Tuesday, December 17, 1996 - 2 p.m.
have two announcements to make.
First of all, I just want to point out that we have today joining us, four public affairs officials from the Polish Ministry of Defense. Their presence here is a result of one of the many initiatives established under Secretary Perry and the Department's Partnership for Peace program, and welcome to you all.
The other thing I would like to announce is that the regularly scheduled Pentagon press briefing for Thursday, December 19th at 1:30 has been canceled.
A: Forever. No, we just will not have Thursday's briefing, is what I'm trying to convey.
Q: Why is that?
A: The studio will be in preparation for an event which will occur later that afternoon.
Q: Could you comment on this Washington Times report about the Russians allegedly spying on U.S. forces at the headquarters in Tuzla?
A: I certainly can. We don't believe that any such alleged eavesdropping is going on from the van that is mentioned there in that story. Let me just give you some background.
As you know, Operation Joint Endeavor is a multinational operation, and the principles of openness and transparency have been at the forefront of the mission since its beginning. The intelligence information is routinely shared with commanders serving in the U.S. sector, and that's one of the reasons for the success of the operation.
Each one of the nations maintains a liaison cell in the headquarters, and they have access to files, to division briefings, to updates, to exchanges of information and intelligence. In fact, the Russian liaison officer has an office four doors down from the commander.
The other thing I would like to point out which is in error in that story is the fact that there are no armed guards associated with that van and, in fact, U.S. officers have access to it. I think that all of you know that there is a requirement for communications between these liaison officers who are at the headquarters and their unit commanders, and indeed, that is the function of this van. It provides communications between the MND North Commander and the Russian Airborne Brigade which is operating in the sector, and it also provides the Russians the capability to communicate with their higher headquarters.
Q: Just to be clear, you're saying that the story is just not true.
A: I'm saying that the story is just simply not true.
Q: You said you don't think there's spying going on from that van.
A: That's correct. That's what the basis of the story was.
Q: Do you believe there's eavesdropping taking place...
A: No. In fact I will go further and I'll say that we don't believe there is any eavesdropping that is going on. It doesn't have to go on because, as I say, there's been this transparency and openness which has been at the forefront of the operation.
Q: Are there certain methods that you have that you would know if you're being eavesdropped upon?
A: Susanne, I think you're aware that we would not discuss any kind of intelligence matters.
Q: Special Forces units are working with the Russians east of Tuzla. Therefore, would this sort of alleviate the need for spying and vans and what not? Would this cause... The Special Forces and the Russians are working together right now.
A: Yes. But their function is not to replace the communications that their liaison officer legitimately has with the MND North Command Headquarters in Tuzla.
Q: Do Russia and the U.S. still engage in this sort of intelligence gathering on each other?
A: I'm certainly not going to answer any questions about intelligence matters.
Q: Given the venting of some displeasure on the Hill in regards to reports of the Air Force exoneration of General Schwalier, is the Secretary concerned or has he made any statements that you know of that there's been a sense of people being allowed to get off the hook here in very serious matters?
A: The Secretary has made no statements regarding this report which is still being reviewed by the Air Force.
Q: When do you anticipate the Air Force might speak to us on the record, on the platform, on camera, on this issue rather than doing it the way they've been doing it, which is sort of leaking it through...
A: I have no indication of a timetable of when this review will be complete.
Q: Is there concern that a commander is being let off the hook, so to speak, as some members of Congress keep saying? Although the Secretary has not spoken publicly about it, is there concern that this is a perception that's growing?
A: I'm not sure, John, that I can answer your question on a report that has not yet been completed. Say again what you're looking for?
Q: The concern is about a growing perception by some in Congress that a commander is being let off the hook after a difficult situation in Khobar Towers.
A: Just being very general, first of all, I want to point out, again, that the report is still under review. Having said that, I should also note that it's no secret to any of you that people in this building are always sensitive to what the thinking of Congress is.
Q: Why is it still under review? What's being reviewed?
A: I can't answer your question. You'll have to check with the Air Force on that. My understanding is that the report is still in their hands. Once they feel satisfied with it, they will brief Secretary Widnall and, at that point, Dr. Perry will also be briefed on the subject.
Q: Do you know what happens to the scheduled promotion of General Schwalier? Apparently by January, he either is promoted as has already happened but he hasn't been officially promoted. If this report drags out even further, is he going to go ahead and be promoted before the report...
A: I can't really predict what is going to happen since I don't know one, when the report is going to be out; and secondly, when the general's promotion is due to occur. I don't believe that the next increment of promotions has yet been announced.
Q: He's on a list, supposedly.
A: That is correct. My understanding is he was actually selected in 1995.
Q: Can you take the question of how long he can stay on an old list before he must be promoted or dropped?
A: I think I would refer you to the Air Force for that.
Q: That means there's been no Congressional action taken? Files are not under review by anyone? This is just an automatic...
