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Daily Press Briefing

Sean McCormack, Spokesman
Washington, DC
June 27, 2007


Quartet Statement / Tony Blair Announced as Middle East Envoy
Blair to Focus on Palestinian Institution Building / Secretary Rice and President Bush to Focus on Political Negotiations, Advancing Israeli-Arab Track
U.S. Welcomes Blair's Insight in Effort to Rebuild Palestinian State
U.S. Envoy to OAC
Need for Turkish Government to Defend Against Attacks by Terrorist Groups and PKK
Secretary Rice's Communication with Foreign Minister Gul
Special Representative Ralston's and U.S. Embassy Working with Turkey
Deployment of Turkish Troops
BDA Involvement in Illicit Activities
Financial Sanctions as Deterrents to Illicit Financial Dealings
U.S. Action in BDA Funds Issue Within Confines of U.S. Laws and Regulations
President Bush's Insight on Achieving Objectives in Palestinian-Israeli Situation
U.S. and E.U. Continuing Effort to Build Up Palestinian Institutions / Political Structure Under Arafat
Salam Fayyad's Work on Palestinian Financial and Accounting System
Role of Israelis, Palestinians and Arab States in Advancement of Israeli-Palestinian track
No Change in Iran's Behavior / Iran Continues to Supply and Train Those Trying to Kill U.S. Troops
U.S. Top Priority is to Secure Troops
Iran's Funding of Groups that Stoke Sectarian Tension In Iraq
A.Q. Khan Network of Continuing Interest to U.S. / Pakistani Government Has Taken Steps to Prevent Further Activity
Shipment of Arms from Syria Into Lebanon
Helping Lebanon Strengthen UNIFIL
Syria's Lack of Constructive Behavior in Lebanon / Syrian Contravention of UN Security Council Resolution


12:05 p.m. EDT

MR. MCCORMACK: Good afternoon, everybody. I have one brief opening statement. Well, it's actually not so brief. It's actually kind of long, a statement from the Quartet which we will be releasing electronically immediately thereafter, so let me get started on this. And as I noted this is a statement from the Quartet.

"The Quartet Principals noted that recent events in Gaza and the West Bank made it more urgent than ever that we advance the search for peace in the Middle East. The Quartet reaffirms its objective to promote an end to the conflict in conformity with the Roadmap and expresses its intention to redouble its efforts in that regard. The urgency of recent events has reinforced the need for the international community, bearing in mind the obligations of the parties, to help the Palestinians as they build institutions and economy of a viable state in Gaza and the West Bank, able to take its place as a peaceful and prosperous partner to Israel and its other neighbors.

To facilitate efforts to these ends, following discussions among the Principals, today the Quartet announces the appointment of Tony Blair as the Quartet Representative. Mr. Blair, who is stepping down from office this week, has long demonstrated his commitment on these issues.

As Quartet Representative, he will mobilize international assistance to the Palestinians, working closely with donors and existing coordination bodies; help to identify and secure appropriate international support in addressing the institutional governance needs of the Palestinian state, focusing as a matter of urgency on the rule of law; develop plans to promote Palestinian economic development, including private sector partnerships, building on previously agreed frameworks, especially concerning access and movement; and liaise with other countries, as appropriate, in support of the agreed Quartet objectives.

As representative, Tony Blair will bring continuity and intensity of focus to the work of the Quartet in support of the Palestinians within the broader framework of the Quartet's efforts to promote an end to the conflict in conformity with the Roadmap. He will spend a significant time in the region working with the parties and others to help create viable and lasting government institutions representing all Palestinians, a robust economy and a climate of law and order for the Palestinian people. Tony Blair will be supported in this work by a small team of experts based in Jerusalem to be seconded by partner countries and institutions. The Quartet representative will report to and consult regularly with the Quartet and be guided by it, as necessary. The Quartet looks forward to welcoming Mr. Blair at its next meeting."

And with that, we can get right to your questions.

QUESTION: Well, I have to go out to make sure everyone heard this, so I'll leave it to my able colleagues here to ask questions (Laughter.)

QUESTION: Thank you.

QUESTION: I'll be back. (Laughter.)

