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Responding to James Rubin

Here's an excellent opportunity for someone to write some vicious vitriol
directed at those who deserve it:

It would be useful if someone put together a strong reply to Rubin's
comments in his latest briefing on Iraq (posted to the list a few days ago
and included at the bottom of this email). I'm not sure if Rubin's comments
have been in the media yet, but they're likely to be soon.

I suppose an idea proposer should be the first to volunteer to implement it,
but I really don't have the time at the moment.


-----Original Message-----
Behalf Of Iraq ListServ
Sent: Wednesday, March 01, 2000 2:53 AM
Subject: State Department Briefing on Iraq

Excerpt: State Department Presentation on Iraq Feb. 29
(Rubin presents newly declassified satellite imagery and documents)

State Department Spokesman Jamie Rubin February 29 presented newly
declassified satellite imagery "that once again documents the perfidy of the
regime of Saddam Hussein and the importance of international efforts to
prevent such violations and to help the Iraqi people."

The imagery presented proves two things, Rubin said:  First, since the Gulf
War and until now, Saddam Hussein has been building enormous palaces and VIP
residences for himself and his regime, costing billions of dollars, and
Saddam Hussein's regime is selling oil outside of the oil-for-food program
and in violation of U.N. sanctions.

Following is an excerpt of Rubin's presentation with questions and answers,
from the State Department's noon briefing:

(begin excerpt)

MR. RUBIN: Greetings. Welcome to the State Department briefing on this here
Tuesday. Before I left, I wanted to make sure I got to do one more of these
presentations. So we do have a presentation today on Iraq, and the purpose
of this briefing is to present newly declassified satellite imagery which
once again documents the perfidy of the regime of Saddam Hussein and the
importance of international efforts to prevent such violations and to help
the Iraqi people.

The imagery that I will show you today proves two things. First, since the
Gulf War and until now, Saddam Hussein has been building enormous palaces
and VIP residences for himself and his regime. These palaces cost billions
of dollars, money which the government of Iraq could and should be spending
on the needs of the Iraqi people.

To pay for these palaces and these luxury goods for Saddam Hussein's family,
Saddam Hussein himself and his supporters, the regime is selling oil outside
of the Oil-for-Food Program and in violation of UN sanctions. The people of
Iraq would be a lot better off if he would simply cooperate with the UN,
sell Iraq's oil under the Oil-for-Food Program and use the money to buy what
the Iraqi people need.

We're releasing this information now because Baghdad is again pushing the
canard that sanctions rather than the misrule and the cynical manipulation
of his own people that Saddam Hussein propagates are responsible for the
suffering of Iraqis. These photos tell a very different story. They document
the real reason that Iraqi people don't have what they need, because Saddam
Hussein refuses to use oil revenues to order goods for his people or to
cooperate with the relief agencies providing them. Instead, he is building
palaces, smuggling oil in order to buy the loyalty of his small coterie of
guards and his small and significant security apparatus so that he can
prevent them from putting a bullet in his head.

These photos and accompanying text are available in English and Arabic on
the Web at, and if you click on Near East, the photos and a new
report on this subject will be available. We are also providing these photos
on beta videotape. So let's go to the palace construction map.

What you see here is that there are nine palaces. Okay, let's move it over

There are nine palaces listed by their names, five of whom are centered
around Baghdad. That's a blow-up of those five palaces and their location.
You'll notice that they're concentrated around Baghdad and in the center of
the country where Saddam is in greater control. There is only one palace in
the north -- over there -- and none in the south because these are both
areas where popular resistance to Saddam Hussein is strong and his security
cannot be assured.

Let's go to the Tikrit residential site, the largest and most elaborate of
Saddam's presidential sites. Construction has been ongoing since 1991. The
site itself covers four square miles. This whole area right there is four
square miles. And then what you'll see is that there are numerous palaces -
this is a palace, this here is a palace, and these are the VIP residences
for his supporters.

