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Interview With Mike Schneider of Bloomberg News

Secretary Condoleezza Rice
New York, New York
September 29, 2008

QUESTION: And we proudly welcome the Secretary of State, Condoleezza Rice, to our program. Madame Secretary, it's good of you to join us.

SECRETARY RICE: Good to be with you.

QUESTION: As you are here in New York, we have Wall Street going through what some people say it hasn't gone through since the Great Depression, and we have Congress in the act now of implementing and approving the President's plan for a financial rescue or bailout, depending upon what vocabulary you choose to use.

How does that affect your ability to project America's strength, America's influence around the world when the rest of the world sees us going through what we're going through right now?

SECRETARY RICE: Well, the first point is, of course, the financial health of the United States is extremely important to all of these countries because, given America's centrality, it's also important to their economic and financial health. And so I believe the Treasury has done a very good job, with our assistance, of making certain that leaders around the world, financial officials around the world, know what's going on, are kept up to date. And that has helped to reassure people, and I think they will be more reassured now that, apparently, there is an agreement on the rescue plan and, hopefully, it'll be enacted through Congress very quickly.

In terms of our leadership, through, people still understand that the United States is and will be for a long time the premier economic power, the premier military power. And when people look to our economy, I think they look to more, frankly, than just the financial system. They look to our great innovation in places like California, the Silicon Valley. They look to our ability to bring people from all walks of life and from all nationalities, the most creative and innovative people here. They look to the fact that people can make their way through the American system from modest circumstances to be very great contributors. So we have a lot of strengths, and people understand that.

QUESTION: But they - but when they see the fact that we hear the President, and the Democratic leadership for that matter, saying our financial systems, if this is not enacted, are on the verge of collapse, does that not give a - open a door to a vulnerability which much of the world would have anticipated that the U.S. simply didn't have?

SECRETARY RICE: Well, clearly, this crisis - and there will be plenty of time to look back and see should it have been anticipated and how. But clearly, steps weren't taken, as Secretary Paulson has said; now they're being taken. And what the world financial officials have looked to us to do is to act, not to be caught still continuing to talk about what we will do. And I think the fact that we've been able to act in really very rapid - in very rapid fashion will reassure people and will help us move forward. And also, the fact that this will deal with the root cause, these assets that are not able to move so that liquidity can be reintroduced into the system, I think this will reassure people.

QUESTION: As we speak this morning, the outgoing Israeli Prime Minister, Ehud Olmert, has called for getting the Israeli - getting Israel out of the West Bank, essentially.


QUESTION: We've heard this before.


QUESTION: Ehud Barak had advocated this in the deal that was offered to Arafat years - a decade ago.

SECRETARY RICE: Years ago. Right.

QUESTION: The Administration, the President, had said he wanted to have a deal in the Middle East.


QUESTION: A peace deal in the Middle East before he leaves office.


QUESTION: Is that going to happen?

SECRETARY RICE: Well, the parties are working very hard at it. Obviously, the political circumstances in Israel may, in fact, make it a little bit more difficult in the near term to go all out. But I would just note that Tzipi Livni, the Foreign Minister, on the day after she was asked to form a government, met with her Palestinian counterpart. That says to me the commitment of the leadership in Israel, and I know the commitment is there on the Palestinian side, to try to get a deal by the end of the year.

QUESTION: Although he speaks only for his part of the Palestinian side, not for Hamas.

SECRETARY RICE: Well, in fact - no, in fact, he speaks for all Palestinians. He is the elected representative of the Palestinian people for negotiation through his position as Chairman of the Palestine Liberation Organization. Not even Hamas questions that. He is also the President of the Palestinian Authority. So he speaks for all Palestinians. Though, obviously, Hamas does not have a charter that would allow it to accept a deal, if they can get statehood, let's see what Hamas would do faced with the prospect of finally a state for the Palestinian people.

QUESTION: But is it likely that these understandings can be reached between now and the end of January?

SECRETARY RICE: Well, you know, I've sat with the parties several times now in trilateral setting. We've talked about the very difficult issues. Obviously, this - if this had been easy, it would have been solved a long time ago. This is a decades-old conflict. But they're working very seriously. They've made a lot of progress on some important issues.

In any case, they have the first robust negotiating process in at least seven years, and they would say one of the most robust, probably the most robust, that they've ever had. And so we're going to stay on a path to work with the parities to continue to deal with the issues. And in any case, they are not going to want to see this process stop or reverse. They're going to want to continue.

QUESTION: Madame Secretary, we have to take a break. So with your permission, we will take that break and be back with more in just a moment.


