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Rice IV With Wall Street Journal Editorial Board

Interview With the Wall Street Journal Editorial Board

Secretary Condoleezza Rice
New York City
September 25, 2006


SECRETARY RICE: Well, thanks. Let me just say two or three words and then we'll just open up. I'm always quite aware that academics can go on in 50-minute slots about things that nobody actually wanted to hear, so I tried to avoid doing so. But I do think I'd like to just make a couple of points that this is a very challenging time in international politics and I see it as a time when we're going through a big historic transformation. And so I am probably less concerned on a day-to-day basis by the turbulence that we see and I think there's a tendency – present company excepted of course – in reporting to report the turbulence on a daily if not hourly basis. And when you're in the midst of a big historic transformation you're going to have a lot of turbulence. And so I think the important thing is to try to understand the underlying trends that are emerging and to be concerned about whether or not those trends are moving in the right direction, not what is happening on any given day.

In the Middle East, I think those trends are moving in the right direction but I think that we got a very big wakeup call in the summer with the war in Lebanon because in a way that it had not really been clarified before the Middle East with all of its historic animosities and so forth, I think had to confront its modern – its current environment, which is one in which extremism on one side and moderation on the other came into pretty sharp relief. And that has been very clearly recognized now, I believe, by the moderate Arab states – the Saudis, the Egyptians, the Jordanians – by moderates in the kind of fledgling democracies that are there, whether it be Iraq or Lebanon or even the Palestinian territories, and the supporter, the financier, the inspiration for those extremist forces like Hezbollah and Hamas, I think is now clearly in everybody's mind Tehran, and that has given a kind of clarity to what the challenge is from Iran, not just on the nuclear side, not just on the internal politics side, but literally on Iran's ambitions for the region as a whole.

So that means that I think the next several months, leading probably into several years, will be trying to find a way to rally moderate forces on behalf of emerging democratic moderate forces in the region to withstand what I think is a now quite substantial push against them by extremists and by Iranian-led extremism.

That will take some time. That will take some thought to what kinds of institutional responses there need to be. It will take understanding almost everything that we're looking at with Iran in that context. But most importantly, it's going to take some real effort at strengthening those moderate democratizing forces in Iraq, in Lebanon, in the Palestinian territories.

I cite the time factor here because I don't think that this is a battle, if you will, or a struggle that's going to be won on George W. Bush's watch. I think the framework can be laid, but I think the struggle is not going to be won on his watch. Now, that is not to by any means diminish the central struggle in the war on terror against al-Qaida and their progeny, but it is another more geostrategic element that for the first time I think puts a state sponsor of terror in a very key position geostrategically. Terrorist groups without state sponsors are obviously extremely dangerous and can do great damage, as we saw with al-Qaida. Terrorists who are the arms and legs and kind of tentacles of a state with considerable assets at its disposal has the potential to – have the potential to change the kind of geostrategic picture. And I think we're dealing with both simultaneously.

So with that opening, let me just ask what's on your mind. I just want to say this personally. When I was in government the last time, I was here for the end of a great transformation, the end of the Cold War and all the work that had been done for almost 50 years to solidify democracy and resist communism and it ultimately weakened communism to a point that it collapsed of its own weight in Europe with a lot of pressure from the outside but ultimately just collapsed from within. So I guess for having been around to enjoy that, I get to be around at the beginning of another great historic transformation and it's considerably harder, the beginning than the end.

QUESTION: Can I pick up on that exact point, because some of us were here through that period and remember Albert Wohlstetter saying he didn't think he'd live to see the Berlin Wall come down. Iran and its nuclear capability – are we possibly heading towards another deterrence model with them, which seems to me would effectively put us back in the Cold War living in a state of mutual assured destruction? And you know, as you say, for those of us who went through the last one, that would be pretty disturbing.

SECRETARY RICE: I don't think we're necessarily headed to – no, I don't think we're headed to a deterrence model because I don't think that Iran currently has that level of capability but we have to accept that level of capability. I mean, remember that what happened in 1949 the Soviet Union exploded a nuclear weapon five years ahead of schedule, the Soviet Union was occupying half of Europe. At that point, your options are pretty limited as to how to confront that and you slide fairly easily into a deterrence model because there really isn't a way to arrest the Soviet nuclear – Soviet nuclear program.

I think we still have a chance to arrest the Iranian nuclear program in its relative infancy and we also have a chance because I think Iranian power in the region is also not as advanced as Soviet power was as a result of World War II. And remember again, the Soviet Union was deep into the heart of Europe as a result of World War II. So expelling the Soviet Union at that point was a very, very tall order which I think rightly they decided instead to try to contain, as Kennan put it, until the Soviet Union had to turn to deal with its own internal contradictions.

This time I think we've got a chance to resist Iranian push into the region, but we better get about it. I mean, it's not the sort of thing that you can just let continue in its current form. It's why you have to resist Hezbollah. It's why you have to try to strengthen the moderate Lebanese forces, which is not an easy matter. It's why you have to resist the Damascus Hamas, creating a situation in the Palestinian territories where moderates can emerge. It is why in the final analysis a stable Shia-led but not dominated government in Iraq is at the core of all of this. There is no surprise that the Iranians in many ways I think fear most a successful Iraqi nontheocratic government where Shia are afforded one man, one vote and therefore have a kind of rightful political place but manage to incorporate with the Kurds and Sunnis into a national unity government, again that's nontheocratic. That's got to be Iran's worst nightmare and that's what you've really got to work for. So I think we've got time to not get into a mutually assured destruction model.

