. Three years of service you put in the Korean Peninsula? Quite a period.

The incentive pay, General, it's a subject that you and I have worked on for the years that you've been in your post. I understand from our conversation yesterday that the Army has approved assignment incentive pay for soldiers who volunteer to extend their tour of duty in Korea, give an extra $300 a month to those who are willing to remain in Korea. Have you done any assessment as to how this is going to benefit your command? And what's the status of the Air Force's decision regarding assignment incentive pay for airmen?

GEN. LAPORTE: Senator, first of all I'd like to thank you personally and the committee for the tremendous support you've given the service members in Korea relative to what was perceived as a pay disparity.

Since I last appeared before you last year, the service members serving in Korea have been benefited tremendously -- first of all with the increase in the family separation allowance from $100 to $250 a month. That's very much appreciated.

Secondly, we were able to work very diligently to justify the cost-of-living allowance that now service members in Korea have started to receive about eight months ago. Up to this point in time, Korea was the only place in the Pacific that was not receiving a cost- of-living allowance. That's not the responsibility of Admiral Fargo. That's the responsibility of my command to justify. And we've been able to do that over the past year, so the service members are benefiting from that.

Recently we looked very closely at the assignment incentive pay that you just mentioned. The Army has established a pilot program. We implemented it on the 12th of March. And the report I received last night, at the close of the end of March, we have had 3,600 soldiers in Korea request due to this assignment incentive pay to either extend one year or two years in Korea. We think this is a tremendous vote of confidence in terms of the mission, the training that they receive in the command, and also an opportunity to make a few extra dollars for a difficult assignment.

The status of the Air Force program -- my understanding is that General Jumper approved the program this week, and it is moving to the secretary and then up to the OSD for approval, and I expect that will be approved shortly.

SEN. WARNER: Would you provide for the record -- are other service members of, say the Department of the Navy, either naval or the Marine Corps, serving in billets that would enable them to qualify under the Army's program?

GEN. LAPORTE: The Navy has used the assignment incentive program very well over the past two years since they've been given the authority. I will provide you details for the record, senator.

SEN. WARNER: I want to make sure, Admiral Fargo, that it's uniform for all service persons who have a assignment in that area.

ADM. FARGO: Yes, sir.

SEN. WARNER: The Colombia troop cap -- this is something that is being very actively considered, General Hill. U.S. military presence in Colombia is currently limited to 800 personnel -- 400 percent and 400 contractors. The administration is asking for an increase in this troop cap. Can you give us your understanding of the justification for that and the size that you think would be optimum to increase?

GEN. HILL: Thank you, Senator. Thank you, senator. The troop cap issue and the request for an increase is directly linked to the great success that the Colombian military has had over the last 18 months since President Uribe assumed the presidency in Colombia. He developed a strategic plan for the nation. The military developed a military plan for security for the nation. And they have now developed an operational tactical plan to literally carry the fight to parts of Colombia where they have not had a presence for the last 15 or 20 years. They are going to take the fight to the enemy.

When I was briefed on that plan, and I was shown the complexity of it, and I was shown the size of it, and they asked my support of it, what I saw was the need to increase our planning assistance teams, the need to help them logistically in terms of planning for sustained land combat, and also communications and intelligence.

SEN. WARNER: And transportation?

GEN. HILL: And transportation -- to help them plan that transportation, yes, sir. And as we began to look at the numbers, we saw quickly that we could not do that amount of work with them underneath the existing cap. And what we've been doing over the last six to eight months is pulling some people out, putting some people in that are doing the more appropriate mission -- and we have been managing the cap at exactly about the 400 level.

This is an opportunity for us to see success of Plan Colombia. The United States Congress three years ago -- we are in our fourth year of Plan Colombia -- has put a lot of money into Colombia -- about $2 billion. That investment is beginning to pay tremendous dividends, and we need to stay the course. And part of that is to, in my view, is to allow me the flexibility to better assist the Colombian military in their undertakings.

