For Immediate Release
Office of the Press Secretary
June 26, 2002

Day 2 Briefing
Kananaskis, Canada

12:10 P.M.

SENIOR ADMINISTRATION OFFICIAL: Thanks, everybody. Let me just take questions. I don't think we need to say very much. I'm here to talk about whatever is on your mind. Obviously, the summit session began this morning. This summit has a number of important issues. We are looking forward to the discussion of nonproliferation issues among the principals, including when President Putin gets here, and how to deal with the threat of weapons of mass destruction and indeed their safe handling and dealing with them.

This is also a very important meeting to which African leaders have been invited to talk about the road forward for development and trade and assistance to Africa. And the President is looking forward to those discussions. And, of course, it's also extremely important for the G-7 to talk about the situation in the world economy. So they met this morning as G-7. They'll meet a little bit later today with President Putin.

David.

Q On the Middle East, I'm wondering if, first of all, you can confirm a couple or reports today indicating that last week's suicide attacks would be the final straw for the President in calling for new leadership for the Palestinian people, in part, and I think large part, because there was evidence that Arafat had authorized the $20,000 payment to the group that actually claimed responsibility for the attacks?

SENIOR ADMINISTRATION OFFICIAL: David, the violence last week, as I said when I briefed you on background a couple of -- I guess right after the speech -- the fact that the President was giving this speech in a context in which violence had erupted did confirm for the President -- confirm for all of us -- the need for a change in leadership.

I've seen the report that you are talking about, but this is not the first time that we've had concerns about the Palestinian Authority and its relationship to terrorism. You will remember there was the major incident of the Karine-A, where Iranian arms were being shipped into the Palestinian territories, in which the Palestinian leadership first was not truthful about that relationship and then went on to try to deal with people who perpetrated that. So this is not the first time that we've had concerns about terrorism.

And so it was another report, but I would not say that it was dispositive. The President was well on his way to, as he said to you many, many times, to understanding that the only way for change in the Middle East, a changed dynamic, is to get changed leadership.

Q Can I just follow? Those reports are accurate?

Q Can you repeat the question?

SENIOR ADMINISTRATION OFFICIAL: I'm sorry, the question is, whether or not the report that there had been a $20,000 payment from Chairman Arafat to members of the al Aqsa Brigade had in fact changed the administration's view, or had reenforced the administration's view that there needed to be new leadership and what role that had played, and then could I confirm that report.

And I'm saying, David, yes, it is a report that we have seen. It is one of several over a period of time that suggests links between the Palestinian Authority and terrorist groups. And, in that sense, it was just one more report.

Q From the beginning, the administration has talked about the President's moral clarity in this issue in particular. Towards that end, he said that Sharon is a man of peace. Now that we have all of this evidence that Arafat is, in fact, linked to terrorism, why not -- moral clarity and just say that Arafat is a terrorist?

SENIOR ADMINISTRATION OFFICIAL: Really, we don't see any purpose to be served by saying that. We've been very clear what we think about the Palestinian leadership, the current Palestinian leadership. The President has been very clear that he thinks that there are problems with terrorism there. We've been very clear that it's a leadership that has done virtually nothing to break up the terrorist brigades that roam around its territory, with which it has clear links. We've been very clear that Chairman Arafat has failed not just the world and Israelis, but he's failed his own people. Because as long as terrorism is carried out in that part of the world, it's going to be very difficult to move forward on -- impossible to move forward on the peace process. So we've been very clear about the nature of this leadership. And in fact, it led ultimately to the President's belief that there needs to be a new dynamic and new leadership in the Palestinian political space in order to be able to move forward.

Q If there's an election and Arafat runs -- which there are reports now that he is going to run -- and wins, assuming the election is held and we believe it's a fair election, what will we do then?

SENIOR ADMINISTRATION OFFICIAL: If there are free and fair elections, we're not going to try to interfere in the electoral process, and we clearly are going to -- we respect democratic processes, but there are consequences. And we are saying that if the Palestinian people want to move forward -- and we believe that they do want to move forward. They couldn't possibly want to continue to live in the conditions that they're living in now. If they want to move forward -- and we believe that they do, we have faith that they do -- there needs to be leadership in the Palestinian territories, leading to a Palestinian state that is not compromised by terror and that is prepared to fight terror resolutely.

The President focused very much not on any single person, but on institutions. It's not only the matter of elections, it also is the matter of a Constitution that separates powers. It is the matter of a legislature that actually is a real legislature. There needs to be an entire reform of the way politics is carried out in the Palestinian territories, but -- if there is going to be a state, and if there is going be peace.