There are also to the west of this site where you can't see, there are rural
and extensive farm retreats also for use by regime favorites.

Now let's turn to the Al Salam Palace in Baghdad, the interior palace photo.

This is located on the site of the former Republican Guard's headquarters in
Baghdad which was destroyed during Operation Desert Storm. Since then,
Saddam has been rebuilding the palace, and it was completed in early 1999.
What you'll see here are - this is the main palace here, this is a large
conference center, these are special waterways that have been created, and
this is the whole palace grounds there in the red and white.

What we know about the interior of these palaces from firsthand reports,
these particular palaces, who have traveled to Iraq and visited the palaces,
that in these type of palaces they feature marble floors, crystal
chandeliers and, according to eyewitnesses, gold-plated faucets and other

Now let's go to the Abu Ghurayb Palace. Construction at the Abu Ghurayb
Palace is ongoing. As these photos show - this is before it was completed -
you'll see all these areas weren't filled in with water. These are the after
sites. So all of this area and down here was not filled in with water as
they were constructed. There are elaborate fountains, waterfalls. We find
the scale of this one particularly excessive.

The point here is that Iraq is suffering from a drought that the government
claims has caused widespread crop damage. Think about this. They complain
about a drought, and yet Saddam doesn't hesitate to use scarce water
resources to ensure that the lakes of his palaces are filled and his grounds
are well cared for.

Now let's go to the oil question starting with the Basrah refinery. The
question always arises where does money come from to provide for these
palaces and to provide for other efforts to build their efforts to
circumvent the sanctions. What you see here is this particular refinery was
destroyed in Operation Desert Fox, and what these squares show you in the
little stacks are not inflamed, meaning they're not operational after Desert
Fox. So these were destroyed during Desert Fox. And you can see from where
these little arrows are that they are not operating refineries.

Now if you look at them, you can see the flares in January 2000 to show that
these are operating. The point here is that these are refineries. Iraq is
not allowed to sell refined oil products pursuant to the sanctions; they are
only allowed to sell oil. And what you discover is by rebuilding this site
is the beginning of the pipeline -- pipeline metaphorically -- for the
illegal gas oil sales that I will show you in the subsequent slides.

What they have now been able to do at Basrah is produce some 140,000 barrels
per day; that is, illegal refined products for sale abroad. Oil exports are
only authorized through the ports at Mina al Baqr; that is, the Oil-for-Food
Program in the Persian Gulf and via the oil pipeline through Turkey. The oil
smuggled at the Basrah refinery is illegally sold and smuggled out of Iraq
through a loading facility called Abu Flus.

So what you see here is that this is the Basrah refinery. The ships are
loaded and they are loaded at the Abu Flus loading facility, which is down
here, and then they proceed down in the - I'm sorry, I should be over there
- down this waterway out into the Persian Gulf. This is an example of the
ships that pick up the illegal gas oil. These are - each of these are
different ships that pick up the illegal gas oil in that waterway.

What then happens is that these ships then hug the coastline and come out
here and hug the coastline along the Iranian border until they reach
international waters here, which is the point at which the Multinational
Interdiction Force can then intercept them. That is how we intercept ships,
and I think we have intercepted a huge number of vessels over the years.
Since 1990, the Multinational Interception Force has queried more than
28,000 vessels, boarded more than 12,000 and diverted 700 for violation of

So the point of this presentation is to show you the extensive effort Saddam
Hussein is making to illegally export gas oil outside the UN Oil-for-Food
Program; take that money, meanwhile crying poverty and blaming the rest of
the world for the effect of sanctions on its citizens; and building these
elaborate palaces that I've just shown you.

