I hope that the United States and other Western countries will change their attitude toward Soviet Army deserters from Afghanistan. That is, I hope that these soldiers will be accepted by the Western countries more systematically.

First of all, such a gesture can be considered strictly from the humanitarian point of view, since these young men have no future in Afghanistan, especially under the current circumstances of war, and since the Soviet Union does not even recognize the status of Soviet prisoners of war.

Secondly, the presence of these young men in the West can help in the fight to liberate Afghanistan, especially since the Soviet Union blames the Western countries, and most of all America, for the entire tragedy that is taking place in Afghanistan.

Thirdly, bringing the Soviet soldiers to the West will help the Mujahedeen, who must exert a great deal of effort in guarding the deserters from the Soviet command, who literally hunt for the POWs, and usually bomb the area where their prisoners of war are held, in order to kill them. By giving asylum to the Soviet Army deserters, you will be contributing toward real peace because these young men left a very real and ugly war.

In order to facilitate the solders' adaptation to their new lives in the West, they will need certain kinds of support, and one of the most important of these is the opportunity to study. Many of the men will want to continue their education, but they have no means to do this.

The Soviet Red Army deserters who come here also need help in finding jobs, a place to live, and in wading through the many bureaucratic problems. In essence, these are the main ideas I wanted to share with you, and I would like to thank you for letting me speak to you.

Senator NUNN. Thank you very much. You are doing very well with your English. Congratulations.

How much education did you have in the Soviet Union?

Mr. MOVCHAN. I completed technical school, and I don't know what it is in America.

MS. THORNE. It is a technical sort of high school, a vocational high school for carpentry. It is higher than high school, but less than college.

Senator NUNN. Had you studied any foreign languages before? Mr. MOVCHAN. Yes, German.

Senator NUNN. Thank you very much.

Our next witness is Mr. Demchenko. We are glad to have you.

TESTIMONY OF EUGENE DIMITRIEVICH DEMCHENKO, FORMER SOVIET PARTY OFFICIAL1

Mr. DEMCHENKO. Since you didn't introduce my background, perhaps I could say a few words.

Senator NUNN. Yes, it is very impressive.

Mr. DEMCHENKO. Let me give you a little bit of a description of what my background is.

Senator COHEN. It will count against your ten minutes, though.

1 See p. 392 for Mr. Demchenko's prepared statement.

Mr. DEMCHENKO. I was born in the city of Kiev, which is not far away from Zhitomir, the birthplace of the witness who just testified. I belonged to the post-war generation, the plentiful post-war generation of the Soviet Union whom, today, Mr. Gorbachev is leading to new heights of socialism.

I started working at the age of 14, as a part of something called "practica"-working during the day and taking classes at night. By doing that, I was able to advance my career to the point when, before the age of 18, I was promoted to perform as the so-called "performing responsibilities of an engineer" of the Ukrainian Union of Consumer Cooperatives, thus becoming at that time the youngest official of the Ukrainian Government.

My background in the Soviet Union, in addition to the College of Soviet Trade, and the Kiev University's Philosophy Department, also consisted of attending special courses at the Higher Party School of the Central Committee of the Community Party of the Ukraine, designed and offered to those slated for a promotion.

In addition to the Ukrainian Union of Consumer Cooperatives, I also worked for the Committee on Radio and TV Broadcast, for the chairman of that committee as a consultant. Eventually, I was recruited by the Party to work in the Propaganda Department of the Kiev Governing Board. In that capacity, I was sent to Chile and Peru at the time when Allende was in Chile. I defected in 1971, on the way back from the trip to South America, in Holland.

Since I came to the United States, I attended Stanford University, where I earned a Master's Degree in Political Science, and I also attended the Harvard Ph.D. program, where I was a teaching fellow for about three years.

Like the gentleman on my right, I was working on my Ph.D., and I had to work not only on my Ph.D., but take some other jobs, which included nightshifts at a computer facility and also working on some construction sites around Cambridge. Because of family considerations I wasn't able to finish it and receive my Ph.D.