QUESTION: On that point, the diplomacy that you've been leading on Iran has been focused mainly on the IAEA and UN and it looks kind of Sisyphean from our point of view, not least because countries like China, France and Russia don't seem particularly eager to take the sorts of steps that would plausibly deter Iran or make it think twice about its nuclear ambitions. Instead, Iran is just flouting deadlines with impunity and Europe seems to will to the French or the Russians and Chinese seem to be happy to go along with it. Are you considering as you take the UN route alternative measures to make the Iranians reassess their nuclear program and not just the threat of a UN Security Council resolution or another pseudo-deadline?

SECRETARY RICE: Yeah. Well, first of all, I wouldn't draw too much of a conclusion just yet as to what the Chinese and the Russians will do. We've actually had very good discussions at the political directors level this last week or so about what a resolution, a sanctions resolution under Article 41, Chapter 7 would look like if in fact the Iranians don't finally decide to suspend their enrichment program.

Now, to be absolutely fair, any such resolution will not look like a resolution that was written unilaterally by the United States. You can understand that. But it is also the case that a Security Council resolution which puts Iran under Article 41, Chapter 7 has collateral effects on the willingness of private companies, private banks, to do business with Iran. Because if you are making decisions which have a reputational component for instance and you're facing making those decisions when a state is under Security Council resolutions, particularly Article 7 resolutions, that's a different environment. And so I wouldn't also underestimate the collateral effects of whatever resolution there is in the Security Council.

You saw that Hank Paulson was out to inform, and it really was just an informational session – central bankers, finance ministers, some private entities – about how we think the Iranians shield their illicit financial activities. And it's his responsibility after all as U.S. Secretary of Treasury to protect the integrity of the financial system from people using it for financing of weapons of mass destruction or terrorist financing. This is a tack, a track I guess I should call it, that we began working when John Snow was here and we've been working all along, and we think it will have an effect.

Iran is not North Korea. It's not isolated and it is pretty integrated into the international financial system. And that actually makes its potential isolation more damaging to Iran than for instance North Korea which, as you notice, has not been too thrilled with even the rather modest financial measures that we've taken against North Korea. So yes, there are other things that are going on.

QUESTION: Do you think that there is – there are differences – well, how do you read the Iranian – what's going on in the Iranian Government? Do you think that there are differences that can be exploited in how to approach the nuclear program or the United States – it's the President's decision to lay in to Khatami? Someone suggested that the President -- that this was his attempt to listen to alternative voices. For those of us who can recall though going back 20 years, other attempts to find Iranian moderates never ends happily. So what do you see going on in Tehran now?

SECRETARY RICE: I do not believe we're going to find Iranian moderates. The question is are we going to find Iranian reasonables. (Laughter.) And that's an important distinction because if you're looking for people who are, you know, prepared to lead the revolution toward a more favorable relationship with the United States and all of those things that has led to some 25 years of looking for those people, usually ending up in some major failure in American foreign policy. I don't think you're going to find them.

But are there possible people in that government that do not want to endure the kind of isolation that they're headed toward, where I think they will find it very difficult to maintain the integration that they have? You know, we forget that with the exception of the United States most countries have diplomatic relations with Iran, most countries trade. Their two big trading parties – Japan, Italy – and they're facing, if they continue down the road that they're on, isolation. The question is are there people who wish to avoid that isolation.

QUESTION: What would Iran's response to the sanctions be, do you think? The financial sanctions.

SECRETARY RICE: Well, I don't know. I mean, there are limitations on the oil card because ultimately you have to sell it in order to be able to use its proceeds. There are limitations that are because Iran imports 40 percent of its refined products so there are limitations there. There are those who think that it might be to get nastier in the region, and that's always a possibility.

QUESTION: It was notable in the President's speech at the United Nations that he didn't issue a challenge to the United Nations. He sort of spoke over the heads of the leaders to the Iranian people but he didn't say anything about sort of the credibility of the international system and the importance of – should anything be read into that?

SECRETARY RICE: No, no, because we've been saying that, you know, the international system has to – I think if you read an interview he just recently, he talks about, you know, you have to be credible and so forth. No, it was just that he wanted to be very concise in speaking to the Iranian people and not muddy the message.

QUESTION: What do you think about a gasoline embargo on Iran?

SECRETARY RICE: Well, I just – I don't think that it was anything that you have to look at it in the near term and I'm not sure that it would have the desired effect. One of the problems that we have is if indeed you would like not to have a situation in which you reinforce the leadership's desire to make their people feel that America is anti-Iranian people, then you want to stay away from things that have a bad effect on the Iranian people to the degree that you can. You know, we've talked – people have talked for instance about barring Iranian students or barring Iranian – there was at one point the World Cup, you know, bar them from the World Cup or something like that.