So we think this is conclusive proof that, to the extent there are problems
in Iraq on the question of food and medicine and concern about the people of
Iraq, those problems are the fault of Saddam Hussein. In general terms, the
level of smuggling has grown in recent months. It's reached the
unprecedented level of 100,000 barrels per day, which puts more than $25
million into the hands of Saddam's regime so then he can spend the money on
these palaces. Overall, we estimate since these palace constructions began,
that over $2 billion of scarce resources has been diverted to the purpose of
building these palaces.

I'd like to make one final point before taking any of your questions. We've
heard a lot in recent days about the regime complaining about the effect of
sanctions. In addition to using the illegal export of oil to provide funds
for building things like these palaces, they also import a number of luxury
goods, and we find it particularly ironic that while he is not spending the
money that the Oil-for-Food Program permits him to spend for food and
medicine, the regime led by Saddam Hussein spends money the regime controls
on alcohol and cigarettes.

In the past ten weeks, ten 20-foot containers of whiskey have arrived in the
Port of Aqabah bound for Iraq. This is, according to experts, below average
for the period. Each 20-foot container contains an average of 900 cases of
whiskey, or a total of 10,800 bottles of whiskey. In addition, a further
20-foot container of wine and beer went to Baghdad during the same period.
That's 350,000 cans of beer and 7,200 bottles of wine. The regime in Baghdad
is consuming more than 10,000 bottles of whiskey, 350,000 cans of beer and
700 bottles of wine per week - and alcohol is illegal in Iraq. Food is
exempt from sanctions, and these goods are classified as foods, so Baghdad
is importing all of this legally.

The important point here is that the regime is getting drunk while it claims
that its people don't have enough to eat. So we are a little tired of
hearing that sanctions are responsible for the problems of the people of
Iraq. It's the government of Iraq that spends its scarce resources on these
palaces, on items like beer and wine and liquor that's illegal in Iraq, and
then complains about the rest of the world causing problems for the people
of Iraq.

The last point, and I'll turn to your question. You know, we're often asked
whether the sanctions regime is weakening, that people are losing their
support for it. I would advise you all to take a look at the communiqué
issued by the Saudi and Syrian Governments last week which squarely places
the blame for the suffering of the people of Iraq on Saddam Hussein's
refusal to comply with UN resolutions. That's the Syria and Saudi Arabian
Governments communiqué as a result of their high-level meetings last week. I
can get you a copy of the public version of that at the end of the briefing.

With that opening comment, let me turn to any of your questions.

QUESTION: Apparently, a lot of these ships are making it past the monitors.
How come it can't be more efficient than it is?

MR. RUBIN: Well, on the monitoring, obviously it is a difficult process. As
I said, we've intercepted or diverted 700 vessels and boarded more than
12,000 and queried more than 28,000. With this increased level of smuggling
that we're seeing, we're looking at ways to beef up the assets for the
Multinational Interdiction Force in the region. The government of the United
Arab Emirates is working closely with the UN and the Multinational
Interception Force to crack down on this smuggling activity. The UAE has
accepted far more vessels diverted by the MIF than any other country in the

Obviously, Iran plays an important role in the smuggling of Iraqi oil by
allowing the smugglers to avoid the MIF by transiting through its
territorial waters, as I showed you earlier. We have raised this issue in
the Security Council Sanctions Committee and we plan to do so again. The
government of Iran has tended to respond positively when this issue has been
raised, and we do expect the government of Iran to uphold its obligations as
a UN member state and to crack down on this illegal activity.

QUESTION: I thought the refining capacity was 140,000 barrels a day and the
illegal export was about 100,00 barrels a day. Does that mean that the other
40,000 is for home consumption?

MR. RUBIN: Well, there may be - that is what - those are the numbers that I
have. I will try to, after the briefing, get you an explanation for whether
that 40,000 stays inside Iraq for domestic purposes.

QUESTION: Jamie, it's not just Iraq that's complaining about the effect of
the sanctions. A significant number of members of the US Congress have
complained also about the effect of the sanctions. What will you tell those
in Congress who are sending you letters and urging you to move to ease the
sanctions after nine years?

