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FW: 000229 U.S. State Dept. Daily Press Briefing

-----Original Message-----
From: U.S. State Department [mailto:stategov@UIC.EDU] 
Sent: 29 February 2000 23:59
Subject: 000229 U.S. State Dept. Daily Press Briefing

Daily Press Briefing Index
Tuesday, February 29, 2000

Briefer: James P. Rubin

1-13     Report on Palace Building and Oil Smuggling /
Construction of Pipeline / Illegal Export of Gas Oil / Oil
for Food Program / Importation of Luxury Goods (alcohol and
cigarettes) / Noncompliance of UNSC Resolutions / No-Fly
Zones / Lifting of Sanctions / Post-Sanctioned World

14     Yugoslav Army Checkpoint Near Montenegro-Albania


14-15     Killing of Journalist / Freedom of the Press /
Release of Andrei Babitskiy

15     US / North Korea Talks

15-16     Resumption of Israel / Syria Talks

16-17     Freedom Party Entry into Austrian Government /
Haider Resignation / Readout of Ambassador Hall's Meeting
with Secretary Albright

16-17     Increase of Military Expenditures

18     Visit of Special Envoy Harry Johnston Visit to

18     U/S Holum's Meeting on Arms Control in Geneva / Start
III Agreement / ABM Treaty Modifications

18     Release of Kurdish Mayors from Jail

18-19     US Assistance with Flood Relief Efforts

19     Communal Violence

19-20     Arrest of American Citizen Teenagers

DPB # 16
TUESDAY, FEBRUARY 29, 2000, 12:40 P.M.

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

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. 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 excesses.

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 sanctions.

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 communique 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 communique 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

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

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 region.

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 Iraq.

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

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 stuff?

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 illegal.

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 directly.

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

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 weapons?

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

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

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 palaces.

MR. RUBIN:  Yes.

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

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

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

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

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.

MR. RUBIN:  Yes.

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

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 interests.

Are we done?  Good.  Before we move to your question, I have
one statement to read on Yugoslavia.  The United States is
concerned by the Yugoslav army setting up a checkpoint last
weekend and again today near the border crossing on
Montenegro's border with Albania.  We are watching this
situation closely and remain in close contact with the
Montenegrin authorities.

The governments of Montenegro and Albania opened on February
24th the Bozaj/Hani i Hotit border crossing which had been
closed since 1997 in order to foster economic development
and promote stability in the region.  We welcome efforts by
both governments to build confidence and cooperation in a
region that has been crippled by mistrust and confrontation
for much of the last decade.

We commend the Montenegrin officials for their show of
restraint and their efforts to prevent this situation from
escalating, and we call on Belgrade to dismantle the
Yugoslav army checkpoint and to join the Montenegrin and
Albanian governments in efforts to build peace and
prosperity in southeast Europe.

Finally, we call on Serbia and Montenegro to renew efforts
to resolve peacefully their disagreements about respect for
the Republic of Montenegro's rights under the federal

QUESTION:  On that same area there, do you have anything on
this UN official being shot on the Serb-Kosovo border this

MR. RUBIN:  I do not have that.  I will check for you.

QUESTION:  Do you have any announcement to make --

MR. RUBIN:  No, we don't.  When I do I will, but I don't.

QUESTION:  On Chechnya, Russian foreign correspondent
Vladimir Yatsina was killed several days ago by Chechen
rebels.  He was kidnapped, tortured, and then he was killed.
There is a lot of talking about freedom of press in Russia,
mistreatment with Russian journalists, not only for Russian
- mistreatment with journalists, in particular with Mr.
Babitskiy, and brutality of Russian forces also.

How would you characterize this situation in this case?  My
understanding is there was not any condemnation, any
reaction on this murder.

MR. RUBIN:  We're not aware - we're aware of reports.  We
have no confirmation of this information.  We're looking for
that.  If it proved to be true, we'd obviously deplore that
in the strongest possible terms.

