infrastructure that moves us back to a theory serious investment attitude, the kind of thing lincoln would have understood, the kind of thing dwight david eisenhower understood that would build a momentum of economic growth in the long run. wheels about what to do it in an intelligent way and i recommend all of you to read the paper and look at what governor wilson did after the northridge earthquake, what governor leavitt did in order to reconstruct highways around salt lake city for the olympics, and what governor schwarzenegger date to years ago when there was a fire on the oakland, california bridge i am the president of the center

for american progress. thank you for joining us. we are honored to have richard holbrooke in this spectacular team. we have more members in the front row. this region of the world is of security concern for the night it stays. it was reaffirmed by the president in march when he made the case for a stronger, smarter, commitment to the conflict there. the center has made this a primary focus to the ongoing work of human policy analysts, particularly one who is here today.

ambassador holbrooke has assembled an impressive team. there is the multidisciplinary interagency nature of secretary clinton and investor who were's approach to afghanistan and pakistan which tendons on the -- which hinges on military assets. to the best of my knowledge, this is a first. drawing all these resources under together under one roof and umbrella and insuring that it will be discussed, the why as well as the how. the need for a coordinated approach is the cornerstone of the center for american progress.

the ambassadors team faces a multitude of interlocking challenges. in less than a week, afghans will vote in council elections for the second time since the fall of the television -- tal iban in 2001. concerned about corruption and violence, reports of electoral fraud, and the ability for the government to provide to them for into a version of this moment. beyond elections, sharp increases in roadside bombs made july the deadliest month for

international coalition forces since 2001. increasing concern at home about the cost of winning in afghanistan and to what end goals we should aspire. in pakistan, the government grapples with instability and a strengthening insurgency, and economic crisis, refugee crisis, and persistent challenges. the situation is complex enough to challenge even this exceptional group we have assembled on stage and in the front row today. perhaps given his multitude of experiences, no one is more capable than my friend richard

holbrooke to lead this team. after he gives a few brief introductory remarks, he is going to introduce his team and the people on stage will have a few minutes with a comment. we will then shift to a discussion format we can discuss some of the larger question surrounding our policies. i hope to focus on the implications of the upcoming election in afghanistan for our efforts there, our objectives, and how we measure progress. most critically, the threat of both countries in the context of broader national security prior to. thank you all for coming today. as a foreword to protect a conversation. let me turn it over to ambassador dick holbrooke. >> thank you, john. i think the center for this

opportunity. when we first talked about an event, i suggested that rather than another speech by me that we bring the entire team. we actually did that have the entire team here. several people are men smissing. i've been privileged to work with a lot of terrific people in my career, including some people in this room who are recognized. i think this is the best team i have ever been able to work with. i am so pleased to be here today. we want to focus today on the civilian efforts. you can ask any questions you want. we are here as the civilian side of the integrated military operation. the background is simple.

they stated they wanted to have a counterpart to integrate the civilian efforts. hillary, who was been instrumental in this process, legally we are attached to the office of state, she approves every member of this team. she knows everybody on this podium personally. it is not the great anonymous bureaucracy. she has approved everyone. she agreed immediately and encourages to reach out to other agencies. what you see here are some of the nine agencies represented on our team. the ones that were missing today, to clarify, are general field is out on personal leave.

our cia rivers is it told me that he cannot be surfaced. he he is not here. our department of homeland security river is is it is not here. they are not in place. we are looking closely, because homeland security has a vital role in all of this. the fbi representative is in town. he is on another urgent assignment. this is not our fault him. -- full team. the mandate is clear. now i want to introduce the team. for those of you who want to discuss the elections and did not stay up late enough to see the discussion on steven cole bear -- colbert, we will discuss the. if he did not see it, you can watch it on you too.

-- watch it on you to go. -- youtube. i'm going to introduce the people one by one. we will start off with barnett rubin which is an nyu professor. he is the leading american expert on afghanistan for the last three -- 30 years. i think all of you know who he is. he is a tremendous asset to have him on the inside telling us why everything we do is wrong is it on the outside telling us everything we do is wrong. he will give you a quick overview. each person will talk for two minutes.

but everyone knows we are engaged in a difficult war. we are in the middle of presidential and provincial council elections under difficult circumstances. you will hear more about this later on. what i'm going to do is talk very briefly about what we might call setting the conditions for success in afghanistan. i know that is something on the mind of the american people. there will be a point we will no longer be so engage in combat as we must be right now. there are too vested -- two six elements. one is enabling the afghan government to control its territory. the sec isn't is a portion and creating -- the second is reporting in creating an environment where people have a stake in the environment of afghanistan. on the side of civilian

governments, we are continuing efforts to build national governments. the election is part of that. we have an important focus on some national government in cooperation with the afghan government and other donors. rather than pouring money into building the government, we are focusing on rebuilding the relationship between the seven national authorities and local communities. our security strategy is aimed at creating an environment that the supportive of competent officials rebuilding relationships with those companies. in order to do this, we have to eliminate or diminish some of the obstacles at the local level, including the presence of armed groups that have grown up in the course of this war.

to make those efforts supportive, we have changed our counter narcotics policy so we are phasing out crop eradication and focusing on assisting rather than threatening the communities there. afghanistan cannot be stable of its members do not want it to be stable. we have a wide ranging diplomatic effort including a network of special riddances who are ambassador holbrooke's counterpart. their policy toward pockets son -- we have a policy toward pakistan and the relationship between those two countries. we are engaged in regular consultations to all the major powers. >> thank you.

he mentioned my counterpart. this is a good example of the way i think the united states should lead. when president obama and secretary clinton offered me this job, there were no counterparts. within four months, there were 25, some of which are countries would not expect of wanted to show their involvement but the gains in the swedes -- danes and the swede in the spanish. there are three want to draw your tension to, saudi arabia, egypt, and the arab emirates. we can get the full list to anyone who wanted. on march 27, the president announced -that-is the kind of thing we do. that is the kind of international coalition building. when i began i did not

properly acknowledge the center for american progress. i was honored to be part of your inaugural event in 2003. i was never invited back. [laughter] i think you are doing an extraordinary job of becoming a critical center for our effort. when we talk about where we should do our unveiling, we want to collething this of the . i know for a fact based on extensive discussions with people at the white house, that the role he played in the number three trip last week with president clinton was " indispensable and invaluable."

it was low-key until showed up wearing that shirt oliver las vegas. that troubled me a bit. other than that, i congratulate you. >> our next speaker is another enormous manager of see on television many times. we are so proud that he has also joined the government full time. contrary to much stuff reported, he does not work in iran even though he is probably nation's leading expert on she is somiii. he worked primarily on pakistan. he is helping shape our strategic attitude. he will give you an overview and then we will plunge right into the operational experts.

>> thank you. good morning. i think it goes without saying is still struggling to

consolidate its transition to democracy. it has been facing a major taliban extensive. it has set up a major refugee crisis and pakistan. equally as important, pakistan's economy in the past year has been tempered by the major financial crisis and a severe electricity shortage that impact of businesses, people, and people measures. we have been directly in continuously engaged with pakistan. my colleague has been working very closely with pakistani officials and all the relevant agencies in washington to put together energy package is. we are also engaged in

international diplomacy. you want to create a much more broad base international support for pakistan. going forward, we will continue to be very focused on pakistan poco stability. we will be working to bring pakistan into our framework for bringing peace. new >> when the refugee crisis hit, we had all the agencies involved and that in our offices. we were able to assemble them immediately that day in and come up with a plan.

hillary clinton was in new york and giving a speech at nyu. she called and said water you doing about this. we said we were meeting right now. she said i want to meet with you as soon as i land. by the time she landed and finished a meeting, we have come up with the first hundred and $10 million. she then announced that at the white house. that probably accelerated the response by a week or 10 days. that is the value of this concept. each person here ties into their agency. mary beth good meman was in the front row as an economic expert. an example of that is auto gonzales. we try not to talk about which agency is their home agency, he

is from the department of agriculture. he served in afghanistan. he is part of a totally integrated team. it works for us in agriculture. >> thank you. as many of you know, afghanistan has eight out of some people involved in agriculture. it is a sector that was devastated by a quarter century of war. we cannot succeed in afghanistan if the afghani people are not successful and agriculture. we have to fight that as a government. we spend more on trying to eradicate poppy than we did try to promote agriculture. agricultural -- revenue strategy

that is new and that is in line with the programs of the afghan government and is truly with the u.s. government. all of the main actors from our government, the u.s. military on the reconstruction team, the army national guard, and the ministry of agriculture, were all involved in developing a strategy that aims to do two things. one is to increase in come. the other is to increase afghans confidence in their government. i mention this is something new. it is. incoherency to our program that we did not have before. -- it is bringing coherence to our program that we did not have

before. we aim to increase productivity. we aim to regenerate business. we want to rehabilitate watershed in improved irrigation and a structure. our fourth objective is to improve the ministry of our culture's capacity to deliver services and to promote the agricultural sector. we do this in line with the afghan government. we also do it with the support of our secretary of agriculture, tom vilsack, who has launched trilateral efforts. they are focusing on three main areas, strength, to come and security -- strain, security, and trade. what we have is a strategy that is integrated, restores --

resources, and agriculture in the forefront. >> we have found so far that of all the programs we have done, this program in conjunction with the phasing out of poppy eradication, afghans may continue to do some. we are out of the business. we are not at war with the poppy farmers. general petraeus and i -- the combination of phasing out poppy crop eradication, upgrading agriculture, and upgrading interdiction, the military is taking down drug dealers, setting off bonfires with opium. this is the most successful thing we have done so far. we have increasing evidence that it is really disrupting the

taliban internally. we are very pleased at the direction that is going. from the aid, we have to people. -- two people. >> good morning. picking up on what otto has discussed, we are changing the way we do business in providing development in both countries. we are focusing on capacity building and moving toward increased country leasing. [unintelligible] we want to improve governance, and justice, and rule of law. under the direction of the

