Weapons of Mass Destruction: Reducing the Threat from the Former Soviet
Union (Letter Report, 10/06/94, GAO/NSIAD-95-7).
In 1991, Congress authorized the Defense Department (DOD) to establish a
Cooperative Threat Reduction program to help the former Soviet Union
destroy nuclear, chemical, and other weapons; transport and store these
weapons in connection with their destruction; and prevent their
proliferation. So far, DOD has more than $1 billion in spending
authority for the program. This report examines the program's (1)
progress in implementing projects and obligating funds, (2) overall
planning, (3) potential impact, and (4) use of funds for nonpriority
objectives.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-95-7
TITLE: Weapons of Mass Destruction: Reducing the Threat from the
Former Soviet Union
DATE: 10/06/94
SUBJECT: Arms control agreements
Chemical warfare
Nuclear weapons
Nuclear proliferation
Future budget projections
Property disposal
International cooperation
International relations
Strategic forces
Ballistic missiles
IDENTIFIER: DOD Cooperative Threat Reduction Program
Ukraine
Kazakhstan
Russia
Belarus
Soviet Union
Strategic Arms Reduction Treaty
START
**************************************************************************
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Cover
================================================================ COVER
Report to Congressional Requesters
October 1994
WEAPONS OF MASS DESTRUCTION -
REDUCING THE THREAT FROM THE
FORMER SOVIET UNION
GAO/NSIAD-95-7
Weapons of Mass Destruction
Abbreviations
=============================================================== ABBREV
ACDA - Arms Control and Disarmament Agency
CTR - Coopertive Threat Reduction
DOD - Department of Defense
FSU - former Soviet Union
MC&A - material control and accounting
MINATOM - Russian Ministry of Atomic Energy
MOD - Ministry of Defense
START - Strategic Arms Reduction Treaty
Letter
=============================================================== LETTER
B-257251
October 6, 1994
The Honorable Earl Hutto
Chairman
The Honorable John Kasich
Ranking Minority Member
Subcommittee on Readiness
Committee on Armed Services
House of Representatives
In response to your request, we have reviewed several aspects of the
Cooperative Threat Reduction (CTR) program. This is the unclassified
version of our previously issued classified report to you. The CTR
program was established to reduce the threats posed by weapons of
mass destruction in the former Soviet Union (FSU). Specifically, we
examined the program's (1) progress in implementing projects and
obligating funds, (2) overall planning, (3) potential impact, and (4)
use of funds for nonpriority objectives.
BACKGROUND
------------------------------------------------------------ Letter :1
In 1991, Congress authorized the Department of Defense (DOD) to
establish a CTR program to help the FSU (1) destroy nuclear,
chemical, and other weapons (including strategic nuclear delivery
vehicles); (2) transport and store these weapons in connection with
their destruction; and (3) prevent their proliferation. Congress
subsequently directed DOD to address these objectives on a priority
basis and to address several additional objectives, including the
conversion of FSU defense industries to civilian uses. Congress has
authorized\1 funding for CTR projects in three annual increments. To
date, DOD has over $1 billion in spending authority for the CTR
program. About $800 million of this total was to be reallocated from
other DOD activities.
--------------------
\1 Congress authorized funding for the CTR program objectives in
title II of Public Law 102-228, title XIV of Public Law 102-484, and
title XII of Public Law 103-160. Congress provided for CTR funding
in the amount of $400 million annually in section 108 of Public Law
102-229, section 9110(a) of Public Law 102-396, and title II Public
Law 103-139. Other related legislation includes title V of the
Freedom of Support Act (P.L. 102-511).
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
The CTR program stands at an important crossroad in its evolution.
Over the past 3 years it has evolved from a hastily established
1-year effort into a wide-ranging, multiyear program. However,
program officials have not established a process to ensure that
annual budget requests are driven by a long-range assessment of tasks
that need to be accomplished and have not estimated total
requirements for achieving CTR priority objectives. Executive branch
officials told us that program officials will continue to ask for
$400 million annually because of a belief that this level has been
deemed acceptable by Congress.
CTR officials intend to obligate the bulk of CTR funds--about $969
million--in support of 36 projects.\2 These projects focus primarily
on the program's three priority objectives. As of June 1994, CTR
officials had obligated nearly $223 million--about 23 percent of the
funding. The program's spending pace was initially slowed by the
time needed to complete agreements between the United States and the
former Soviet republics, fully develop projects, and comply with
legislated requirements for reallocating funds originally
appropriated for non-CTR purposes. Program officials expect
obligations to accelerate to almost $600 million by the end of fiscal
year 1995 as more projects enter implementation. DOD plans to
allocate $400 million for CTR projects in fiscal year 1995 and to
program $400 million annually for CTR projects. If approved by
Congress, these plans would result in a total CTR budget of over $3
billion\3 during fiscal years 1996 through 2000.
Although DOD intends to expend a considerable amount of funds for the
CTR program, program officials have not yet (1) established a
long-term planning process, (2) prepared a multiyear plan and
requirements-based funding profile, or (3) implemented an audit and
examination process. The need for long-term planning to help
prioritize CTR projects is underscored by the disparate prognoses for
achieving priority CTR objectives. The program's direct impact over
the long term is still unclear and appears to vary widely from one
objective to the next. Information obtained during the course of our
review indicates that:
Currently planned CTR aid appears to be crucial to Ukrainian and
Kazakhstani efforts to dismantle delivery systems.
CTR officials appear to have overstated the probable impact of
similar CTR projects in Russia. Russia can meet--without CTR
aid--its Strategic Arms Reduction Treaty I (START) obligations
and eliminate thousands of strategic nuclear delivery vehicles
and launchers over the next decade. Russia also does not want
U.S. involvement in actually destroying its nuclear warheads.