About ten years later, after my defection, I had to start anew, and I went into banking. I entered the management trainee program of a major New England bank. I graduated at the top of the class. I began as a commercial bank lending officer, later on, assistant vice president, and still later on, I left the bank and became managing director of an international division of an investment banking firm specializing in leverage buy-outs, acquisitions and mergers.

At present, I am a political and financial consultant in the Washington, D.C. area. I have an American wife and four young children who were born in the United States.

Senator NUNN. How did you adjust to the Black Monday episode this week?

Did you handle that well in transition from Marxism to capitalism in its purest form?

Mr. DEMCHENKO. I guess you are right, Senator, I am sort of a living witness that it is possible to bridge the gap between the Communist indoctrinator and the commercial banker in the United States.

The event that you refer to, and please remember that I am under oath, I could say that I think it is a corrective action because

we had the bull market for five years. I think that if I had extra money, I would invest now in some certain stocks.

Senator COHEN. Which, for a fee, he will tell you about. [Laughter.]

Mr. DEMCHENKO. That is why I mentioned that please remember I am under oath. I didn't want to be asked that question.

I want to make two specific comments concerning the treatment of defectors and what could be done to improve their lot here in the United States.

First, I would like to suggest, if I may, a formula to be used to really understand and study the situation that the Soviet defectors are facing here in the United States, and that is, how well we treat defectors here in the United States is really a function of how well we utilize them. We tend to take care of things that we use well or we are fond of using. I think that all the difficulties with the treatment of defectors here really stem from the fact that we don't utilize them that well.

I would agree, to some extent, with the gentleman on my right that defectors mostly have been used to illustrate and to confirm the already existing theories about the Soviet Union, especially those on the right.

I think that this is really regrettable because, in my view, the real value of the defector's knowledge is that it is unusual in comparison with the scholarly knowledge of academicians born in the United States; it is an applied knowledge. It is the kind of knowledge that tells us what we can do, what could really happen, as opposed to theoretical knowledge which always warns us and hedges and tells us what should not be done.

Defectors, as was testified before, indeed, are used more to teach us how we should mistrust the Soviet Union. I really wish that there would be a time when they will be used to teach us how we could trust the Soviet Union, how we could trust the Soviet Union by realistically perceiving their capabilities, and also having no illusions about how their system really works.

It was also testified before that the problem with defectors is that they are frustrated, and sometimes even disagree with each other as to what is happening, for example, in the Soviet Union today, and so forth. I think we also have to understand the market in which defectors are forced to operate.

I often argue with some people who are handling defectors and I urge them to treat defectors' knowledge, and offer this knowledge outside, not in the context of a warehouse, wholesale operation, but that of a "boutique store", because, indeed, we have a very unique knowledge, and we have to make the world outside, in American society-at-large, in business, and in the government, be aware that such knowledge exists, and market it accordingly; something that General Williams was referring to, and for this we need a clearinghouse operation.

Let me also give you a simple example, to give you a sense of the market which someone like myself-who is a politicial-financial consultant in the Washington area-is facing today. It is a brief example that I think illustrates the situation very well.

Recently I was approached to give an extensive presentation on a subject which happened to be my specialty, which is the day-to-day

workings of the Soviet Communist Party apparatus, as a part of a training seminar for middle-level personnel of a government agency. The original price mentioned for such service was unbelievably low.

I met with intermediaries and the representatives of the consulting firm putting together this seminar. For a moment, it appeared as if they were agreeing to subcontract five to six lectures, as opposed to one, and for a total price that was starting to reflect the uniqueness of the information to be provided.

At the last moment, my presentation was cancelled and substitated for a single one made by a former Soviet music teacher, who was paid about half of the original unbelievably "lower price." I happen to know this other individual, another defector who is a music teacher, and I am very fond of his abilities, not only his musical ability but also his knowledge of Soviet cultural life.

What I am trying to say is, if that was the case, if that agency really needed the knowledge of cultural aspects of Soviet society, they still should have paid him maybe three or four times as much as what they paid.