ambassadors in afghanistan, we are increasing the number of civilian staff. that is allowing us to move away from the large contracts and moving more toward local planters and improved accountability for the way we do our program. our increased capacity building efforts are allowing us to channel more of our plans directly to the government and allowing us to do our programs more efficiently. otto mentioned the programs that we do with the agriculture ministry. we have already channeled some of our funds directly. we are planning on doing more of that in the next several months as the ministries argo through

more capacity building. we are working increasingly through multi lottery trust funds -- multi logroll -- multilateral trust funds. we are increasing our efforts in that efforarea. all of this is trying to improve donor coronation. >> our next speaker is from the treasury department. you on of the subject is going to talk about. it is luces. it is complicated. and all of this -- a lot of the we cannot discuss in public. it is important. >> this war is being fought on two fronts. [unintelligible]

these and other terrorist raise funds externally and internally. and surely they come from kidnapping and drug trade. externally, but these groups receive funds from donors in the gulf. secretary geithner have raised these issues both domestically and abroad. we have formed the listed finance task force to coordinate u.s. government initiatives that threaten our efforts in the region. some of the key initiatives include counter threat finance acid building in coordination with the government's to further develop their ability to identify and deter other activities like al qaeda and the taliban. [unintelligible]

another is the joint u.s. and russian federation [unintelligible] we are working with the central bank to extend the reach of banking in afghanistan. we will use it to pay the afghan national army and increase salaries very moving cash and the battlefield. we are also exploring ways to do business with the u.s. government and other donor countries and organizations. thank you. >> the next two presentations where when to do together. i will introduce both people. my longtime assistant and chief of staff in your, ashlandey bl

balmer, and secretary gate. a preferred to call it what it really is, communications and counterpropaganda. >> information is as strong as a weapon as a gun they have emerged militants to gain power tears strategically timed radio broadcasts, videos, and cds. their public executions, throwing acid on girls in school, and publicizing the names of the people they want to kill every single night given the archaic values of al qaeda, we must abide policies that expose the true nature of the militants. we must ship the paradigms' of the debate is not between the

united states in the militants, both between the people. we are going to use 21st century technology including mobil and radioed to empower the people. there are only for legal fm radio stations. -- four legal fm radio stations there. there are over 150 illegal fm low wattage stations. they are conducting a daily campaign of terror. cellphone is the fastest growing technology. the taliban are ordering cell phone companies to power down it every night. with the lack of the information, the links between

poverty in terror ring card entry. mobil banking, 97% of the country is unbanked. we are pursuing an expansion immobile banking, mobile payments, insurance companies to protect the power. initiatives like these and others are critical to supporting a communications and counterpropaganda strategy that protect and empowers the people. >> thank you. what ashley just discussed is central to the strategic thinking of our adversaries. they fight information wars

supported by military effort on both sides. we need to think more like our adversaries. we are extending the reach of communication and information to populations the religion not have other than what they have locally, which is often violent messages or intimidation from our adversaries. it is not developing content that is competitive beckham provide people a message that counters what they hear from insurgents.

it is about tying the population to the government in areas where they historically have not been tied. critically, a lot of this is on making sure our actions support our messages. none of this is new. getting our focus on it is going to require a number of significant changes. early on, most of it might be general mid crystal's rapid and tireless effort to reduce the number of civilian casualties in afghanistan. [unintelligible] our focus is on resources,

resources that have been stamped but are not flowing and insuring those resources can support this kind of strategic view of how the night states uses information. it is an entirely new level of effort to get this right. it is critical. >> thank you. he mentioned averell -- admiral smith. we are in the process of recruiting civilian counterparts for that job. we are going to change the structure to reflect this central priority. it all depends on communications. let's now turn to the elections. we have here two tremendous resources in addition to the rest of the team.

i will ask them to talk sequentially. rema is just back last night from afghanistan. she worked for the osi. she worked for the united nations during the last set of elections. she is well known in afghanistan. she recently joined the state department and her colleague in this will speak with a rather funny accent. that is because she is not an american engine is not an employee. jane mary it is on loan from the british government. -- marriott is on loan from the british government. we are proud to have her here. i had the experience of sitting in a meeting at the white house and we spend 30 minutes debating a paper she had written.

i said to my colleagues, i have to tell you, we are reading a paper written by british to lament. ira mention that because it underscores how we have other countries -- i mention that because it underscores how we have other countries such work with us. she is invaluable. we will turn it over to rema and jane and then i'll make closing remarks. >> thank you. president obama has to third to the elections -- has referred to the legend that the most important event of the year. i was born in afghanistan. i have been a part of every political process. i have seen it turned out over and over again. they believe this process -- in this process.

these events also historic in that there the first afghanistan lead direction in afghanistan. the elections are quite historical. the most candidates that have competed in an election anywhere in the world. i think they are going in the guinness book of world records. there are 41 candidates, including two women. they are being contested by 3324 people. 70 million people have registered to vote. it just came back from afghanistan. the campaign season is not very different from what we see in the united states. there are campaign paraphernalia all over the country, a checkered of people's houses, cars. there are political rallies

taking place all over the country. the candidates are being interviewed on radio and television stations. there are pungent -- pundits. the polls show that there are four serious contenders. the former minister of affairs, the former minister of finance, and the former minister of parliament terry. [unintelligible] the elections will go into a second round in early october. what is the u.s.'s position on these elections any candidates? i'm going to turn to my colleague for that. >> thank you. >> we want to see to things

coming out of these elections. we want to see them capitalize on the momentum of the policy debate that has been generated. both by the candidates and in the public is itself. we want to see that. it will be supported by an international community. the second thing we want to see is these elections continue to build up a tour of institutions and mechanisms with and afghanistan. -- within afghanistan. a statement earlier really set the stage. the u.s. actively impartial in these elections. we want elections that are credible, pure, and closer. i want them to be seen

legerdemain by the afghans and the rest of the world. -- legitimate by the afghans and the rest of the world. we will continue to reach out to the candidates to encourage them to debate the issues and what their policy platforms are. we will hold into account the key electoral institutions. thirdly, pressing the principles of access to the media on transportation for the candidates said they can get around on the commentary in campaign properly. the international community may have a very subtle role to play after polling day.

these elections are the first afghan held since 1970. they are being held in very difficult security conditions. they will not be perfect. we expect everything possible to be done to minimize fraud and insure the integrity of the ballots and the process to ensure these elections are seen as legitimate by the afghan people and the world. >> thank you. and sure most of you know dan feldman. -- i am sure most of you know dan feldman. he will be available for questions. that is our team. i'm sorry others are not able to be here. on the elections, as rina,

president obama has called this the most important event this year and afghanistan. why do we say that even though this election is undoubtedly a very difficult event? holding an election in a wartime situation is always difficult. holding one with the enemy has said they will try to disrupt it makes it even more difficult. holding it under historic conditions that have been alluded to, they can go on forever about how this relates to the history of the country. it is even more daunting. . .

a national reintegration amnesty program, improving the governance at the sub-central level which barney and others alluded to, sepideh particularly mentioned it, all of these are vitally important in a counterinsurgency effort but until an election legitimizes the government, whoever wins, we have had to focus on that. as all of you recall if you

have followed afghanistan when we came into office the country faced a constitutional crisis over how to deal with the fact that with the aiding and abetting of the international community the afghan constitution, the one rinna helped draft, was be going -- not going to be carried out. imagine what would happen in the united states if people announced that the election would be delayed indefinitely. well, that's what we inherited. the opposition says who is going to be legitimate? who's going to rule? we spent most of the spring helping the afghan government seeing -- it threw to the august 20 date coming up next week. so this election matters and we will see what happens. my -- i will be leaving the day after tomorrow for afghanistan and pakistan in reverse order. pakistan first, then afghanistan then i'll fly to istanbul where the turks are hosting a friends of democratic

pakistan meeting and the president's asked me to be on the scene during the elections. but i do want to emphasize that we have an extremely strock -- strong team in the american embassy and in the military command. ambassador eikenberry is superb and as the former commander of the forces in afghanistan has a unique ability to integrate civilian and military issues. his deputy was our gaffer -- ambassador in to -- two of the world's largest american embassies, egypt and the philippines. the number three person, who was already mentioned, tony wayne was a former assistant secretary of state and just came directly from buenos aires as ambassador. the number four person is a former ambassador as well as -- and we have an additional election unit out there headed by ambassador tim carney. on the united nations side, kai

runs you asuperb operation and his senior deputy is an american. peter gathbrathe served as our first amerin@marr!g ,rrbd'@ '#@r

pule of law. counternarcotics. the illicit financing. that's what we're doing. the payoff is still to come. we have to produce results and we understand that. and we're not here today to tell you we're winning or we're losing. we're not here today to say we're optimistic or pessimistic. we're here to tell you that we're in this fight in a different way with a determination to succeed under the direct personal supervision of the president as -- and secretary of state and the rest of the cabinet. and so i want to close with that and turn it back over to john and, john, thanks again for the center for american progress doing this today. >> thank you, richard. >> i want to come back to the election but i am going to ask

a few questions and then we're going to open things up againing with the press. i want to come back to the elections but i want to pick up perhaps where you left off and ask a larger strategic question which is that, and let me begin by noting that when the president announced the policy after the 60-day review he laid out what appeared to be i think in the minds of many people a very narrow objective. which was to disrupt, dismantle and defeat al qaeda in pakistan and afghanistan and to prevent their return to either country in the future. but actually to execute against that very narrow definition of what the project was all about, you need a broad strengthening of the governmental capacity and security forces in afghanistan. you need a stronger, more committed partner in pakistan. i think this team reflects that. and reflects a much larger strategy than what is embedded

in that very narrow definition that the president"pñ used on march 27. i think probably ambassador eikenberry's budget request that was recently reported reflects that again. so in that context, for, from the perspective of the mediterranean -- american people, how do you define clear objectives of what you are trying to succeed with as out putts against the -- how do you measure success against that broader array of problems and inputs? >> a very key question which john, you are alluding to is of course if our objective is to defeat, destroy, dismantle al qaeda an they're primarily in pakistan why are we doing so much in afghanistan? it's a legitimate question. it was addressed directly by hillary clinton in her july 15 speech at the council on