A: Well, the only Congressional action that's been taken with regard to the general was that his promotion was confirmed by the Senate.
Q: On the issue of the merger announced on Sunday, was there any informal heads-up given, I guess Deputy Secretary White was in town over the weekend. Did he receive any advance informal notification of...
A: I am not aware of any kind of advance notification that was given to anybody on this, other than the fact that there was a meeting which occurred on Monday, yesterday, involving the chief executive officers of both companies. And they came to the building to essentially restate what they had announced the day before to the news media, which is appropriate since, I might add, the Department is involved in the process of determining any kind of concerns that the government might have on the merger.
Q: As far as you know, no one in here...
A: I think there was... Excuse me?
Q: As far as you know, no senior officials here knew before Sunday morning?
A: That's correct.
Q: Can you walk us through what the process is, how the Pentagon voices its either concern or support for this merger? What is the process?
A: There will be a team formed headed by the Deputy Under Secretary for Industrial Affairs and Installations, John Goodman. He will be joined on that team by a representative from the General Counsel's office, and by service representatives.
Now the actual process varies from case to case, but basically, the purpose of the team is to thoroughly review the potential merger of Boeing and McDonnell Douglas as to what national security and industrial competition consequences it could have. Once they have made a determination on that, they will provide it to the lead agency of the government which will be dealing with this issue, and that varies from time to time, and it will be either the Federal Trade Commission or the Justice Department. I don't believe it has yet been determined which one of the two it will be.
Q: At this point can you say if the Pentagon has any concerns about the merger?
A: I don't believe that we have any opinion at this point since we have not yet started the review. However, I will say that the Department recognizes that consolidation of the defense industry is both inevitable and necessary as the defense budget has declined. I want to point out that in the past ten years, defense procurement spending has dropped more than 60 percent in real terms, so consolidating and restructuring make good sense. As long as we continue to have competition, the economies of scale can help the taxpayers in the long run through savings.
Q: Hasn't the Defense Department actively been encouraging this merger back behind the scenes?
A: I am certainly not aware of any behind the scenes encouragement. I'm aware that the talk of this merger has been going on for the past, I think, three years. So I don't believe anyone was particularly surprised by the announcement on Sunday, except perhaps the timing.
Q: Aren't there Pentagon policies that in fact encourage companies like this to merge? Don't they get to write off certain expenses and things that...
A: No, we don't cover any costs in mergers. There is a provision for the Department to provide some, to share some costs in connection with restructuring, but it's not clear at this point exactly what would be involved in this case. We have in the past shared some of the cost of restructuring as a result of other company actions. But we do not pay for mergers.
Q: Is there a Pentagon policy that results in any sort of financial windfall or benefit to these companies for merging?
A: Certainly not for merging.
Q: What is the timetable for John Goodman to report back?
A: The only guidance I think he is operating under is to do a very thorough job and one which can provide insight to either, as I say, the Federal Trade Commission or the Department of Justice. I'm sure that the companies involved would like to have it done as quickly as possible. We would like to be as accommodating as we possibly can, but there's certainly no timetable that's outlined in this.
Q: That report goes to the Deputy Secretary?
A: It goes from the [Deputy] Under [Secretary] and then no doubt it will go through his boss who is Dr. Kaminski, to the Deputy Secretary. But ultimately, it is communicated to one of those two agencies, whichever has the lead.
Q: Who would actively start the process? Will they wait until after the holidays?
A: I think that their intentions, based on what we were told in this meeting yesterday, was to proceed as quickly as possible. But their lawyers have some work to do before they can actually do the appropriate paperwork on the subject.
Q: Is this a practice that the Defense Department has to approve this, or do they use implied...
A: I think that we provide our input to the Federal Trade Commission or the Justice Department, but I think the word approval is probably too strong. But we do play a very active role in this as we have in recent years.
Q: Has Congress changed the amount or the formula for the amount of money you can actually rebate to companies as a result of restructuring?
A: I am not aware of any Congressional action that has taken place in this, but the restructuring process is one that involves the contractor submitting an overall plan; it involves our auditors going out to the companies and actually going through with a fine tooth comb exactly what they propose; evaluating it; and then we make a determination based on this audit as to what share of this we believe that we should accept.
Q: Do you know if either of the companies did that before this, as part of their...
A: You mean in the past?
Q: No, maybe they've already estimated what their potential whatever you call it...
A: I have no indication that they've done that. Again, they didn't have any idea, and as far as I know, they didn't communicate in yesterday's meeting any sense of restructuring, and certainly not of any cost associated with that.
Q: If merger acquisitions are so well received, why specifically has Kaminski asked for a review of the Pentagon's merger and acquisition policy, I think from the Defense Science Board or the Defense Resources Board? What's the purpose of that review?
A: I'll have to take that question because I'm not sure that indeed he has, but let me take it and see if we can get an answer for you on that. Have you got any more on this one?
Q: Does Goodman's panel include people from outside the building like Defense Science Board people?