SEN. WARNER: General, while we want to support that government in its effort to preserve freedom in its country and a stabilized governmental situation, the drugs that emanate from that region cause a tremendous cost to this country -- in life and disease and harm, and law enforcement and the like. Can you say that there's a direct correlation between that flow of narcotics from that region and this troop cap? In other words, will the troop cap hopefully further try to limit that flow?

GEN. HILL: In my view the answer to that question is, yes, it will. The FARC, the AUC and the ELN derive their resources to conduct their nacro-terrorist activities out of narcotics. The region that the Colombian military is going into is one of the highest growing narcotics areas. We will continue to take down their ability to finance themselves -- they being the illegal armed groups. And we have seen over the last year the progress that the Colombian military has had has in fact played a significant role in making life much more difficult for especially the FARC to operate in their areas, because of lack of resources.

SEN. WARNER: So there's a clear correlation and a clear benefit to our nation to give this added support?

GEN. HILL: In my view, yes, sir.

SEN. WARNER: Your professional view, and I thank you very much.

Senator Levin.

SEN. LEVIN: Thank you. Admiral Fargo, in order to meet the current demand for forces in Southwest Asia, the Marines decided to redirect to Iraq some of the battalions usually assigned to Okinawa. In your view, does that increase the risk that you won't be able to meet operational requirements?

ADM. FARGO: Senator, we took a very careful look at this. As you know, in the first rotation of forces to Southwest Asia, the Pacific was largely untouched. We did move the carrier Kitty Hawk into the Gulf, but it was immediately backfilled by the carrier Carl Vinson. This rotation we have moved forces, and the Marines off of Okinawa -- those three battalions are a part of that.

General LaPorte and I looked at this very carefully, and felt that the risk that we would accept by moving those Marines was both reasonable and prudent.

In addition, the Navy and the Air Force have had the opportunity to pretty much reset. They've been able to come back and reconstitute, recock, if you will. And we have the ability to use those forces to help mitigate that risk.

SEN. LEVIN: Admiral, this question is either for your or General LaPorte. It relates to our intelligence regarding North Korea's nuclear capabilities. And I'm wondering whether or not you believe that they've reprocessed all of the 8,00 fuel rods over the last six months.

ADM. FARGO: Well, I'll give you my initial answer, and I'm sure General LaPorte can add to it. Senator, I don't know whether they have or not. I don't think we have enough intelligence to tell that.

SEN. LEVIN: General?

GEN. LAPORTE: I would agree with that. Obviously they've had the opportunity to in terms of time, but we don't have the intelligence that tells us that they in fact have done that.

SEN. LEVIN: Now, how good is our intelligence generally, relative to North Korea?

GEN. LAPORTE: Well, Senator, as you know, North Korea is a very tough intelligence target because of the closed nature of its society. They have worked very hard at countering technical intelligence means such as using fiber optics, developing indigenous frequency-hopping radios, and they have a tremendous number of underground facilities. So technical intelligence becomes problematic when you're addressing a target of that nature.

And from the human intelligence standpoint, because it's such a closed and controlled society, that is also challenging for us.

SEN. LEVIN: Do you disagree with that? Or do you want to add anything to that, Admiral?

ADM. FARGO: I think it's a very tough target, as General LaPorte said. The closed society makes it tough to penetrate. We've had numerous conversations with our intelligence community, and certainly we've laid out our requirements to them, and they're working on them, and they're working on them hard. But it's a tough target.

SEN. LEVIN: General LaPorte, have you noticed anything different or unusual in North Korea's military posture, training or operations?

GEN. LAPORTE: Sir, since I last appeared before the committee, I would say no, we have not. I agree with Admiral Fargo's assessment. The likelihood of war on the peninsula, my assessment is that it's low at this point in time.

During the past 12 months, there have been no tactical provocations along either the demilitarized zone or in the West Sea. Their conventional forces continue to train within seasonal norms that we have seen. They're just recently completing their winter training cycle, and there's been an average level of training that we've seen over the past five years.