foreign relations here in washington. and it's a relatively simple connection but it needs to be very explicitly stated. al qaeda and the taliban, or to be more precise the talibans, because pakistan taliban and afghan taliban have some connections but they are also separate in many ways and it's very elusive to analyze the inner connections. and by the way in the aftermath of mehsud's apparent death there's all sorts of reports that you've all read in the papers of inphyting and there's going to be some major readjustment coming up. we don't know what it is. we have many theories, but the connections are clear. if afghanistan is first ill re -- is fertile recruiting

territory for the taliban it gives more terrain from which to operate. unless the taliban were to renounce explicitly al qaeda they are basically fighting in support of one another, so they are allidse. in secretary clinton's speech and i would draw your attention to this, she laid out the fact that if -- that we would support the reintegration into afghan society of any people fighting with the taliban who renounce al qaeda and lay down their weapons and reintegrate peacefully but on your key point, the question we're always asked, i think it needs to be stated very clearly that if you abandon the struggle in afghanistan, you will suffer against al qaeda as well. but we have to be clear on what our national interests are here. >> i guess what i'm asking is can we settle for a

reconciliation process, a weak state, and continued intervention, destruction of al qaeda forces in pakistan? as we've seen just this last week. >> i think that you say a weak state -- >> is that a, an acceptable end state? >> i think we have to be reasonable about afghanistan. as barney said at the outset, it's the poorest nation in the world outside of africa. it's been torn apart by 30 years of war. we're going to help rebuild it. the military part of this struggle with american troops is not an open-ended event. but our assistance, our civilian assistance is going to continue for a long time. i can't give you dates. and we will help strengthen the government. that has to be part of our mandate. the specific goal you asked, john, is really -- it's really hard for me to address in specific terms but i would say

this about defining success in afghanistan and pakistan. in the simplest sense the supreme court test for another issue, we'll know it when we see it. ok. >> let me -- rinna gave a, i think, very great backdrop to the election. let me ask you a question about that. i think some observers believe it's not the taliban or insurgency that's so strong but the government of afghanistan that's so weak and there's a lot being built into -- you quoted the president being the -- with respect to the election this year. do we have any expectation that this national election that includes provincial elections will change the weakness of the government going forward? >> couldn't be a more important issue.

i asked the ambassador particularly to focus on that issue and without going into too many details let me say that after the post election phase is completed and i stress that we aren't going to know on the evening of august 20 who won, cnn is not going to call this election -- >> well, we may, but we still -- they may but we still won't know. >> so all 41 candidates may call it. but the process will take a while. the ballots have to be brought into kabul to be counted. hundreds and hundreds of observers out there. i think something like 600 or 800 journalists have already registered to cover it from around the world, including i think some of you in this room. we -- after this process has determined a winner and there will be disputes. they aren't american elections. we only picked a senator from minnesota just a few weeks ago after a rath elengthy delay and

so after this is settled, we will be looking to the government and when i say we i want to echo what jane marriott said. we means the international community. this has been one of the main topics that i've discussed with my 24, 25 counterparts. we will be asking the government to reinvigorate or invigorate if it's a different president, the leader -- leadership in these fields that you have heard today. the reason we start with agriculture is that that was the -- we start our presentations with agriculture today. we started our efforts with agriculture because that was the least controversial program. and astonishingly, the u.s. government was spending -- spending more moneyer add i indicating poppy crops than building up agriculture. it made no sense to us. by reversing that, we were able

to jump-start the issue. but many issues -- anti-corruption, etc., are deferred. we're going to be trying very hard to help the afghanistanans. i want to go back to something sepideh said. another thing we discovered when we came into office is less than 10% of american assistance wand -- was going through the government. it was going to contractors. if any of you are in this room, be warned, we're going to try to cut the contracts down. we just have to because of the way -- because of the way they work. they're not flexible. they undermine the very government we're trying to strengthen. an example, we found a $30 million contract for women's programs that was going to be given out to somebody, to some n.g.o. or some consultant and we just cancelled the contract and turned the money over to the embassy for an ambassador's fund on women's programs. that way we can increase our

flexibility and respond to this hugely important issue. and secretary clinton's women's advisor, your old colleague milanda deer, went out there with ashley bommer and they had a fantastic trip. these programs will be implemented. we have about 20 of them. only discussed a few today. after the election, because with whoever is elected. we have to try to strengthen the government bearing in mind all the inherent problems. the biggest single problem we're going to face, i'm going to be very honest with you, is going to be strengthening the police. no question. unfortunately we didn't have our police team here today and it's a whole active issue but the police in any -- whole different issue but the police in any counterinsurgency, guerrilla wars, i spent a lot of my life working in these areas, you can't do it unless the police take over a key role in security after the military

forces do the clearing. this point was made quite well in an article i don't entirely agree with in last weekend's wall street journal. i didn't agree with everything in it but the emphasis on police was correct. so we have a vast array of programs which have been deferred by the delay in the election which we hope to emphasize as the military pushes forward and disrupts the taliban. that in turn going back to your first question, john, that in turn we know will weaken the links between taliban and al qaeda and together with the dramatic events in pakistan in the last week and a half which are enormously important, but we don't exactly know how, we just they they're important, are the direction we're trying to go.

>> al: vexing question in my mind is the role of iran in the region. we had cooperation earlier from inan the now putting tremendous diplomatic and other pressure on them. do we need support from iran and afghanistan to succeed? what's the tradeoff? maybe another way of asking that question is what's the greater threat to national security if you can opine on that. what's going on in iran or in afghanistan or pakistan? >> i can't opine which is the greater threat because a nuclear iran would be a very great threat not only to us but to everyone. nor do i work on iran. but i do want to make very clear that while i don't have

an iranian count part, the -- counterpart, the -- we recognize geography and its realities and anyone in this room who's been to herat, as ashley bommer and i have on a trip as -- and many of you know that herat is in a kind of cultural economic orbit with political influence from iran, iran has a legitimate role to play in the resolution of the afghan issue. but whether they will play it or not depends on a lot of other critical factors and that's really about all i'd like to say on that issue now. but we are completely aware of the iranian factor and they went and i would also draw your attention to one other fact. on april 17 in tokyo at the

pakistan pledging conference, the iranians came and pledged $330 million in an international conference to pakistan. so they are a factor and to pretend they're not as was often done in the past do%sggá"g

on the other hand, i am in constant touch with the indians. i met with the indians continually. the new ambassador in washington and i have had dinner recently and she and i are in close touch. i go to indio whenever the schedule permits. i stress we're completely transparent. the secretary of state and my close colleague assistant secretary for south asia, central asian affairs bob blake and i were in india recently and the indians are a major factor in the region. they're the dominant power. improveb -- improving u.s.-indian relations ha been a continual goal of the last three u.s.strations, all which i think have been successful in that regard, starting with president clinton's trip in 2000. i will keep the indians fully informed and i have an indian counterpart who i keep fully informed in india. >> ok.

going to open it up. [unaudible question] >> i'm not going to stand so i don't block the cameras. >> please identify yourself. >> martha raddatz from abc news. ambassador holebook i know you want to talk about the civilian side of this. >> but you don't? >> but the security is so intergind. tell me how that is affecting what you're trying to do, what kind of a hindrance that is, what hads to happen in order for you to succeed and as part of that i want to sigh that a lot of people i talk to, civilians in afghanistan complain that they really can't go outside the wire in certain areas because of the security. >> you mean the americans? >> yes. >> let me start with the second question because we're really changing that, martha. when's the last time you were in kabul? >> about a month or so ago. >> all right. so you may have noticed then,

you say the wire. the first thing that the new team did was cut wire down symbolically around the compound. they used to need permission. they used to drive in an armored car from the embassy across the street to the a.i.d. compound. they had to drive. that's all being changed. they have changed the curfew regulations, extended the curfew from midnight to 2:00 a.m. you no longer need 72 hours prior permission to leave the compound. you can leave on -- you don't need permission at all. . you just notify people where you're going. it made no sense to any of us when we came in. we send people over there and put them under restraints they can't work. now we have to protect them but we're doing it to gib them much more discorrection. -- discretion. we have also guaranteed any person who goes to afghanistan for the united states government that if his or her

spouse wishes to work in the mission, we will guarantee them a job. so far the first time, we have tandem couples in significant numbers starting with ambassador eikenberry himself. and so on that point we agree with you completely. it was a self-denying situation and i will continue to talk about it with the security officers and ambassador eikenberry. on your first point, i of course -- of course security is the underlying component. that's why i mentioned the police. without security you can build a school, you can build a bridge, and one grenade, one mine sets it off. so we understand the did, completely the integration of the two. but as you've seen and this is refered in a lot of reporting

been done lately including the washington post piece on page 3 this morning by karen de young and her colleague, we are trying to integrate the civilian and military. general petraeus and i and our whole teams have had two full-day sessions on this to integrate. if i go into details i'm going to take up a lot of time for smug already know but of course you can't could civilian growth unless you have security. it's obvious. what? >> [inaudible question] >> i think that general mcchrystal and secretary gates, and general petraeus have addressed the troop question very fully and i think there's a process underway the integrity of which i think we

must respect. >> beth mendelsohn with voice of america, the afghanistan service. if one of the candidates doesn't get 50% and this goes into a second round and things get complicated there, what are the constitutional laws that are in place? can karzai call the loya jirga? and also if it goes the way some of the things did in iran, what is the united states prepared to do in these circumstances? >> rinna? >> i'd like barney to comment on this as well. if there is a security situation then there are stipulations where a loya jirga can be called. but i'd like barney to speak in more detail about this as well. >> well, i'm not sure what your question is about. according to the constitution if no one gets more than 50% of the vote, then a second round

has to be held within two weeks of the date of announce mentd of the result. perhaps your question is what is -- if there is civil conflict and it is not possible to do that. we of course do not want to address hypothetical questionsb3 like that. there is an international presence in afghan government that is our partner and if such an unfortunate scenario sha rise there are policies and institutions on the rise to address it. >> thank you, mr. ambassador. sky news. the british and u.s. troops as well as the nato troops will be watching this very closely within their own compound. what message does this administration and do you, mr. ambassador, want to project to the troops in-country right now in >> you mean what message do we want to address to the u.s. and