The Iranian regime has been pretty insistent on a line of reasoning that this is not between the United States and the Iranian regime; this is between the United States and Iran, the culture, the people, its great national pride. And that's something we really do have to fight against and some believe a gasoline embargo might play into that.

QUESTION: Are you optimistic that the international system is going to work here, that the Security Council for example will be able to agree on a level of pressure that will be sufficiently great to force the Iranians to change tack?

SECRETARY RICE: I do believe that the international system will agree on a level of pressure. I think it will evolve over time. I don't think you're going to see an all-in Security Council resolution at the beginning. But as I was noting, you get both direct and collateral effects from Security Council resolutions and I think that the Iranians frankly have to worry more about the collateral effect than they do about anything the Security Council might actually sanction because, again, Iran is a pretty integrated entity and if you start making it – start adding to the environment of uncertainty about whether Iran is a good place to be engaged, and I think it's going to be very difficult for them. You're already seeing major banks pull out of Iran. You've already seen companies thinking again about their investments. You know this business better than most. If you sit on the board of a company or a bank and there are – there is the potential for some kind of action against an Iranian client with whom you're dealing, that's not a very comfortable position. And so I think that the Iranians have a collateral problem.

QUESTION: You noted at the beginning that the Soviets tested a nuclear weapon five years ahead of schedule. How confident are you that we have time to allow pressure to build up and for the international community to come around to the nature*, you know, the level of the threat?

SECRETARY RICE: Well, the problem is of course you never know what you don't know, particularly in a fairly opaque place like Iran. I don't think it is quite as opaque frankly as Joseph Stalin's Russia was and you have to remember that the way that we found out about Natanz was through reporting of dissidents who had been told things by people inside Iran.

So one of the things that we have to do is we have to increase our capability to mine resources and intelligence about Iran. And one of the challenges that we have is we haven't been in the country for 26 years. And you would be surprised what it does to both your diplomatic and intelligence capability to not be in the country. One of the things that we've done – you will not believe this. The Department of State did not have an Iran desk, did not have an Iran desk. Why? Because we didn't have relations with Iran. So why would you have an Iran desk if you didn't have relations with it? Well, the first thing we did is we created an Iran desk. The second thing is that we've actually --

QUESTION: So is there no North Korea desk either?

SECRETARY RICE: No, there's a North Korea officer but there's no desk. Now, so it just sort of shows, you know, the thinking that foreign relations is those with whom you do relations rather than kind of foreign policy.

QUESTION: And why --

SECRETARY RICE: And could I just – so one thing we've done is we are going to in Dubai create a dedicated Iran section that sort of mirrors the work that they did in the 1930s in – when we didn't have relations with the Soviet Union, so we had Riga station which is where George Kennan worked initially.

So I'm not – I can't tell you I'm absolutely confident. I can tell you I think we have better insights into Iran. And we have to work quickly, obviously, but we also have to work smart and that means probably trying to cut off some of their access to foreign help because that is for many people the long pole in the tent on how fast we can move.

QUESTION: Why does Europe, Russia, China see less concern about Iran's nuclear ambitions than we do? You mentioned how integrated Iran is and the trading partnership they have. Is this just a case of them putting economic interests ahead of their security concerns?

SECRETARY RICE: I don't think so. I think there's great concern about Iran and I actually think the Europeans have been very strong on this. It's why for instance they have never permitted negotiations to go forward without suspension. I mean, they're the ones who initially set this condition. And with the Europeans there hasn't been much daylight because us and the Europeans about what you do if the Iranians don't go along. I think with the Russians and the Chinese you've got a couple of things going and they're a little bit different. The Russians actually believe that – and I think I actually believe them – they believe that there are downsides to sanctions, including the possibility that the Iranians may leave the NPT and kick out all inspectors and at that point you have no eyes and ears.

Now, I happen to think that the worst situation is that they, you know, continue their program and then they kick out the inspectors and they've made progress. But you can see that it's not an unreasonable concern.

Secondly, I think that the Russians, who live very close to the Iranians, do worry about the response that I was just saying to Melanie, which is they get tougher in the region.

So I wouldn't be so quick to say that people are just putting their economic interests ahead. I do think there's a genuine debate about how best to handle the situation. The good news is though that debate ended with Resolution 1696 because we all agreed that if the Iranians don't suspend, we'll seek Security Council sanctions.

QUESTION: Could I take you to the other side of the continent and talk a little bit about North Korea? It's a very different challenge that we face there and both China and South Korea have not been very helpful, at least from our perspective.

SECRETARY RICE: Well, South Korea has been more helpful than you might think. I mean, it was quite a remarkable thing for Roh Moon-hyun to sit in the Oval Office – and by the way, it was almost completely missed – and say we don't call them sanctions but the measures that we've taken are actually tantamount to sanctions, he said. This is the South Korean President when asked about the North Korean 1695. He also said when asked about our financial measures, well, that's a U.S. legal matter and we're not going to get involved in it.

Now, how this got missed after all the stuff about we and the South Koreans had similar – had dissimilar views about how to handle this, I don't know. But just go back and look at the transcripts in the Oval when the President talks to Roh Moon-hyun. And that was a pretty important signal on the part of the South Koreans.