SEN. LEVIN: The South Koreans seem to think that instituting a freeze, going back to the agreed framework as a starting point, is more desirable than the current situation where the five-megawatt reactor continues to produce enough plutonium for about another device each year, and where reprocessing has and may continue to occur.

Do you have an opinion on the issue of whether or not it would be desirable to reinstitute that freeze? Or do you think that we should basically insist that they dismantle everything up front? Do you have an opinion on that issue?

GEN. LAPORTE: Well, first of all, I would like to say that the United States many times is accused of unilateral action. But in this case, the United States has been the driving force in developing the six-party talks and getting other nations who have a vested interest in keeping the peninsula nuclear-free involved in the process.

I think we need to have a very strong diplomatic effort that's backed up with very strong military readiness posture.

SEN. LEVIN: On the specific issue, however, as to whether, since the South Koreans apparently believe that reinstituting a freeze would be a good starting point or an adequate starting point compared to the position of requiring the North Koreans to dismantle everything first, do you have an opinion on that issue?

GEN. LAPORTE: Well, the challenge always with the North Koreans is getting them to abide by any agreements that they make. They don't have --

SEN. LEVIN: Either way.

GEN. LAPORTE: They don't have a history associated with complying.

SEN. LEVIN: Admiral, do you have an opinion on the question I asked?

GEN. FARGO: I think that General LaPorte has stated it very properly. Getting the North Koreans to abide by the agreement is the toughest proposition. And getting to the end state we're looking for, which is a nuclear-free Korean peninsula, is where we need to be.

SEN. LEVIN: Okay. General Hill, the -- if we raised that cap that you and the chairman talked about, will that increase the risk in any way that U.S. troops would be drawn into combat?

GEN. HILL: No, sir. I am not asking for a change in ROE. I don't propose to put American troops into a combat situation, nor, frankly, would the Colombians like that to happen. The Colombians understand that this is their war. It is their war to win, and they are going about doing that.

SEN. LEVIN: So your judgment specifically, if we increase the cap, as you requested, that does not increase that risk.

GEN. HILL: I do not believe so, no, sir.

SEN. LEVIN: Thank you. Thank you, Mr. Chairman.

SEN. WARNER: Senator, your question is very important, but I think the record should reflect that our troops, by virtue of their physical presence in that region, are subjected to a fairly high degree of risk.

GEN. HILL: Senator Warner, that is correct. And if that is the context of Senator Levin's question --

SEN. LEVIN: I was talking about combat, whether they'll be drawn into combat.

GEN. HILL: No, sir.

SEN. LEVIN: That's the risk I referred to.

SEN. WARNER: Yeah, I think --

SEN. LEVIN: There are a number of risks that you're referring to, but I limited the question to that risk.

GEN. HILL: But on the force protection issue, Senator Warner, is that we have a vigorous force protection policy in Colombia and we work that every day very hard.

SEN. WARNER: I don't question that.

GEN. HILL: Yes, sir.

SEN. WARNER: You know, our attention is drawn this morning to a tragic picture of contractors and others. But at any moment elsewhere in the world, our troops, while they're not in direct combat --

GEN. HILL: Yes, sir.

SEN. WARNER: -- they're in harm's way.

GEN. HILL: Clearly.

SEN. WARNER: Let it be very clear. Thank you. Senator Allard.

SEN. WAYNE ALLARD (R-CO): Thank you, Mr. Chairman. And I want to thank all of you for your testimony today, and thank you for your service to America and to us as citizens.

I have the first question I want to direct to Admiral Fargo, and this deals with an issue that I've been working on from my office.

As you know, two Americans were murdered and several others were injured in Indonesia on August 31st, 2001, when they were attacked as they were returning from a picnic.

