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U.S. Department of State Daily Press Briefing #108, 99-08-19

U.S. State Department: Daily Press Briefings Directory - Previous Article - Next Article

From: The Department of State Foreign Affairs Network (DOSFAN) at <http://www.state.gov>


813

U.S. Department of State

Daily Press Briefing

I N D E X

Wednesday, August 19, 1999

Briefer: JAMES P. RUBIN_

BOSNIA
1-4	Reported 4,000-page secret report does not exist; nor has $1
	 billion of foreign aid been stolen.  As best as US can tell, loss
	 of US aid totals $1 million. 

IRAN 4-5 US reiterates that charges against 13 Jews accused of spying for US are without foundation. US has long had problems with human rights situation. 5 US policy is well known: US wants government-to-government dialogue, discussion of problems.

TURKEY 5-6 Several Americans may be among killed and injured by earthquake. Search and rescue team began work there last night. Emergency supplies are being airlifted. US Navy ships are en route from Spain, with 22 helicopters.

CHINA 6-7,9 American detained in Qinghai Province; consular access to be given soon. 7-8 US arms sales to Taiwan are generally opposed by China; US acts in accordance with Taiwan Relations Act, 1972 US-China communiques. No extraordinary developments by China noted.

CHINA/TAIWAN 7-8,10 US has urged Taiwan and China to dialogue, resolve problems in peaceful manner. US will continue to assist Taiwan with its legitimate defense needs. US has made no decision to provide theater missile defense, other than to protect US forces. Use of force to resolve any dispute would be of grave concern to the US.

LIBYA 11-12 US policy is that Libya must renounce terrorism, comply with pertinent UN Security Council resolutions, cooperate with Pan Am 103 trial as it unfolds.

NORTH KOREA 12 US troops in South Korea are not there to invade the DPRK.

RUSSIA 12-13 Charges of money laundering by particular bank best directed to US Department of Justice. 14 US continues to condemn use of force against lawful authority in Dagestan. 18 US had preliminary arms talks; US believes it can make minor changes to ABM Treaty.

MIDDLE EAST PEACE PROCESS 13-14 US in contact with both sides, so that they can find way to bridge differences over Palestinian prisoner release can be resolved. 14 Secretary will have time in her trip to explore full range of issues between parties.

CUBA 14-15 US has received response to US counter-narcotics proposals made in June.

IRAQ 15 US made clear that no country should facilitate travel of Izzat Ibrahim. There is no international legal basis to hold him in Austria. 15-16 US in consultation with other governments to establish an inquiry regarding possible war crimes.

GERMANY 15-16,17 Holocaust-Era Forced and Slave issues. Meetings in Germany beginning Tuesday.

DEPARTMENT 16-17 An inter-agency group has been created to collect and coordinate USG information in order to counteract anti-American propaganda overseas.


U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING

DPB #108

THURSDAY, AUGUST 19, 1999 1:10 P.M.

(ON THE RECORD UNLESS OTHERWISE NOTED)

MR. RUBIN: -- Only one of the wire services has failed to wear their tie, as duly noted. That's really something that is deplorable. It's not condemnable; it's deplorable. I have concerns about it that I'll express to that reporter after the briefing.

With that opening comment, let me just make one additional comment that I had hoped would have gone away, which unfortunately has not gone away.

Corruption in Bosnia is a serious problem and the authorities there need to take it seriously. That said, there continue to be reports about a non- existent report by the anti-fraud unit of the Office of High Representative. That report does not exist. The High Representative confirmed that yesterday in his press conference. Nor are the reflections of $1 billion of foreign aid being lost accurate. That $1 billion is a lumping together of domestic revenue losses with minimal foreign assistance losses that leads to a false impression that $1 billion of foreign assistance has been stolen.

Furthermore, there is a suggestion that the international community has sought to cover up this problem, when the opposite is true. The Peace Implementation Council and the United States in particular have sought to bring attention to the problem of corruption by mandating the creation of this anti-fraud unit, establishing an anti-corruption strategy and speaking openly about it.

This is particularly egregious. As best as we can tell -- and we've now done an exhaustive search -- the 4,000 pages is work that the Bosnian federal police themselves have done to uncover fraud in Bosnia. So not only is there no 4,000-page report that the international community has proven Bosnians are engaged in fraud, but the only 4,000-page document that exists is a document in Serbo-Croatian that constitute the receipts and the proof that the Bosnian federal police have put together an investigation of corruption of one of their own.

Therefore, the perception hanging out there -- that continues to hang out there -- that the international community had a report detailing $1 billion in foreign aid is wrong and needs to be corrected.

The fact of the matter is that we have lost very little money in Bosnia, precisely because we have been prepared for the corruption problems there; precisely because we've made fighting corruption part of our policy. The sum total of potential losses to us at this time is in the nature of $1 million. That is 1,000 times less than what the international community has been subjected to reports about, over and over again.