MR. MCCORMACK: I really know how to clear a room, I guess. But this is not your opportunity, Lambros. (Laughter.) Yes, Gollust.

QUESTION: Tony Blair's mandate is apparently limited to this institution building. Does he have any authority to do actual political negotiating for a settlement of the Israeli-Palestinian conflict?

MR. MCCORMACK: Well, Mr. Blair's focus will be on building those Palestinian institutions which will form the basis of a Palestinian state. And I would say that without those institutions and without those institutions being developed, you're not going to have a Palestinian state. So the idea of the political negotiations and the building of the institutions within the Palestinian state are really of almost equal importance as you're not going to have a Palestinian state in the absence of one of those two, success in one of those two areas.

So Secretary Rice and President Bush are going to focus on the political negotiations, as they have, and Mr. Blair is going to focus his considerable talents and his efforts on building those Palestinian institutions. I daresay that that is going to be a -- take as much time as he is ready to devote to the issue, and I know that he is ready to devote a considerable amount of time to building those institutions.

So I would expect that you can -- you would continue to see the same basic breakdown or division of labor in trying to bring about a more peaceful Middle East, bring about a Palestinian state. And Secretary Rice will focus intensely and President Bush will focus intensely on those political negotiations, advancing the Israeli-Palestinian track, advancing the Israeli-Arab track in those negotiations. I'm sure that Secretary Rice and Mr. Blair are going to talk. Of course, they're going to need to communicate very closely not only though the formal mechanism of the Quartet, but I would also expect on a more informal basis as well.

Anything else on the Middle East? Lambros --

QUESTION: Allow me this on Turkey --

MR. MCCORMACK: It's your big day.

QUESTION: Mr. McCormack, to a pending question of mine from yesterday's briefing regarding the Ecumenical Patriarchate of Constantinople in Istanbul, Turkey, a DOS spokesman stated on the record, "The United States has a great respect for Ecumenical Patriarch Bartholomew, who is a religious leader of world standing. Promotion of religious freedom and human rights are integral to a U.S. foreign policy." Do you agree? Do you have any additional comment?

MR. MCCORMACK: This was a statement from a Department of State spokesman?

QUESTION: That's exactly (inaudible).

MR. MCCORMACK: And why would I have any dispute with such a statement, then?

QUESTION: It's an email so I had to verify, sir.

MR. MCCORMACK: I think you can take it as a statement of policy from the Department of State.


QUESTION: I was also going to ask on Turkey. It's about this troop buildup on the border. And we've heard comments today from the head of the armed forces saying --


QUESTION: -- that -- you know, they think that they need to go into Kurdistan. What's your reaction to that?

MR. MCCORMACK: Well, it -- our reaction is the same as it has been over the past weeks whenever this question has come up. We understand absolutely the Turkish Government's sensitivity and the need for the Turkish military to defend the Turkish people against attacks by terrorist groups. PKK is a terrorist group.

All of that said, it is not our view that a substantial land incursion by Turkish forces into Iraq is going to help the situation. The solution here is to have the Turkish Government, the Iraqi Government work together to address what is a common threat. The Iraqi Government doesn't want a terrorist group operating on its territory. In fact, that's the fight that they are engaged in now and the PKK falls into that same category. So what we're trying to do is we're trying to work with both sides. We're trying to work with the Turks, trying to work with the Iraqis, bring them together, try to find ways to address the situation.

But we don't think an operation into Iraq from Turkey is going to help the situation, either in the short, medium, or long-term. Turkey and Iraq are neighbors. That's not going to change. So they have to find a way to work together to address what is a common threat.

QUESTION: At what level are you working? Has Rice spoken to the Prime Minister?

MR. MCCORMACK: Secretary Rice has not spoken with the Prime Minister recently on this, although she has, on a fairly regular basis, stayed in contact with Foreign Minister Gul on this as well as other topics. I can't tell you the last time they spoke, but it's been within weeks that they have spoken on this. General Ralston, our special representative, is still working on this issue as well and I can tell you, as a matter of fact, that our Embassy is deeply involved in the issue, working with the Turkish Government. And our Embassy in Baghdad is deeply involved, working with the Iraqi Government.

QUESTION: And in your view, is the PKK receiving any assistance from other nations; want to finger anyone?