allied troops? >> yes. >> um -- >> in edgerrin james tv the election -- >> well, every trip we make out there we always meet with the troops and talk with them -- them about why they're there to find out how they feel at the lowest levels, particularly on the front lines which are really dangerous. and i think the troops really do -- they don't love it out there. they're carrying 120 pounds of equipment on their back in 120 degree heat and i'm not making those numbers up. and it is an extraordinary thing to see. but they know why they're there. they know exactly going back to john podesta's opening question, they under the causal connection between their presence and 9/11. they under their mission. and they are now more and more trained for the integrated civilian military. otto, you may have noticed that otto mentioned in his

agriculture presentation. national guard units from texas , nebraska, several states have agricultural development teams which they are very proud of in uniform. the military is supporting these programs. vikram discussed the initiative on counterpropaganda. i stress nobody likes to be out there. it's very tough work. but i felt that they really understood it. >> let's go to this side of the room. start with karen. karen? >> karen dion with the washington post. i'd like to go back to the question of iran. barney rubin said we were in regular consultations with all major neighborhoods who have a stake in afghanistan and i want -- wondered what that meant in terms of iran and also if you could give us an up to date

assessment of iranian activities in afghanistan, particularly the provision of weapons, training, and advice to insurgents. >> well, karen, in regard to all neighbors and regular contact. barney did not mean to include iran. we don't have any direct contacts with them on this. but you can judge for yourself by their statements, and -- what was the second part of your question? sorry. >> are they training? >> oh, are the iranians training? we get conflicting reports on that. vikram, do you want to address that? >> there's certainly -- you know, i didn't comment on it. i wouldn't want to get any -- the most current information i don't have. certainly the iranians have in the past troy -- provided some arms to certain groups inside afghanistanity i do not think

it's been viewed from a defense perspective as a substantial effort or a substantial threat. i do not have the most recent information more you, however. >> i think for the benefit of people who don't follow this issue closely i'd add one very publicly known but underexamined fact. iran has arguably the highest -- the largest problem as a percentage of adult population of drug addiction in the world and those drugs are coming across the afghan border. it is a major concern to them. they've admitted to a very high number. don't hold me to this but i think five million. it may be higher. and there is obviously a very high imperative on this. you also will note that in the declaration that president obama and. medvedev gave during the moscow trip there was a specific

paragraph on the russian concern with the drug trade in afghanistan and its effect on russia, with a particular emphasis on precursor chemicals. so i mention this because if you look -- barney dade -- said earlier about strategic parallelism but not fully integrated policies -- there are these issues which every other country in the region and all the way through to europe and this includes another afghan neighbor, china, all share and this is one of them. >> yeah, hi. simon denny from reuters here. i wanted to pick up on something ashley and vikram are talking about, propaganda. the taliban are going around telling people in afghanistan that the russians were here for 10 years, the americans have been here for seven, you know, stick around, we're going to be

on the winning side and it's changing that perception of who the winning side is going to be which is crucial to getting the villagers to actually support your goals. and i just wondered, you know, i understand that the military commitment can't be open-ended, that the goals have to be realistic but can you really tell the afghan people you're here, the military's here until you provide security, development, and democracy and not just at a presidential level but democracy at a local too. is that commitment still there from the international community to do that? >> great question. barney and rinna, would you comment? >> well, first, you accurately describe the message from the taliban. the situation, however, is quite different. the soviet invasion of afghanistan was condemned by virtually the entire world community and the -- it was one

of the major factors actually isolating the soviet union. the operation in afghanistan of which the u.s. is a part and it plays a leading role is perhaps the most fully multilateral operation in history which commands the support of at least officially if not unofficially as i mentioned, of virtually every government and every international organization. i don't think it's crass to say that we are committed to waging a war in afghanistan until afghanistan is a perfect democracy which would seem to be what you implied, nor would we make did, nor would we expect people to believe such an unrealistic commitment but i believe we are committed and it is realistic to ask believe -- people to believe that we are committed to fight there until we are security from terrorist attacks launched from there and until the region is free from

the danger of nuclear terror and other forms of danger that would be extremely dangerous. >> rinna? >> one of the first places i

>> my name is wande, i'm with the south asia voice of america and my question is about the legitimacy of the election. only earlier this week i think it was the british ambassador to afghanistan who said there will be a very low turnout and also the security yisheds -- issues. who is going to decide the result of elections to be legitimized? the concern is here, in afghanistan they're watching the situation in iran and other groups. >> no, this is obviously a central issue. who will decide the legitimacy of the election? there are thousands of observers, international an -- and domestic. there's going to be enormous media including the voice of america. i gave you an interview yesterday about all this. but you know, my own answer is it ends up being the media, frankly. not an answer that john podesta

probably thinks is the right one but the truth is that all of what happens in any distant place is in the end reduced to the simple headlines of media. and you take the three most obvious recent examples, iran, kenya, and zimbabwe. no one knows what actually happened there. what you know is what you think you know, thanks to the media. in all three cases, by the way. i think they covered it quite accurately and i know something about those countries. so i will leab it to you to report. we're going to do the best we can along the lines we've discussed earlier. as everyone here has said, nobody is looking for a level of perfection in an election to which we are ourselves don't always achieve, to put it mildly. and the -- so we're just going to do the best we can.

this election was called for under the constitution. it shouldn't have been delayed. it was. we have put an enormous amount of effort into it, we being the international community. >> the leading commission will be the body that ultimately decides what the result is and the point is that it will be about the media and the international election observers and government staff statements in behaving responsibly, not speculating too much and allowing the i.e.c. to take forward its work, allowing the electoral commission to address and adjudicate on complaints, are the best way to come -- your mike was down. could you state the front end of your answer? >> yeah. the front end was ultimately the afghan electoral authorities, the independent election commission will have

the say on the election and making sure we don't speculate too much on the legitimacy. >> and there -- will there be challenges to the election? there are in every other democracy. i think we should assume those. >> it's generally recognized that afghanistan is unwinnable as long as the taliban and al qaeda have privileged areas in the areas on the afghan border. i'm just wondering why fattah did not come up this morning. >> we did talk about fattah, but there were no questions. i agree with you on the larger framework. i prefer to use the word "succeed" rather than "win" because this war isn't going to end on the battleship missouri or as you alone in this room can attest, in geneva, because

you were alt that famous conference. the issue of pakistan and the sanctuaries is central to success. that's why president obama took these two countries and hillary clinton and asked for a separate organization which you see here before you. just for a point of reference on how different it is, up to january 20, afghanistan and pakistan were not only in the south asia bureau, but they had different deputy assistant secretaries in charge of them. so the integration -- there was no integration until you got up about three levels. now we have a single desk and everyone on this podium and any colleagues here works in both countries. and with all the other countries. now to your question. this is an enormously important issue. the end of mehsud as we all

know is a very big deal and as i said earlier we don't know how it's going to play out but we know that the reports you've been reading in the press of disarray among his people, of other factions maneuvering, al qaeda has to decide what to do because mehsud was sort of like an independent subsidiary of yadier -- al qaeda, focused on pakistan, but some of the other groups in the area were focused on afghanistan. everyone is thrark around. there are -- thrashing around. there are unconfirmed reports of a shoot-out during the leadership meeting. this is very good news for all of us. equally important, arnaud, the pakistani people are converging on a consensus on the importance of this. i think this will pave the way for redoubled efforts. i know we're running out of time but i'd like to ask vali,

who is really one of the great experts on this, he lived in pakistan for years and has a network of friends that there -- that is extraordinary, to add additional comments that this. >> it's no longer enough to just think of this as a sanctuary contributing to fattah. fattah is still a very important locale for afghan taliban as well as pakistan taliban. the zone of taliban operation rups much farther east and south and north. and what we are seeing is that to bring pakistani and afghan and american interests into alignment to deal with what is now a much broader regional problem, so what we're seeing is the pakistanis have engaged and the ultimate conclusion of this fight against the pakistani taliban will have to

have a resolution of the fattah problem. so we are seeing much more of the hammer and anvil approach and in ard to succeed we'll have to maintain that kind of a relationship and cooperation with pakistan. >> robert, last question. >> good morning. i'm bob dreyfuss from the nation magazine. do you think when you are involved in all this do you have in mind that there's a domestic political clock here in which americans could look at this and as you said know it when they see it and decide that this isn't succeeding? and also do you think that al qaeda's comments about negotiating with the taliban leadership were helpful and constructive? >> whose comments? >> the u.n. did, kaida. >> oh, yeah. >> that we should start talking to the top leadership of the

taliban rather than trying to peel away the local people? >> on the second question i haven't seen the full text. in the contempt -- context i saw them in they seemed to be consistent with our positions and those of everyone else. on your first question, i can't answer your question. no one can. but i can tell you that we all feel the impatience and pressure of the american public and the congress, which legitimately wants to see progress. that's an absolutely legitimate thing and we have spent a great deal of time talking to members of congress and reaching out to groups, never in this configuration, this is unique for us, but to talk about this and so far it seems to me that people understand how critically important is this is. do we need to show progress in of course.

we can't make these investments without making some demonstration that they have results. that's why i said earlier i don't want to confuse input and out putt. we've answered your questions about what's going on on the ground but we're very mindful of the fact we need to show that all these programs talked about today, frankly unveiled in this context for the first time, have to produce results. make john can invite us back in a year and you can hold us to act. i'll leave that to him. that is an open invitation. let me close by noting that when richard began his remarks he noted he was aught our launch event for the center for american progress. he said he hadn't been invited back. i reminded himj#u we had invite him back many times nor private consultations but it's sometimes dangerous to give him a microphone.