In some cases, currently planned CTR aid may not be enough to
overcome existing challenges. Ongoing CTR projects will not
enable Russia to meet Western safety standards in transporting
warheads to dismantlement facilities, nor will they provide
Russia the means to safely destroy its vast chemical weapons
arsenal. Currently planned CTR projects could help reduce but
not eliminate certain proliferation risks.
DOD plans to spend nearly $153 million on nonpriority objectives.
DOD officials plan to make defense conversion a higher priority than
nonproliferation--a congressionally designated priority--in deciding
future CTR funding of projects, despite its uncertain prospects for
success.
--------------------
\2 DOD does not give funds directly to FSU states but instead
provides goods and services needed to address CTR goals.
\3 A separate GAO review of all U.S. FSU aid programs indicates that
about $1.3 billion in non-CTR DOD aid was also appropriated. Of this
amount, $979 million was transferred from DOD to the Agency for
International Development.
PROGRAM IMPLEMENTATION AND
SPENDING PACE
------------------------------------------------------------ Letter :3
CTR officials have obligated or intend to obligate $969 million for
36 projects (see app. 1) in support of 37 agreements negotiated with
Russia, Ukraine, Kazakhstan, and Belarus.\4 As shown in figure 1,
about 81 percent of these funds will be directed toward projects that
support priority objectives.
Figure 1: Distribution of $969
Million Obligated or to Be
Obligated By DOD
(See figure in printed
edition.)
By June 1994, CTR officials had obligated $223 million of the total
$969 million and had disbursed about $50 million. As shown in figure
2, about 87 percent of the $223 million obligated has been directed
toward priority objectives. Appendix II provides information on the
status of some projects for which funds have been obligated and
disbursed.
Figure 2: Distribution of $223
Million Already Obligated By
DOD
(See figure in printed
edition.)
CTR officials cite several factors in explaining why they have not
obligated and expended more funds. These include delays in
completing agreements with FSU states and complications due to
political sensitivities and disarray on the part of the recipient
republics. For example, Ukrainian delays of nearly a year in signing
a strategic nuclear delivery vehicle dismantlement agreement with the
United States held up the initial $135 million in aid. The Russian
Parliament delayed completion of an agreement to establish a science
center for almost 2 years. U.S. efforts to help Russia design a
nuclear material storage facility have been slowed by local
environmental concerns, changes in Russian plans, and Russian
government delays in identifying specific types of equipment for the
facility. Difficulties in adapting surplus U.S. railcars for
carrying nuclear warheads on Russian railways led to a 2-year effort
to develop hardware for enhancing Russian railcars.
DOD officials told us that the nature of the program's initial
funding authority has also complicated their efforts. For both
fiscal years 1992 and 1993, Congress authorized DOD to transfer up to
$400 million from other DOD funds to CTR projects. Program
officials, however, lost access to $212 million of 1992 transfer
authority at the end of fiscal year 1993 by failing to transfer it\5
within the allotted 2-year period--due, they informed us, to delays
in reaching agreements and changing project requirements. CTR
officials told us that they also had difficulties in finding funding
sources within DOD to transfer to fiscal year 1993 CTR projects
valued at $310 million.\6 As of March 1994, program officials had
only $278 million available to spend. The program has since received
authority to spend $400 million of appropriated CTR money for fiscal
year 1994. It now projects a steep increase in obligations--to
almost $600 million--by the end of fiscal year 1995.
--------------------
\4 U.S. allies plan to provide similar aid valued at about $194
million. The United States and its allies periodically discuss such
aid.
\5 Program officials are seeking restoration of the expired transfer
authority.
\6 According to the DOD Comptroller's Office, DOD had previously
funded CTR projects from its Defense Business Operations Fund.
However, by 1993 such monies were no longer available.
LACK OF CTR PLANNING
------------------------------------------------------------ Letter :4
Congress initially set the CTR program's funding level and provided
the program with several broad objectives. A National Security
Council-chaired steering group\7
subsequently set priorities to spend appropriated CTR funding based
on project proposals developed by several U.S. agencies and FSU
experts and officials. DOD officials began requesting CTR funding in
their fiscal year 1994 budget submission, but did not identify to
Congress what priorities or projects would be funded.
CTR program officials have testified before Congress that the program
will run through the year 2000 to achieve its weapons dismantlement
and storage objectives. DOD plans to program $400 million annually
for the next 5 years to implement CTR projects.
Although the program has thus evolved into a multiyear effort,
program officials have yet to adopt the planning tools needed to
guide such a program. These officials have not established a process
to ensure that annual budget requests are driven by a long-range
assessment of tasks that need to be accomplished and have not
estimated total requirements for achieving CTR priority objectives.
Moreover, DOD officials have not yet begun auditing FSU use of CTR
aid. Results of audits and examinations can provide important input
to planning efforts. DOD is required to ensure that such aid is
being used for intended purposes and has negotiated CTR agreements
that give the United States the right to examine how the aid is being
used. DOD recently approved an audit and examination plan and CTR
officials hope to initiate audit procedures within the next several
months.
--------------------
\7 The group includes representatives from the Joint Chiefs of Staff;
the Arms Control and Disarmament Agency; the Central Intelligence
Agency; and the Departments of Defense, State, and Energy.
IMPACT ON PRIORITY OBJECTIVES
------------------------------------------------------------ Letter :5
The long-term impact of CTR projects is unclear, but current
information suggests it is likely to vary widely by objective and,
within priority areas, from project to project. For example, the
Russians have specifically stated that they do not want U.S.
assistance in dismantling nuclear warheads. However, CTR aid appears
likely to facilitate Ukrainian delivery vehicle dismantlement
efforts. Currently planned CTR projects should provide needed
requirements data and technical support to Russian efforts to destroy
chemical weapons but will not actually destroy the chemical weapons.