QUESTION: On that very subject, the newspaper that got this all started had an editorial today which continues with the same theme, despite yours and others' attempts to sway them away from it. Would you like to see The New York Times run a correction on this story; is that what you're saying?

MR. RUBIN: I do believe that it's hard enough to get support in this country for foreign assistance as it is. To have a false and unjustified and unsubstantiated perception that $1 billion in foreign aid money has been stolen by the Bosnians, when there is no such report proving that, and there are no such estimates by the international community, harms that cause, which the Secretary believes is a correct one; which is to find appropriate ways to assist countries around the world through foreign assistance.

To have the world continue to be told that $1 billion in foreign assistance has been stolen, out of $5 billion total, does grave harm to that just cause. We would like to see corrective measures taken that create the truth and not this false perception. The truth would be that the Bosnians themselves uncovered corruption; they documented that corruption; they shared that information with the people in the international community; and it was the Bosnians themselves that uncovered corruption in Tuzla of moneys that ought to have been deposited for the purposes of funding in Tuzla. This was not foreign assistance. The sum total of the foreign assistance at issue here involves $1 million that we believe we are going to get back.

So when all is said and done, it will probably be that no foreign assistance has been misappropriated or lost. Instead, the world continues to be told that $1 billion in foreign assistance has been lost.

QUESTION: What adjectives would you like to attach to The New York Times editorial today in the light of all the statements that you've made on the subject?

MR. RUBIN: Mistaken.

QUESTION: When you're talking about the $1 million, you're just talking about US money, right; you're not talking about other?

MR. RUBIN: Correct, as best as we can tell. The whole issue of foreign assistance relates to one bank which is now being litigated. In most of these cases there is collateral for the various loans. The collateral will be obtained if the loans are not repaid. So it's just a shame that this mistake continues.

QUESTION: Jamie, as I read the story I didn't think it said that the United States had incurred losses up to $1 billion, but talking about the whole international community, including the World Bank and other international financial institutions. I don't think it ever suggested that the $1 billion was all out of US aid.

MR. RUBIN: Right, but if you deconstruct the facts, rather than cobbling them together in the way that has been done, you discover that the total amount of foreign assistance at issue is $20 million. The remainder of the funds are local funds that have been obtained and possibly misused -- and worse, projections on what funds ought to have been provided to the local government if taxes had properly been levied and collected.

So the $1 billion comes from projections of taxes that weren't collected or levied, (and) from funds that were misappropriated. The Bosnians themselves uncovered this fraud and are acting on it. People have been fired. They put together the proof; that's the 4,000 pages of documents; what the Bosnians themselves uncovered.

That is -- if I were to do the rough mathematics, and please don't hold me to this -- 99-98 percent of the $1 billion. Two percent relates to $20 million with this particular bank, which, having been subject to a loan call, the bank is now going through a litigating process. And we believe -- AID believes -- that at the end of the day, none of that money will be lost because there are collateral for these loans. At the end of the day, $1 million is now being subjected to litigation and I believe a court has ordered that $520,000 of that $1 million is scheduled to be paid back next week.

So when you deconstruct the $1 billion, you find that this alleged theft of $1 billion simply didn't happen.

QUESTION: Have you been getting angry calls from the Hill about--

MR. RUBIN: We have received a number of calls, to my knowledge, from people asking questions about the $1 billion of foreign aid money. I don't have a detail of that; I know it's been an issue in the building. I certainly know it came up on television programs that people who were on were asked questions about.

QUESTION: So you think there's a real serious concern in this building now, that if this report has not been corrected, that there's going to be problems getting future aid, particularly for Kosovo?

MR. RUBIN: We're concerned that it is hard enough to get support in this country for foreign assistance that advances the national security of the United States in the way that the President had suggested just the day before, by heading off conflicts that would cost far, far more to deal with, and that it will be much wiser and cheaper and safer for us to use diplomacy and foreign assistance to stop problems before they grow, than having to deal with them militarily.

On the day after that call was made by the President for assistance and for greater support from Congress, the next day we have a situation where an incorrect perception has been created. That's what concerns us.

QUESTION: Jamie, so is your best estimate at the moment that all foreign donors may have lost $20 million?

MR. RUBIN: No, again, and some of this is extremely detailed and, as Betsy Steuart knows well, I am not a banker -- nor a pediatrician. There are a lot of other things I'm not. But the best judgment that we have from researching this carefully over the last two days is that the foreign assistance at issue, the foreign money at issue, relates to the one bank -- the $20 million that was at issue when that bank went under, or went into a situation where it couldn't pay its loans.