When I just met in this odd configuration, admittedly, with the South Koreans, the Japanese, the Canadians, the New Zealanders, the Australians, the Indonesians and the Philippines, it was the South Korean who took the lead in talking about the things that they were doing to put pressure on the North. And the South Koreans have been very clear; if the North were somehow to test a nuclear – have a nuclear test, to have a missile test, that would put a lot at risk in their relationship. So I think they've been pretty solid.

QUESTION: What are those things that they're doing?

SECRETARY RICE: Well, for instance, they have cut fertilizer supply to the North. They have cut, actually, food assistance. They've pulled back some of their basic assistance to the North. They continue their economic relations, but I think the implication is pretty clear that if the North were to go further, maybe even that's at risk. But again, let me not put words in the South Koreans' mouth. Go and read again what Roh Moon-hyun said on that day. It was pretty remarkable.

QUESTION: And China?

SECRETARY RICE: China, I think, is very frustrated with the North. Very frustrated. You have to realize that when the North Koreans are challenged even by the Chinese, they just get meaner. The things they say are really quite remarkable. I think the Chinese are trying to figure out how they can press the North without doing things that they believe will destabilize the Korean Peninsula. I think that's really their dilemma.

QUESTION: By which they mean topple the regime?

SECRETARY RICE: We're going to have to go back at it. This current situation isn't really acceptable. I think Resolution 1695 was pretty remarkable in that you did get a 15-0 vote, including China. That sent some shockwaves through the North. I do think we're going to have to – we are in discussions now with South Korea, Japan, and I suspect I'll go to Asia sometime in the next month to six weeks, probably next six weeks or so, to take stock and see whether or not one last push to get the six-party talks back on can be made.

We are going to continue the financial measures because they do relate to illicit North Korean activities. The North Koreans keep saying they want to talk. They can talk in the six-party talks anytime they'll show up. And in fact, you know, we've had situations where the night before the six-party talks, a couple nights before, Chris Hill sat with his North Korean counterpart and talked. They talked on the margin, so they're – when I keep reading this, "You should talk to the North Koreans," there's no absence of an opportunity to talk; it's that the North Koreans haven't been willing to show up at the forum in which to talk. So I think we'll need to make another push to see what we can do.

QUESTION: Can you tell us how the count looks for the seat? And also our friends, the Brazilians and the Argentines, I guess, have wound up on the side of Chavez for that seat, publicly anyway.

SECRETARY RICE: Well, if I knew the count, I wouldn't really trust it. You know, I think that the problem is that lots of people say they're going to do certain things and so I tend not to focus so much on the count. But we are focused on making the case to people that the Security Council is the most serious body that the international community has, that it has dealt this summer with the North Korean nuclear program, the Iranian nuclear program, ending a war in Lebanon. It just had a very serious and actually very good session on the future of the Middle East. This is not about regional politics. This is about the most important body in the world and you want responsible states on that body.

I've been saying to people, look, we don't – it's not a matter of policy disagreements. We sit on the Council all the time with people with whom we have policy disagreements. We sat there for two years with Syria. But this is about whether or not a state is responsible or simply wishes to have a constant struggle with the United States every day on every issue, thereby making the Security Council unworkable. And the Argentine – I think it was the Argentine Ambassador to the UN said, "Well, you know, it might be fun to have them on the Council; it would be lively." But it would --

QUESTION: To tango. (Laughter.)

SECRETARY RICE: It would mean the end of consensus on the Security Council. Now, that's a serious matter. So what I've been talking to people about is whether or not that's a circumstance we wish to create. I will tell you that I think Hugo Chavez did himself no good with that speech. And whatever press attention it got, it also got the attention of a lot of people who worry about the responsibilities of the Security Council.

And so I've had a lot of conversations this week with states that are either undecided or that may have been decided about what this would really mean. And again, this is not about policy disagreements. It's not even about people that we have tough words with. That's not the issue. The issue is whether the intent here would be to simply use the Security Council to, in a very high-profile way, push the struggle with the United States at the expense of solving or contributing to the solution in the North Korean nuclear program, contributing to a solution in the Iranian nuclear program, contributing to stability in the Middle East, serious debate about Darfur and getting UN peacekeeping troops into Darfur, dealing with places like Burma.

We're always told the Security Council is the most important international body. I accept that. So if it's the most important international body, then we need to act and when we elect as if we think it's the most important body.

QUESTION: Could I ask you to broaden out your discussion of Latin America a little bit? I mean, a few years ago, if one assumed that Fidel Castro was mortal – I know he doesn't assume that – but one could look forward to – you know, sort of an end of an era in Latin America. You had Latin America embracing capitalism. Now it looks like Castro may be about to walk off the stage, but instead you're going to have somebody with oil money and who's on the continent kind of performing a similar role. And he's – while I don't think his neighbors particularly like him, you know, he's getting in Argentina and Bolivia, to a modest extent, in Brazil, a certain amount of traction.

And then you have in Mexico, which is, I think, a much more important country to us than a lot of people realize, you had a very close election where the loser – you know, admittedly, the good guy won in a sense, but the loser wanted to take it to the streets and he got – it looks like he's gotten encircled and contained. But it looks like things which had been going in a very good direction in places very close to us are now going in a negative direction. Besides containing Chavez himself, are there any things – is there anything that we've got going on that can try to help reverse that trend?