U.S. officials note that CTR projects will only lay the foundation
for addressing the FSU proliferation threat.
NUCLEAR WARHEAD
DISMANTLEMENT
---------------------------------------------------------- Letter :5.1
Russia appears able to dismantle tens of thousands of retired nuclear
warheads by the end of the century without U.S. help. The total
Russian nuclear stockpile is estimated to be 30,000 warheads.
According to Russian officials, they are dismantling the FSU nuclear
stockpile at a rate of 2,000 to 3,000 weapons per year. If Russia
can continue dismantling warheads at the highest rate, then as many
as 24,000 warheads could be eliminated by the year 2001.
Furthermore, Russia does not want any help from the United States in
actually dismantling these weapons.
Some Russian Ministry of Atomic Energy (MINATOM) officials have
asserted that a shortage of storage for nuclear materials from
dismantled weapons will eventually impede their dismantlement efforts
and are seeking assistance in constructing a new storage facility.\8
Although U.S. agencies have been unable to confirm that a shortage
exists, some agencies believe that Russia has adequate storage space.
These agencies believe that sufficient space could be available at
Russian Ministry of Defense (MOD) nuclear storage facilities. In the
past, however, MINATOM has argued against the use of MOD facilities.
Recent Russian statements suggest that warhead dismantlement could
proceed without the new facility.
On the other hand, U.S. proponents of the facility argue that (1)
Russia could blame dismantlement delays on the U.S. government if it
fails to support the facility and (2) existing storage space,
designed for other purposes, may not be well suited to store weapons
components.
--------------------
\8 U.S. officials estimate that the facility could cost $315
million. CTR officials have obligated $15 million to help design it
and plan to obligate $75 million for operating equipment. Russia has
asked for another $75 million in construction aid. Japan has
indicated that it might be willing to assist Russian fissile material
storage efforts.
NUCLEAR WARHEAD SAFETY AND
SECURITY
---------------------------------------------------------- Letter :5.2
U.S. officials are concerned about the safety and security of FSU
nuclear weapons. Although there have been no known incidents,
concerns exist that a Russian nuclear warhead could be lost, stolen,
or involved in an accident.
The United States has begun providing Russia with railcar safety and
security enhancement kits, emergency response equipment, and nuclear
material storage containers. Deliveries of armored blankets\9 have
been completed. While such aid may lessen transportation risks
somewhat,
U.S. analysts informed us that it will not make the Russian weapons
transportation system safe by Western standards.
To meet their dismantlement requirements, the Russians have requested
that 115 railcars be modified. According to a study conducted by
U.S. analysts, the number of railcars being modified is sufficient
to meet Russian dismantlement needs. However, the railcar
modification kits will not remedy all shortcomings. The Russians had
asked for no more than 115 kits and deleted fire suppression
equipment because such equipment increased the weight of their
railcars.
Russia recently indicated concerns over safety issues by asking the
United States for (1) railcars to carry guards, emergency response
equipment, and hardware for detecting obstructed and defective
tracks;
(2) 600 "supercontainers" to transport weapons; and (3) 15 containers
to transport damaged weapons.\10 The United States has not yet
determined whether to fund this request.
--------------------
\9 Blanket deliveries began not long after Russia had completed
removing tactical warheads from other FSU states.
\10 The French and British plan to provide another 350 weapon
supercontainers--valued at about $35 million. The British also plan
to provide Russia with special trucks to carry weapons.
STRATEGIC DELIVERY VEHICLES
---------------------------------------------------------- Letter :5.3
The FSU states must still eliminate about 530 START-accountable
nuclear delivery systems and destroy their launchers (e.g., silos,
submarine tubes, and heavy bombers) to comply with START I limits.\11
Assuming that Kazakhstan and Ukraine eliminate the systems deployed
on their territories, and Belarus returns its systems to Russia for
redeployment as agreed in the Lisbon Protocol, Russia will be
required to eliminate only about 200 delivery vehicles and their
launchers.
CTR program officials intend to provide Russia with cranes, welding
implements, hydraulic tools, bulldozers, liquid fuel containers,
incinerators, plasma cutters, and other items. CTR officials
acknowledge that Russia already possesses similar items. CTR
officials informed Congress, in early 1994, that they may provide
more dismantlement aid from fiscal year 1995 funds to insure that
Russia can meet its START I obligations.
However CTR officials' past assertions that Russia cannot meet its
START I obligations without CTR aid appear to have been overstated
and inaccurately justified the dismantlement assistance. Russia has
been dismantling nuclear delivery systems in compliance with arms
control treaties for decades without U.S. assistance. According to
Russian officials, Russia has already achieved 100 percent of START's
3-year limits and nearly 50 percent of its 7- year limits for
delivery vehicles. At this rate, Russia could meet START delivery
vehicle limits in 5 years--well within the allowed 7-year period that
will begin when START enters into force. In the past 4 years,
Russian officials have claimed to have eliminated over
400 launchers.
CTR officials have since conceded that CTR aid is not necessary to
ensure Russian START I compliance and instead indicated that Russia
will need additional assistance for START II dismantlement efforts.
Officials have also asserted that CTR aid will increase the Russian
dismantlement rate. The Russians have made general statements
indicating that the aid could accelerate their progress by increasing
the flexibility and efficiency of their efforts but have not
indicated the rate of acceleration.