But the remainder of the money that is talked about in that particular article refers exclusively to funds that were either collected and misused, in Tuzla and other areas, or never collected an ought to have been collected. So 2 percent of the $1 billion figure relates to foreign assistance. Of that, I've gone through in some detail and tried to explain - and I can get additional information for you -- how AID has protected itself to ensure that the only funds now at issue for us are these $1 million that was deposited; and $520,000 of that $1 million is expected to be paid next week.

QUESTION: Jamie, has there been conversations about this between anybody at the State Department and The New York Times?

MR. RUBIN: Yes.

QUESTION: You don't want to go any further than that?

QUESTION: I assume that discussions would pretty much follow the same tone.

MR. RUBIN: You can be assume that we take our same position in private as we do in public, and sometimes perhaps not as politely.

QUESTION: New subject -- apparently you irritated the Iranians to no end yesterday, by demanding the release -- or saying they should release these 13 Jews accused of spying. Would you like to meddle a bit more today in Iran's internal affairs by responding to their refusal to release them?

MR. RUBIN: We continue to stand by our views that the allegations that these individuals were involved in espionage are without foundation. We call on the government of Iran to uphold its stated commitment to protect the rights of all religious and ethnic minorities by releasing these individuals and ensuring that no harm comes to them. That remains our view, despite the comments from Iran.

QUESTION: Can you extrapolate that a little bit, and say what this particular chapter or subchapter in US-Iranian relations means <I>vis-a- vis</I> the purported softening of their line and the <I>rapprochement</I>?

MR. RUBIN: Well, let me say this -- we've long had concerns about human rights; those concerns, obviously, continue. What we have also said is that we would be prepared to have a dialogue with the government of Iran about issues like terrorism, issues like support for the opponents of the Middle East peace process and issues like weapons of mass destruction, that remain the reason why a number of laws and other steps have been taken with respect to our relationship.

So this has long been a problem -- human rights issues. We've detailed them in our human rights report. This certainly fits into that category.

QUESTION: Just a one-day visit. A similar question on Libya.

QUESTION: Did you see anything interesting in President Khatemi's remarks, which came up yesterday and you hadn't seen them? Also, do you have any reason to believe that this spy case is, in fact, merely a reflection of the internal struggle in Iran?

MR. RUBIN: Let me say we have no way of knowing for sure what the reasons for the spy case are, and I don't want to speculate.

With respect to President Khatemi's statements, as well as statements attributed to Ayatollah Khamenei, we've seen press statements and reports about that. As far as we're concerned, our policy toward Iran is well- known. Secretary Albright has called for a government-to-government dialogue with Iran. That dialogue would be conducted without preconditions on either side. In the course of such a dialogue, the United States would address Iranian policies which the US finds objectionable, including, as I said earlier, support for terrorism, violent opposition to the Middle East peace process, and development of weapons of mass destruction.

That remains our view. The Secretary articulated about a year ago the reasons why we were prepared to have that dialogue and the reasons why we thought it worthy of moving forward if the Iranian Government was willing, and how a road map to normal relations could be created.

QUESTION: And the US policies which Iran finds objectionable, too, right?

MR. RUBIN: Yes.

QUESTION: Secretary Grossman said this morning -- without getting into any details -- that five Americans are among the victims in Turkey; five dead and two injured. Do you have any details on that?

MR. RUBIN: I have very little detail, but let me provide you what I can in a situation like this. Our consulate general in Istanbul has learned that several American citizens may have been killed or injured in Tuesday morning's earthquake. We are in touch with families of those affected. Out of deference to the families, we will not be providing the names of these individuals.

With respect to four contractors at the Turkish naval base, which is another issue, we understand that two of the contractors had left the area prior to the earthquake, but that the other two remain unaccounted for. We are following up on these individuals.

Our consulate general continues to work with local authorities, and has sent personnel to Izmit to determine the well-being of Americans. In that regard, let me say that Secretary Albright did speak today to Foreign Minister Cem. She laid out in detail what it is that we've been able to put together in a short period of time, including the search and rescue team that already began work last night, and was able to pull two children and one adult out from the wreckage; that the USAID has sent a disaster assistance and response team; that the USAID has contributed eight experts to augment UN coordination efforts; that we are sending disaster assistance charter planes to Istanbul with emergency supplies, including 30,000 blankets, plastic sheeting, emergency medical supplies for 10,000 people, in addition to epidemiologists.

She also informed him that the European Command expects a 24-person medical crisis response team to arrive in Istanbul at 1:00 p.m. local time, to help Turkey assess the medical situation; that three Navy ships are en route to Turkey from Spain. One ship has 22 helicopters to evacuate people to medical facilities on the ships. The military is also preparing to send manpower and equipment to fight the fire at the Tupras refinery in Izmit. She emphasized American readiness to assist Turkey in this great time of need. We intend to continue to remain in close contact with the government there.

QUESTION: (Inaudible) -- five were killed?