In regard to your question, let me say that we were very
pleased to learn that Radio Liberty journalist Andrei
Babitskiy was released from detention today in Moscow.  We
were extremely troubled by the circumstances by which a
journalist would be traded as a hostage like a criminal in
that circumstance, and that was a rather chilling
demonstration of one of the problems in that coverage of
that war.

We understand Mr. Babitskiy has agreed to remain in Moscow
while an investigation is completed into charges that he was
carrying falsified documents.  We continue to urge the
government of Russia to conduct a full investigation as well
into the alleged exchange of a civilian journalist to
Chechen separatists for Russian soldiers held prisoner.  We
support freedom of the press in Russia for all journalists,
and urge the government of Russia to ensure that journalists
are able to do their work without unnecessary constraints.

If indeed Chechen rebels were responsible for murdering a
journalist, that would be profoundly troubling indeed. We're
checking into reports that we've heard to that effect.

QUESTION:  You are aware but you have no confirmation on

MR. RUBIN:  We don't have confirmation of the event, no.

QUESTION:  Have you taken up with the Russian officials all
these conflicting and sometimes confusing stories that they
kept putting onto you and others?

MR. RUBIN:  We believe there should - as I said, yes, we
have raised this with them at many, many, many occasions.
What we're urging the Russians to do, as I said, is to
conduct a full investigation into the exchange of Mr.
Babitskiy and what happened and what didn't happen so that
we can get to the bottom of that.

QUESTION:  Could you give us the latest about US-North Korea
talks?  You said yesterday that the announcement would be
made very shortly.  How shortly is shortly?

MR. RUBIN:  Well, I said that before I left this job I was
hoping to define shortly for you.  Obviously, shortly does
not always mean within 24 hours.

QUESTION:  Or within 10 minutes since the question was first

QUESTION:  I would have been very angry if you had answered
his first.

QUESTION:  Can you go to the Middle East for a second?

MR. RUBIN:  Sure.

QUESTION:  There's a whole new spate of reports about
Syria-Israeli talks being resumed in March and also that the
ILMG that you guys and the French have managed to get a
meeting of this together.  Any --

MR. RUBIN:  Yes.  On the Lebanon question, the co-chairmen
have been in Syria, are going to Lebanon and then will be in
Israel in capitals meeting to see that when a meeting of the
ILMG is held that it can be as effective and successful as
possible.  So the co-chairmen have been in these capitals
starting in Syria, then Lebanon, then Israel on Sunday, I
believe, at which time we hope to be in a better position to
have such a meeting.  Their job is to work in capitals
pending such a meeting happening.  I'm not aware of any
imminent announcement of a meeting.

On the first question, I see these reports from time to
time, and I think I'm as well briefed as one can be on the
Israel-Syria track.  Let me say to you there is no truth to
these rumors, reports, suggestions that there is an imminent
announcement of a breakthrough on the Syria track.  I wish
that were true.  It's not true.  What is true is that we are
working with the Syrians and the Israelis on a number of
levels to try to make that possible, but there is no
imminent announcement that I'm aware of.

I think that hit both your questions hopefully out of the

QUESTION:  And the Palestinian track?

MR. RUBIN:  Well, Ambassador Ross has just returned today.
He'll be briefing Secretary Albright, and maybe after that
we'll have more to say.

QUESTION:  Can I switch the subject again?  On Austria, has
there been a review on the diplomatic steps that the US has
taken in the wake of Mr. Haider's announcement to step down
as leader of the Freedom Party?

MR. RUBIN:  If Mr. Haider's resignation leaves the Freedom
Party better able to work with Chancellor Schuessel in
meeting the standards the Austrian Government set for itself
in the preamble to the coalition agreement, we will see this
as a positive step.  We remain deeply concerned about the
Freedom Party's entry into the Austrian Government and have
told the Chancellor that we will hold the new government to
the spirit and letter of the preamble which both parties
signed and which commits them to democracy, pluralism and
tolerance.  We are following the actions of the new
government very closely, and we will react swiftly and
firmly to any statements or actions suggesting sympathy with
Nazi-era policies or that express racism, xenophobia or

The long and the short of it is we continue to monitor this.
 He's still a member of the party.  The Freedom Party is
still part of the coalition.  We're going to continue to do
what we have been doing which is to be pleased with the
preamble of the coalition agreement but to be monitoring to
ensure that that preamble is indeed the guiding force for
the government.