This is a typical case of the Washington, D.C., market, which should be probably the best market in the country, considering the potential customers that we have here, including the various government agencies, but government contracts, usually, reflect no cognizance of the wealth of the specific knowledge available from highly qualified defectors.

As a result, there is a strong tendency to interchange rather indiscriminately the services of former Soviet officials with a plethora of other Soviet immigrants, thus making the market very depressed and very competitive, sometimes a too competitive place to function.

What could be done is the second point, and I am finishing on that.

As I mentioned, I am seconding General Williams' recommendation, I think that it came up several times before-the clearinghouse type of operation that make government agencies aware of what sort of knowledge is really available out there. It is really a must next step in my opinion.

I think that for a larger American audience, for businesses, for example, I think the government clearinghouse operation may not be that appropriate. I propose, perhaps, to consider funding a small quarterly magazine where the defectors could sort of show their 'wares." They could write small articles, comments on the current developments in the Soviet Union and the U.S.-Soviet relationship, and through such a publication they could advertise their abilities and their knowledge; and maybe this will attract the business side and help them to make their living.

I also wonder if it would be possible for Congress to legislate something similar or analogous to "the minority contracting provisions" in every government contract or grant that deals with various aspects of the Soviet Union and the Soviet relationship with the United States. By doing so, I think, we would deal with the imperfections in the market that exist today, which is dominated by well-established companies, for example, in the Beltway area, consulting firms, or the academic go-getter type of organizations that

always know how to channel the funds available into certain channels.

I think that if this provision would be made as a part of every contract government has on the study of the Soviet Union, these provisions will make certain that the minimum percentage of a grant, a research grant, or some sort of sponsoring contribution will go directly to the defectors, regardless of what kind of organzation is involved. Perhaps this type of legislation will help to recognize, I think, the deficiency that exists in the market today.

If you notice, of all the people who testified here from the agencies that handle defectors, none of them employ, actually employ defectors on their staff. Despite the fact that in front of your committee, we saw people with MBA degrees, with other degrees, with knowledge and command of English sufficient enough, a knowledge of financial aspects that was sufficient enough to warrant their presence in a managerial capacity in one of those organizations.

To conclude, I would like to say that as long as the Soviet Union continues to deny to its otherwise privileged officials, the government and party functionaries, the right not to be prosecuted for desiring to act as a political opposition to the party, the United States will do well by encouraging such officials to seek political asylum in the United States. The wealth and the creative qualities of the knowledge these individuals bring with them is essential for the development of dynamic U.S. foreign policies, the type of policies that we seem to be in need particularly today, at a time when the Soviet challenge is suddenly growing again in stature and sophistication.

Thank you, Mr. Chairman.

Senator NUNN. Thank you very much, Mr. Demchenko.

I just have a couple of questions, and then I am running about 30 minutes late for a meeting. I am going to ask Senator Cohen if he would preside and close the hearing. I know that he will have some questions.

Mr. Mikheyev, you mentioned that to the Soviets, compromise is deemed almost an insult in their own mentality, and so forth. That has been our experience in negotiating with the Soviets over a long time, until the INF negotiations. In the INF negotiations, if you look at the various fallbacks-I don't know whether you would call them compromises, but fallbacks that were made from the Soviet position, they have been considerable.

There have been a considerable number of moves toward what I consider to be a more sensible direction, and that is one of the reasons that we are on the verge of coming up with an agreement. How do you place the INF, the intermediate nuclear force, negotiations in that context of the mentality you were describing?

Mr. MIKHEYEV. Mr. Chairman, for the Soviets, the goal in all of this operation about INF, it is a big political offensive. They are taking a big political offensive and in this regard, they are making no compromises whatsoever. They do make concessions on the military side, on the rockets which from their point of view will be irrelevant in final analysis.

If we go ahead with the SDI, those rocket forces will be largely irrelevant in any case. So they can afford to make those little compromises and concessions for the bigger political goal, which is