Ukraine has fewer delivery systems than Russia to dismantle but lacks
Russia's capabilities and infrastructure. U.S. aid, thus, appears
likely to facilitate Ukrainian dismantlement efforts. U.S.
officials plan to obligate over 70 percent of the estimated cost of
dismantling Ukrainian systems. The United States will help provide
equipment (including fuel, cranes, cutters, computers, and
incinerators) and a SS-19 liquid propellant neutralization
facility,\12 as well as assist in deactivating SS-24 missiles.\13
CTR program officials plan to provide Kazakhstan with needed
technical assistance in destroying SS-18 missile silos once Russia
has removed the warheads and missiles. The United States and
Kazakhstan have yet to define program requirements or obligate
significant funds for dismantling delivery vehicles. CTR officials
also plan to provide assistance to the government of Belarus to
clean-up former strategic rocket forces bases and use them for
civilian purposes. Under CTR, the United States will provide
training, but the Belarusians will complete the work themselves.
--------------------
\11 START I limits the FSU to 1,600 delivery vehicles and 6,000
warheads no later than 7 years after entry into force of START I.
START II further lowers these limits and bans multiple re-entry
vehicle intercontinental ballistic missiles.
\12 Other allied nations have held discussions with Ukraine on the
disposal of liquid fuel from strategic weapons.
\13 "Deactivation" is a non-START I/II term used to describe the
status of Ukrainian SS-24 missiles that have had their warheads
removed. Ukrainian officials have stated that SS-24 warheads are
being returned to Russia as part of the agreement with Russia and the
United States. The United States is uncertain what Ukraine plans to
do with its SS-24 missiles once the launchers are eliminated as
Ukraine is not legally bound to destroy the missiles under START.
CHEMICAL WEAPONS
---------------------------------------------------------- Letter :5.4
Russia lacks needed technical capabilities for safely destroying its
chemical weapons. As such, it may not be able to comply with the
time frames of the international Chemical Weapons Convention for
safely destroying its declared 40,000-metric ton chemical weapons
stockpile.\14
U.S. officials have concluded that Russia is likely to place a low
priority on paying the high cost of doing so.
To date, CTR officials plan to obligate $55 million to assist Russia
with its chemical weapons destruction. Officials are now providing
Russia with a technical support office and technical services.
Officials are in the process of providing a chemical weapons
analytical laboratory and have awarded a contract for a detailed
operations plan for destroying the Russian chemical weapons
stockpile. These projects should provide needed requirements data
and technical support but will not destroy Russian chemical
weapons.\15
CTR program officials have indicated that the program may help fund
construction of a chemical weapons destruction facility from its
fiscal year 1995 budget. One DOD official has stated that the United
States may spend $300 million to help build a pilot destruction
facility.
--------------------
\14 Arms Control: Status of U.S.-Russian Agreements and the Chemical
Weapons Convention (GAO/NSIAD-94-136, Mar. 15, 1994).
\15 Germany has committed funding to explore destroying Russian
chemical weapons.
NONPROLIFERATION
---------------------------------------------------------- Letter :5.5
U.S. officials are concerned that FSU weapons of mass destruction
and related technologies may spread to other countries and that
continued FSU economic deterioration could exacerbate this threat.
CTR officials plan to help employ FSU weapons experts, improve
controls and accountability over nonmilitary and military nuclear
material, and strengthen national export control systems.\16
The CTR program has not assessed the total requirements for
addressing the FSU proliferation threat, and U.S. officials note
that these CTR projects will only lay the foundation for future
efforts by the FSU states themselves.
According to Russian estimates, there are several hundred FSU experts
capable of designing a nuclear weapon and 10,000 individuals with
related weapons skills. To help them find peaceful work in the FSU,
U.S. and allied officials have established a multilaterally funded
science and technology center in Moscow and plan to establish a
similar center in Kiev. The Moscow science center's currently
approved projects will sponsor more than 3,000 scientists for about 3
years.
CTR officials plan to help develop or improve national controls and
accountability over nonmilitary and military nuclear materials in
Russia, as well as nonmilitary nuclear materials in Ukraine and
Kazakhstan.\17 Such systems are prerequisites for international
safeguards. U.S. officials informed us that the FSU system lags 20
years behind that of the United States. While the Russians have had
a facility-based material control and accounting (MC&A) system for
all facilities on their territory, they never instituted a
consolidated nationwide nuclear MC&A system for reconciling facility
level records and transported shipments.
The Department of Energy has prepared a program plan for
strengthening Russia's nuclear MC&A system by creating a national
level information system and improving MC&A and physical protection
at the facility level by installing systems for two or three
facilities. The Energy Department is developing similar plans for
Ukraine and Kazakhstan. The United States has not determined the
total requirements or costs for establishing complete systems.
CTR officials have provided training and equipment for developing a
Western-style national export control system in Belarus. Officials
are assessing what would be needed to develop such systems in Ukraine
and Kazakhstan and have conducted export control seminars in the two
countries. The United States and Russia are negotiating export
control assistance to include training and seminars but not
equipment.
U.S. officials have cited nonproliferation objectives in justifying
U.S. support for the proposed Russian nuclear material storage
facility. The facility should help Russia prevent unauthorized
access to its weapons material, although the Russians are not
obligated to store all the materials from disassembled nuclear
weapons in the storage facility. However, until additional
agreements are signed, the extent to which the facility will do so is
unclear. The facility could also help support the
U.S. long-range efforts to encourage nations to place such materials
under international safeguards.\18
To help ensure that the facility accomplishes desired
nonproliferation objectives, the United States has attempted to
negotiate specific transparency measures that would help ensure that
stored materials are derived from dismantled weapons, safe from
unauthorized use, and not used in new weapons.\19 However, Russian
officials insist the U.S.-proposed transparency measures be part of a
reciprocal and comprehensive arrangement with the United States. To
date, the two nations have not reached such an agreement. According
to DOD, Russia needs to agree to various transparency measures for
the storage facility and adhere to agreed upon audit and examination
procedures before the project can move forward.