QUESTION:  The Indian Government announced --

MR. RUBIN:  On this, yes?

QUESTION:  I just want to know if you have a readout of
Ambassador Hall's meeting with the Secretary yesterday and
what the Ambassador thinks.  Without mentioning Haider at
all, just what she thinks of what's going on.

MR. RUBIN:  Well, there was a number of meetings with
Secretary Albright and other administration officials.
Ambassador Hall is going to return to Washington in a few
weeks for further consultations.  We have limited our
contacts with the new government, and we're constantly
reviewing the appropriate measures.  We want to see how the
new government performs before considering other actions.

With respect to her views, I think I've reflected the US
views on this subject, and I don't intend to be more
personal in saying what an Ambassador's views are as opposed
to the US Government's views.  I think Ambassador Hall is
comfortable with what I just said.

QUESTION:  Have you told Austria exactly what it needs to do
to emerge from this cloud?

MR. RUBIN:  Yes.

QUESTION:  Like there's benchmarks?

MR. RUBIN:  We've told them that we need to monitor closely
their implementation of the preamble which we were
supportive of.

QUESTION:  There seems to be a note of skepticism.  Your
statement begins with the word "if."  Do you think that
Haider's resignation was perhaps a deceptive maneuver
designed to abort punitive actions by you and the European

MR. RUBIN:  Well, I don't know what the motivation was.  I'd
prefer not to speculate.  What I can tell you is what our
policy is, is to remain concerned about the presence of the
Freedom Party in the Austrian coalition and to judge them by
their actions and not the presence or absence of
personalities, although that obviously, if his absence means
they're more likely to go along with the kind of policies
that we have advocated, that would be great.

QUESTION:  Are you at all concerned by the Indian
Government's announcement that it's going to sharply
increase defense spending in the new budget?

MR. RUBIN:  On that subject, we have seen press reports the
Indian Government has submitted for parliament's approval a
substantial increase in military expenditures.  They assert
that this is a result of heavy fighting in the Kargil sector
last year.  We don't have any details at this point, and we
want to get a full readout on the budget proposals and the
Indian Government's justification before reacting.

QUESTION:  Did the government decide whether the President
will be going to Pakistan?

MR. RUBIN:  The President's schedule is normally not
announced here from the State Department.

QUESTION:  Apparently, there's been a flurry of activity
involving US diplomats in Khartoum of all places preparing
for a weekend visit by Mr. Johnston.  I'm wondering if you
have anything on that?

MR. RUBIN:  Yes.  On Sudan, what I can say about that is
that the visit of Special Envoy Harry Johnston along with
Special Envoy Tom Vraalsen met with the leadership last week
in Nairobi to offer direct US and other donor assistance.
With respect to visits to Khartoum, I'll have to see whether
there's anything more I could say.  I know he was in Nairobi
meeting with Garang but I don't know what other meetings,
and I'll try to get that for you after the briefing.

QUESTION:  Mr. Rubin, if I'm not mistaken, Under Secretary
of State Mr. Holum is in Geneva now for talks on arms
control issue as a Russian counterpart.  Could you update us
on this issue or the development?

MR. RUBIN:  Yes.  I know he is - I don't know whether the
meeting started yet, but I know he's expected to travel for
that purpose, and we will work in those meetings to try to
move towards a combined agreement on START III and the ABM
Treaty modifications we've proposed to try to get into
greater detail so that Russia and the  Russian side can
understand that these modifications can take place without
undermining the fundamental principles of the ABM Treaty and
help both we and they deal with this coming threat that we
see in the future.

We certainly hope that START II is indeed ratified by the
Russian Duma as Mr. Putin has indicated he would like to see
- Acting President Putin see -- happen.  And that will make
it easier to turn discussions on START III into negotiations
on START III which would then accelerate the prospects for

QUESTION:  Do you have anything to say on the release from
prison of Kurdish mayors in Turkey?