QUESTION: We are back once again with the Secretary of State Condoleezza Rice. Madame Secretary, here in New York, just a matter of a week ago or so, the President of Iran, once again, paid a visit, made some speeches, did a lot of interviews. Did you hear anything in any of his statements which leave you to believe that relations between the United States and Iran could get any better?

SECRETARY RICE: Unfortunately, I have to say that what the President of Iran said made me very doubtful that at least the President of Iran understands the important overtures that the United States and the international community has made to Iran. Iran needs to suspend its enrichment and reprocessing activities, come to the negotiating table, and then we can talk about anything. But what the President of Iran did was to come here and say really the most horrible things - not just about the United States, but about another member of the United Nations. The idea that one member of the United Nations can say that another should cease to exist - it just isn't right in civilized company.

QUESTION: For those who say, well, he just says that for consumption back home, he doesn't really mean it, do you think he means it?

SECRETARY RICE: Well, I think you have to take people at their word in this business, particularly given that Iran is the state sponsor of terrorism, a kind of poster child for the sponsorship of state terrorism, sponsors Hezbollah, sponsors radical factions within Hamas, and of course, is seeking the technologies at least that could lead to a nuclear weapon. So, of course, you have to take him seriously; people would be really irresponsible not to.

QUESTION: We have heard, though, that there are indirect talks between the U.S. and the Iranians. There has been speculation about talks at a level that has not been disclosed at all. Are there any contacts going on that you can discuss with us that might give us a reason to believe that there might be a rapprochement to some degree?

SECRETARY RICE: No, this is a case of what you're seeing is what we're getting. There have been contacts with Ambassador Crocker that are limited to issues on Iraq. Those have not happened in some time. And there, of course, the Iranians' own proxies in the south have really been disabled quite effectively by the Iraqi army and by coalition forces. There, of course, was the time when Ambassador William Burns, the Under Secretary of State, went to Geneva just to hear the Iranians out on a proposal that we'd made.

But I've said we could have the contacts, I'll have the contacts, anytime, anyplace, anywhere, if Iran will just suspend its enrichment and reprocessing so that we can be sure that we're not having talks and negotiations while they're continuing to improve their capability.

QUESTION: Is there any doubt in your mind that Iran will be a nuclear power in a year or two years?

SECRETARY RICE: Well, that simply depends on the response of the international community. I still believe that there are reasonable people in Iran, and sometimes there are signs of that, that recognize the costs of what Iran is doing. Iran can have civil nuclear energy, if that's what they want. The Russians have built a power plant there. They are prepared to supply it with fuel and then take the fuel back so that you don't have a proliferation risk. We have talked with the Europeans about even some of the most advanced civil nuclear technology to Iran if it will forego enrichment and reprocessing.

So this is not an issue of denying Iran certain technologies. There's plenty in this for Iran. I hope they'll take it.

QUESTION: We had on our program the former Israeli Ambassador to the UN, Dore Gold, a couple of days ago. And he said quite openly that the next administration, in a year, will have to deal with a nuclear-armed Iran. Do you believe that to be true?

SECRETARY RICE: Well, again, I think it depends on what the international community does. Look, the Iranians have made some progress on their nuclear enrichment capability, but there is still time to stop them and - if we can rally the international community. We have been able to impose a cost on the Iranian economy through the financial measures that the United States, Europe, and others have taken. And I do hope that some reasonable people will recognize that there is another way.

QUESTION: I want to talk about similar issues regarding the North Koreans in a moment, but let's stay with the Middle East as well. We are seeing or hearing signs of some sort of improvement of relations with Syria. What can you tell us about that?

SECRETARY RICE: Well, in fact, there have been some contacts with the Syrians because there are some elements in the Middle East that are moving forward. There is a Lebanese President now. I met with him here. The President met with him in Washington. And Syrian forces, of course, are out of Lebanon. And the Lebanese - we want the Lebanese to be able to carry out their affairs independent of foreign interference. The fact that they have a president is a good start. It's not the finish, but it's a good start.

The Syrians, of course, are engaged on a track with the Israelis through the mediation of the Turks, which we very much support. And so - and the foreign fighter flow is down in Iraq. Foreign fighters were flowing through Syria.

QUESTION: Coming through Syria, right.

SECRETARY RICE: Now, it's not stopped, but it has improved, partly because, of course, with the improved security situation and Iraqi capabilities, it's harder for foreign fighters to get in. But those are developments that may mean some improvement. I met with the Syrian Foreign Minister here on the margins of a dinner that the Secretary General of the UN gave. We talked for about ten minutes. The Syrians had approached us and said that they wished to talk.