MR. RUBIN: I don't have that; I can see what we can get for you during the course of the day.

QUESTION: Five? Because you just said seven.

MR. RUBIN: If Grossman said five, then I'm sure he has it. I just don't have that information in front of me. I'll try to get that for you.

QUESTION: Greece and Cyprus are among some of the donors that are giving aid to Turkey. Do you see their gesture as a softening in some of the tensions between the two countries, or do you think it's just a big humanitarian gesture or what?

MR. RUBIN: Well, they would have to describe the rationale for their decisions. But in our view, at times like these when thousands of people have died and many, many more thousands are at risk, it is appropriate on humanitarian grounds for all countries in the world to get together and try to assist when they can. If this reflects something beyond that, it would be up to those governments to say that.

QUESTION: Do you have any comment on the detention of an American and an Australian in China in Qinghai Province?

MR. RUBIN: Immediately after hearing of this detention, we requested -- and have since been granted -- consular access. The consular officer will be on the first available flight to Qinghai Province and will arrive late Friday evening. We have urged the Chinese to release the American. We understand they were preparing an independent study of the impact of a proposed World Bank project. That is our understanding of the situation.

QUESTION: I'm wondering, has China communicated recently to the United States that it wants to see America gradually reduce arms sales to Taiwan, saying that such sales are destabilizing to the region and the world? Did such demands -- if they were to be classified that way -- come in a letter from President Jiang Zemin to President Clinton?

MR. RUBIN: Let me say that President Clinton and President Jiang have exchanged correspondence on several occasions in recent months. The Secretary of State has spoken to the Foreign Minister on several occasions in recent months.

My experience has been that whenever the subject of Taiwan comes up -- and especially at times when the subject is of greater interest -- that the Chinese position has been to oppose arms sales to Taiwan in general and to make the points that you made.

That is a continuing position of China; they continue to have that view. We continue to take the view that we are guided by the Taiwan Relations Act and the three <I>communiques</I>, and will act in accordance with those to provide the equipment we think appropriate to Taiwan.

QUESTION: Can I just follow that, too? Do you have any comment, just reaction to the ambassador's statements today basically saying that Taiwan is not Florida, and that the US should not interfere in internal matters of Taiwan and China?

MR. RUBIN: Well, our relations with China and our unofficial relations with Taiwan have been guided by the Taiwan Relations Act and the three <I>communiques</I> for many years. We think the differences between China and Taiwan can be resolved peacefully. We think our policy promotes that kind of peaceful resolution, and is to the benefit to the people of Taiwan as well as to the people of China.

So we act pursuant to those guidelines in a way in which we think promotes peace in the region and promotes the welfare and well-being of the people of Taiwan and the people of China.

QUESTION: The US still has not seen any extraordinary developments on the part of Beijing in terms of movements?

MR. RUBIN: No, we have not seen any extraordinary developments.

QUESTION: The Taiwan Cabinet has announced plans to put forth to Parliament the idea of setting up an early warning system to detect airborne Chinese planes and missiles and, ultimately, to have a total missile defense system. First of all, what's your view of that proposal? And in the event Taiwan goes ahead with some early warning system, would the United States be prepared to help with equipment or advice?

MR. RUBIN: First of all, those are obviously decisions that Taiwan has made. With respect to our involvement in them, let me say that Taiwan's security in the region depends on more than a balance of weapons systems. We have strongly urged both China and Taiwan to engage in dialogue and to resolve differences in a peaceful manner. That is one of the key components of security in the region. The record clearly shows that good US-China relations contribute to reduced tensions in the region.

With respect to the specific suggestion on theater missile defense, let me say that we will continue to assist Taiwan in meeting its legitimate self- defense needs in accordance with the Taiwan Relations Act and consistent with the 1982 joint <I>communique</I> with China.

Among the items Taiwan has already purchased has been technology for Taiwan's modified air defense system, which has anti-aircraft and anti- missile capabilities. The Taiwan authorities are assessing their own capability and needs for missile defense, as these comments and suggestions you reported indicate. We have made no US decisions here in the United States on deployment of theater missile defense systems, other than for the protection of American forces in the region.

We do not preclude the possible sale of theater missile defense systems to Taiwan in the future. Our interest is in preserving peace and stability in the region. It is premature to make that decision about theater missile development now, when those systems are still under development and both we and others are studying this question.

QUESTION: Does it concern you at all that the Chinese Ambassador repeatedly today refused to rule out the option of the use of force by China against Taiwan?

MR. RUBIN: Well, we've been operating for many years now, as I said in response to the previous question, under a framework in which our relations have been guided by the Taiwan Relations Act and the various <I>communiques</I>. We believe that has been to the benefit of the people of China, the people of Taiwan and stability in the region.

For some time now, the Chinese have taken the position you describe. There is nothing new about them taking that position; they've been taking it for years.