MR. RUBIN:  On this subject let me say that the release was
a positive step.  The release of the three mayors arrested
last week was a positive step.  We learned yesterday the
order to remove the three from office has also been
rescinded.  It is important that the mayors be accorded full
due process and treated in a manner conforming to
international human rights standards, and we're going to
continue to follow the case - monitor the case closely.

QUESTION:  Do you have anything else today on aid to

MR. RUBIN:  No.  I will try to check for you, but I don't
think I have anything.  I do?  I thought that I used this

All right.  The US has provided approximately $1.7 million
in response to the flooding in Mozambique.  Additionally,
USAID is sending a seven-member disaster assistance response
team to Mozambique which will arrive later this week.  This
will supplement a 14-member team which is already on the

USAID has also activated its public donations hotline,
1-800-USAID-RELIEF, 1-800-872-4373.  For people interested
in assisting the people of Mozambique can call this hotline
from 9:00 to 5:00 eastern standard time to receive a list of
non-governmental organizations who are assisting in
Mozambique.  An Air Force C-17 loaded with humanitarian
supplies is expected to arrive in Maputo tomorrow.  Supplies
include 6,000 5-gallon water containers, 6,000 wool
blankets, and 200 rolls of plastic sheeting.  We're also
transporting 30,000 pounds of high energy biscuits on behalf
of the United States.

QUESTION:  It won't surprise you to learn that the measures
that you've just detailed are being criticized in the
African press already as paltry.  There's some mocking that
President Clinton and Secretary Albright recently said that
Africa matters, yet it comes up with the measures that
you've just outlined.  Could you respond to that, please?

MR. RUBIN:  Yes.  We always wish we could do more, and we're
doing a substantial amount to try to ease humanitarian
relief, ease humanitarian crisis there.  This is a flood
that has caused damage that we're responding to, and we
certainly hope that our friends and allies in Africa don't
have the views that you attributed to some critics.

QUESTION:  Do you have anything on Nigeria's suspension of
Sharia law in three northern states?  I understand there's
been --

MR. RUBIN:  I do.  I'm aware that there was serious violence
that broke out yesterday in Aba, in southeastern Nigeria.
The return from Kaduna of the body of a local soccer star
sparked the violence.  The soccer star was reportedly killed
during last week's violence in Kaduna.  We understand that
police have set up roadblocks around Aba.  Our embassy
reported that at least 30 people have been killed.

We would like to take this opportunity to again call on all
Nigerians to respect each other and find peaceful ways to
resolve their differences.  We support all Nigerians of good
will who are working together to resolve disputes, and we
condemn any exploitation of differences to pursue
short-sighted objectives that harm Nigerians and their
shared goals of democracy and prosperity.

QUESTION:  Is the US going to be able to provide choppers to
help in Mozambique?

MR. RUBIN:  I will check that for you.

QUESTION:  Do you have anything to say about these American
youths who have been arrested in Germany, possibly facing
murder charges?

MR. RUBIN:  Yes, I'm aware of this incident.  The State
Department wishes to join Secretary Cohen in expressing
shock and sadness at the tragic incident that occurred
Sunday in Darmstadt resulting in the death of three German
citizens and injury of four more.  Our thoughts and prayers
are with the families of the victims who have experienced
this terrible and senseless loss.  The suspects, who are
military dependents, were arrested Monday evening near
Darmstadt, which is south of Frankfurt.  We understand they
were arraigned earlier today in German court, and
prosecutors asked a magistrate for a warrant charging the
three suspects with murder and attempted murder.  We will be
cooperating fully with German officials as this case

QUESTION:  Do you know if there's any kind of a treaty the
US has with Germany that might --

MR. RUBIN:  It is my understanding that the German
authorities have jurisdiction in this case, but the
Department of Defense would have to be able to clarify the
rules more and the legalities more specifically.  Thank you.

(The briefing concluded at 1:35 p.m.)
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