but the real reason was we were waiting for a tremendous encore event and i want to thank he -- him and his colleagues for presenting the many components going into the strategy here. it's a very challenging context in which to work and we loork -- look forward to seeing what happens next week during the elections. you have a standing invitation to come back and report on how we're operating against the metrics and objectives that you laid out today. so thank you very much for being here. thank you, john. [applause]

lie" a defense of the free market in a time of crisis. this is about an hour. [applause] >> thank you. if you read the book, you'll miss the french accent, so this morning you have the book and a french accent. and, as brian just explained, the purpose of the book is to show, to demonstrate that the economics is a science and that free market works. and, it is a science. it is quite a recent signs. if we look back into history, you had an extraordinary men have had extraordinary intuitions like explaining more than two centuries ago like the free trade was good, but it was more like the intuition. what is quite recent an

economics and the science is that most of our arguments and certainly most of the arguments in this book are based on facts, facts that we can measure. we now build mathematical models. we confront the mathematical models with economic reality and we know if the model is right or the model is wrong. if the model is wrong we build a new model in salon. so economics works as a science since quite a reason period. when i started studying economics and even teaching economics it was very much a matter of opinion. people would think that free trade with good and other people would think that free trade was that. some would advocate inflation as a way to create growth for example. it was before milton friedman and so it was a matter of discussion until the late '70s.

economists would compare the efficiency of the soviet model versus the capitalist model, and some would argue that the communist model was more efficient or more egalitarian because we didn't have the data. when we started having the data, economics thought to be matter of opinion and it became a scientific matter. when i say economics is a science and the free market works better, it is not because it is my opinion or because it is my choice. it is a fact and i would say most of the economist work now with then this framework. the role of the economics and the role of the economy today is to try to define what is a good economic policy versus a bad economic policy so economics is a way to make a distinction. i argued that we are today in a

position to make this distinction. we know what works and we know what doesn't work. doesn't work perfectly because we are human beings and as human beings we have fashions and we make sometimes irrational decisions and there are parameters that we do not control, but basically within the parameters we control we need more or less know how to define a good economic policy. what is a good economic policy? the good economic policy is a policy that brings people out of poverty and they are out of poverty, which is the case in the united states or western europe, good economic policy is a policy which improves opportunities and more opportunities and more freedom of choice as milton friedman says. the criteria are very clear. so what works? basically six principles and i have no time to elaborate but

six principals would seem very evident today and which we are not that evidence 30 are 40 years ago. the first principle on which i think most of the economist today would agree and be on the free market economy is the basis is the entrepreneurship. without entrepreneurs you have no growth. you have entrepreneurs because you have political and legal circumstances which allow people to take initiative, like the rule of law, and the respect of property. if you destroy the basis of the entrepreneurship and if you destroy private property, if you don't have a rule of law because there is a first they are unpredictable state and you don't have entrepreneurs ship then you have no growth. it is as simple as that. this of course has been very often described before as an

intuition than by the fact. now we have fact we can compare. we can compare countries were on the premiership has been destroyed by the name of communism and the name-- the rule of law has been raised in private property has been destroyed, taxes have been too high, entrepreneurship has disappeared and as a consequence you have no growth. the second principle which is also extremely important is the innovation. innovation is the only engine for growth. there is no other engine for growth and innovation so once you say that the web not gone very far, so you need to go even further forth like a entrepreneurship and to try to understand what are the conditions for innovation. the united states are a pioneer in innovation since more than one century because of the very specific conditions, which are basically the relationship, the

close relationship between the university, the academics and the business community. this is quite unique in the world and if you look at fundamental research or fundamental science, he let other places which are as good as the united states. europe and japan, but there's no place where the connection between the business community in the academic community is as close, as narrow as it is here. as long as the united states will be able to keep this connection, this relationship between the academic world and the business world i think the united states will be the leader in terms of innovation. many other countries, france for example or south korea right now, are trying to build this kind of connection but it is quite complicated. it is rooted in history and its people. so, you know i read all of the

columns and books about the united states losing its edge in terms of innovation. i see no risk to there. as long as you keep the circumstances which i just described. the third principle, and i want to elaborate is to predict-- predictable money and predictable currency. this is absolutely evident today. it was not the case and i mention that in my introduction. we do remember in the late '70s, the brazilian model, when it was explained in shared by many economists all around the world, that by creating more money, even through hyperinflation, you could bring faster growth. this was a common wisdom largely accepted and friedman demonstrated it was wrong and until experimentation demonstrated that it was wrong. economics, like any signs come work on two legs, fundamental,

abstract theory and also the verification of the theories of this has been the case as far as inflation is concerned. one of the most positive moves in 30 years is that most of the countries all around the world, they have created the independent central banks and in most of the cases, these independent central banks have been able to guarantee to the people that the currency would be stable and predictable. this is one of the reasons for example why many countries in africa, which were mired in poverty, started growing and the main explanation has been the monetary stability. before monetary stabilities in countries like malley or elsewhere people had no interest in investing in the future because there was no future. since we have a stable currency

in these countries, all conditions meaning-- remaining the same, this country started to grow because the enders dead principle number three. principle number four is free trade and all economists without exception. i'm talking about economies, not politicians. all economies do agree that free trade is essential and is positive, so it has been demonstrated by theory and i practice. the question is, why is it that not economists are still sometimes against free trade? it has to do with one of the characteristics of economics. it has to do also with the fact that economics is not a popular signs. people do not like economics and you understand why. economist who work globally. we say free trade is good for you. for you as a group, for you as

the nation but if you happen to be a worker in an industry which will disappear, because of the chinese or competition, to hear that free trade is good for you is completely irrelevant, and you have constantly this contradiction in economics between a discourse which is a globaled this course, free trade is good for you, and the individual perception of free trade which can harm certain individuals. this is why it is extremely important that the government or local or national government or whatever, would take care of the negative net consequences of free trade and other kinds of economic modernization when they do impact individuals. but, there will be all of this discrepancy between the global benefits of economic growth and the individual perception. this does apply to principle

number five, which is a destructive creation, to use the word of-- when inactivity has become obsolete, irrelevant, it has to be closed, destroyed in order to be replaced by something else. in principle, it is like free trade is extremely efficient. in non-efficient countries, new factories were closed and this is why there was no growth in the soviet union for example. but when you close a factory, this will ensure-- simultaneously new factories or new activities will be created somewhere but you don't know where and therefore there will be no television coverage. creative destruction is like free trade. i.t. creates effective asymmetry and this explains why for

politicians, columnist, pundits it is easier in a way beyond the fact that sometimes they do not understand the principle of economics or they do not like it, which is the same. when you don't understand it, i think you don't like it but it also helps, if i may say so, that the negative aspects of growth are visible and the positive are not or not is easily visible. so milton friedman vote balad about this, explaining what economics and free market economics is not extremely popular. what is extremely interesting, this came as a surprise for many people, even for economists, as the big surprise since 20, 25 years is that the free market and capitalism work everywhere, any civilization. this is not well accepted. i will give you an example. today you have many arab

countries or muslim countries which are still very poor. not all of them but i am talking mostly about the non-oil-producing countries. if you listen, many pundits say they are poor because they don't have the right religion and islam is not expressing individual responsibility or everything is destiny. if everything is destiny there's no reason to invest in your future. you just wait and see what will happen to you, so this was a common explanation. like in the '50s, you had the dominant explanation and the haitian people, because they were confusion as they were never able to grow because in confucianism there is no interest in the future and people keep repeating the same gesture. what happens today under our own eyes and it has occurred in less

than 25 years is that when you apply the right economic policy, which happens to be exactly the same everywhere. the five principles i quoted to apply everywhere. growth starts immediately in very rapidly. i mentioned egypt is growing. china is growing. india is growing. india is a very interesting case as well. win india became independent in 49-- no, 48, in 48 and yet chosin an economic model which was extremely popular at that time, no closed border, stay controlling the industry, what was called the license king demeny couldn't starting a business, even a small business and this was supposed to bring india out of poverty. the growth rate of india between 1991 was 1% for have a tent and

this growth rate was so predictable, so constant so regular that economists in india call that-- rate of growth as of 1% was rooted in the ndn pour hindu culture. in 91, the finance minister decided to open the border to welcome foreign investment to a certain extent, to counsel the licence system and india is growing between five, six, 7% according to the years. i mentioned india because it is less known then what happened in china in which i would not elaborate. one of the applications of sound principle in good economic policy showed that religion, civilization is not a key factor. the key factor is the economic

strategy. it is good or it is bad. it goes into the direction of more free market or less free market and this makes the difference. now, if the system is@ @ @ @ @ not work it brings negative consequences. and economy is much connected with the economic cycle and

cycle of innovation. if you don't have innovation you have no growth and if you have innovation you take risks. the market is a dangerous place to be. so the market is efficient but the market is dangerous by definition. among all the markets, the financial market is the most dangerous place to be. it is the most unpredictable of the market because there's a lot of innovation going on in the financial market, securitization for example has been one of the most remarkable innovations in the financial market. not recently, started centuries ago but it becomes more and more sophisticated so when you have innovation u.s. danger and when you have danger you have risk. this is the fundamental reason. in the socialist economy or the can do economy, there were no cycles. you could be sure that it was 1% a year. they would never reach six or 7% a year.

now they are brown sixers 7% a year. so therefore i don't think you can eliminate cycles. what you can do is to help individual people to confront the harshness of the cycle. people lose their jobs, factories are closed and so on because of the cycle and because of the crisis. what is to be done is for a responsible government to take into consideration the hardship, which is supported by the people and which is the consequence of the crisis. but, to have the growing economy without any cycle seems impossible to me. now we have a second explanation, which is a short-term explanation. how to explain specific crises. not cycles in general but specific crises.