A: I am not aware that it includes anybody outside of the building, but let me take that question just in case there's a change in that.
Q: Do you have examples of companies that did go through restructuring that received assistance from the Pentagon in doing that?
A: The only one that I have up to date information on is Lockheed Martin, and there is savings there of $2.375 billion. Our share of the cost involved in the restructuring was $348 million.
Q: Can you define savings... When you say savings, what do you mean in this case?
A: It's savings based on certified projections of future cost savings, and I believe that there is a piece of paper that we put out some time ago on this that actually comes up with some details that we can provide you.
Q: The report of General Shalikashvili proposing, or at least talking about a separate kind of force to apprehend war criminals in Bosnia, and my question is what can you tell us about that? Is this a program or proposal that's about to bear fruit in the Administration national security apparatus? Or what can you say about it?
A: Basically what I can tell you is that I think the United States and other countries are not satisfied with the progress that is being made in bringing war criminals to justice, and there have been some recent international conferences on that subject. NATO authorities, since the outset, have been looking at options to strengthen the ICTY and to put pressure on these indicted war criminals. There have been discussions on new and effective means of implementing procedures that would accomplish this, but as yet no decisions have been made on how they will proceed.
Q: This is not really a contingency plan or...
A: This is not a plan that has gone to the point that anybody can actually talk about it.
Q: There are no forces being assembled?
A: No forces being assembled.
Q: The Khamisiyah modeling was to have been delivered to the Pentagon. Do you have any update on that?
A: The only update that I have is that we anticipate receiving a briefing on the subject of the work that has been done on this, on the modeling, some time this week. And if there's anything that comes out of that, I will be back to you.
Q: Is it in the building? Is it still being analyzed?
A: My understanding, there may be some paper in the building, but nobody in the building has been briefed on it yet. And we anticipate that there will be a briefing later this week that will go over the results of what they have been doing. But I just want to hasten to add that what we're talking about here is the study that has been done by the Institute of Defense Analysis. IDA is what they are called. It does not actually apply numbers to the models. It just looks at the models themselves.
Q: In other words, it defines a geographical area?
A: I do not know that. That's why I say I think we've got to be briefed on this before we can really tell you much about it.
Q: Do they include a simulation? IDA does simulations. Do they include a simulation?
A: Again, I can't tell you. My sense is that there is information that we are going to have to apply to the models after we actually receive the report and receive the models that will enable us to come to some decision, but we're not to that point yet.
Q: Can you tell us anything about what kind of military equipment is included in the aid package for Lebanon?
A: First of all, I think there may be... There was a conference which took place which discussed this matter, which had to do with non-military sorts of aid. What I can tell you is that, some time ago, we agreed to sell Lebanon some utility helicopters, and I think it's 16 UH-1s. They have not yet been delivered. This was announced, I don't know how long ago, but some time ago. This is not associated with that recent conference that took place.
Q: So there's no military equipment in the new package?
A: Not that I'm aware of.
Q: There's a report in the Washington Times quoting a Defense Intelligence Agency official as telling a Congressional staff that it's his opinion a shoulder-fired missile shot down TWA Flight 800. Do you know if there's any evidence to support that?
A: I know of no evidence. Let me just restate what you said, and that was that, first of all, this was a personal opinion. Secondly, the individual in question was speaking in hypothetical terms. He indicated that this was a possibility, which I think you will find is basically the approach that has been followed as this investigation has proceeded. The third thing I wanted to point out is he indicated he had absolutely no evidence on this score.
Q: I wanted to ask on the Shalikashvili proposal, who all backs that? I'm sure he didn't just speak off the cuff. Does the White House back it? Was it a Pentagon proposal? Who was he speaking for?
A: I can't tell you. I know that the subject, though, has been discussed, as I indicated, in recent weeks and months in this building and elsewhere, but as I said before, there have been no decisions made.
Q: So this is something that Shali just sort of dreamed up and floated out there?
A: No, I don't think it's anything he dreamed up. I don't think he said anything that is different from what other people have said in the past. If you look at what he said, was that he thought that this mission required a certain kind of a force, a certain kind of a force that was trained in a certain way, and I think everybody would agree with that.
Q: Send in an IFOR of some kind.
Q: Did Secretary Perry talk to him about it? Did they talk together and agree...
A: I can't help you on that one.
Q: Will there be any review of the policy regarding transporting nuclear weapons since this truck apparently slid off the road in Nebraska with two nuclear warheads on it? On icy roads.
A: I am aware of no plan to change any rules regarding the transport of special weapons.
Q: Snow tires? [Laughter]
Q: There was another item today that was rather disturbing. Can you confirm reports that some elements of the Russian IFOR contingent in Bosnia are spying...
A: We went through that. We've been down this road once. I'll be glad to go through it again, but let me not bore everybody else with it.
Q: What about this "Perry Praising U.S. Troops"? [Laughter]
A: I can confirm that one.