QUESTION: What's your reaction to it?

MR. RUBIN: We believe very strongly, and have said very strongly, that all the dispute between China and Taiwan must be resolved peacefully. We've made clear that the use of force would be a matter of grave concern to the United States.

QUESTION: Follow-up on that. I know that last week you hadn't heard this, but I wondered whether this week people in think tanks were passing on the message they've been receiving from Chinese officials --

MR. RUBIN: I'm not aware of that.

QUESTION: -- on the inevitability of some kind of military gesture by the Chinese.

MR. RUBIN: I'm aware of the reports about it; I'm not aware that any of those reported outsiders have talked to our people. They haven't told me. I can't rule it out; I'm just unaware of it.

QUESTION: -- the ratcheting up of the rhetoric in the government- controlled media; for instance, the statement that a neutron bomb can take care of an aircraft carrier?

MR. RUBIN: Well, let me just say that we, as a matter of policy, would view with grave concern any use of force to resolve that dispute. We do not want to engage in a to-ing and fro-ing on who can do what under what circumstances. But we would view with grave concern any use of force.

QUESTION: Two seconds -- and I don't want to split hairs. I want to go back to the two people that were detained in China. Is there some reason that you aren't calling on the Chinese to release the Australian?

MR. RUBIN: There's no particular reason. Again, as the State Department for the United States, our primary responsibility is to American citizens overseas.

QUESTION: Yes, but, I mean, you're also calling on the Iranians for the release of --

MR. RUBIN: I'm going to get to that, OK? So when an American is taken in a situation like this, the first thing we do is call for the American to be released. Then we seek access to him, pursuant to the Vienna Convention.

I will have to check, but I don't see any reason why the Australian shouldn't be released either. It certainly would be our view that anyone in this position ought not to be imprisoned for doing what was envisaged by the World Bank; and that is to examine the project in that area that the Chinese themselves indicated they would provide access to.

So -- provided there weren't some internal laws broken, which I'm not familiar with -- we call for people in that position to be released.

QUESTION: Tell me what exactly the status is of the nomination of Admiral Prueher as Ambassador to China. It seems to me that at this point in time with everything going on in the US-China relationship that it's really vital to have an ambassador there. It would seem that placing that on fast track would put us in a --

MR. RUBIN: It is the prerogative of the President to nominate ambassadors for countries; so therefore, that question is best directed at the White House. I don't believe they've nominated an ambassador formally. So anything I say will be inappropriate.

QUESTION: The Chinese ambassador this morning seemed to be particularly concerned that American defense of Taiwan would become an issue in the presidential campaign. For instance, George W. Bush yesterday promised that if he becomes president he would defend Taiwan's independence. The ambassador said this morning, "A few American politicians have already said the US would defend Taiwan against invasion. I believe this is a very dangerous statement. The Chinese people will not be cowed by anybody's threats or blackmail." Are you concerned that this delicate issue of whether or not we would defend Taiwan is becoming an issue in the presidential campaign?

MR. RUBIN: Wow. Good question; well-formulated, well-researched. The only thing I can do in a situation like this is to quote Secretary Albright, which is that she had her partisan instincts surgically removed when she took the post of Secretary of State. Since I work for someone who has no partisan instincts left after being surgically removed, I certainly wouldn't want to say anything that could even be construed as partisan.

What I can say is that it is the view of this Administration and this President and this Secretary of State that the issue of Taiwan is best dealt with through the means that we have been dealing with it. That is, encouraging dialogue between Taiwan and China; acting pursuant to the Taiwan Relations Act; pursuing a relationship with China that advances the national security of the United States through improvements in their practices on non-proliferation, cooperation with respect to the issue of North Korea, and other matters that I've repeated endlessly here in the briefing room. That is our view.

I am confident that the Chinese understand our political process, having worked with this country through several different administrations that have changed. I would hope they would understand the democratic process and act according to that understanding.

How did I do, by the way, on that? Did I navigate it OK?

(Laughter.)

QUESTION: It seems that Beijing is not only directing their threats towards Taiwan, but they're directing them towards the United States. I mean, the statements that are coming out of there are very strong. Are you all alarmed at those type of statements?

MR. RUBIN: As I indicated, we believe that the issue of Taiwan must be resolved peacefully. We would view with grave concern any attempt to use military force. That is our view. In the meantime, we will continue to work with China and work through our unofficial relationship with Taiwan to promote a peaceful dialogue. That is our position.

QUESTION: With the trial of the two suspects of Pan Am 103 due to start in a couple of months --

MR. RUBIN: By the way, let me point out we have mentioned other news organizations on a regular basis here in the briefing room. So there's no attempt to favor one news organization or another.

(Laughter.)

I think the record would show very clearly that a number of different news organizations have been mentioned roughly equally in the two years that I've been here.