it is not that easy. there is still a lot of debate around the 1930 crisis, a lot of debate around the 1970's crisis. but my position and many other free-market economists will share this position, that the root cause of the present crisis and former crises has been a loose monetary policy. it is very probably the excess of money available in the market, which has brought speculation and a bubble and a crisis after the bubble. and, this is not a new phenomenon in the economic history. most of the bubbles have always then, had the consequence of an excess of monetary creation. the problem with the bubble is there a very difficult to predict and when you are in a bubble it is very difficult to get out of the bubble, because you don't know how long the

bubble will go on. so it is good to be inside because when you were inside you make a lot of money. if you go out of the bubble, then you regrets to have left because others are still making money. bubbles have been described through mathematical models and did my book normally i describe a brazilian economist teaching at princeton, who shows how the bubble works and you know you are in a bubble not by looking at prices but by looking at the number of transactions. when the number of transactions is increasing very rapidly, probably you are in a bubble. at that stage, we can't predict how long the bubble will go on and when to get out of the bubble. we can't, because financial markets follow the rule of wild

randomness. financial markets are widely random and they cannot be otherwise because if it were otherwise they would not be a market anymore because everybody would make money on the market, so financial markets are random by definition. like capitalism will suffer cycles and crazies by definition. at that stage of economic knowledge we can't do marker committee curtis and-- critics will say why do we need economist of they don't know how to make predictions? in many sciences we don't make predictions, we can predict what is bad for you and we are like primitive medical doctors. if you smoke in each rank, probably you have a shortened life. economics would save you close your borders, like you did in 1930, if you print a lot of money probably won't be better

off afterwards. the situation will be worse. the indian economists when he was consulted on the best economic policy for developing countries, sometimes enters, if i were you i would not start from here. we know we are not to start from. we know what is to be avoided. we know what doesn't work. for example, to talk about the current situation in the united states in europe, the stimulus doesn't work. we know that because it has been done before so maybe this time it will work because we can't make predictions. so i cannot predict that the present stimulus will work or will not work but what we can say, in the past stimulus never worked. i won't get into details. we can demonstrate why it doesn't work. we can demonstrate in theory but we can demonstrate also is a

practical matter because it has been tried many, many times insofar there is no case, no case study to show the stimulus works. it usually does not. i wanted to say something about, because also today stimulus is promoted, regulation is promoted, so on stimulus i am very clear. on regulation, i say that regulation is usually these lists and they have proved to be, and so if regulation is useless, regulation is usually good. it has been demonstrated. reregulation would be useful. it certainly would be useful for the regulators because a lot of regulation is very important. lot of regulation is justified,

if i say so, by the political desire of bureaucrats and politicians to increase their own domain, their own power. you can understand that very well. we are all russian to a certain extent of bureaucrats are russian as well so you have to understand the bureaucrats will explain the origin of the crisis even this is not the case, because i still don't see the connection between the regulation and the current crisis. but, i am more liberal than brides because i say that some kind of regulation can be useful with increased transparency so my position is to say that regulation would allow individuals to be better aware of what they buy and would increase individual freedom, individual choice. the fear, and they speak in your name, regulators would use the

arguments of transparency to build more regulation so economics is always about the question of fine-tuning and trade-off. finally, i will repeat a story that i try never to repeat myself, but you did not listen to me yesterday night, and maybe you didn't read my latest paper in the journal but i really love the discussion i had with the liberal economist at cornell university, because you have this big debate about health care in the united states. many liberal economists in the united states look a different system and they love it. bob frank explain to me why i love the fran system and why do you would like to have the same in the united states. he goes to france every summer and when he has a medical problem or children with a medical problem, they go to a

french doctor. they can freely choose a doctor and it is extremely cheap. they also love the high-speed train. they go from paris to the riviera in less than three years. franks says, you can't blame me for wanting the same as you have. but i say bob, i pay for the high-speed train at the taxpayer and i pay as the taxpayer through that with access to a free medical doctor when you are on vacation. if you were not on a vacation, if you were french, you would have half of your income used to pay for the train and to pay for the welfare system. also, the people who paid the most are the unemployed people. the cost of the french health care is so high that it does prevent the employment of a lot of young and qualified people, so economics is always a

trade-off and you can't have both. you can't have a perfect world with everything. you have to choose and the rule, the responsibility of the economist is to give the data, to give the figures and to say yes, you can have the welfare system or health care system like in france but you have a permanent basis in good years between ten and 12% unemployment, which is what you have been the united states in bad years. that is what we have been the better years ago when we have 10% unemployment we are extremely happy, 40% of young people less than 25 are unemployed. but, we have high-speed trains and we have these wonderful medical doctors. so, fundamentally economics is always about-- i am not a radical and i am sure some

people in the journal sammy as a social democrat and certainly that was the view that milton friedman had of me. i think economics, you need clear principles. you need to know the facts. you need to work on data but then it is all about fine-tuning , trade-off in a discussion and let the people decide their democratic process. thank you. [applause] i understand you have some questions. >> there is a mic. we do have time for questions. there is a microphone going around. this is being tapes of please use the microphone and pleased to identify yourself and tell us where you are coming from so that the viewing audience at home knows who is asking the questions. i am going to take the privilege of asking the first question, which is, did we learn anything

fundamental about economics from this crisis, or will we have as we sort it out? was all of this somehow already taken into account by the present state of knowledge circa 2006 andy science of economics? >> it is a bit early to answer, but i think we haven't learned a lot, and when you talk about, when you talk with the academics come to they change the curriculum for example? strangely, it could be thain to say nothing is really new in this crisis. i.t. rather confirms a certain knowledge that we have and people who share the view for example that the loose monetary policy has provoked the crisis.

this has been confirmed by the crisis, but i wouldn't say that there is a revolution in the knowledge of economics based on the crisis. at least, so far. even if you read columnists, very liberal columnists like krugman, they are not bringing in new ideas. they want more of the same or less of the same but basically we are still working within the same, with in the same framework and all the debate about it is the end of capitalism is completely irrelevant. there are new elements in this crisis. maybe that is vain but this is the present situation. >> i work in the hedge fund business. my question is, the form of

regulation that you seem to subscribe to about regulators' increasing transparency, i wanted to know if he could comment on the decision about i think there is a misunderstanding when you look at the crisis between the consequence and the cause, and once again, i think that the real cause is the monetary creation, loose monetary policy

and what has been done with the success of the monetary creation is the only consequence. there relationship is reversed. and, it is the same debate about greed, you know. when people say the bankers or financiers have been greedy, this is a completely irrelevant argument. everyone is greedy and if you have no great in the economy, you have no innovation. so, it is kind of an ideological interpretation or a moralistic posturing but this has nothing to do with economics. it is a very old tradition. it started a long, long time ago with the division of risks and it has been extremely helpful. and i hope it will continue and

that regulation will not stifle innovation in the financial sector. also, many observers say it is too bad in the financial sector and other companies, the risk manager has no more power but the risk manager has power. they have not been listened to because they-- possibilities to make a bundle of money so huge that there was equilibrium brought into the system not by the lack of regulation but by the quantity of money which was available. so i would rather look at the root causes rather than the consequence. this comes only afterwards. the final observation, when you regulate, the regulators will always did late financial regulation. you cannot regulate was does not

exist. when you regulate, you regulate what exists in because of the lessons of the past we have some kind of regulation based on what just happened. but what just happened will not repeat itself, because in the coming years you will have new financial innovations. so, the regulation becomes obsolete on the very day it is published. the regulator will always be late and will always run behind the market, said the arguments saying that if we have better regulations, and by the way if we had better regulators, and i don't know where you find them, it is a real problem. the regulators, it is not the best people who become regulators so regulators and regulation will always be behind innovation except in the stifling innovation. did i answer your question more or less? >> the question had more to do with market exchanges.

you don't have regulators telling people what products-- we have counterparty risk here and transparency to the market is a good thing. to me it seemed like a market mechanism to solve a market problem. >> i do agree. >> in the back, yeah. >> my name is steve hoffman, the mediation services. on the question of regulation, prior to the year 2000, virtually all of the states regulated insurance and there were two key factors. what is, you write insurance and you take in premiums, you have to set aside a certain percentage of the premiums you take in in reserves because the radically and in reality, people are buying insurance to protect themselves against loss. therefore, you can't treat all the premiums as 100% profits.

that was number one. number two, you had to have an insurable interest. i can't buy fire insurance on your house or i can't buy life insurance on your life because i don't have an insurable interest. in the year 2000, congress at the obviously urging of the financial community, the regulated. they trump all of those laws, federal statute which said in effect, you can write credit default swaps which is insurance but we are going to say it is not insurance and we are going to preempt all the states from regulating it and requiring reserves and we are going to preemptor ruled that all the states have, so instead if you on some debt, like goldman sachs has the dead of some entity and they are worried that they will default, they buy insurance and obviously they know their wrists very well. they are not stupid. they know there are risks of lawson yet ag to his writing all this stuff basically assume

there is zero risk of loss because aaa rating agencies said there is no risk of loss because they gave it a aaa rating. so, is that the absence of getting rid of the regulations that made sense, that really is very much behind with the crisis we are in now? >> an answer-- the answer for you within the next book, which is to be published when? november. and i don't want to interfere with her on this subject. she knows best. [laughter] >> yes, please, in the front. >> i am steven with national review. my question is, in your book you, the very first line is economics is a science and use

survey the current state of the field and as you just said, if science is about making predictions from observations from the past, we have seen that keynesian stimulus does not work and yet a number of high-profile economists, certain columnist for "the new york times." persist in their belief that keynesians solutions are the best way to address cyclical downturns, so what is the scientific equivalent of this kind of a disagreement within the field of economics or keynesians or something less radical than that? >> usually he calls himself neo kenisha and because they don't really follow what keynes recommended in his time. keynes was taking cycle into consideration and in order to save capitalism, he thought that

in good years, you should have a budget surplus, keep the money and in bad years you should spend the money. what he was suggesting was counter-cyclical budgets. newt countries, have followed this keynesian recommendation. the only person i know who recently came out again with this recommendation has been the german chancellor. she said that in the future, we should follow keynes model and have a surplus in good years. so, what neokeynesians abdicator is a bit different because there is no public savings, so you just advocate a care deficit. this was not part of the keynesian agenda. in the short term, public stimulus may work.