SECRETARY RICE: Well, I think Latin America – you can overstate the degree to which there's been kind of (inaudible). It is absolutely the case that the Summit of the Americas doesn't feel like the Summit of the Americas that we were in in Quebec, where people talked about free market principles and the free trade and it looked like the free trade association of America was going to get off and where, you know, the sense that the Washington consensus was, in fact, the way to go. You know, that's true. But I think it broke down or that particular direction was challenged by the sense that for all the growth that was going on and all the free trade, that there wasn't – that benefits were not, if you will, trickling down or spreading to the populations more broadly and there was a kind of expectation that goes with democratization that things were going to go better for people. People's lives weren't getting better.

And so as is the case in democracies, people started reacting to that and you got both a reaction from governments that moved somewhat to the left from the right, but center left, and then you also created a stage, if you will, for populism, old-fashioned Latin American populism. But I think if you look underneath, you see that with the exception of Bolivia, and even in Bolivia where some of the trends or some of the policies that Morales tried to adopt got him very quickly into hot water with his big friends in Brazil, I think you may see that there will be a moderating of that because, you know, Bolivia doesn't exist in isolation.

And I will tell you that as much as the Bolivians stand up and say horrible things about the United States, they also are constantly pulsing to see if they can keep our relationship on track, because they really can't afford to have the United States pull out of Bolivia. So this is a mixed bag. And then if you look at Peru, where Chavez literally tried to intervene in the election and it backfired; it backfired in a major way.

Mexico has come through this crisis and I think it's been a real vote of confidence in the Mexican democratic system, which after all, is relatively – you know, it's just now maturing in a kind of two-party system. And I think that that has come out in a way that, while Chavez continues to say he'll support Lopez Obrador and all of that, the question is will Mexicans. And it doesn't appear that they will. It appears that the Mexicans wish to get back to reality here, to a stable political environment.

And then if you add to that what I think has been very effective trade diplomacy by the United States in the Central American Free Trade Agreement, the free trade agreements with a number of the Andean countries, you know, Colombia, Peru, we've – the Ecuador has been on hold, but I suspect that eventually, that will get back on track. You have growing – you have the Chilean Free Trade Agreement. I think you're seeing that the free trade agreements are continuing despite the fact that the Free Trade Area of the Americas has not proceeded.

The final point I'll make is that I do think we had a problem in our rhetoric that needed to be addressed. The United States obviously cares about economic growth and cares about free trade, but we also do happen to care about the improvement in health and improvement in education and improvement in the lives of people. And our – some of our best allies in the region came to us and said, "But you never talk about that. It's always free trade and economic growth, as if it has no relationship to but should have no relationship to the lives of the people." And we've been trying to make very clear, after Monterrey a few years ago, that this is also about improving the lives of people.

And so the Millennium Challenge compacts that we've signed with Honduras and Nicaragua – there will soon be one with El Salvador -- I think, speak to that part of it because you shouldn't cede that ground to the populists and you shouldn't cede the ground either of marginalized people being involved in politics. One of the reasons that Morales got traction was that there is this huge indigenous population that has been completely cut out of politics in Bolivia and that needs to be addressed.

And so we've tried to have a much more well-rounded, I will say, approach to Latin America that still starts with the importance of open economies and open trade but recognizes the need to make those work for people, even for the most marginalized people. And we've tried to be disciplined about having a positive agenda for the region rather than constantly answering the Venezuelans. And that's how we --

QUESTION: Those indigenous people that Morales tapped into are also coca growers.

SECRETARY RICE: Yes.

QUESTION: Is there a plan there to deal with that?

SECRETARY RICE: Well, you know, you can't give up on the drug war and coca eradication. But as we've done in Colombia, we have had some conversations about whether or not alternative livelihoods programs might have some impact and some appeal. But no, you're right, it's a very big problem.

QUESTION: Can I yank you back to the Middle East. (Laughter.)

SECRETARY RICE: It feels good to talk about Latin America.

QUESTION: Two issues specifically. About a year ago, you were in Cairo, you spoke about democracy. Egypt had an election and then they didn't have elections. And yet in May, you worked fairly sedulously to stop David Obey, the Democratic Congressman, from cutting off some portion of funds to – foreign funds to Egypt, even though Ayman Nour is in jail on trumped-up charges and repression has really kicked in. So I wanted to ask you first about democratization in Egypt.

And this – another issue that comes up. A year ago, Assad looked very – Bashar Assad looked like he was on the ropes. You had an active investigation into the Hariri murder. Now he looks – Assad looks very confident. Syrian influence in Lebanon is in the ascendant and the investigation into Hariri's murder seems to have just kind of vanished. And I'm wondering if you can speak about those countries.

SECRETARY RICE: On Syria, I think that the Syrians look as if they've made their choice and their choice is to associate with extremist forces in Iran, not with their traditional – calling it allies is not quite right – the traditional partners like the Arab states. But I think that that will cost Syria and I'm not certain how ultimately stable that configuration is to Syria. And so this is one of those twists and turns that when I started speaking to at the beginning. I don't think you can kind of know today the effect of Syria's isolation from the Arab world, but I think not a terribly comfortable place for Syria to be.