MR. RUBIN: Well, what we would tell them is that the sanctions are there for
a very real purpose: to deny Saddam Hussein access to the funds he needs to
build up his military machine; and that this is a repeat offender who
started a war with Iran for eight years, who started the war with Kuwait
that led to this situation; and that we're prepared to err on the side of
caution when it comes to ensuring that Saddam Hussein can never again get
the capability to threaten his neighbors and the world.

When it comes to the suffering of the Iraqi people, we would tell these
members of Congress and whoever made this point that they are misinformed.
It is the United States and Argentina and the United Kingdom that created
the Oil-for-Food Program that forced Saddam Hussein to spend over $10
billion on food and medicine that have now been approved for the export to

And we would further add to those members of Congress that even if sanctions
were lifted, only wishful thinking could make someone think that Saddam
Hussein would spend more of his money on food and medicine for his lower
classes when that is only being done because we force him to. Instead, if he
has his way, he would be using the money to spend on the kind of palaces and
luxury living that I've been describing.

QUESTION: First of all, I was wondering why you didn't condemn or in some
way repudiate Iran for its - what you called an important role in the
smuggling of oil. You only said that Iran should live up to the UN
regulations, but you didn't have any sort of negative language about them.
That's my first question.

My second question is the US has used deadly force in its enforcement of the
no-fly zones, and I wonder why - if this is a problem why you're not doing
what you've done before which is to bomb, for example, the Basrah refinery.

MR. RUBIN: Well, you shouldn't confuse, on the second point, apples and
oranges. With deadly force on the no-fly zone, we're talking about a
situation where Iraq is threatening our pilots, and we believe that the use
of force is necessary to deter and to eliminate those threats.

Secondly, the purpose of the no-fly zone is to prevent Iraq from using its
air space to kill and maim its own citizens in the north and the south, as
it has done in the past. That is a different - both of those issues are
different than illegal oil smuggling.

With respect to your first question, we do expect Iran to live up to its
obligations as a member state. We have had some success in bringing to the
attention of the Iranians through the Sanctions Committee this activity, and
they have responded, and that is the accurate statement of the facts.

QUESTION: To follow up on the question of force or not and why it's apples
and oranges, why not use something less than deadly force and blockade the
Shatt Al Arab?

MR. RUBIN: Well, we have made the decision to intercept ships and deter
additional smuggling through this interception of ships. We're looking at
providing additional assets. I'm not going to get into a tactical discussion
with you about what our other options are.

QUESTION: Jamie, a couple of things. There seems to be something - one thing
missing. What's the destination of all this illegal oil? Who's buying this

MR. RUBIN: What happens is it gets on the oil market, and then it gets mixed
in with oil products that go anywhere.

QUESTION: Well, it's got to go somewhere first where someone knows that it's

MR. RUBIN: Well, absolutely. What we try to do - well, if we knew every
place that it was, we would certainly try to take action. It's not always
possible once a ship leaves this area where you know it's an illegal export
to track it so thoroughly that you can be sure that you know once it's mixed
in with other products. So we've tried to deal with it at the source through
this Multinational Interdiction Force, and obviously when we have evidence
of where the illegal oil ends up, we act on that as well.

QUESTION: Where has it ended up in the past?

MR. RUBIN: I'll try to get you additional information after the briefing as
to some of the locations.

QUESTION: And the other thing is that there is a lot of smuggling of alcohol
in other places --into a lot of countries where it's illegal, and I'm just
wondering why -- you know the destination of these thousands of cases of
whiskey is Saddam and his --

MR. RUBIN: That's the information I've been provided, yes.