--------------------
\16 Canada, the European Union, France, Germany, Italy, Japan,
Norway, and the United Kingdom intend to provide assistance for
various nonproliferation projects, including export controls, and
science centers in Russia and Ukraine.
\17 Belarus has recently requested similar aid.
\18 The United States plans to place surplus weapons materials under
international inspections to encourage other countries to do the
same. U.S. officials consider the Russian facility to be a model in
response to the global dilemma of safely disposing of nuclear weapon
materials. Russian officials have stated that the facility could be
placed under international safeguards as part of the global
disposition effort.
\19 Russia has agreed to allow the United States limited inspections
of the facility to ensure proper use of CTR aid.
FUNDING NONPRIORITY OBJECTIVES
------------------------------------------------------------ Letter :6
The CTR program has developed several projects aimed at addressing
nonpriority objectives. Of these, defense conversion is to receive
the highest share of CTR funding--nearly $123 million. CTR officials
currently plan to help the FSU spin-off privatized civilian firms\20
from enterprises that were producing weapons of mass destruction.
The new firms would then serve as role models for others. Program
officials plan to award contracts to U.S. firms to help create
civilian companies from four Russian defense enterprises.\21 DOD has
also established a nonprofit corporation to administer a
demilitarization enterprise fund to invest CTR assistance.
Prospects for success in defense conversion are unclear at best. For
example, many Russian officials remain interested in preserving a
sizable defense industry--in part to earn hard currency by exporting
arms--and three of the four Russian enterprises designated for CTR
conversion are not slated to be privatized but will remain state
owned. These parent companies would still produce some defense
equipment, and the extent to which the new business ventures will be
clearly separated from their parent companies remains to be resolved,
raising the possibility that
U.S. aid could benefit the parent defense companies if safeguards
are not put in place.
DOD officials acknowledge that the untested CTR approach may not
succeed in producing profitable projects or lead to fully privatized
firms. If so, they said, the United States can terminate remaining
projects.
Although the CTR program has yet to assess the total requirements of
converting Russian industries or the total cost for FSU defense
industry conversion,\22 CTR officials have stated that defense
conversion projects could receive another $60 million in fiscal year
1995 funds and could eventually cost as much as $250 million.
--------------------
\20 CTR officials also plan to set up enterprises to provide housing
and training for demobilized Strategic Rocket Forces officers in the
FSU states. U.S. analysts estimate that between 20,000 and 25,000
such officers may be demobilized.
\21 Program officials awarded contracts to U.S. firms to help
develop civilian firms from three Belarusian defense firms.
\22 According to one Russian estimate, defense industry conversion in
Russia could cost $150 billion.
RECOMMENDATION
------------------------------------------------------------ Letter :7
We recommend that the Secretary of Defense institute a proactive,
long-term CTR planning process to help DOD properly allocate the
billions of dollars it hopes to spend over the next several years
among many competing--and shifting--demands. Such a planning process
should incorporate estimates of total requirements for achieving CTR
objectives, prioritization of competing objectives, evaluations of
projects, and assessments of what U.S. aid could reasonably achieve
in overcoming obstacles confronting CTR objectives. Under this
planning process, DOD officials should periodically revise and update
the plan and use it in producing annual budget submissions that are
keyed to achieving priority CTR goals.
MATTERS FOR CONGRESSIONAL
CONSIDERATION
------------------------------------------------------------ Letter :8
Given the uncertainties concerning defense conversion in Russia,
Congress may wish to consider withholding large-scale funding for
future Russian defense conversion projects until the initial results
of currently funded projects have been assessed. Because the
executive branch has not clearly articulated U.S. objectives with
regard to the storage facility, Congress may also wish to consider
requiring the executive branch to provide a detailed explanation of
how the nuclear material storage facility will (1) serve U.S.
nonproliferation interests and (2) directly affect Russian warhead
dismantlement.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
We asked DOD, the State Department, the Department of Energy, and the
Arms Control and Disarmament Agency (ACDA) to comment on a draft of
this report. Energy declined to comment, but DOD, State, and ACDA
generally agreed with the factual elements of the report. DOD also
said that it intended to implement our recommendation that the
Secretary of Defense establish a proactive, long-term planning
process for the CTR program. DOD will establish two new offices to
address CTR planning--a policy planning office in the Office of the
Assistant Secretary of Defense for International Security Policy and
a program office in the Office of the Under Secretary of Defense for
Acquisition and Technology. However, DOD did not indicate when such
offices would be established, how they would prepare a long-range
strategic plan for the CTR program, or how these separate offices
would coordinate their planning efforts.
DOD and the State Department did not concur with our suggested
matters for congressional consideration. DOD and the State
Department commented that providing additional information on the
nuclear material storage facility is unwarranted. However, this
report demonstrates that, to date, the rational for supporting this
expensive facility is still not clear. DOD further stated that it is
premature to make judgments about the effectiveness of defense
conversion and reduce its funding. Given the uncertainties
associated with defense conversion in the FSU, we believe that the
outcome of initial projects should be evaluated before the program
commits additional funding. DOD's and the State Department's
comments are presented in their entirety in appendixes III and IV,
respectively, along with our evaluation.
ACDA agreed with our report message but suggested that we address our
recommendation to the National Security Council not the Secretary of
Defense because an interagency steering group chaired by the National
Security Council should plan the priorities for the CTR program. We
made this recommendation to the Secretary of Defense because DOD has
the spending authority to fund the CTR program. ACDA's comments and
our evaluation are presented in their entirety in appendix V.
SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10
We reviewed CTR documents and met with officials from DOD and the
Departments of Energy and State in Washington, D.C., as well as with
officials from ACDA and the Central Intelligence Agency. The
specific data on funding obligations and disbursements represents a
compilation of figures provided by various DOD sources, including the
Office of the Special Coordinator for Cooperative Threat Reduction,
the Defense Nuclear Agency, and the U.S. Army Corps of Engineers.
We conducted our review between October 1993 and July 1994 in
accordance with generally accepted government auditing standards.
--------------------------------------------------------- Letter :10.1
Unless you publicly announce its contents, we plan no further
distribution of this report until 30 days after its issue date. At
that time, we will send copies to other interested congressional
committees; the Secretaries of Defense, Energy, and State; the
Director of the Arms Control and Disarmament Agency; and the Director
of the Central Intelligence Agency. Copies will also be made
available to others upon request.
Please contact me on (202) 512-4128 if you or your staff have any
questions concerning the report. Major contributors to this report
are listed in appendix VI.
Joseph E. Kelley
Director-in-Charge
International Affairs Issues
FUNDING FOR COOPERATIVE THREAT
REDUCTION PROJECTS
=========================================================== Appendix I
(Dollars in millions)
Obligations
Planned as of 6/13/ Disbursements
Projects by country obligations 94 as of 6/21/94
------------------------------------ ------------ ------------ --------------
Belarus
--------------------------------------------------------------------------------
Communications link $2.30 $0.30 $0.27
Defense conversion 20.00 7.27 0
Emergency response 5.00 3.98 1.50
Export controls 16.30 0.48 0.17
Site restoration 25.00 2.87 0
Propellant elimination 6.00 0 0
================================================================================
Subtotal 74.60 14.90 1.94
Kazakhstan
--------------------------------------------------------------------------------
Communications link 2.30 0.06 0
Defense conversion 15.00 0 0
Emergency response 5.00 2.00 0
Export controls 2.30 0.04 0
Material control and accountability 5.00 0.02 0
Silo elimination 70.00 0.12 0
================================================================================
Subtotal 99.60 2.24 0
Russia
--------------------------------------------------------------------------------
Arctic nuclear waste assessment 20.00 10.00 2.79
Armored blankets 5.00 3.24 2.91
Chemical weapons destruction 25.00 11.58 1.63
Chemical weapons lab 30.00 0 0
Defense conversion 40.00 0.15 0
Emergency response 15.00 11.77 9.06
Export controls 2.30 0 0
Fissile material containers 50.00 48.18 3.03
International science and technology 25.00 23.02 0.47
center
Material control and accountability 30.00 0.25 0.15
Railcar security upgrade 21.50 21.50 13.97
Storage facility design 15.00 15.00 11.42
Storage facility equipment 75.00 15.01 0
Strategic offensive arms elimination 130.00 28.06 0.06
================================================================================
Subtotal 483.80 187.76 45.49
Ukraine
--------------------------------------------------------------------------------
Communications link 2.40 0.04 0
Defense conversion 40.00 5.38 0
Emergency response 5.00 2.00 0
Export controls 7.30 0.09 0
Material control and accountability 12.50 0.03 0
Nuclear reactor safety 11.00 0 0
Science\technology center 10.00 0 0
Strategic nuclear arms elimination 185.00 4.67 0.03
================================================================================
Subtotal 273.20 12.21 0.03
Other projects
--------------------------------------------------------------------------------
Defense/military contacts 15.00 1.01 0.09
Defense Demilitarization Enterprise 7.67 0 0
Fund
Other assessment costs 15.00 4.84 1.99
================================================================================
Subtotal 37.67 5.85 2.08
================================================================================
Total $968.87 $222.96 $49.54
--------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
COOPERATIVE THREAT REDUCTION
PROJECT STATUS
========================================================== Appendix II
This appendix provides information on the status of some projects for
which funds have been obligated. The Department of Defense (DOD) was
unable to provide updated information for all of these projects.
BELARUS
Communications link: Interim equipment was installed and made
operational in August 1993. Permanent equipment is expected to be
provided by March 1995.
Defense conversion: The program has selected three defense-related
enterprises as conversion candidates and issued a draft request for
proposals on how these candidates could be converted. The program
also issued a request for proposals to U.S. industry regarding
housing for demobilized Strategic Rocket Forces officers.
Emergency response: DOD delivered 400 protective suits, 147 pairs of
protective boots, 4 radiation detectors, 10 air samplers, 100
dosimeters, and 34 computers. The project is planned to be completed
in June 1995.
Export controls: DOD delivered equipment in late 1993 as part of a
Commerce Department administrative automation project activity. The
project also supported assessment visits, bilateral meetings, and
technical exchanges, including a training session for Belarusian
export licensing and enforcement officials.
Site restoration (Project Peace): Project requirements are being
discussed. Equipment lists and needed training are being finalized
for the selected site of Postavy, a former SS-25 missile base.
KAZAKHSTAN
Silo elimination: Requirements and equipment lists are being
determined.
RUSSIA
Arctic nuclear waste: Several workshops have been held. DOD
sponsored several expeditions during the summer of 1993, and some
assessments of nuclide levels in the Arctic and North Pacific were
conducted.
Armored blankets: This project is completed. In July 1992, 250 sets
of surplus U.S. Army armored blankets were delivered. By June 15,
1993,
250 sets of Cooperative Threat Reduction (CTR)-contracted armored
panels and 24 gallons of seam sealer had been delivered.