Nothing is a breakthrough and I'm not sure that there will be, but it's time to talk about some of the changes that are taking place in the Middle East, although we have a long way to go on Syria's support for terrorism, Syria's proliferation behavior, and Syria's human rights record at home.

QUESTION: Have you seen any improvement in those regards? I mean, the Israelis took out what appeared to be a reactor of some sort last year. There's talk that this could be part of a triangulation process to split the Syrians away from the Iranians on our part, and that that would also require the Syrians to stop dealing with or supporting Hezbollah, right?

SECRETARY RICE: Yes. Well, Syria - if Syria were to stop supporting destabilizing elements in the Middle East like Hezbollah, like Hamas, it would certainly help to improve the atmosphere in which the Palestinians could get their state in peace and where Syria could have -

QUESTION: Do you have any reason to believe that that's a likely possibility?

SECRETARY RICE: Well, I don't think it's going to happen certainly in any short order. But there are some trends to follow up. I do want to note again, though, there is a long way to go with Syria because they are supporting destabilizing elements, they are too close to the Iranians, they do have to repair bridges with Arab friends. And on human rights, I don't think there's anything to suggest that that situation has improved.

QUESTION: All right. Madame Secretary, we have to take a break. Once again, we'll continue our conversation in a moment. Back with the Secretary of State after this brief break.


QUESTION: Back with Secretary of State Condoleezza Rice. Iraq.


QUESTION: How close are we - if Senator Obama is elected president -


QUESTION: - we could be out of there, or at least start a phased withdrawal rather quickly. Is that a prudent thing to do?

SECRETARY RICE: Well, I sincerely hope that all the progress that - the hard-won progress in Iraq - and trust me, it's been much harder than any of us thought. But the people who've sacrificed their lives for a stable Iraq, we're finally beginning to see a more stable Iraq emerge. And - but this deal is not done yet. There - this is a fragile set of circumstances. The Iraqi political system is really coming alive. They passed their elections law just a few days ago. These people want to live together. They want to live together in a strong and democratic Iraq that is multiethnic, multiconfessional, and they want to be our friend. What better thing than to have Iraq as the friend of the United States in the center of the Arab world. Why in the world would we risk that at this stage?

QUESTION: So if we were to pull - if we were to follow what Senator Obama is advocating, we would be risking that?

SECRETARY RICE: Well, I think that the President has laid out the best plan here. We want our forces to return, and in fact, forces are returning. And more forces will return because the Iraqis are getting more capable. But to do it on some kind of artificial timetable that isn't related in any way to what we think the circumstances would be, look, three years out, 2011, there's going to be a lot that will have changed in Iraq. But the Iraqis want our support. They need our support. We're negotiating an agreement. It's tough because we have to balance and make certain we've taken care of the legal framework for our troops. The Iraqis want their sovereignty to be affirmed. We want both. But it's going to take some time to get the right agreement.

But again, after all that we've sacrificed, to have a friendly Iraqi Government in the heartland of the Arab world in a Middle East that is changing rapidly and still has great forces of instability, it would be really irresponsible to risk that.

QUESTION: We touched upon North Korea briefly a little earlier in the program. What happened with North Korea? Why do we suddenly find them, you know, asking the UN observers to leave, breaking the seals, making moves to restart their enrichment programs? What happened?

SECRETARY RICE: Well, we've had these ups and downs before in the six-party talks, and we're going through one of those. I can't tell you whether or not the North Koreans are trying in their own way to create negotiating conditions, but we're saying to them and we're saying through - and the Chinese are saying and the South Koreans are saying, this is not the way to deal in the Six Parties.

QUESTION: Does it have anything to do with the reports of the leader having had a serious illness, perhaps being incapacitated?

SECRETARY RICE: Well, I've certainly heard the reports, too. It's a pretty opaque place, so I don't think anybody really knows what's going on there. But Ambassador Chris Hill, our negotiator, has been invited by the North Koreans to go there. We'll see if that's a good sign that they have wanted him to come to Pyongyang. We know and they know what's ahead. There has to be a verification protocol that will allow us to verify the veracity of the declaration that they gave and to answer some unanswered questions about proliferation, about highly enriched uranium, and about their plutonium program.

QUESTION: Well, their contention was we didn't take them off the terrorist list quickly enough or free up the funds that they wanted.

SECRETARY RICE: Well, they were supposed to submit an accurate declaration. There are big questions about the declaration that they submitted. And so we need - verification means to be sure that it's accurate and that we can get at remaining questions. But we will see what happens.