QUESTION: We don't have any - I mean, you don't have any photos of
impounding Chivas here. How do we know --

MR. RUBIN: Well, if I get one of those, I'll be sure to provide that to you

QUESTION: Jamie, the bottom line in your message is that the sanctions is
not responsible for the suffering of the people of Iraq; the government is.
However, the people in the area, fair-minded people, are wondering why
official after official of the United Nations are disagreeing with you. The
head of the - Hans Von Sponeck, Denis Halliday before him, the head of World
Food Program, they all disagree with your assumption.

MR. RUBIN: Well, as I indicated, the Saudi Government and the Syrian
Government last week put out a very clear statement placing the blame
squarely on Saddam Hussein's shoulders for the harm done to his citizens. So
it's not just our view; it's the view of the Syrian and Saudi Governments in
that statement. I'd be happy to provide you a copy of that.

With respect to well-intentioned but misguided individuals like Mr. Von
Sponeck, I've heard his account of these events. And he seems to think - in
what I consider and what this administration considers a matter of wishful
thinking - that if sanctions weren't on Iraq, somehow the people of Iraq
would be getting the benefits of sanctions relief when all the indicators
are the opposite.

Let me give you a very clear example. In northern Iraq, the UNICEF did a
study and they looked at infant mortality in northern Iraq during the period
of the Oil-for-Food Program where Saddam Hussein has no control over the
distribution of food and medicine. And what they discovered is the infant
mortality rate is lower in northern Iraq during the sanctions under the
Oil-for-Food Program than it was prior to sanctions.

Think about that. That means that before sanctions were imposed, there were
more people dying in northern Iraq, infants, than there are now under the
Oil-for-Food Program. That's an indicator of what a post-sanctions world
might be like under Saddam Hussein where no effort is made to provide food,
medicine and necessary supplies to prevent problems like infant mortality.

So as well-intentioned as Mr. Von Sponeck is, we have consciences too. He's
not the only one with a conscience. That's why we created the Oil-for-Food
Program. That's why we've allowed $10 billion worth of food and medicine to
go to the people of Iraq. And if we hadn't done so, it never would have
gotten there. So we find it unjustified for people like Mr. Von Sponeck to
point the finger at us rather than pointing the finger at Saddam Hussein's
regime which hasn't implemented the Oil-for-Food Program.

The problems Mr. Von Sponeck identifies in central and southern Iraq, many
of them could be resolved if Saddam Hussein's regime would take the medicine
and food and other supplies out of the pipeline - out of the warehouses and
distribute them, if he would spend the money that he's allowed to spend on
food and medicine.

The UN has to force him to buy food and medicine for his people because he
doesn't care about them. That should give you an indicator of what the world
would look like if sanctions were lifted. So we think he's well-intentioned,
he has a conscience. So do we. We have a different judgment as to what would
happen in a post-sanctions world.

QUESTION: Jamie, some of those on Capitol Hill are urging the administration
to delink sanctions and basically get rid of the economic sanctions and keep
military sanctions in place. Is that something that seems reasonable?

MR. RUBIN: No. We think that would be ill-advised in the extreme. The
problem here is making sure that Saddam Hussein's access to hard currency is
as limited as possible. We have denied him something like $100 billion in
hard currency. That has prevented him over the period of sanctions from
spending that hard currency on weaponry, on illegal goods that he could try
to buy even if there were sanctions around. Hard currency to Saddam is a
prescription for disaster, so we try to limit the amount of hard currency
through the oil embargo and through other steps and try to keep it down to
these small amounts of money that we track as best as we can.

And so we think it would be ill-advised in the extreme to allow a dictator
like him to get access to billions of dollars of hard currency through some
suspension of the economic embargo unless and until he has shown a
willingness to comply with UN Security Council resolutions.

QUESTION: What makes you think he isn't using some of that money that he
gets from selling oil illegally to buy the very things that you're --

MR. RUBIN: We have no doubt that he's trying to do that. What we're trying
to do through sanctions is limit the amount of money he could use, because
the more you have the more you're able to bribe people, do things illegally,
get dual use equipment. So what the sanctions - the primary tool they serve
is to limit his access to hard currency so we limit his access to military
hardware and military goods so that he can never again be the threat that he
was to the rest of the world.