it does happen that it can have, it can create some kind of jobs in the very short-term, but not for very long, because the kind of investment where the state goes our investments which create jobs but which does not create wealth. so, they are not real investments with no return on this investment. therefore as a consequence, we know sooner or later the stimulus is paid by higher taxes or inflation. in most of the cases now, because we don't have inflation because of a relatively independent bank, it will be higher taxes which will slow down the recovery. as you say, columnist for recommending this kind of public stimulus of politicians but economists, i don't see many of them right now suggesting this

kind of policy. no name comes to my mind actually. and, if i may add, if i may add, why would a political leader recommend job creation through public spending? because it is in market and it is running for re-election so he must demonstrate that he is acting and you are not reelected by not acting, and also because he hopes that he will have kind of a short-term return, because the elections are always short term. this is normal behavior in all democracies and this is why economists are playing their own role, to say well, maybe it can work in the very short term but the consequences are negative in the long term but we economists

are not running for office. the people running for office, they can listen or not listen, and follow their own rationale. >> my name is kate. i am with commentary magazine. you quoted mendell grove toys approvingly in his characterization of the market and about randomness. viet, in the beginning of your speech he said economics grounding is a science has been solid-- solidified by the ability of data and applications of mathematical and statistical models which everything he would take convention with. do you believe that in addition to helping economists verify their hypothesis or check them against reality, the reliance or should i say over reliance on

mathematical models is a blindspot in the circles of academia and economics, and it fails to take into account the wild randomness and the unpredictability of financial and economic cycles. do you think it trumps sometimes common-sense and a healthy account of human nature? >> at least three questions, so i will try to make the distinction. starting with the notion of what randomness. what he wrote, and tried to show, in nature you don't have wild randomness. you have what he calls mild randomness, physical events that can be predicted to a certain extent. he has built mathematical models

the model shows that many chaotic events like noise for example to follow mathematical patterns and can therefore be predicted. the consequences of for example lynn telecommunications. myla brandon this mathematical model applies to nature and physically fence. chaos is not that chaotic is what he says. then, he tried in many others tried to transfer this model to the financial market. when looking at the data, and we have data in the late 19th century starting with the cotton exchange in new york, which are the oldest financial data which are available, it appears that no pattern ever appears. it is completely random, and any

mathematical model which tried to introduce a prediction in the evolution of the crisis of the market, all of these models have been proven wrong, including many models which have been used in recent years, at least not to lose money. so, these models were an attempt to predict the evolution. they all failed, and the conclusion of the-- to say at that stage we have new mathematical tools and no way to predict the financial market. therefore, randomness is in the physical nature. in the financial world of randomness is complete or white. this is what we know at that stage. and i won't elaborate, but there many mathematical models i am sure which come to your mind,

which have been extremely popular until the recent stock exchange prices. these models proved not to be extremely precise. the second question is about the relevance of mathematical models in general. and do they take into account human parameters, human nature and common sense? the purpose of the mathematical model in economics is very limited or should be very limited. there are a certain number of parameters and economics which tend to repeat themselves, like a very simple example, there is a mathematical relation between money creation and the level of prices for example. there is the mathematical relationship between the level of wages and their rate of unemployment. there is a mathematical relation

between the level of your education, what is called the college premium, and your chances to be employed or not to be employed. this limited knowledge is built into mathematical model. this mathematical model has to virtues. the first virtue is that they introduced a certain amount of predictability. you know that you do this with the currency, you have that type of consequent. you know if people go longer to college, probably they have a stronger chance to find a job. the second reason why mathematical models are used is because it is a universal language. if you need to communicate with a friend-- the france, a chinese are ndn, you are talking the same language so mathematics are universal. this is the rationale for mathematical models but

mathematical models, and you were right, they only represent part of the reality. and they used to be wrong. following the suggestion, the model should be constructed and the proven force. i have seen in the way economics is taught in the united states, there is an abuse of mathematics and an abuse of models. many students in the economic department in the united states think that economics is only about mathematical models, and this is absolutely wrong. the mathematical model is only one of the instruments that can be used to understand the facts and the facts going around in to make some predictions in certain cases. there is a lack of common sense in education. maybe this answers your question about what has changed and what should change. i am very worried by the fact

that only, mathematics now is a requirement and also that the history of economic ideas is not talk any more. i think this is a big loss and it reduces the scope and the knowledge of students in the economic departments. >> marshall jaffe, and i'm an investment adviser. i was intrigued by your definition for your yardstick for the success of an economic system as the extent to which it brings people out of poverty, and maybe this is not an economics question but a political question. what you think of the hypothesis that, as a society prospers and its political leaders have less and less direct experience of poverty, that they also have less and less appreciation for the power of markets and capitalism to lift people out of

poverty? >> the scope of the domain of economics is a limited the main. economists are like-- and if you want hot water, you had better choose a good plumber and i said to governments, i am tempted to say, if you want growth, we can show you the way to a certain extent to growth. economics is basically about growth, and the question is, beyond your-- the question is, it is growth irrelevant criteria? many attempts have been done by some economists like the calcutta economists or at the u.n. they don't like capitalism.

it is right to build other instruments to measure the happiness of the people, for example, and trying to understand if happiness was distinct from economic growth. all of these attempts have failed. it happens that growth is a factor and that people tend to be more happy in a growing economy. because, a growing economy brings more opportunities and more freedom of choice globally, globally. and there is another debate, which is the relationship between growth and social justice, and the case of countries where growth is creating new inequality, which is the case in china for example. but, there is no connection between growth and social

injustice. in most of the cases, the growth does bring more social justice. it doesn't bring necessarily more democracy, which is another complicated question. the relationship between growth and political freedom is not a clear connection. so, your question open so many fields that i can only focus on one aspect of your question. i am very sorry about that. >> the final question, yes, please. >> michael from u.s. trust. you talked about china and india and chose to focus on india. i wonder your thoughts on china, keith think about your checklists china is running a tension between command-and-control in the free market. how does it stack up on the checklist and how much does it make you think about the future for their growth? >> fma quote myself, and my former book was a book on china,

also by encounter in the title of the book, the empire of lies. so, to summarize my argument very shortly, the fact is china has chosen to be a strong country, not a developed country. it is not the same. in a nun democratic country, you have got to decide to concentrate on the investment, on the narrow part of the country and the narrow part of the population, and make the distinction between what the chinese leaders called useful china and useless china. useful china is basically the eastern part of china, the part of china which is profitable because it is in a permanent relationship with the rest of

the world. it is the globalized china. this globalized china is using the workforce of the peasants or not using the workforce of the peasants at all, which means approximately 60% of the chinese people are completely left out of the development process. this is a strategy choice. this brings-- so, there are a pleased to risk factors for china, three even i think. the first one, when you leave about 60% of the people, even in a perceived regime, you don't know what will happen in the long term, and we can see that these days. there is a huge risk factor because of this imbalance in china, which is not the case in other developing countries like brazil or india, where because of democracy governments try to incorporate a larger number of people.

so there is a huge risk factor connected to the social deviation. second-- weakness of china is a complete lack of innovation. china basically is an economy which is based, which is a subcontracting economy. if you have an ipod or a cell phone in your pocket, probably it is written in yourself on or your ipod right now, you can verify right now, it is made in china. if you are sure it is made in china, probably it is 80% but for most of what we call made in china, the participation of china is no more than 5%. because it is not an innovative economy. you cannot quote one chinese

innovation. much is done in spoken about this huge, new chinese university. i have taught in some of these universities. the quality is not very high. the level is not very high in the best students usually will leave the country and try to go to the united states, candidate or western europe. the chinese are leaders-- they had a lot of-- india. and yet immerged in the software business and india tried to understand why there is indian software indochinese software. they came back from india and discovered there may be a connection between freedom of speech, especially in this field but so far there's no innovation and no freedom of speech. i think the regime is not very helpful as far as innovation is

concerned. when the olympic games, all this big equipment was built by foreign countries and foreign engineers in for an architects because the chinese government did not trust the quality of its own architects and its own engineers. beared, the risk with the chinese government that is discovered these days, how many depend on the global market and how many depend on the growth rate of the u.s. economy? when the u.s. consumers stopped buying chinese products for example, the very next day factories are being closed in china and people are losing their jobs, so it is a very dependent economy. they are doing very well for 20, 40% of the nation because 20% are doing very well, 40% because you have a trickle-down effect in 60% are completely out of the loop.

it is very and predictable, very dangerous. i very often say, if you want to make money very fast he go to china. if you want to make money for very long, you go to india. you would be patie

why patrick fitzgeral failed to stop him." this is just under two hours. >> barnes and noble holds a very special place in my heart because when i was a starting

all student i lived at 80 fifth avenue in the original flag ship barnes and noble is at like 17th and fifth and i used to go there. this is long before they had coffee bars and plush chairs to hang out in. i liked hanging out from the cold and reading and barnes and noble has a special place in my heart, so when i had this opportunity to have book tv, c-span tape this event i was thrilled johnny and the people here in santa barbara were able to let us come. without further ado, this book that you see, "triple cross" is the third book i've done an investigative series for harper collins. i started this literally two days after 9/11. my son christopher went to high school two blocks above ground cero and the day after, the might of mine and he was safe shortly thereafter i found out that a fire marshal, an incredible hero you will hear me talk about today, rodney booka

perished on the second floor with his boots on and because i met him several years earlier doubles my one personal connection to the trade center at tax of 9/11 and i just said i've been writing fiction for like ten years, how did this happen and could happen again? like any american i was asking these questions and i decided to go back and use the skills learned as an investigative reporter for abc news and put 1 foot in front of the other and try to figure this out. this wasn't a great intelligence failures since pearl harbor as many people said. it was the greatest intelligence failures the trojan horse and how the 40 billion i year intelligence budget in america for all 9/11 did this happen so there are five big intelligence agencies as you know, the cia, fbi, dia, defense intelligence, national security agency and the state department has one, and the only when a citizen like me,

reporter, without subpoena power work can audit or investigate or look into is the fbi and particularly because the war on terror as we know with the exception of a few missiles fired into khartoum during the clinton fears the war on terror was conducted as a series of legal cases investigated by what we call bin laden offices up origin. the new york office of fbi which i will refer to repeatedly known as the ny yo and sd ny and these incredibly all cost federal agencies, the bureau, this is the biggest office outside of washington. the best of the best. the original joint terrorism task force when set up in this office sdny has produced prosecutors like rudy giuliani, will be freed later became a federal judge and fbi director and of course patrick fitzgerald the gentleman who was probably the most successful and powerful

federal prosecutor in america. we will talk about mr. fitzgerald in a few minutes. this office produced these people. we are not talking about the wichita office or the keokuk iowa office. we are talking the best of the best. how is it this al qaeda i'd proved in my work basically set up an operation in new york as early as 1988 and were on their radar with the fbi as early as 198920 years ago the week we are taping this event in july of 09, how was it these two offices missed so many opportunities on the chart to interdict the al qaeda juggernaut as eight just raced words ultimately 9/11? that is what i wanted to find out as a citizen and guess what? most americans still want to know the answer to that because ladies and gentlemen, 9/11 as i began this book i said 9/11 is a cold case. effectively the greatest mass murder in american history is still on solved.