The good news is the United States is not in this alone. The Chinese, the South Koreans, the Japanese, the Russians all have points of leverage, and we will all use them to bring about a resolution here.

QUESTION: You mentioned the Russians, so you know I have to go there. What is our relationship with Russia right now? From the outside, it doesn't look very good. We have Russian forces that are doing maneuvers now in what was traditionally considered the American sphere of influence, violating the Truman Doctrine to a certain extent.

SECRETARY RICE: Let me just make one thing very clear. A few aging, anarchic, Blackjack bombers flying along the Venezuelan coast is not going to change the balance of power in the Western Hemisphere, and I think the Russians know that. I think they -

QUESTION: What are they trying to do?

SECRETARY RICE: Well, you know, I think they need to be careful about their relations with other Latin Americans. Because are they really going to arm Hugo Chavez? Is he going to borrow a billion dollars when the Venezuelan people are experiencing economic troubles? Is he going to do that, build up his military and threaten other Latin American militaries? Let's be very clear. The Russian buildup of Venezuela doesn't threaten the United States. I think there's - America has plenty of military power in the Western Hemisphere. But if I were Russia, I would look at what this might mean for other Latin American states with whom they'd like to have good relations: Brazil, Chile, Colombia. That's the problem that Russia will have in this hemisphere.

QUESTION: On the other hand, Ecuador also kicked our Ambassador out.

SECRETARY RICE: Well, and we will - well, we - Bolivia - we do not have an ambassador there. In Venezuela we do not. We maintain good relations. And you know, it's a little bit of a myth that somehow this has gone the wrong way for the United States. Whether it's Central America or Colombia or Chile or Brazil or Uruguay, we have excellent relations and the best relations we've ever had with Mexico. So we're in good shape in the hemisphere.

QUESTION: But this is your specialty -


QUESTION: - the Russian studies.


QUESTION: I mean, this is - you know this turf as well as anybody.

SECRETARY RICE: Well, it was at one time.

QUESTION: Were you surprised? Are you surprised by what has happened here?

SECRETARY RICE: No, look, this is - what has been - this has been coming for a while. Russia has, ever since - particularly with oil wealth, but really, been trying somehow to establish that it can - I'll use the word 'avenge' the end of the Cold War in some way, that it can reestablish a basis for Russian greatness.

The problem is, this is the 19th century way to do it, and you can't have one foot in the 19th century and one foot in the 21st century. And that's what the Russians have learned. Their international standing hasn't been this low in almost two decades. They tried, through the recognition of Abkhazia and South Ossetia, to cement their, quote, "gains" what from what they did to their neighbor in Georgia. They got nothing but rejection from the entire world about their recognition.

Georgia, which they tried to bring down the democratic government, is in a stronger position internationally than before the war started, with banks lending them money, the Asian Development Bank, the IMF with a program, the World Bank looking to help them, a donors conference being held in Brussels. If I were in Moscow, I would be asking what in the world did we achieve by demonstrating that you can beat up on a small neighbor with your military power if it has bounced back against Russia and backfired in this quite profound way. And if Russia is seeking to intimidate the states around it - Ukraine, Kazakhstan, others - I don't think they succeeded.

Our relationship with Russia, of course, is going to continue. I had constructive discussions with Sergey Lavrov, the Foreign Minister, when he was here. We passed a Security Council resolution on Iran that had one purpose: to let particularly the Iranians know that there is no distance between the six parties on the package that we have put before the Iranians and on the willingness to pursue other measures if they don't negotiate.

QUESTION: Will we see this relationship, these tensions, between the U.S. and Russia continue for a protracted period of time? Or is this a phase that we'll pass through and go back to what was?

SECRETARY RICE: Well, what was was a hope that Russia would fully integrate into the international community; a hope that Russia would, in terms of its own domestic development, take a path toward democracy and human rights; that it would do what President Medvedev said he wanted to do: focus on innovation and investment and the intellectual capital of the Russian people. Invading Georgia is not a way to give anyone confidence that that Russia is emerging.

But we will cooperate with Russia on the Middle East, on Iran, on North Korea, on nuclear proliferation, on terrorism. The unfortunate circumstance is that the kind of deepening of the relationship for which we had all hoped, that seems to be in jeopardy. But it's still Russia's choice to make, and I believe that now, having seen the impact of their invasion on Georgia, that perhaps Russia will take a second look at the course that they're taking.

QUESTION: Madame Secretary, we have to leave it there. We thank you very much.

SECRETARY RICE: Thank you very much. It's good to be with you.

QUESTION: Likewise.


Released on September 30, 2008

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