QUESTION: The New York Times was mentioned earlier.

QUESTION: The New York Times was mentioned in a way it probably didn't want to, actually.

MR. RUBIN: Yes, perhaps.

QUESTION: Anyhow, with the trial of the two suspects in Pam Am 103 due to start in a couple of months, might we expect an improvement in US-Libyan relations; and if not, what else does the US expect from Libya?

MR. RUBIN: There is no new development in our Libya policy. Our Libya policy has been quite clear and it remains clear. That is that there is a Security Council resolution; that Libya must meet its requirements, which include renouncing terrorism, demonstrating that all the support for terrorists has been cut off, that compensation is paid to the victims, and that the trial of the Pan Am 103 plane -- they cooperate in its unfolding.

That trial is in February and we will be, obviously, following that very, very closely. We continue to have a number of deep, deep concerns about Libyan support for terrorism. We have taken the view that Libya must take concrete steps -- beyond the fact of the trial of the Pan Am 103 suspects -- to end and renounce support for terrorism. It has not yet done so. The specific requirements, again, are in the Security Council resolutions. So that is where our views on Libya remain.

QUESTION: The Dutch are holding a US-Libyan dialogue in Malta next week. There are reports around town that maybe one of the government agencies, including the Department of State, might send a representative.

MR. RUBIN: I don't know anything about that.

QUESTION: Could you take the question?

MR. RUBIN: We'll take the question.

QUESTION: Just to see, what else does the US Government believe Libya should do specifically with regard to the Pan Am 103 case?

MR. RUBIN: As I indicated earlier, we believe that Libya should not only have provided the suspects, as has now been done, but should also cooperate as the trial unfolds. It would be premature for me to speculate as to what specific steps unfold in that area. It is correct that Libyan Government officials have not been implicated directly in an act of terrorism in recent years, but we remain concerned about what might unfold as this trial unfolds.

So we will await the beginning of this trial. We will be watching very carefully whether Libya complies with the requirement in the Security Council that they cooperate fully as the trial unfolds, and that they pay compensation to the victims of the Pan Am 103 terrorist bombing.

QUESTION: Does "cooperate fully" mean that other Libyan officials might be called upon to testify and that you would expect them to do so?

MR. RUBIN: Well, as I indicated, I'm not prepared to speculate on what additional steps may be required as the trial unfolds. But whatever is required, we expect Libya to cooperate fully if they're to meet this requirement of the Security Council resolution.

QUESTION: Does the United States believe that Moammar Qadhafi or any other senior officials in Libya above the level of the two suspects were or might have been involved in ordering that crime?

MR. RUBIN: Under legal advice, it is our considered judgment that it would be best to allow the trial to unfold without expressing our opinions publicly prior to that trial.

QUESTION: Korea -- the North Koreans have broadcast once again that they believe the United States still harbors the intention to invade North Korea. They have said this again and they say that one of the evidences is that the US keeps troops and material in South Korea for this purpose. I would just ask, is there any way the United States Government could perhaps convince the North Koreans that this is purely wrong?

MR. RUBIN: Well, we've certainly tried and we're aware of that particular claim. It's something that comes up regularly.

QUESTION: Put on the green eye-shade again.

MR. RUBIN: Uh-oh, does this require banking capabilities?

QUESTION: Another banking story.

MR. RUBIN: At least I have a future ahead of me.

QUESTION: Another banking story, another story in The New York Times. This one is about -- I'm not sure which bank it is -- but the Russian mob laundering money through their -- can you comment on that?

MR. RUBIN: Yes, I can. The battle against money laundering is a top priority for the American Government. We are, of course, concerned about any reports of money laundering, and the State Department will do whatever it can to assist the agencies that are investigating this case. However, it is long-standing policy not to comment on ongoing investigations. This, therefore, would require those interested in more details to contact the Department of Justice.

QUESTION: Since the issue of siphoning off of aid has been elevated, can you say or can you look into whether any aid to Russia -- and there have been allegations that that's been siphoned off, as well -- has been laundered through this bank?

MR. RUBIN: We will look into whether there's any connection here to the extent it relates to foreign aid. We may or may not be able to give you an answer, but we will certainly endeavor to do so.

QUESTION: I'd like a 4,000-page report.

(Laughter.)

MR. RUBIN: Wow.

QUESTION: Can you tell us whether the United States is doing anything to try and resolve the dispute over Palestinian prisoners? And while you're at it, could you remind us what your position was when this blew up under Prime Minister Netanyahu? Maybe it's changed since then, but I doubt it.

MR. RUBIN: Oh, I see. The prisoner release issue in Wye; is that what you're talking about?

QUESTION: Yes. Have you been trying to --

MR. RUBIN: We are in contact with both sides. We understand that discussions and contacts between the two sides are continuing. We want them to find a way to bridge the differences on this issue, and all the issues between them.