But the consequences are clear. This leadership of a Palestinian people has failed them. It has not led. It continues to cavort with terror. And we're not going to be able to make any progress forward with this leadership. That's why the President called for new leadership.

Q Does the wait for the elections put further substantive talks about borders and refugees on hold? And also can you talk a little bit about how the reaction has been in the President's meetings to his calls to replace Arafat? Have other leaders specifically supported it?

SENIOR ADMINISTRATION OFFICIAL: Well, on the question of the final status agreement --

Q Not on final status, just further substantive talks. Are they on hold until the elections?

SENIOR ADMINISTRATION OFFICIAL: I think the President believes that when this process begins moving forward, there will be opportunities to talk about regularizing relations, about improvements in movement for the Palestinian people -- which, by the way, is something that we talk with the Israelis every day, even now -- trying to make it possible for the Palestinian people to go back to work; that there will be some security arrangements that will need to be made between the Palestinians and not just the Israelis, but also the Jordanians.

In other words, as this process of reform moves forward, it will be possible to begin to engage a whole range of issues that we currently cannot engage because the Israeli people live in fear of terrorist attacks coming out of the territory of their supposed negotiating partner. And that's just unacceptable. And so, as progress is made on reform, as the security situation improves, a whole range of discussions might be possible.

As to the reactions, I think Prime Minister Blair was particularly clear this morning in how he sees this. He said that we respect democratic processes. He said that the Palestinian people have to choose their own leaders. And, as a matter of fact, since the President called for elections, I think it is axiomatic that that means the Palestinian people will be choosing their own leaders. But the Prime Minister also said that there are consequences for those choices. And we have to have a partner for peace; we currently do not have a partner for peace. I think he said that he had had over 30 meetings with Arafat over the years, and that it is very clear that we're not getting anywhere we this leadership.

So I take it that people understand that something needs to change in the Middle East, or we're not going to get anywhere. And if you have a leadership that is compromised by terror, a leadership that continues to not just not fight terror, but to actually encourage it, the hope of the Palestinian people for a state and for peace is simply not going to be realized. So there are consequences for choices.

Q Besides Blair, have there been any other leaders' voices --

SENIOR ADMINISTRATION OFFICIAL: Chretien last night.

Q Can I ask a question about reports today that the President has decided to freeze all assets for the Palestinian Authority until the requests he made two days ago are met?

SENIOR ADMINISTRATION OFFICIAL: Well, the fact is we haven't been able really to spend a lot of the allocated resources for the Palestinian Authority for a variety of reasons, including concerns about where those monies might be going. But it is obvious from what the President said, that with -- if there are humanitarian things that need to be done, you know, we've always said that we would not, for instance, ever withhold food aid or the like. But in terms of resources that might go to the corruption that has been in the Palestinian Authority, I think it's pretty clear from what the President said that there need to be new processes and new transparency before more money goes into the Palestinian Authority.

Q It's not a change in policy? Or was he just restating something that, you know, has been longstanding --

SENIOR ADMINISTRATION OFFICIAL: No, the practicality has been that it's been difficult to expend a lot of the funds that have been there for the Palestinian people because of a variety of things, including a lack of confidence in where those monies would go. But to the degree that there need to be resources spent, including new resources spent, including new resources spent, I think the President made very clear that there has got to be transparency, there's got to be accountability. And we're not prepared to see funding go down a black hole.

Question from Calgary.

Q This is Jean Cummings with the Wall Street Journal. Two quick ones. In between now and the Palestinian elections, can U.S. officials, including Secretary Powell, meet and deal with Mr. Arafat? And then, secondly, if the President isn't going to call Arafat a terrorist, is the administration prepared to list the Palestinian Authority among its terrorist organizations?

SENIOR ADMINISTRATION OFFICIAL: Look, we've made very clear what we think of the Palestinian Authority. And anyone who can't be -- who has doubts about what we think of the current Palestinian leadership needs only to read the last 12 months of the President's statements about the Palestinian Authority, the current leadership, and about its relationships to terror.

So we think that the President on -- the other day laid out a way forward. We're not going to get trapped in talking about the past. We're going to try to look forward here, and try to get to a changed dynamic in the Middle East. Nothing has worked until now because you have, as the President said, Israelis living in fear of terror, and Palestinians living in squalor and occupation. And the only way that that's going to get changed is when you have a new dynamic and new leadership in the Palestinian territories leading to institutions that can lead to a state.