As a result of Indonesia's lack of progress investigating this attack, last year I, along with Senator Russell Feingold, inserted language in the FY 2004 Foreign Appropriations Act restricting funding for international military education and training to Indonesia until the secretary of State has certified that Indonesia has made progress in its investigation and is cooperating with the Federal Bureau of Investigation.

Are you satisfied with Indonesia's progress in investigating this attack?

ADM. FARGO: Senator, I think we all recognize that Indonesia is a tremendously important place. This is the largest Muslim country in the world, over 200 million people, larger than Russia right now.

It's a moderate, secular democracy and a relatively immature democracy. They're going to hold their first direct election for president here in April. A lot of their institutions are immature and require a large degree of reform, and the TNI is one of those.

The latest reports that I have from the country team on the TNI's cooperation with the FBI are actually very positive, and they indicate that the cooperation has improved dramatically. And the FBI is getting very close to being able to file their report.

So I'm encouraged by that. I've had direct conversations with General Sutarto, the chief of defense for Indonesia, about the importance of their full and open participation in this investigation, and he's assured me he's going to provide his complete cooperation.

SEN. ALLARD: Well, it sounds like you've emphasized the importance of finding those responsible and holding them accountable to the Indonesian leaders. And I appreciate your helping us out in that and being involved in that very crucial issue.

The next one I want to address also to you, Admiral Fargo, and then also General LaPorte, and it regards missile defense. In your prepared testimony, you both underscore the problems and concerns with the growing proliferation of weapons of mass destruction and ballistic missiles.

It is no secret that the North Koreans are assembling a significant missile inventory of great ranges and are one of the most aggressive proliferators across the globe. I'm glad to hear in your testimony the added emphasis on ballistic missile defense programs.

Could you share with us your respective efforts and progress in completing your concepts of operations and operator training activities for initial ballistic missile defense operations later this year? In particular I would appreciate hearing any resource concerns you may have.

ADM. FARGO: Yes, sir. Senator, let me start, if I may. We think missile defense in the Pacific is tremendously important, and, of course, on the national level also. It is one of my top three priorities that I've submitted in my integrated priority list.

Right now we're moving to an initial capability this year. In the Pacific, that will involve the deployment of Aegis ships that provide a search-and-track capability, and that will fit into the larger national architecture.

We also -- I think it's particularly important that we move ahead on theater ballistic missile and cruise missile defenses because of our clear responsibilities to protect our forces, our ships and personnel ashore, as well as our allies.

So the early fielding of systems like THAAD and expanding the Patriot PAC III capability, the fielding of the Navy's mid-course sea- based system and sea-based terminal, are particularly important to me to meet my responsibilities.

SEN. ALLARD: General?

GEN. LAPORTE: Senator, let me just add to what Admiral Fargo has said. My responsibilities, obviously, are localized to the peninsula. During the past 12 months, we have been able to significantly upgrade our Patriot capabilities on the peninsula as a result of integrating the PAC III missiles and technology into the forces that are currently on the peninsula.

SEN. ALLARD: Thank you.

General Hill, there seems to be a growing trend among terrorist elements to partner with drug traffickers for financing their terrorism. This direct and growing linkage between the narco- traffickers and the global terrorists, I think, is becoming more of a direct threat to the United States.

Is it time to start looking beyond just foreign military assistance programs and toward direct U.S. military action against these illicit partnerships?

GEN. HILL: Senator Allard, you raise a true concern of mine also. There is a growing, in my region, Islamic community, some of it long-standing, some of it fairly new. They are involved in all manner of illegal activity, including narco-trafficking.

There is a connection between many of those groups and Hamas, Hezbollah and other organizations where illegal funds generated in our region pay for and help support international terrorism. We watch those groups very carefully in the region. To this point, we have never found, have not found an operating terrorist cell. Were those to be found, then I would recommend appropriate action.

SEN. ALLARD: Thank you. Mr. Chairman, I see my time has expired.

SEN. WARNER: Thank you, Senator. Senator Reed.

SEN. JACK REED (D-RI): Thank you very much, Mr. Chairman.