MR. MCCORMACK: Off the top of my head, I can't tell you from where they gather their arms, their money and -- to sustain themselves. But if we have any other information on that, I'm happy to provide it for you, but off the top of my head, I can't tell you.

QUESTION: And a couple of weeks ago, forgive me if I'm wrong, but you seemed to downplay the wire reports on the troop buildup which was creating thousands. Have you got any more intelligence on how many of the troops are there?

MR. MCCORMACK: I'm not going to speak on behalf of the Turkish military about where their troops may or may not be deployed.


QUESTION: On North Korea and what I consider to be my last question ever on BDA. (Laughter.)

MR. MCCORMACK: Now don't make promises you can't keep. (Laughter.)

QUESTION: Well, it depends on your answer, of course. Considering that the six-party talks are back on track and you've maintained all along that everything was done in accordance with U.S. law --


QUESTION: -- and that you allow the money to be transferred to the New York Federal Reserve, is it safe to say that the U.S. Government considers the funds and their origins legal, like absolutely?

MR. MCCORMACK: I'm not sure what funds.



QUESTION: The $25 million that were transferred. That they are legal in origin and in the capacity that they were at the Macau --

MR. MCCORMACK: Well, the whole issue with BDA was never about, per se, the money. It was about BDA as an organization involved in facilitating money laundering and being -- facilitating illicit activities. I don't think the Department of Treasury has ever talked about the money per se. The lesson here is that these financial sanctions, these financial actions that we can take unilaterally and that the international system can take on a multilateral basis are incredibly powerful tools and that any country involved in illicit activity should take heed of that fact. There was -- the object was never for the U.S. Government to dispose of the funds in BDA one way or the other. That wasn't our -- that wasn't our goal here. The fact of the matter is Treasury issued a rule -- BDA is not going to be an institution engaged in illicit activities anymore. And it was really a matter of our assisting the six-party talks in trying to find some final resolution to this -- to these funds. The North Koreans said that they wanted their money back. It was something that we were able to do within the confines of our laws and regulations. And with the objective of getting the six-party talks back on track, it's something that we thought that was the right thing to do.

QUESTION: Well, it's just a very fundamental question that there seems to be this reluctance to say that, yes, you do consider the funds to be of legal origin. And you know, obviously in the broader sense, it would be very problematic for the State Department to have the funds characterized as illicit. So would it be safe to say that you do -- you would consider them absolutely legal or --

MR. MCCORMACK: Well, it is -- I would point you to the Department of Treasury. They are really the experts on this. They are the ones who did the forensics on this. They are the ones who did the forensics on all these funds. And I don't think that they have pronounced on the origins of the money and whether, you know, in what category these funds might fall. So they might have some more information for you, but I haven't seen any comment coming from the Department of Treasury that would indicate one way or the other their thoughts on the matter. We here in the State Department we're not bankers; we're diplomats and we work very closely with Treasury on trying to resolve this issue. So you can check with Treasury to see if they have anything more on your final question about BDA.

QUESTION: Sean, basically what you're saying is that although the BDA has been classified as an illicit institution --


QUESTION: Funds in the BDA are not illicit.

MR. MCCORMACK: You can talk to the Department of Treasury about how they look at these monies. Again, the steps that the U.S. Government took in this regard were legal, within the confines of our laws, within the confines of our regulations. And that, as I said, the real lesson here is that once you have a financial institution that has been designated that that cast a shadow over all the dealings of that institution. So for example, a country like Iran should really take heed of the fact that it is very, very difficult to get out from underneath these kinds of actions. These are not actions that we take lightly. These are actions -- there are very strict guidelines, evidentiary guidelines that go along with these actions. So I think it's really an object lesson for those countries who would try to use the international financial system for illicit means.

It's also a lesson for bankers and those involved in the international financial institution -- know your customer, know with whom you are dealing. Because we as well as others are not going to allow the international financial system and the institutions that comprise that system to be used for illicit activities, for states working to develop illicit WMD and missile technology programs or to those states involved in the funding of terror. It's a powerful tool that we have developed in accord with other members of the international system and we're going to continue to use it. We're going to wield it in a judicious way and within the confines of our laws. But we are -- where we have the evidence, we're not going to hesitate to use it.