We're also not going to get focused on any one person. I want to call to your attention, the President gave a broad tableau about institutional reform, about separation of powers, about the role of the Palestinian legislature, about new voices being heard in Palestinian politics. He didn't once actually mention Mr. Arafat. His point was that this is a broader picture. And so we're not going to get caught up in -- as we try to move forward, we're not going to get caught up in what we do with one or one person. It's just not where this administration is.

Q It's Corbett Daily with AFX News.

SENIOR ADMINISTRATION OFFICIAL: Yes, second question from Calgary.

Q Yes, it's Corbett Daily from AFX News. Last week Secretary O'Neill made some comments about Brazil, saying that he didn't think the U.S. should throw any more U.S. taxpayer money there. And I'm wondering, how concerned are you about the possible further aid to Brazil? Because he then did clarify that they haven't asked for any. And how worried are you that his comments unnecessarily rattled the Brazilian markets?

And, secondly, the Commerce Department announced their third tranche of exclusions to the steel request, and I'm wondering if the President made it clear to his counterparts, or if he intends to make it clear, that this is the final exclusion announcement that will be made?

SENIOR ADMINISTRATION OFFICIAL: The President is indeed talking with his partners here about trade. He's made clear why he made the steel decision that he did. And the process of developing exclusions and working those is really something that is done at the Commerce Department. The President is supportive of the exclusions that have been made to present. And I wouldn't expect him to get into the details of what exclusions will or will not be made.

As to the Brazil question, Brazil is a very important and strong partner of the United States, very important country in the region, obviously very big economy in Latin America. I think what Secretary O'Neill was saying -- and his comments were misinterpreted; he came back and clarified what those comments were -- and that is that the economics here are sound in Brazil, that they have sound economic policies, they have a sound economy. In fact, Brazil had not asked for additional aid, but the United States had been supportive of the last IMF program that had just recently been funded for Brazil.

And so I think the Secretary's comments and the clarification of them speak for themselves, that the United States is supportive of Brazil, Brazil has not asked for further assistance, and the economic fundamentals remain strong. The political uncertainties are political uncertainties, and -- but the economic fundamentals remain strong, and the United States has not heard any desire from Brazil to have further funding.

Q But the clarification, with all due respect, did lack the key point of what the U.S. would do in such a situation.

SENIOR ADMINISTRATION OFFICIAL: I'm sorry, I'm getting another question from Calgary. Let me take that one and then I'll come back to the lodge here.

Is there another question from Calgary?

Q Oh, sorry, yes. Sorry. With all due respect, the clarification did lack the key point about the U.S.' willingness to provide assistance to Brazil?

SENIOR ADMINISTRATION OFFICIAL: No one has asked. Brazil didn't ask for further assistance.

Q On nonproliferation, what do you hope to see coming -- come out of this summit, 10-plus-10-over-10 or something short of that? What is the concrete goal or objective of the administration here?

SENIOR ADMINISTRATION OFFICIAL: Well, the first is that we need to have a thorough-ranging discussion about the problems that we face with weapons of mass destruction proliferation. And I think we hope that some guiding principles might come out of this discussion, so that everybody is working from the same script.

This is a process, and I wouldn't expect any one meeting to try and resolve, obviously, the proliferation problem. But having this particular group of leaders together is an opportunity for them to explore how to deal with the proliferation problem and to begin to come to some common understanding of what we're going to do beyond what we already do through the nonproliferation regime.

It is also a time for them to discuss issues of nuclear safety, issues of the destruction of chemical and biological weapons. You know that there is an idea out there that the G-7, the United States and Russia might cooperate over 10 years to fund some of the destruction in Russia and in other -- possibly other parts of the former Soviet Union. This is something that we have been very involved in from the very beginning, through the Nunn-Lugar programs. And they're going to have that discussion and we'll see what comes out of it. But I think it's a process that has already made a lot of progress in determining what might be done and we'll see what the final outcome is here.

Q If I could just follow up very quickly, you refer to Nunn-Lugar. That's been on the books now since, when, 1990 --

SENIOR ADMINISTRATION OFFICIAL: Well, '92 really.

Q -- '92. And there have been studies after studies about the problem. The problem, it seems to me, is well-known. Why is it still necessary to have a discussion about the principles?