Iraq has become a drain on land forces of considerable scope. We've talked about the Marines that have been deployed from Okinawa. The 25th Division has significant deployments into Southwest Asia.

In addition, I assume that there are items of equipment that are in high demand, such as airlifters and other pieces of equipment. And beyond the unit, there are a huge demand for Special Forces, special operators. Can you comment, Admiral Fargo and General LaPorte, the effect in the Pacific of this commitment in Iraq? Do you have areas where your troops -- you have less forces; you obviously have less forces today -- but that they're draining your ability to respond?

ADM. FARGO: Well, certainly, Senator, we have less forces that are specifically based in the Pacific; as you point out, the deployment of the 25th Infantry Division to both Iraq and Afghanistan in this rotation, as well as the Marines. But, of course, we source forces for all of our efforts globally, from the entire capacity, really the immense capacity of the United States military. And that's precisely what we're doing in these cases.

And as I mentioned earlier to Senator Levin's comment, we do have the ability to achieve comparable effects with other forces other than ground forces, such as the air that's provided by both the Navy and the Air Force, who are largely reset.

So I think that, based on what we have available in our evaluation of the risk, we're in an adequate posture right now.

SEN. REED: General LaPorte.

GEN. LAPORTE: Senator, your concern is a concern that we need to stay focused on. I will tell you, the forces resident to the peninsula have been minimally affected by the Iraqi operation. We continue to be trained and ready.

I work very closely with Admiral Fargo in terms of the reinforcing forces. And we have exercised those reinforcing forces globally, not just in simulation but in real-life movements of those forces.

I'm confident that we have the capability as a nation to reinforce the Korean peninsula if required.

SEN. REED: Admiral Fargo, you pointed out that the administration is pursuing a diplomatic approach to the North Korean nuclear situation and that the military stands by as a complement or an exclamation point, if you will, to their diplomatic efforts.

The North Koreans seem to be intransigent, non-cooperative. Might that be a result of their simply looking around the Pacific and seeing the 25th in Southwest Asia, the Marines from Okinawa now in Southwest Asia, even though you do have considerable air power? Is that a -- I guess the question would be do you think our military posture is complementing effectively this diplomatic initiative?

ADM. FARGO: Senator, what I've seen is that the North Koreans are complaining about our presence. As General LaPorte just mentioned, we just finished up our annual exercise, RSO&I and Foal Eagle/Freedom Banner on the peninsula. As General LaPorte mentioned, we used forces that were sourced globally for some of those efforts. We have maritime forces, a carrier strike group and an -- (inaudible) -- strike group that was fully involved in that effort. And we rotate forces into the Pacific on a regular basis from the continental United States that maintain a very level and deterrent posture. And the response we've gotten out of the North Koreans is one of they noticed that, and in some cases they object to it.

SEN. REED: General LaPorte?

GEN. LAPORTE: Senator, I would only add that my command is a combined command, of both ROK and U.S., and the ROK military is an extremely capable military force. They are well trained, well equipped, well led, and highly motivated. So, the U.S. and ROK alliance together complement and allow us to, first of all, accomplish our deterrent mission, and second of all, they'd be ready to fight tonight if required.

SEN. REED: Thank you. General Hill, following up in SOUTHCOM, there's been stories about the drain of special operators from the active forces for private employment and other endeavors, and also, obviously, the demand in Southwest Asia for these special operators. Your Colombia operations seem to have a particular, you know, rationale for additional special operators. Will you find a problem filling these additional slots that you requested?

GEN. HILL: No sir. I -- and in context to the whole OPTEMPO/PERSTEMPO issue, which I am very sensitive to, not only just for Iraq but other operations, most of the requirements and many of the requirements that I'm going to fill in terms of upping from 400 to -- as we see it in 2005 about 726 people max, are short-term. They'll be mostly filled from forces already assigned to me or from headquarters assigned to me. Some special forces operations, but in many (regards ?) not special operations forces.