QUESTION: If I could try one more time; obviously, there are still lingering questions regarding the legality of the monies there. And if there were -- obviously, the U.S. Government must be confident that the funds aren't tainted, that they are, in fact, clean in order for them to allow it to pass through the New York Federal Reserve.

MR. MCCORMACK: As I said, you can check with Treasury to see if they have any other information. But everything that was done, and this was at the explicit direction of Secretary Rice and Secretary Paulson, and one might assume that this doesn't have to be said but I will mentioned it anyway, that everything that we did and all the avenues that we explored were -- had to fall squarely within the confines of our laws and the confines of our regulations. That's one of -- when you play by the rules sometimes it takes a little longer to actually come up -- come to a solution. And we all know that this took some time to conclude and part of that was because we were going to play by the rules.

QUESTION: Well, we did ask Secretary Paulson that same question and he kind of sized up the issue saying that, you know, sometimes you have to look at the broader picture for diplomatic purposes. Some -- he made it seem like he was implying that some exceptions must be made.

MR. MCCORMACK: I haven't seen Secretary Paulson's remarks, but I doubt that Secretary Paulson --

QUESTION: He was at --

MR. MCCORMACK: -- would do anything that would contravene U.S. laws or regulations.

QUESTION: Sean, you don't mind if I -- this question was asked before, but how does the U.S. view Tony Blair's appointment?

MR. MCCORMACK: Well, we welcome it. The very fact that you have now former Prime Minister of the United Kingdom who has taken a deep interest in this issue, who's passionate about it, and who is ready to devote a considerable amount of time, and his considerable talents to building -- helping to build up from within a Palestinian state; absolutely that is something that Secretary Rice welcomes, President Bush welcomes and members of the Quartet welcome. It's important -- it's an important issue. It'll be tough, but it is absolutely critical if you are going to have a Palestinian state.

QUESTION: What difference would it make in terms of past diplomatic efforts that basically these deadlocks and, you know, impasse? And in terms of Secretary Rice diplomatic efforts herself, you know, in terms of she has been really going to the region, how -- what difference will it make with Tony Blair coming into the picture?

MR. MCCORMACK: Well, one of President Bush's critical insights to the issue -- and you note the fact that many have tried over the decades to bring about a peace between the Israeli and the Palestinian people without success. His critical insight back in 2002 that as important as the outlines of a Palestinian state, what the borders might be and how that state relates to Israel as well as others around it is as important as what goes into that state. Those two things are almost equally important. You have to have a -- the ability to govern well, to govern on behalf of the Palestinian people and to govern in a democratic manner. If you are going to really achieve the objective here, and that is a more stable, peaceful Middle East, where the Israeli and Palestinian people can live side by side in peace and security, and if you don't have a well-governed, democratic Palestinian state, you're probably not going to be able to achieve that objective.

So we have -- we have worked with the Palestinians through our efforts and the European Union as well as others have worked with the Palestinians to help build up those institutions. It takes some time. And part of the reason why it takes some time is they started off at such a low point, and they started off at such a low point because Yasser Arafat built a thoroughly corrupt Palestinian government where security forces, you're paid in brown envelopes, where you had a command structure that had absolutely -- made absolutely no sense at all, and it was fractured. And it was done on purpose so that Yasser Arafat could rule without any challenges to himself. And it was exactly the inverse of a democracy. It was not a system that was designed to rule -- govern on behalf of the people, but it was a system that was designed to keep in power and to further the ends of one person, Yasser Arafat.

So you started off at a low point and we have been making efforts in that regard and the Palestinians have been making efforts in that regard. Salam Fayyad, the new Prime Minister, has revolutionized the Palestinian financial and accounting systems to the point where the international system now trusts those financial and accounting systems. They can put money into it and they know that money will be well spent for the objectives for which it was intended.

But you have gotten now to a point in building on the experience of Jim Wolfensohn, who had a very discrete mission to work with the Palestinians in Gaza, it's now at the point where if we are going to make progress that you have to build up those institutions and you need somebody to focus on that almost full time. And so that's -- and that's the role that Mr. Blair is going to play and Secretary Rice couldn't be more pleased that he has decided to accept this job on behalf of the Quartet.