And it is isolated. The speech that Assad made accusing the Egyptians and the Saudis and the Jordanians of all kinds of things has just been – has not helped them – helped him with his normal partners.

Syrian influence growing in Lebanon? I'd say Iranian influence from Hezbollah has been a problem. The Syrians, I think, found it uncomfortable that the Lebanese deal was done without them, and it was done without them.

Now in '96, when Warren Christopher negotiated a ceasefire, he negotiated it between Syria and Hezbollah and Israel. This time it was the Lebanese Government, albeit a government that has a lot of weaknesses, but – and there's a lot of pressure on them from the Syrians, but I think, you know, they've made a pretty big step forward in being able to speak for themselves and act for themselves.

As to the Hariri assassination investigation, I don't think it is stalled. I think it is moving forward. Brammertz is a very careful prosecutor, but he is continuing to question people, he's continuing to move forward. There is considerable pressure in the Security Council to start to get the results of that.

QUESTION: Do you have any idea what the timeline is?

SECRETARY RICE: Many would like to see some movement forward by the end of the year, but obviously it's an independent investigation and so you can't interfere in that. But that it would be good if it moved forward in that direction. So I don't think – you know, the Syrians are perhaps not as uncomfortable as when it looked like the inquiry was about to come down immediately, but I don't think life is really quite comfortable yet for the Syrian regime.

As to the Egyptians, these things also have – go in waves. I don't think that Egypt is ever going to be the same place after the competitive presidential election, where many of the taboos about what you can and cannot say, the criticism of the president, the criticism of the president's family, is going to be easily put back in a box. I think you're going to see that they will start to make some legislative reforms that will move things forward, not at the pace that we would want, and certainly the success of the Islamist forces unnerved a lot of people; in the parliamentary elections, not in the presidential.

QUESTION: Did it unnerve you?

SECRETARY RICE: You know what? I believe that this is the normal course of democratization, that you're going to have a period of time in which there – in which the competitive environment is going to lead to some outcomes that we don't like. But you're better off with a competitive environment. You're better off making people compete in the open than cover their faces and run the streets with guns.

Because the truth of the matter is, there was politics in the Middle East. It was just taking place in the radical mosques, not in the political squares. And I think it's one reason that these forces emerged stronger and more organized, because they were organized and they were doing politics and they were doing social services. And what was absent was any moderate, legitimate political forces to counter them. And now you have to have the time to build them up.

But there are also some important lessons. Hamas has learned a pretty tough lesson. They have not been able to govern. They've flat-out not been able to govern. You know, all of the talk about, you know, there would be all this Iranian money coming in and they would be – they were going to be supported, it hasn't happened. People are on strike, they can't make their peace with the international community, and it's been really tough. And in fact, it's been especially tough if you are Hania in the territories, as opposed to Khaled Mashal in Damascus.

So I think the competitive – going ahead and creating a competitive environment is appropriate, but the answer to the emergence of Islamist forces is to create or is to support moderate forces that can contest on the political battleground. And as to cutting off, I just – we just don't – we don't think it's going to be helpful. We need to help these people.

QUESTION: A little bit about Iraq and – you know, what's Jim Baker up to there? Is he – what job is he doing?

SECRETARY RICE: Well, I think he is taking, along with a number of people, a kind of fresh look, if you will. You know, people who haven't been in it every day, all the time, talking to people, interviewing people, and I think they're going to give us a sense of where they think things are going right, where they think things may be going wrong. The strategic direction is set. The strategic direction is set. But if there are adjustments that you can make, if there are things that are not being pressed hard enough, if there are some alternative ideas, by all means, I think we'd be delighted to have them. And who better than Jim Baker and, you know, we have, in him a very sound person and I suspect we're going to get good work out of that and good help out of that. I'm looking forward to it.

QUESTION: Speaking of such efforts, the National Intelligence Estimate, which the New York Times claims 12 officials talked to them about --

QUESTION: Current and former, I think it was.

QUESTION: Yeah, all of whom have seen it and so they're all having this conversation and Congress claims we don't see this stuff. Why not declassify it at this point? If Negroponte says we're seeing it through a false prism, let's get a better look.

SECRETARY RICE: Maybe. The problem is the leaks of classified information have just gotten to a level that it's absolutely outrageous. I mean, (inaudible) every time somebody leaked something classified, we wouldn't have any classified information anymore. It's really gotten quite, quite bad. And the problem that it's selective so that the entire picture isn't there, and unless you wish to engage yourself in leaking the other side, then you are somewhat tied.

But I'd make the following comments without going into the specifics of the document. First of all, do we know that Zarqawi and his group, which by the way, was in Iraq a long time ago, well before the war, decided that they would try and make Iraq a battleground in the war on terror and that they would try to use it as a recruiting tool? Yes, and that they would try to al-Qaidaize or Islamize the Iraq conflict? Yes, we know that.

Did they, to a certain extent, have some successes in feeding on the sense of insecurity to press their own agenda? Yes. Is it also true that in the last year, there has been a backlash against that policy, particularly among Sunni and Sunni tribesmen who consistently now talk about foreigners not playing this role in Iraq. You know, without going into too much detail, there's a reason we got Zarqawi. It wasn't because we suddenly got smart, right? It's because people gave him up. So the --

QUESTION: The 12 heads were kind of pro – (laughter).