SEN. REED: Thank you. Admiral Fargo, the Philippines has been a source of concern. Can you comment upon the situation now with the JI and their Abu Sayyaf operatives? What's the situation?

ADM. FARGO: Well, Senator, as you know, from the outset the Philippine government has been -- has provided superb support on the war on terrorism. They do have significant concerns, as we do, abut the Abu Sayyaf Group and the Jemaah Islamiyah. As you know, the ASG -- the Abu Sayyaf Group -- was really pretty much a hostage-for-ransom group that operated in the Southern Philippines, in the archipelago. President Arroyo has recently stated that the Jemaah Islamiyah, the JI, is their top threat and concern.

The Philippines has made some progress against the ASG. There were reports this weekend of the arrest of four to six ASG members and the recovery of some number of explosives. We're still trying to corroborate those reports.

The JI are a regional concern. The region -- the countries of this region in Southeast Asia have cooperated very thoroughly -- and I mean the Philippines, and Indonesia, and Thailand, and Singapore -- to arrest or detain some 200 JI members. But I think we need to be concerned about the JI. I'm concerned about the potential for JI training in the Philippines, and certainly our goal and our effort with the armed forces of the Philippines is to provide them the intelligence and the training and the advice so that they can develop a long-term and sustainable counterterrorist capability to deal with these threats.

SEN. REED: Thank you. Thank you, Mr. Chairman. Thank you very much, Senator. The senator from Alabama.

SEN. JEFF SESSIONS (R-AL): Thank you, Mr. Chairman. General Hill, what is the troop strength you have under your command in SOUTHCOM?

GEN. HILL: Sir, I have about 1,200 people in my headquarters. And then my -- my command, I derive forces from JFCOM. I'm a force user, so I don't have a lot of people under my personal command.

SEN. SESSIONS: Well, I think about Germany -- we have recently had an opportunity to be there and examine our strength there, and I think we're around 88,000 in Germany. I'm not sure that we have any threats to United States interest of significance in Germany that we require 88,000 troops, but it is pretty clear to me that Southern Command has the potential to have some real problems. And as part of our realignment and restructuring of our forces, I am inclined to believe that you should gain strength out of that process. Do you have any comment on that?

GEN. HILL: Senator, I think that the American people have gotten a big bang for their buck out of the Southern Command for many years. I operate right now at .22 percent of the Defense budget. We get a lot of goodness out of Southern Command for that.

SEN. SESSIONS: Well, I think we are a bit of Euro-centric on government around here, and we have a big world. We have a lot of responsibilities in the world, and I don't expect that we can expect a lot of European help if there's a problem in South America. That's just the way it is. So, I think we need to consider that.

And General LaPorte, I know you are restructuring your bases, thinking completely anew about how we ought to be positioned in South Korea. I visited very poor housing for some of the soldiers that hasn't been changed since we first came into Korea. And I know you want to change that, create a better circumstances.

So, I guess my two questions would be, how is that going? Are you on pace? Do you have the funds to make that move? And will that allow you to reduce our troop strength in South Korea without diminishing our capabilities?

GEN. LAPORTE: Well, Senator, our program in Korea is an enhanced shape and align program. And over the past two years, and in the next three years, we will make significant enhancements in our military capabilities. And that runs the range from command and control all the way through missile technology, to our naval and air forces. So that helps tremendously in our ability to shape the force and align it into what we call two strategic hubs. One hub would be in the Osan/Camp Humphries that you visited, and the other would be down in the southeastern portion of Korea.

We are making progress. We have had a long series of negotiations called the "Future of the Alliance Study Ongoing with the Republic of Korea." Republic of Korea has agreed in general principle to the Second Infantry Division's relocation south of Seoul, and also the relocation of forces that are in the greater Seoul metropolitan area. As you know, we have 7,000 service members in 14 different locations in the metropolitan area. Those forces no longer are required in that area. They can be much more effective in an area south. So, we are moving in that direction.