SENIOR ADMINISTRATION OFFICIAL: Principles moving beyond the nonproliferation regime. Look, the spread of weapons of mass destruction we believe, as you know, has gotten worse and it's accelerated to places that are particularly irresponsible. And so it's an evolving problem, not a fixed problem. And we need to keep looking to see what international mechanisms we have, what principles we have, what mechanisms we have, what the IAEA can do to deal with what is an evolving problem that is getting worse. And so that's why we need to continue to talk about the issue.

As to Nunn-Lugar, you just have to understand that we're dealing with the legacy of the Cold War and we're chipping away at it little bit little. But there obviously is still a lot of work to be done, and it's one reason that the administration has been so supportive of the Nunn-Lugar agenda.

One more question, anybody? Okay, I'll take one from Calgary and one from here, how's that? Okay, one from Calgary.

Q This is Richard Benedetto at USA Today. I have a question about whether or not the President is planning to press President Chirac and Chancellor Schroeder to get on board with this Middle East peace plan, as he did Blair and Chretien. They have credibility with the Palestinians and it would be a -- it would seem important that he would try to recruit them to help out.

SENIOR ADMINISTRATION OFFICIAL: Well, I think the President -- hello? Can you hear me? Okay. I think the President has laid out a way ahead here and he is obviously very anxious to discuss it and to talk to others about how we might jointly get on this way ahead. But I would find it hard to believe that anybody believes that the current situation in the Middle East can continue in the status quo; that we can continue in a situation in which the Israelis are facing terror attacks of the kind that they've -- suicide bombings of the kind that they've been having, a situation in which life continues to get more miserable for the Palestinian people.

The President has taken a new departure here and said it's time to do something different, something has to change. And there simply hasn't been a way forward that has gotten us out of this current situation. And so, yes, I think he will talk with others about how we move this forward. It's hard for me to imagine that anybody believes the Palestinian people should not have an opportunity for new institutions, for elections, for a constitution, for separation of powers, for a legislature that works, for an economy that is functioning without corruption, hiving off resources that should be going to their well-being.

It's hard for me to believe that that isn't a plan that makes a lot of sense for the Palestinian people. And it's hard for me to believe that people would not be committed to finding a way to move to a Palestinian state rather quickly, that could live side by side with Israel and give Israel confidence that it's going to be able to live in peace and security. And those are the essentials of the President's plan, and I think we're going to find a lot of people supportive of it.

Last question here.

Q It's about the same subject. Obviously, the administration sort of contemplated a lot of different options. And what you just outlined is basically the best possible scenario, something changes and it changes to the better. But what if Arafat's authority and Arafat's power will be even emboldened by the pressure that is applied on him and the Palestinians by the President and by other world leaders if they follow, and we get to have a Palestinian Authority that is still led by Arafat, but is much stronger than it is now?

SENIOR ADMINISTRATION OFFICIAL: The President laid out a choice for the Palestinian people and it said that the international community is prepared to help them to get to a place where they can have a good choice. I would hope that there are enough leaders among the Palestinians who want their people to have that future and to have that choice, and that they are prepared to try to deal differently with their own people. I would hope, too, that the international community would not think it acceptable that the Palestinian people are living in squalor and occupation in large part because they have a leadership that is continuing to cavort with terror, that is continuing to feed their grievances and, frankly, isn't doing a thing about their standard of living.

I would hope that the Israelis -- and we all hope that the Israelis will carry out their responsibilities to also welcome and make possible a new life for the Palestinian people in a state that can live in peace and freedom with them, because that ultimately is the best thing for Israel, as well.

Very often, we -- those of us who already enjoy freedom don't give enough credit to our own institutions and to our own ideas, and recognize them as universal ideas. We seem to be continually surprised that if people are given a choice between freedom and tyranny, they will choose freedom. People said the Afghans wouldn't do it; they danced in the streets so they could send their daughters to school.

What the President is doing here is something that is consistent with American values, with democratic values, and indeed, we believe, with universal values. And that is giving the Palestinian people a chance to get out of this situation by institutions and processes that we all well understand, that could lead them to new leadership that might actually be able to deliver better conditions for these people.

Thanks.

Q Can you just clarify one thing. And that is -- maybe I missed this, but has the administration ruled out contacts with Arafat at any level, going forward?

SENIOR ADMINISTRATION OFFICIAL: David, we are not going to focus on Arafat here. We're just not going to do it. He wasn't mentioned in the speech; that's for a reason. We're not going to focus on it. There is a leadership there. It is larger than Arafat, as well. The administration is determined to try to move forward here and to try to get a process entrain that can move this forward.

Thanks very much.

Q Thank you.

END 12:32 P.M. (Local)