QUESTION: First of all, is all of the money being spent?

MR. RUBIN: No. We think that there are significant gaps in what he is
prepared to order, and I can go through a little bit with you after the
briefing. But certainly we believe that UN reporting has shown that he is
under-utilizing the funds. They've under-funded the food sector by more than
$200 million. It is allocated to the health sector, two-thirds less than
what the Secretary General said was minimally acceptable. And it continues
to ignore calls - that's the regime - by the UN to order critical medicines
to treat child leukemia.

So those are some of the examples of ways in which he has not ordered what
he could using the funds available. We're talking about a lot of money here.
Over the coming year, there may be as much as $20 billion in oil revenue
that could then be used for significant portions for food and medicine, but
if he doesn't use it and he won't spend it, that's where Mr. Von Sponeck
should have focused his energy on the regime. Why isn't it using these
enormous amounts of money to ease the concerns that he has?

QUESTION: Von Sponeck and others have said that the requisition and the
licensing procedure is unnecessarily restrictive and cumbersome. Have you
thought about improving that system?

MR. RUBIN: Well, we do not believe contract holds are the problem. In
December 1999, the UN's Office of the Iraq Program issued a report on the
impact of holds on the program. The report concludes that contract holds
have had a minimal impact. This is the UN's own report. Mr. Von Sponeck's
own organization has said that holds have had a minimal impact on most
sectors. It also says that poor ordering by Iraq and Iraqi delays in
distribution are hampering the program's effectiveness.

About 90 percent of the contracts submitted to the UN are approved. There
are no contract holds on food. With minor exceptions, there are no contract
holds on medicines. The most frequent reason for contract holds is the
quality of information that accompanies the contract. We currently have 300
contracts on hold because the technical information or the end use
information in the contract was insufficient to make a judgment.

We want to be cautious. We do not want to let dual use equipment sneak
through this process. Let me give you an example. Pesticides. Pesticides can
be used for legitimate purposes and illegitimate purposes. And unless we
know the information and understand who the end user is and whether the
supplier is someone who has violated sanctions in the past, we want to be
careful. But none of that interferes with the bulk of the job of the
Oil-for-Food Program, and Saddam Hussein's refusal to order supplies, food
and medicine, far exceeds the very limited effect of these holds.

They constantly want to blame the holds, and we are troubled when people
fall into the trap of accepting that as the reason when the reality is these
tens of billions of dollars that are available they don't want to spend on
food and medicine, and they have to be forced to. So our concern is that we
will obviously look to ensure that the contract review process is speeded
up, that there are pre-approved goods that don't require committee approval
pursuant to the Resolution 1284.

But if you look at the facts, a really good, hard look at the numbers, the
delays in distribution, regularly we have situations where there is huge
amounts of food and medicine sitting in warehouses that they don't want to
distribute. And they only distribute them when we make so much noise
publicly that people running the program, like Mr. Von Sponeck, finally feel
compelled to approach the Iraqi Government and ask them what happened to the
food and medicine that's in this warehouse. And then suddenly, magically,
there is an effort to distribute it.

So the concern on holds is greatly exaggerated. It's a very small percentage
that are put on hold, but we obviously want to improve the process.

QUESTION: On the pesticides, the illegitimate use would be possibly chemical

MR. RUBIN: Correct, yes.

QUESTION: Do you think the diesel fuel trade with Turkey also contributes to
Saddam's wealth and this decadence?

MR. RUBIN: The Turkish Government estimates that Turkey has suffered losses
of tens of billions of dollars as a result of enforcing Iraqi sanctions.
Because of these losses, Turkey asked the Sanctions Committee in 1996 to
legalize its diesel and gas oil trade with Iraq. The action was deferred on
this request.