In that regard, it is our diplomats' judgment that further comment could only complicate the prospect of achieving a successful resolution of that particular issue.

QUESTION: Can you tell us how you're in contact? What level -- who's in contact with whom?

MR. RUBIN: I would expect that the very able team of Ross and Miller, ably assisted by Mr. Indyk and our embassy in Israel and our consulate with the Palestinians, is the vehicle. I can certainly try to check when our last contact was, but normally it's through that Middle East peace team, broadly defined.

QUESTION: Can you clear up one thing on that point? Wye does not specifically require Israel to release any "flavor" of prisoner. Wye gives Israel the power to select which prisoners are chosen and it leaves the rest of it completely ambiguous; is that not correct?

MR. RUBIN: I'll have to check on that; I don't know the answer to that.

QUESTION: On the Middle East: back to confidence-building measures. Is the Secretary going to take up demolition of houses and perhaps some of the other issues that are not directly related to Wye, but are the basis for confidence between the parties, and for future negotiations? Is she going to mention any of these issues that have been taken up by the Department previously but have been ignored in the past few years?

MR. RUBIN: I would like to leave the Secretary the option of publicizing her agenda items at the time of her trip. But let me say I would expect that the Secretary would have an opportunity in the time in the Middle East to explore the full range of issues related to the Middle East peace process, and the efforts we have made in that regard, and efforts we believe are necessary to avoid complications in that process.

QUESTION: Barak has decided not to grant Peres a Cabinet position or a ministerial position. Do you have any comment on that and if that's going to affect at all the peace process, since Peres is such a major player?

MR. RUBIN: That would be a comment on an internal political decision of the Israeli Government, which is not appropriate for me to make in that regard.

QUESTION: Dagestan? With increased Russian involvement in Dagestan, even strikes against sites in Chechnya, it's occurring in an environment which is much different than it was the last time they got involved in this area. You have increasing Azeri-Turkish ties; both Azerbaijan and Georgia are making noises about joining NATO; some people in the West -- some foreign policy observers -- are saying we have to draw the line in the sand with Russia in the Caucasus. I was wondering if there's not concern in this building, that that military situation in the Caucasus may serve to draw the West into a conflict that would not be in its interests.

MR. RUBIN: I'm not aware of heightened concern in that regard. I'm aware of our position about the conflict in Dagestan, which is that we condemn strongly the use of force against lawful authority, and that we urge all parties to exercise restraint in preventing indiscriminate attacks against civilians. That's our position on Chechnya. I'm not aware that that particular concern of those thoughtful observers has seized the Department.

QUESTION: There are some reports that the United States and Cuba are about to reach an agreement on drug fighting.

MR. RUBIN: We have received a response from the Cubans on the proposals we made in June regarding counter-narcotics cooperation. No final decisions have been made. Continued cooperation between the United States and Cuba, on a case-by-case basis, is essential to plug interdiction gaps being exploited by traffickers using Cuban airspace and seas.

As Under Secretary Pickering said yesterday, that would be cooperation in discovering trafficking and ending it.

QUESTION: This sort of cooperation has already taken place. Has this taken place without any kind of formal agreement, or would this be a first agreement of this kind?

MR. RUBIN: No, this would be efforts to improve counter-narcotics cooperation.

QUESTION: Jamie, yesterday as you were urging the Austrians not to facilitate the travel of Saddam Hussein's right-hand man, he was in fact jetting out of the country on a plane. Are you disappointed at all that the Austrians didn't "un-facilitate" his travel?

MR. RUBIN: We have made our views clear to concerned governments that Izzat Ibrahim has been implicated in some of the Iraqi regime's most heinous war crimes and crimes against humanity, and that his travel should not be facilitated for any reason. Obviously, he didn't feel completely comfortable in Austria, and we are not losing any sleep over that.

QUESTION: But are you disappointed that the Austrians didn't stop him from leaving, or that they apparently did facilitate his travel?

MR. RUBIN: Well, again, as I indicated yesterday in response to these questions, what we were primarily referring to in that regard was the facilitating of travel from Iraq to countries of convenience for any reasons -- not travel back to Iraq.

As I indicated, there is no basis to hold him, even though we regard the Iraqi regime as responsible for a number of atrocities. We've been working with the Indict Campaign and others to try to bring greater and greater attention to those violations of humanitarian law and human rights. We would like to see the international community give greater and greater attention to it.

But as far as legal grounds for holding him, I pointed out that there are none. But we certainly don't think members of the regime that is responsible for these atrocities, and causing the great suffering that they have caused to the people of Iraq, to the Kurds and to so many others in the region, should have their travel to locations of convenience facilitated.

QUESTION: On that, Jamie, is the US trying to encourage the UN Security Council to develop a tribunal for war crimes in Iraq?