Chemical weapons destruction: In June 1993, the Army Chemical
Material Destruction Agency opened a chemical weapons support office
in Moscow. The United States and Russia signed a joint work plan in
January 1994. On January 31, 1994, DOD issued a request for
proposals to U.S. industry for a concept of operations plan for
destroying Russian chemical weapons. The contract was awarded to
Bechtel National, Inc.
Defense conversion: DOD issued draft request for proposals to U.S.
industry concerning conversion of four Russian defense enterprises
and housing for demobilized Russian Strategic Rocket Forces officers.
Emergency response: According to CTR officials, 800 protective
suits,
105 radiation detectors, fiberscopes, communications equipment;
3 packaging trucks; a portable integrated video system; 10 "Jaws of
Life" sets; 56 computers; 235 radios; and training have been
provided.
Fissile material containers: Ten prototype containers were delivered
to Russia in April 1993. Sixteen containers are to be delivered for
testing, followed by 500 production containers. About 10,000
containers should be delivered by December 1995. The remaining
23,000 on contract will be delivered by the end of 1997.
International Science and Technology Center: The center began
operations on March 3, 1994. The second Governing Board meeting was
held in Moscow on June 17 and 18, 1994, at which a broad range of
proposals were considered. Thirty-one new project proposals, worth
about $18 million, were approved that could help develop technologies
related to international efforts in verification of nuclear test ban
treaties, destruction of weapons of mass destruction, and
environmental monitoring. To date, about $30 million has been
committed to a total of 54 projects. These projects will sponsor
more than 3,000 scientists for a period of about
3 years.
Material control and accountability: The Department of Energy
completed a program plan to strengthen the Russian national system of
material control and accounting and physical protection. Activities
conducted included a U.S.-Russia technical exchange, Russian visits
to U.S. facilities, U.S. visits to Russian facilities, a technical
working group meeting, and a U.S.-Russia seminar on material control
and accounting and physical protection.
Railcar security upgrade: The United States developed kits for
enhancing the security of railcars used to transport nuclear weapons.
As of February 15, 1994, 10 conversion kits had been shipped to
Russia. Delivery of another 105 kits is scheduled to be completed by
October 1994.
Storage facility design: According to the U.S. Army Corp of
Engineers, the U.S. component for the facility design was completed
in December 1993. The Corp delivered, installed, and provided
training for 13 computer work stations in 1993. Additional computer
supplies, three lap top computers, software, and a printer were also
shipped to Russia.
Strategic offensive arms elimination: DOD procured some equipment
(such as oxyacetylene torches, welding, and cutting tools) and
planned to begin deliveries to Russia by July 1994.
UKRAINE
Communications link: At the time this report was written, the United
States had offered to meet for initial technical exchanges to
identify requirements, but Ukraine had not accepted the offer. In
the interim, the United States had conducted a cost-benefit analysis
of possible equipment to be provided.
Defense conversion: In March 1994, the United States and Ukraine
signed an agreement for up to $40 million in defense conversion
projects. Two contracts worth $15 million have been awarded. One of
these contracts will employ about 300 workers this year and will
manufacture about
300 homes. Later this year, two other contracts should be awarded,
one for converting a defense industry into a housing industry and the
other to convert portions of defense industries into commercial
ventures.
Emergency response: The United States has proposed dates for initial
technical exchanges required to identify requirements. Ukraine has
not responded to the meeting dates. Until requirements are
determined, no procurement actions can occur.
Export controls: This project will provide assistance in the
building of export control institutions and infrastructure. Basic
requirements were received in May 1994 and a Ukraine delegation
visited the United States to refine requirements for automation
equipment. A technical exchange is being scheduled for this year.
Material control and accountability: Technical exchanges took place
earlier this year and the first site visit to identify specific
hardware requirements was scheduled. Once requirements are defined
request for proposals will be issued. Initial deliveries of small
equipment are anticipated in January 1995.
Strategic nuclear arms elimination: At the emergency request of
Ukraine, DOD delivered dismantlement materials, including cranes,
all-terrain vehicles, communications equipment, truck batteries,
power saws, and other tools. This equipment, in addition to gasoline
and diesel fuel provided under the CTR program, were used by Ukraine
to help return nuclear warheads to Russia. In addition, contracts
have been awarded for additional equipment such as cranes,
bulldozers, and graders. The contract for the design of the missile
neutralization facility has also been awarded to a Ukrainian company.
OTHER PROJECTS
Defense and military contacts: For Russia, a bilateral working group
met in November 1993 to develop the 1994 program agenda. A
memorandum of understanding has been signed with Belarus. U.S. and
Ukrainian officials have scheduled 27 events for the rest of this
year and into 1995. To date,
10 events, worth about $268,000, have been funded.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
========================================================== Appendix II
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The following are GAO's comments on DOD's letter dated August 25,
1994.
GAO COMMENTS
1. DOD did provide us with documents showing the Russian
dismantlement schedule with CTR assistance but could not provide any
baseline data. We therefore could not determine to what extent CTR
assistance would accelerate Russian dismantlement efforts. We do not
disagree that CTR assistance could help the Russians increase the
flexibility and efficiency of their dismantlement efforts.
2. While we do not disagree that CTR assistance being provided for
nonproliferation efforts could assist the former Soviet republics,
according to the information obtained during our review, DOD has not
assessed the requirements needed to address the proliferation
threats. This lack of requirements based spending underscores our
recommendation that the program needs to develop a long-term planning
process to ensure that funds are being properly allocated and that
obstacles confronting CTR objectives can be effectively overcome.