We have raised this issue with Turkey and are working to find a way to
strengthen sanctions enforcement without causing further hardship on
southeastern Turkey. But we certainly believe that Turkey, like all
countries, should understand that these sanctions are important to the
security of the world because they deny hard currency to the regime so that
it can never again pose the same threat as it has to its neighbors.

QUESTION: Jamie, to go back to the question of the imports, Mr. Eckhart,
Kofi Annan's spokesman himself, said after he resigned - Mr. Von Sponeck
resigned -- that Mr. Annan shared the views of Mr. Von Sponeck on how to
improve the regime in terms of getting (inaudible) with Iraqis. Are you
saying that he's just being diplomatic? Is he --

MR. RUBIN: Well, you know, if you look carefully - and I'll be happy to get
you the material, it's quite voluminous - there are many reports by the UN.
Most of the figures that I'm giving you about the ways in which Saddam
Hussein has refused to sell - buy the food that he's able to buy, to
distribute the food that he has purchased or to buy the medicine or
distribute the medicine that he's allowed to do, most of this data comes
from the UN. And there are many reports the UN has put out that include the
demonstration that the bulk of the problem is their refusal to order -
distribute pursuant to the UN's recommendation we agree with.

When it comes to the contract holds, I'm - we're being quite candid, we tend
to err on the side of caution when it's a dual-use issue, and we do that for
very good reasons. And what I'm suggesting is that the UN itself
acknowledges that that's a very, very tiny percentage and bears almost no
effect on the problem. Minimal is the word they themselves have used.

QUESTION: Well, Jamie, getting back to the smuggling coming through Aqabah
you cited cases of alcohol which is illegal in Iraq. Why is that allowed to
be trans-shipped from Aqabah out through --

MR. RUBIN: Well, it's under the food and --

QUESTION: Well, it's under food, but you apparently know what's in it. And
it would seem to me --

MR. RUBIN: They're classified as foods, these goods. I'm just pointing out
the hypocrisy of the regime, that they spend their money on things like
whiskey and then come to people like Mr. Von Sponeck and others and they try
to make the case that they don't have the money to feed their people.

QUESTION: Just about the palaces that you showed before, you showed a before
and after. What were the time periods --

MR. RUBIN: There were some dates on those, and we'll be able to give you
that. They're along the top.

QUESTION: And you also mentioned that you all estimate about $2 billion --

MR. RUBIN: Over $2 billion.

QUESTION: Over $2 billion was diverted for the purpose of building those


QUESTION: Again, what --

MR. RUBIN: That's an estimate.

QUESTION: But over what period of time?

MR. RUBIN: Say over the last decade roughly, okay?

QUESTION: Children in Iraq are suffering from diseases because of impurity
of water, and Iraq has claimed they need chlorine to purify the water which
is dual function - one of their dual - how do you deal with issues like
pesticides which they need to grow their food and their plants, chlorine to
purify the water? How do you deal with such issues?

MR. RUBIN: Well, obviously, there are complexities, but what we deal with
them in -- is because, based on caring about what happens to the Iraqi
people, unlike the regime, which I think we've demonstrated conclusively
doesn't care and uses these arguments to try to divert attention from what
their real intent is. There are very technical issues. I can try after the
briefing to get you some information about various contracts and what the
concerns were. But by and large, once the legitimacy of the product is
certified and once the legitimacy of the end user is certified, we allow
these things to go through. We're just not going to do it willy nilly. And
Iraq tends to use any contract hold as an attempt to divert all of your
all's attention from the fact that their not spending the money that is in
the program.

QUESTION: Nobody will argue about the focus of the system, and you describe
those who believe lifting the sanction may end the suffering of the people,
and you describe them as wishful thinking.

MR. RUBIN: Right.

QUESTION: Do you still believe that sanctions or lifting the sanctions or
staying with the sanctions may put an end to the system or to the regime, or
this too is wishful thinking?