MR. RUBIN: Well, I think a tribunal would probably be beyond what we are doing right now. I think we are in consultation with other governments and have been for some time, encouraging an effort to be made to establish an inquiry. We're certainly supportive of the non-governmental organizations that are trying to develop evidence and highlight that evidence.

QUESTION: On the meeting between Mr. Eizenstat and Count Lambsdorff, I know that Mr. Eizenstat's no longer here, but apparently you're in charge of his public relations. Can you tell us what you know about the meeting?

MR. RUBIN: Is that what he said?

QUESTION: Yes.

MR. RUBIN: I wonder how that would go over with Treasury PA?

QUESTION: And also can you tell us whether --

QUESTION: The second-longest serving --

MR. RUBIN: He's gone; Howard left.

QUESTION: Can you tell us whether there is a proposal to postpone the slave and forced labor talks in Germany next week?

MR. RUBIN: There will be meetings next week in Bonn. These meetings will include all of the parties who have previously participated in plenary sessions. The participants will continue the discussions on principles for structuring the German foundation initiative. The participants include attorneys representing German enterprises, Central and East European governments, the Jewish Claims Conference and US class action lawyers. German Government and US Government attorneys will also attend.

The meetings begin on Tuesday and will continue through the week. We hope to reach general agreement on key principles for the establishment of the German foundation initiative. Further comment on these talks would be discouraged, and I refer you to Secretary Eizenstat's press briefing of July 15, available on our able website -- if a website can be able.

QUESTION: Have you seen the proposal put forward, I think, Tuesday by the class action lawyers for a new foundation -- in other words, a new variation of an idea? Does the State Department think that this new idea put forward at this point is going to be helpful?

MR. RUBIN: I'm advised that given the meetings coming up next week, it would be in appropriate to comment on substance at this time.

QUESTION: My colleagues will forgive me for this one. Please forgive me. This is regarding that new international group which would coordinate State Department information overseas. The international information --

MR. RUBIN: I'm familiar with that.

QUESTION: No, my question is -- my understanding is that part of the purpose is to counter anti-American propaganda overseas. How would forming this group do that?

MR. RUBIN: This is a classic misunderstanding. The United States Government, much to your surprise I'm sure, has hundreds of inter-agency meetings. There are hundreds of inter-agency meeting groups that meet under various auspices. And they call themselves something, and they have a meeting. In other words, just the way the Correspondents Association for the State Department Press Corps has meetings. They call themselves the Correspondents Association.

So the issue here is simply that a forum and a mantle for a meeting was created, with the idea that the more we coordinate inter-agency, we get information from around the government, the better able we will be here at the State Department to project that information to debunk anti-American propaganda overseas and to promote what we believe to be America's interests overseas.

There is nothing strange about that. The only new element is that there's an inter-agency group. There are a lot of inter-agency groups. There's no new entity; there's no new organization; there's no new agency; there's merely a procedural device, called an inter-agency group, that will work harder to do better what I try to do every day.

QUESTION: Does this involve any extra staff, setting up this procedure?

MR. RUBIN: No, an inter-agency group just means everybody has to go to a meeting.

QUESTION: OK, so there's no new office.

MR. RUBIN: There are a lot of changes that have been made as a result of integration, and preparations for the United States Information Agency's joining the State Department. I would be happy, for those of you who are interested, to get a briefer to explain to you the way that integration is going to work. But I'm not aware that there are new hires unrelated to that and solely related to the fact that there's an inter-agency working group.

QUESTION: Is it true that at one point you were seeking to have the entire US Information Agency's I Bureau put under your wing at the Public Affairs Office?

MR. RUBIN: Under my wing -- what can we call that? Let me say that there were a number of different proposals during the process of integration. I did not take the view that the entire I Bureau ought to be attached to the Bureau of Public Affairs.

QUESTION: I think we forgot to ask you one thing on the Holocaust. You said the meetings begin on Tuesday and they will deal with two principles. What are they -- you're talking -"p-l-e-s" or -"p-a-l-s?"

MR. RUBIN: A speller I be not. We hope to reach agreement on key principles -- l-e-s.

QUESTION: Those principles are?

MR. RUBIN: The main elements of the German foundation initiative.

QUESTION: Anything on Holum and arms talks in Russia?

MR. RUBIN: Just that we had our discussions. They were preliminary discussions. We have long wanted to be able to get together with Russia, to spell out our vision of how we can have the ABM Treaty modified and still move forward with deep reductions in strategic arms. We believe that we can make minor modifications to that treaty in such a way as to permit any necessary limited national missile defense, while still ensuring that the basic principle of the treaty is upheld. That is something that we've been discussing with the Russians.

QUESTION: Thank you.

(The briefing concluded at 2:05 P.M.)

[end of document]


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