The South Korean government has begun to purchase land. We have developed a master plan and have submitted it to the Department of the Army that will submit it to Congress here very shortly, a master plan for Camp Humphries that will allow us to continue on. We continue to negotiate the timing of this move with the Republic of Korea government. So, we -- we are -- we are moving very aggressively on this project.

The discussion of troop reductions have not entered into our -- our discussions at this point.

SEN. SESSIONS: We don't expect, however, that you would need more troops? And is it possible that you could use less troops as you reconfigure your positions in Korea?

GEN. LAPORTE: I think we have to make a look and assess our capabilities, not necessarily the number of personnel but the capabilities that we're able to put towards our deterrent mission and our war-fighting mission.

SEN. SESSIONS: Thank you. General Hill, with regard to Colombia, I know you've made some comments about how the war is going against the narco-terrorists there. And I'm very proud of the people of Colombia. I know they for many, many years tried talking. They tried working with the insurgents that threatened the oldest democracy in South America and it didn't work. And they have, I think, pulled together effectively and have taken strong military action. Do you sense that they are continuing to pursue the advantages they gained? Are they losing momentum? Are they willing to see it through so that they can rid themselves of this terrible problem they've been having for so many years?

GEN. HILL: Senator, I think your opening statement was exactly on the mark. I think that what happened in August of 2002 when President Uribe was inaugurated -- he was elected to that post by a people who had said to themselves, "We're fed up with this." He maintains about an 80 percent popularity rate. The Colombian military is today the second most respected institution in the country, right below the Church. They are respecting human rights in their way of dealing with their people, and the people are responding.

I believe that there is a momentum in Colombia today to see this through. There's a desire to see this through. They have begun to -- they can travel on roads today they couldn't have traveled on two years ago. They like that. They have a sense of security that they haven't had two years ago. They like that.

So, I think that there is a momentum that will continue beyond President Uribe, and they will see this through.

SEN. SESSIONS: General Hill, one of the things that has frustrated me is that a group out there continues to criticize the American military for training foreign militaries. I believe we have the highest standards in the world in human rights and civil rights. And are you telling me, it seems to me that you're saying that the troops that we've helped train --we haven't trained them all -- but helped train, the values that we've taught are being applied and they're being respected by the population as a result?

GEN. HILL: I don't think there's any doubt about that. If the -- if the Colombian military was abusing its citizenry, they would not be the second most respected institution in the country.

Another anecdote on that issue. Several years ago, over the last several years, as members of the FARC, the ELN or the AUC, have deserted or demobilized, they've almost always gone to the Church or to an NGO of some kind to turn themselves in. Seventy-five percent of those demobilized last year -- it was about 3,000 folks -- turned themselves in to the military. Now, if they feared that they would be abused by the military, they would not so do that.

In 2002, less than three percent of the human rights allegations in Colombia were against the military. In 2003, that number is two percent, less than two percent. I feel strongly that they are on the right approach, and they -- and in my view also, the Colombian military looks at it two ways. It's a very practical solution to them because they know that they've got to have the support of the people, and they will not gain that support if they're abusing their people.

SEN. SESSIONS: Thank you very much, Mr. Chairman.

SEN. WARNER: Thank you, Senator. Senator Ben Nelson.

SEN. BEN NELSON (D-NE): Thank you, Mr. Chairman. And thank you for what you do on behalf of the American people and the world to make us safe and our democracies free.

I've got a couple of questions. Admiral LaPorte, it's good to see you again after having seen you twice last year in South Korea. And this would really be to either you or Admiral Fargo. As you're making progress with the relocation of the troop locations in Korea, do you have any kind of a time line that you might expect to have the discussions finished with the -- with the South Korean government? And I know you are working on the cost of the relocation because it seems that the South Korean would -- the government there would pick up a considerable amount of the costs of the relocation. Can you give us some idea of what kind of time frame progress might mean?