QUESTION: Just a final one. The U.S. has always been in the forefront of Middle East diplomacy, do you see Tony Blair's role at all taking away the U.S. high-profile role?

MR. MCCORMACK: No, no. I think that everybody understands that in order to advance the Israeli-Palestinian track, to advance the Israeli-Arab track, you're going to need the interventions and efforts of the United States in the form of Secretary Rice and President Bush. I think everybody understands that. Certainly, we understand that. And we have been quite involved in those efforts and we believe that we have helped change some of the underlying conditions so that you can make some progress.

Now that is going to require the concerted efforts of the Israelis and the Palestinians and Arab states as well. And so we are going to try to marshal their focus and their energy to move that track -- both of those tracks forward.

QUESTION: And to raise a question that was -- that I raised earlier -- there's no compensation for this, right? It's just basically, he'll get -- he won't be paid, but he'll get logistical and --


QUESTION: -- transport and that kind of support --


QUESTION: -- from the Quartet members or from the United States?

MR. MCCORMACK: Quartet members. Everybody's going to pitch in.

QUESTION: Okay. On something else, I just want to make sure --

MR. MCCORMACK: Anything else on this?

QUESTION: I was gone. You talked about Iran and Iraq?


QUESTION: Crocker?

MR. MCCORMACK: No, I didn't.

QUESTION: Is there any movement on meeting the Iranians?

MR. MCCORMACK: Nothing at this point. I -- we haven't had a -- I checked into this and we have not had a formal meeting request from the Iraqis. They have talked about their desire to have another meeting and we'll take a look at that request and we'll take a look at the atmosphere, we'll take a look at what a next meeting might achieve. We said that we're not going to have another meeting just for the sake of having another meeting. We would like to see these -- this mechanism actually result in some changes. I think at this point, it's safe to say we haven't seen any substantial changes in terms of Iranian behavior. They have, in their rhetoric, talked about the fact that they want a more stable Iraq, a more secure Iraq, and thus far, their actions have not supported their words.

QUESTION: What sort of actions -- sorry, what sort of actions you feel Iraq should -- Iran should take to bring about a more stable Iraq?

MR. MCCORMACK: Well, for starters, stop supplying money, technology, and training for people who are trying to kill our troops. That's a start. And you can be sure that, as President Bush made clear, that we're going to defend ourselves. The top priority is making sure that -- to the extent that we can safely secure and make more safe our troops, we're going to do it. They can stop funding those individuals and groups who are trying to stoke sectarian tensions in Iraq. So those are two starters and I'm not sure that we've seen much change in behavior at this point.


QUESTION: Consequently, you're dissing -- you will not meet with him unless you see something tangible?

MR. MCCORMACK: Again, we'll take a look at, when there is a request for a formal meeting, whether or not the time is right, whether or not we can make the judgment that another meeting would be useful.

Yeah. Nina

QUESTION: Can I ask about A.Q. Khan? There's a hearing -- Foreign Relations Committee -- today. There's a new report out from the Institute for Strategic Studies that's raising fresh questions about, you know, the scope of his network, whether it's still up and running. Do you have any concerns or reaction to this?

MR. MCCORMACK: I haven't seen the report. I know that -- to my knowledge, the network as we knew it is out of business. I can't tell you whether or not there are any copycats out there or any elements that were associated with the A.Q. Khan network who are attempting to continue to engage in these kind of illicit activities. The -- I don't think we know everything about the activities of the A.Q. Khan network. I think it is a matter of continued interest not only to us, but to others. And I know that our folks continue to take a look at it.

QUESTION: And there was a certain lack of accountability. I mean, he's still in Pakistan. He doesn't seem to be held accountable for what he did. Are you disappointed with this? Would you like to see him held accountable? Would you like to see him --

MR. MCCORMACK: Well, I think -- as I understand it, he's under house arrest and his ability to engage in the kind of activities that he engaged in previously -- my understanding is Pakistani authorities no longer -- have taken steps to prevent his engaging in those kinds of further activities. So I don't think that there -- this is certainly a cost-free exercise for A.Q. Khan and fundamentally it's up to the Pakistani Government to deal with him.