SECRETARY RICE: Yeah, but the counterargument that – they had a strategy to do two things. The first was to make Iraq a battleground in the war on terrorism for their radical ideas and, secondly, to try to sow sectarian conflict between Sunnis and Shia. It was there in stuff on his computers that we actually did put out.

So we know what the strategy was and, to a certain extent, it was having some successes. I think it has really also had a huge backlash effect and you – it was one of the things that helped get the Sunnis into the political process, because this idea of foreigners coming in and doing this, it's one of the things that's helped us drive him out of places like Fallujah. So that's the part that doesn't get accounted for.

The other point is this argument that – you know, "Well, because of Iraq, now they're just getting a worldwide recruitment effort," first of all, this recruitment and capacity and worldwide al-Qaida, jihad, whatever you want to call it, began a long time ago. And it was '93 and '98 and 2000 and finally it exploded in '01. And so now, yes, we're finally really, really going after it and countering it. Are they going to fight back? You bet they're going to fight back and they're going to fight back in larger numbers.

But unless you confront them, the alternative is, "Well, we just won't – we won't go after this and maybe they'll go back into the woodwork." They're not going back into the woodwork. They have to be defeated. And just because they are recruiting on the basis of Iraq – and by the way, they recruit also on the basis of Afghanistan and they're trying to recruit on the basis of Sudan and they recruited on the basis of military – U.S. military forces in Saudi Arabia. They've always had a reason to recruit.

So to my mind, Tony Blair had the right response to this, which is, you know, when are we going to stop blaming ourselves for the existence of a terrorist organization and recognize that there simply is terrorism in the world; it is big and it's organized and it's networked.

The final thing I would say is that it is true that one of the trends has been that as al-Qaida has been less able to work centrally, largely because of successes at going after their hierarchy, particularly these field generals who are now in Guantanamo, you have spawned a lot of kind of smaller, less connected, more local groups. But I think that was just a natural outcome of the central organization being weakened and decentralized in that way.

So it's a long way of saying that this is the kind of thing that gets very big, big headlines, of course. But it doesn't change the essential logic of war on terror. You have to bring down the al-Qaida organization, continue going after it the way that we are. You have to try and protect the homeland to the degree that you can, but that means information, information, information. That means the ability to interrogate and that means the ability to surveil. And third, you have to begin to create alternatives in the Middle East to this particular ideology and that means the strengthening of moderates and giving – taking space for moderates to develop in places like Iraq, in places like Afghanistan and places --

QUESTION: But just so that I understand you, are you saying that the NIE has been misrepresented or that you disagree with its conclusion?

SECRETARY RICE: Well, I think that it is – the representation is not -- does not fully represent the NIE. This is one element of a much larger argument in the NIE.

QUESTION: We had – Talabani was here last week and he was very emphatic in saying that both Syria and Iran are not – are really working against what they're trying to accomplish. And they're going to try some things diplomatically to make that -- to help with that effort. But do you have a strategy for – and you talked earlier about Syria paying a price for what it's doing. But at least from our vantage point, it doesn't look to us as if either Syria or Iran are paying much of a price for harming American lives in Iraq. Is there a strategy for reducing their damage to what's going on in Iraq?

SECRETARY RICE: Well, with Syria, we went in pretty directly, which was that the operations of – back in the spring – this was in the Euphrates Valley -- were largely to deal with infiltration from that Syrian border. And I think that, you know, we had a lot of affect in that regard.

Iran is more difficult because it's stealthy. It's, you know, the stirring up of militias. It's allowing technologies to be used or maybe even transferred that are really quite damaging to us.

QUESTION: Like IEDs?

SECRETARY RICE: Like IEDs, advanced forms of IEDs. We've tried and I think we will continue to try to make clear that we will use whatever means we can. If we find that there are – you know, if we find this kind of thing going on. The problem is it's a little hard to find and we know it's there – specifically, we know it's there. It's a little hard to have a point of contact there or a point of origin to know exactly where to go.

I think the other thing that we are – we have to be with this, is we just have to fight tooth and nail for the victory of the Iraqis who do not want to Iranian influence in their daily lives. I mean, they're going to have -- you know, they're going to be neighbors and that's all fine, but the thing we could do best is if we can get some of these militias under control so that we don't have the kind of daily sectarian problems, I think it would do a lot to strip away the environment in which Iran is able to do these things. In many ways, you have to go at it in a more indirect fashion. You have to remove the troubled waters in which they're fishing or they're always going to be able to fish.

QUESTION: What price has Syria paid for its meddling in Iraq?

SECRETARY RICE: I think the story's not out – the story's not done yet. They have – we have sanctioned Syria and I think that has made it harder. It --

QUESTION: The President picked the two weakest sanctions out of the eight that were offered.

SECRETARY RICE: Well, because what we'd really like to do is we'd like to get some others to join us in other kinds of sanctions. And I think as Syria continues to show its stripes and isolate itself from its Arab friends, that may be somewhat easier to do. But the combination of the Brammertz investigation and I think we're going to have to start looking at further sanctions on Syria. You know, the Syrians for instance have not been able to have an accession agreement with – not accession – association agreement with the – with Europe, something that they were at one point negotiating which just got stopped.