GEN. LAPORTE: Yes, Senator. We've made significant progress to be where we are today. As you know, the future of the alliance initiative was a two-year program, and we're 12 months into that program. We have had seven sessions, and we have an eighth session scheduled next month. Our desire is to complete these negotiations so that legislation in the South Korean National Assembly can be presented after the 15 April elections, when a new national assembly takes office on 1 June --

SEN. BEN NELSON: Of this year?

GEN. LAPORTE: Of this year, yes sir. So, we would like to complete these negotiations this year, have them approved and ratified by the national assembly.

SEN. BEN NELSON: Can you give us some expectation of what the costs may be that we will bear versus the cost that their government would be expected to bear?

GEN. LAPORTE: Senator, that's all under study right now, so I'd hate to mention any numbers, because I really don't have a good, firm grip on that.

SEN. BEN NELSON: But you're going to try to get a good deal, I take it?

ADM. FARGO: Yes, Senator.

SEN. BEN NELSON: Well, good luck with the discussions and negotiations. Anything further, Admiral, that you might want to add to that?

ADM. FARGO: The only thing that I would add, senator, I think as General LaPorte said, the South Koreans are going to pick up a very significant portion of these costs. There will be some military construction costs to us, but I think it will be on locations that will facilitate our enduring presence on the peninsula, and I think strategically that's absolutely where we want to be.

SEN. BEN NELSON: And then with respect to North Korea, because the lack of intelligence is so obvious in dealing with the North Korean nuclear activity, is it safe to say that over the last year or so that it's very likely that they could have increased the use of those 8,000 watts, if by making them into significant nuclear potential devices?

GEN. LAPORTE: Senator Levin in his opening comment really gave a great synopsis of that process. The answer is it is possible --

SEN. BEN NELSON: But likely?

GEN. LAPORTE: We don't know, Senator. We just don't know.

SEN. BEN NELSON: Because we don't know, we also have to assume that it's likely that they have done, because it would be consistent with what they've been doing to become a fairly significant one-stop shop for technological and weapon-grade equipment. Is that fair?

GEN. LAPORTE: That's a fair assessment, yes, sir.

SEN. BEN NELSON: And that's why over last year I said that we ought to stop debating and talking about whether we're going to talk and proposed a -- and this is for the diplomacy side, not the military side -- but it seemed to me that we -- and I developed a simultaneous model where we would begin mutual talks with mutual agreement, that we would agree during the talks not to take action against them if they would stop in place and begin to talk about reducing their nuclear activity and their activity stock.

I'm worried that the time that continues to go on while talking about talking is occurring that we are losing ground, that the potential is for them to increase their activity. Although I applaud the fact that the Chinese government is now engaging in some of those conversations. But I am very much concerned about their expanding their ability, because of their lack of a significant economy outside of selling technology to increase the shelf stocks if you will for those who might otherwise come by and purchase what they have to sell.

Let me ask, as it relates to Colombia, General Hill, just in 2001 I think it was a couple of my colleagues -- I guess Senators Nelson, Reed and Levin and I visited Colombia and SOUTHCOM, when General Peter Pace was the CINC. I noticed that we feel like we're making some true progress with respect to the narco-trafficking. I've heard from those who are involved in dealing with the problem of methamphetamine use in the United States that maybe part of the progress is because there's less demand -- maybe less demand for Colombian product based on the fact that there's a growing demand for meth here in the United States. Do you have any thoughts or any knowledge of that?

GEN. HILL: Senator, I would defer on that to more experts on meth use in the United States. But if I could -- just one point on that. Let's say that there is -- well, just a hypothetical number is about 900 metric tons of cocaine that are generated in the Andean region every year. We don't know exactly how much comes to the United States, but about 550 metric tons begin to make their way to the United States. We interdict anywhere from 150 to 200 metric tons. That means that 300 or so tons get into the United States. But if the United States consumers stop doing cocaine tomorrow afternoon, there would still be a huge market for cocaine in the world.

SEN. BEN NELSON: In the world, yes.

GEN.