3. We note that Congress has never designated defense conversion as
a CTR priority. Instead, it has acted at times to limit some funding
spent on defense conversion such as spending caps on the Defense
Enterprise Fund. Many of the enterprises selected for conversion
will continue to produce weapons. Profits and technology from the
newly privatized firms could be returned to the parent defense
enterprises. Furthermore, many Russian officials remain interested
in preserving a sizable defense industry to earn hard currency by
exporting arms. Based on these factors, the impact of defense
conversion on nonproliferation efforts in the Former Soviet Union
(FSU) appears to be remote. DOD's plans to request additional
funding for defense conversion efforts in the FSU without first
evaluating their outcome also indicates the need for a long-term CTR
planning process.
4. Recently, CTR officials in meetings with us, conceded that CTR
assistance was not essential for Russia to meet its Strategic Arms
Reduction Treaty I (START) obligations. Rather, DOD has stated CTR
assistance will help accelerate Russian dismantlement. We do not
disagree that CTR assistance could help the Russians improve the
efficiency of their dismantlement efforts. As a result, we have
deleted this matter for consideration from our report.
5. The uncertainties of the storage facility have not been fully and
clearly conveyed to Congress in past executive branch reports and
statements of testimony. Given the facility's high potential
cost--estimated at about $315 million--we continue to believe that
Congress may wish to consider requiring the executive branch to
justify the storage facility by discussing all of the factors
affecting its potential benefits.
(See figure in printed edition.)Appendix IV
COMMENTS FROM THE DEPARTMENT OF
STATE
========================================================== Appendix II
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
The following are GAO's comments on the Department of State's letter
dated June 21, 1994.
GAO COMMENTS
1. We do not take issue with the State Department's assertions that
one of the CTR program's major direct effects has been to increase
the willingness of recipient states to become non-nuclear and that
the U.S. provision of assistance allows for U.S. participation in
discussions of nuclear issues in the FSU and access to high-level
policymakers. However, the verification and validation of such
assertions were beyond the scope of our review.
2. The report does not equate program success with the expenditure
of funds. Instead, the report cites several reasons why funds could
not have been expended sooner.
3. We took issue with DOD assertions that CTR assistance was needed
to ensure that Russia can meet its START I obligations. Such
assertions were conveyed to Members of Congress as justification for
providing dismantlement assistance to Russia. Recently, however, DOD
officials have conceded that Russia does not need dismantlement
assistance to meet its START I obligations.
4. DOD provided us with documents showing Russia's dismantlement
schedule with CTR assistance but could not provide any baseline data.
We, therefore, could not determine to what extent CTR assistance
would accelerate Russian dismantlement rates. We do not disagree
that CTR assistance could help the Russians improve the efficiency of
their dismantlement efforts.
5. The State Department is correct in noting the role of other
agencies involved in the CTR program; however, DOD plays a key role
in the decision-making process for allocating CTR monies.
6. The State Department's definition of an audit and examination
process is narrowly focused. An audit and examination process is
much more than a financial accountability system. Without knowledge
of how well assistance is being used, DOD cannot plan what future
requirements should be fulfilled in the FSU.
7. As noted in our report, U.S. officials are concerned that a
Russian nuclear warhead could be lost or stolen.
8. We have removed this matter for consideration from our report
because DOD officials have recently conceded that Russia can meet its
START I obligations without CTR dismantlement assistance. DOD has
stated that CTR assistance will help accelerate Russian
dismantlement. We do not disagree that CTR assistance could help the
Russians improve the efficiency of their dismantlement efforts.
9. We disagree with the Department of State's suggestion that the
facility will necessarily contribute directly to the Russian
dismantlement effort. The uncertainties of the storage facility have
not been fully and clearly conveyed to Congress in past executive
branch reports and statements of testimony. Given the facility's
high potential cost--estimated at $315 million--we continue to
believe that Congress may wish to consider requiring the executive
branch to provide it with a detailed justification of the facility
project that discusses all of the factors affecting its potential
benefits.
(See figure in printed edition.)Appendix V
COMMENTS FROM THE ARMS CONTROL AND
DISARMAMENT AGENCY
========================================================== Appendix II
(See figure in printed edition.)
See comment 5.
(See figure in printed edition.)
(See figure in printed edition.)
See p. 15.
See comment 7.
(See figure in printed edition.)
The following are GAO's comments on the Arms Control and Disarmament
Agency's (ACDA) letter dated June 17, 1994.
GAO COMMENTS
1. Although we do not take issue with ACDA's assertion that
Ukraine's willingness to deactivate its missiles was a direct result
of dismantlement assistance both provided and promised, verification
and validation of such an assertion were beyond the scope of our
review.
2. We took issue with DOD's assertions that CTR assistance was
needed to ensure that Russia can meet its START I obligations. Such
assertions were conveyed to Congress as justification for providing
CTR dismantlement assistance to Russia. Recently, CTR officials have
conceded that Russia does not need dismantlement assistance to meet
its START I obligations.
3. Based on the uncertainties associated with defense conversion
assistance in the FSU, the impact of defense conversion on
nonproliferation efforts appears to be remote.
4. While Congress had authorized over $1 billion for the CTR
program, only $278 million was available as of March 1994. We did,
however, modify the report to clarify this point.
5. To date, no long-term plan exists for the CTR program.
6. The heading of "Nonpriority Objectives" describes those CTR
efforts that were not congressionally designated as priorities.
7. The information discussed does not represent interagency
discussions and deliberations. Rather, we generated the
recommendation and matters for congressional consideration based on
our findings. Based on our sources, the information, as stated, is
unclassified.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
F. James Shafer
Beth A. Hoffman Le�n
Pierre R. Toureille
David J. Black
Jo Ann T. Geoghan
Richard B. Kelley