I think if you add it up, there are costs. But I think yeah, I think you're right, we're going to have to look at tougher measures if Syria continues to be on the path that it's on.

QUESTION: The Thai coup. A week ago if we'd been having this conversation and had looked at the democracies of Southeast Asia, we'd probably put Thailand near the top of the list of stability and then Tuesday there was a coup. How do you think the coup and the political turmoil in Thailand is going to affect its neighbors – Indonesia, Malaysia, the Philippines – all of which are democracies that, you know, aren't as firmly planted as they might be?

SECRETARY RICE: Well, the biggest problem is that in a Southeast Asia that was pretty stable it's a bit of a – it's a u-turn and that's the biggest problem. But I don't actually see much problem of contagion. (Inaudible) to this circumstance. But you know, it's not a good thing and we are terribly displeased to have had a military coup and this -- they need to get a civilian government and they need to get to elections and get back on a democratic path very, very quickly. But I don't think it will have – at least we don't see – an impact on the rest of the region.

QUESTION: Could I come back to the issue of leaks and the response to those? And I really do wonder why something like this, this assessment, if it wasn't secret it wouldn't be put in the right-hand top of the page. In other words, all it is an another set of arguments and if you simply made it public nobody would read it. (Laughter.) And you know, I mean, there are classified parts that you could keep classified but, you know, you'd have the basic arguments out there.

And I guess the second issue that troubles me is sort of the rise in stifling leaks. You know, there's I'm sure from your perspective is a leak – you have a leak – you know, it seems like a crescendo. From my perspective of, you know, kind of 40 years of doing journalism, it's sort of pretty much the same. What's different is sort of an increasing thrust to, you know, in the courts and among prosecutors to squeeze journalists and to threaten them with jail, in some cases put them in jail, to get them to give up their sources.

And I guess I'm not trying to give a speech to you. I'm leading to a question here, which is aren't you better off having a certain amount of leaks that do bring things out into the public where they're debated than getting ferocious in trying to plug every hole? I mean, this is a democracy. We've survived in the past with a certain amount of leaking that, you know, has gotten issues out into the public without too much damage to the republic, and I wonder if in trying to have a no-leaks environment that the cure is worse than the disease.

SECRETARY RICE: Well, I don't think anybody believes there's going to be a no-leaks environment. I mean, (inaudible) too. I understand that it's going to happen. The problem is that when it happen it's, --you know, some are more damaging than others but you don't get to choose and say, okay, well, you know, that one wasn't so bad but this one was really bad. And if the government cannot keep secret information that it has acquired in ways that if those ways get known it will cease to acquire information, then you've really crippled the government and you've crippled out ability to do things.

There's also the problem of what it does to our allies when these leaks occur. You know, not this particular one. I mean, this is more of a problem of kind of selectivity and what are essentially the old arguments dressed up as something differently. But if I look at the ones kind of over the summer where you had the issue about the surveillance program, you had the issues of months ago about interrogation, you had the issues about cooperation with other states in interrogation and intelligence sharing, I can't tell you how many times countries, friendly and not friendly, say, you know, well, I'm not sure we can do this with you because it might end up on the front page of the newspapers. Because perhaps they don't have the same tolerance for just having things spill out and it really does make it extremely difficult to do business.

I think that the whole set of leaks has made it harder for our partners to really engage us in some very critical matters of intelligence sharing. Because when it gets out, it never gets out in a very balanced way. It's in the most sensational way and then their parliaments are upset and their press is, and it's just not a very good way to do good business. And particularly at a time where we have to do a lot of very difficult things with the cooperation of a lot of different countries with different cultures and different political systems in order to protect the country, you know, it's just very damaging. If somebody had said to you, "Well, you know, it would have been all right to have a debate about the cryptography that we were using to break German codes," you would say, "Come on." This is kind of like that. And I don't know why we don't see the similarity that when you are trying to deal with an enemy that is as difficult and as cagey, as dug in as this one, you need every possible advantage, and you lose that advantage when things start to leak.

QUESTION: Last question.

QUESTION: Just one more, please.

SECRETARY RICE: Yes.

QUESTION: Unrelated to all this. Do you have any interest in being on the Republican ticket in '08? (Laughter.)

SECRETARY RICE: No, no, no. I am – you know, I really hope that in the next two years that we can really get some fundamentals in place. In the Middle East there is a lot of work to do to get some of the fundamentals in place for what I think is going to be a long-term struggle between extremists and moderates. I do think we need to make – we need to see if we can gather the interested states to make another push on the six-party arrangement because I do think it's the best way forward I think we've got a good chance in Latin America to solidify what I think is a much more defensible strategy than even a couple of years ago, and ironically some of the populism that's producing the kind of backlash that I think can help us.

You know, I could go on and on and on. But if I've been lucky enough to do half of that, I'll be very glad to go back to Stanford and do something else.

QUESTION: Thank you.

SECRETARY RICE: Thank you.

2006/865f

Released on September 26, 2006

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