QUESTION: But were U.S. authorities ever given access to him to question him?

MR. MCCORMACK: I can't tell you. I don't know. I'll check it out for you.

QUESTION: Can you check, please?

MR. MCCORMACK: Yeah, sure.

QUESTION: And are you satisfied with the level of investigation he was under via Pakistani authorities?

MR. MCCORMACK: I'll check for you, Nina. I don't know. I mean, we're not the primary lead on that sort of investigation, I would expect.

QUESTION: But would it be fair to say this is still a matter of great concern in the Administration --

MR. MCCORMACK: I'll tell you, it's a matter of continuing interest certainly to us. And the issue, the larger issue of trafficking in these kind of nuclear technologies, WMD technologies is of deep interest to us. We have spent a lot of effort to track down individuals, groups, states who might be engaged in this sort of illicit traffic and make sure it doesn't happen. It's hard to get your arms around.


QUESTION: Sean, in his remarks this morning, the President talked about another special envoy and I missed the whole speech, so I don't know if he actually named anyone.

MR. MCCORMACK: No. That's -- the person will be named.

QUESTION: It will? Well, okay, so that's a presidential appointment. Presumably, you won't know who I'm talking about. But my question is why has -- is this the first time the U.S. is going to have an envoy to the OAC.

MR. MCCORMACK: That's right.

QUESTION: And if it is, why? Why has it taking so long? Didn't a bulb go off in anyone's head over the last -- certainly during the first part of this Administration that it might be good to have a representative who -- to go and liaise with every single Islamic country in the world?

MR. MCCORMACK: You know, we didn't have all the good ideas in the first four years. We continue to have them, so I would point to this as one that we're -- it shows that we're continuing to be interested in reaching out to the Arab as well as Islamic world. This is an organization that a lot of people in the region look to and we thought it was the right time --

QUESTION: Okay. Well --

MR. MCCORMACK: -- to appoint somebody.

QUESTION: -- how did you deal with this organization as a group before or did you not?

MR. MCCORMACK: You know, I think -- well, the presidency of it, it rotates among the member-states and I thought -- I think that we dealt with it more on a bilateral basis. So our Ambassador in the -- to the country that held the presidency was the primary interlocutor. We just thought it was important to regularize it more, to have somebody that deals with this issue on a full-time basis.

QUESTION: So where is that person going to be?

MR. MCCORMACK: We're going to be --

QUESTION: In Washington or are they going to be --

MR. MCCORMACK: In the region. I think that those are details. Details --

QUESTION: Well, the region is pretty much the whole world then.

MR. MCCORMACK: Details to follow.


MR. MCCORMACK: Yes, ma'am.

QUESTION: Yeah. On Hong Kong. There have be media reports that at least 30 filing petition from Taiwan, including a lawyer who were denied entry into Hong Kong right before the handover -- you know, the anniversary date. I wonder if you have seen the report and if you have anything on that?

MR. MCCORMACK: I haven't and we'll try to get you an answer.

QUESTION: You will?

MR. MCCORMACK: I said, we'll try.




QUESTION: Sean, you (inaudible) be able to look into this -- a report that was sent to the UN Security Council yesterday about arms flow from Syria into Lebanon which apparently continues completely unabated. Do you have any response to that?

MR. MCCORMACK: I had a chance to check with some folks who have seen the report and who looked at it and yeah, it's an issue; it's a real issue. And I think the report recommends enhancing the capabilities of the Lebanese armed forces as well as seeing what UNIFIL might also do to help prevent the shipment of arms across the border into Lebanon. But more importantly about what -- than what we might do to help out the Lebanese and beef up UNIFIL, it is yet another indication that Syria has not decided to play a constructive role with respect to Lebanon. They still don't have an embassy in Beirut. And there are a lot of questions surrounding continued Syrian activities in Lebanon. And I think it's safe to say that Syria is not engaged in constructive behavior in Lebanon. So it's yet another indication that Syria is playing outside the boundaries, once again -- outside the boundaries that the international system has set and in this case, in contravention of a UN Security Council resolution. Okay.

(The briefing was concluded at 12:36 p.m.)

DPB # 115

Released on June 27, 2007

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