MR. RUBIN: No, that's not what we say sanctions are for. The sanctions are
for containment. We believe that to protect the security of the region where
he has gone to war against Iran, gone to war against Kuwait, threatened the
whole Gulf with war and devastation and destruction - and those of you who
remember the Gulf War know the threat that he poses where he's used weapons
of mass destruction against his own people - those are the dangers. We are
containing that danger through sanctions by denying him the hard currency to
rebuild the military machine that poses those dangers.

In the meanwhile, we are supporting a number of opposition groups who
understand that the only long-term solution to the danger of Saddam
Hussein's regime to the region and to the world is to have that regime
changed. But the sanctions we've never said are going to change the regime.
We think they contain the danger he poses to the extent they put pressure on
him and cause other Iraqis to understand the value of another way of running
their country. Fine. But the purpose of them is to contain the danger posed
by hard currency reserves.

QUESTION: Jamie, besides buying whiskey and building palaces, do you all
have any idea where this money is going?

MR. RUBIN: Well, that's obviously two important outputs. There are other
outputs. We certainly think they tried to rebuild their hardware,
cannibalized their system, used some of their hard currency to try to
improve their military machine. They've been testing and seeking to deploy
very short-range missiles that are permitted below, I think, 150 kilometers.
That cost a lot of money.

So they're spending their money on the things that have nothing to do with
the concerns about water and water purification and infant mortality. They
are focusing their money on missiles, palaces and other outputs.

QUESTION: You mentioned nine palaces.


QUESTION: Are these new palaces, or is that the sum total since he started
his palace construction program?

MR. RUBIN: I think there are others. It depends on where - these are the
large style. There are smaller ones, and I can get you some numbers of -
there's dozens of others that are in the small palace category. These are in
the large palace category that are particularly egregious examples of excess
and waste.

QUESTION: So you don't dispute the statistics that say that people,
particularly children, are suffering from malnutrition and dying in Iraq?
You just dispute who's to blame for it?

MR. RUBIN: I think what I indicated from the UNICEF report is that we do
care about the children of Iraq, that's why we created the Oil-for-Food
Program, as a result of which the children in northern Iraq, where the UN
runs the program and Iraq doesn't, have a lower infant mortality rate than
the children in that part of the region did before the Gulf War when there
were no sanctions.

Is there suffering in Iraq? Of course there's suffering in Iraq. Mostly the
suffering is a result of the fact that this mad dictator has launched his
country into 10 years of war against Iran and 10 years of war against the
rest of the world. After 20 years, it's not a surprise that their economy is
in shambles. What we're saying is that we care about it and we're trying to
do something about it, and that people should not be misled from the
propaganda that comes from Baghdad.

QUESTION: On Chechnya, Mr. Rubin --

MR. RUBIN: Are we done with Iraq? Iraq, yes.

QUESTION: After all these violations and these numbers, do you have any new
- do you think you are going to revise or review?

MR. RUBIN: Sorry?

QUESTION: After all these violations by the system - Iraqi system -- and
complaints all over the world, I mean are you inclined, are you thinking
about revising or reviewing sanction policy?

MR. RUBIN: No. On the contrary --

QUESTION: No modification or --

MR. RUBIN: No, no. We were going to implement Resolution 1284 in the way
that I suggested in trying to make sure that certain products are notified
and approved in advance, that the control hold process is limited. That's
not changing the sanctions policy. The sanctions are those measures that
deny hard currency to the regime and prevent the import of weapons of mass
destruction, military hardware and other consumer goods that could be used
for that purpose. There is no consideration whatsoever being given to that,
headlines in major newspapers notwithstanding.

QUESTION: How long is the United States going to wait?

MR. RUBIN: Well, we are not in the waiting business; we are in the
protecting business. We are protecting our national interests by containing
the danger he poses. And so long as there is a danger from Iraq to our
national interests, we're going to continue to act to defend those

(end excerpt)

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