osama bin laden has never been invited, khalid sheikh mohammed, the man the fbi calls the mastermind was waterboarded at least 183 times. he will never be brought to justice in any conventional set the date a sense of the word. despite what the 9/11 commission did and we will get into that we don't know. so i have stayed on this story through a lot of fake and then as you will hear in a few minutes against very difficult odds and this book, "triple cross" is the third in the series and focuses as you will see on the cover the mug shot is ali mohamed, and x egyptian officer. he succeeded briefly and infiltrated the cia in 1984 in the sense that he was used as an asset and went into a mosque in hamburg, supposedly blew his cover, got put on a u.s. watch list, but he ended up getting on a twa flight into america.

listen to this, on the flight he meets a woman named linda sanchez coming back from greece for vacation. and ali mohamed is a stud. when he bound up in the army he set a record. we are talking push-ups' on the fingers kind of guy. he meets this woman, seduces her and they get married at a drive-through chapel in the nevada six weeks later. now he's an nevada and sets up. this is an egyptian army commando so radical and his religious views that president mubarak after the assassination through this guy out of the army. he was adopted by ayman al-zawahiri and approached the cia, gets into america and is now we're? fort bragg north carolina, the john f. kennedy special we're fair school with one of the most secure operations in america with top special forces and

delta force officers treen and on weekends she's coming up to new york trading the original world trade center bombing. i will get to those in a minute. but i also found astonishingly from 1990 he is an informant from the fbi in the west coast. that is why i call this book "triple cross." he's crossing the cia, the dia at fort bragg and the fbi. now, patrick fitzgerald. why is patrick fitzgerald part of the store? as i said he's one of the most successful and important prosecutors in america. he recently as you know indicted governor bill voinovich and illinois and has convicted the former governor, he convicted conrad black a new york when he was the call had a multiple we have an organized crime and terrorism convicted in number of responsible helping convict many mobsters and terrorists, has a fantastic record and i applaud all the good things patrick fitzgerald has done. but as i begin to tell the story, i went back over his

track record. i found some things about what patrick fitzgerald did in the southern district of were questionable. i tried to interview him twice over the course of two books he turned me down effectively. and so when i reported "triple cross" when it came out in hard cover -- and the hard cover of "triple cross" looked a little different. the story said hauer al qaeda masters infiltrated the cia the green berets and how patrick fitzgerald stopped him. that became an important part of the story and the book came out in hardcover november 06 and was relatively successful in 11 months later we are getting ready to put the paper back of the book out when patrick fitzgerald since the first four letters you will see on the screen. he said ultimately 32 letters, 32 pages of threat letters to my publisher harpercollins over the next 20 months threatening to sue for libel literally asking that the book be pulled, that the hardcover editions be destroyed and the paperback

never see the light of day, citing these letters in his individual capacity at the post office box in chicago, but it was patrick fitzgerald, the u.s. attorney making these threats against me and my publisher. harper collins after the first letter in october 07 they rejected him. i had won a minor factual error in this book that had to do with misstating of an msnbc article which each and today is still misstate on their website, it's in an effort and error. we told them we would correct it. the book had 32 pages of documentary appendices, fairly meticulous the research and we said we will make that change mr. fitzgerald week rejected. he called -- harper collins called my work important investigative journalism. the man said a second letter this time 16 pages and look at the top of the letter you will see he faxes it from the u.s. attorney's office in chicago as if to make it clear even though

he's doing it and see the letterhead is p.o. box patrick fitzgerald there is no doubt in my mind that this was an effort to channel my publisher. what does jill? a chilling effect. you will see later i did a piece for played way and by the way they do have articles in playboy. this is something i recently found out. i did it publish or delete copublishing this basic the called the chilling effect and infil lal, a i have a law degree i will talk about later, a chilling effect is an effort buy particularly a government official to make an action that effectively and petites the media. someone in the media, and i consider personally what mr. fitzgerald did sending the second letter an attempt to chill me and my publisher. out of the abundance of caution because of what was we decided to go back and revamp the entire book and by talking literally not just the material on mr. fitzgerald, every book was checked and it took 14 months and strategically it was a

brilliant move for fitzgerald because he took me off the story. i was working on my fourth series for harper collins. i had to delay the book. the book is a year overdue. 14 months i am taken out of play as we went through and meticulously checked the book and my publisher decided the book was bulletproof as it was in the beginning and if he sent another letter in september of 08 and his fourth letter as recently as june 2nd 2 books before that because it was to come out and he actually said and i want you to understand -- i want to hold this back up this is so heavy you can use it to press your shirt, it weighs three and a half pounds and there are some pages that ten separate invitations, the current appendices and many of these are fbi memos, they are material from the fbi files. there's even a six page affirmation sworn in by patrick fitzgerald. i am not just throwing cartoons and. patrick fitzgerald actually called the entire book, quote, a

deliberate lie masquerading the truth. how can anyone conceive of a book even if you don't like peter lance or agree with my findings how could you call this whole book of why? he said if you publish this book and it defames me or holds me and false light harper collins will be sued and that's a pretty strong statement as recently as june 2nd, 2 weeks before the book is due. well, we published the book and had a press conference at the national press club, my daughter allison and mabry were there. my daughter took this video and we had many first amendment advocates and censorship advocates on the left and right supported our right to publish this book and this week this past week i wrote a piece for the huffingtonpost.com which you see on the homepage and basically what i'm saying is mr. fitzgerald, in your threat to sue for libel, bring it. the book has been out for weeks now. so, you know, where is the complaint, where is your level sood? my contention is you didn't have

a suit to begin with. you didn't have one then, you don't have one now. one of the things i'm going to say today to give equal time as patrick if he would come here on c-span, meet me in any auditorium, church, a public gathering and debate me and talk about this issue i happy to do that with you at any time, but to use the civil libel laws which are, you know, as a government officials to try and suppress a book, i find repugnant and something that is below you as the kind of prosecutor that you are and they're great work you've done for america. so what i'm saying to you and i sit in the challenge this week, four weeks after publication said of the book comes out and it defames you you would sue. we haven't heard from you. why don't you either file a complete or back off and apologize and i'm happy to accept your apology. all right? now why would patrick fitzgerald -- that is the introduction to this. i'm going to get into the meat now because you have to say to yourself -- again, 32 pages of

letters why would a man on the level of patrick fitzgerald, u.s. attorney for the district of illinois also prosecutor in the cia the case is the man responsible for getting "new york times" reporter juditha jailed for 85 days. he also patrick fitzgerald subpoenaed herself on records and those of "new york times" reporter phyllis and got the cell phone records and went to the second circuit appeals so to me this is his third encouragement on the first amendment. why would patrick fitzgerald cared if peter plants's book was meaningless or some crazy conspiracy theory why would a guy on his level of their? let me give you the story today and a few people in the audience here in santa barbara who can ask questions at the end and those watching at home, then you can maybe ask yourself, you will have an answer for me be why he didn't want. ali mohamed, there are few figures in the history of radical islam to match ali

mohamed. okay? in my first book, well, before i get to that let me mention in any great war, in any military combat, and we have a friend of mine who is a distinguished navy veteran. my father was a need the chief i'm proud to say. in any great war you need to things, operations and intelligence. you need somebody on the ground blogging things up and you need spies to figure out with the other side knows so you can beat your enemy. ali mohamed filled the role of the j2, the intelligence directorate. but the j3, the operational director, was filled by ramzi yousef. this is the first of the three books i've done for harper collins. for you to follow along in the middle of the first book and now "triple cross" in this new edition i have a 32 page of a stated time line i like to call

it the little golden book of terror. it begins with the murder of anwar sadat almost to present day. some of this is updated as early as april and my anarbrbrbrb man of many aliases from of astana. i call him the mozart of terror in my first book. this is an area the size of france that crosses afghanistan, iran and pakistan ramzi ahmed

yousef's ogle is the khalid sheikh mohammed, the fbi calls the mastermind of 9/11. this is the picture referred to as the ron jeremy shot. [laughter] where he was captured in 2003 and as you know he's one of the high valued detainee's down in guantanamo but he is the man the fbi says is responsible for the 9/11 tax but will lightproof in my book 1,000 years for revenge and i use a simple standard preponderant of evidence i proved that ramzi ahmed yousef, the nephew, it's criminal genius planned this in pakistan and 94 and was perfecting it in minnelli 95. 2,973 deaths as i said 9/11 has become a cold case. now, khalid sheikh mohammed, as you can see to look at it of involvement in the original world trade center bombing and

9/11, but ali mohamed as i began to tell the story and fell in the dots over these books i began to say to myself you're going to see in a few minutes and credible apparent incompetence by the fbi by these to bin laden offices of origin and you start to say how could best of the best mix of any mistakes? one morning i woke up because the mentioned ali mohamed in my first two books, and i went ali mohamed. i had this a tiffany one day. i said if i can go back and figure out maybe i can answer the question how this thing happened. why should we care? very important to ask. the 9/11 commission. you see condoleezza rice testifying. we have the 9/11 commission did a great job and told the truth. their book became nominated for a national book award. guess what? my second book, cover-up, went into this, half the staff on the line 11 commission was on the fbi, and csa of the white house that guarded the chicken coop. and they decided early on in the

commission they would not find anyone accountable. that's what they decided. why is that surprising? have the staff or the people that should have been held accountable and one of them i will talk about in a while is beatrix now, that will be important as i tell the story. i wrote my second book half of the analysis of the 9/11 commission i have a source on the commission i would meet with once a week and he told cherry picking, democrats and republicans this isn't a political thing. they don't one involved in that. they don't want to go back to the original trade center bombing. they're focusing forward and the guy was ready to quit and i encouraged him to stay on the inside and he was an important source for the book. the jersey girls, kristen bright wiser, minn equine burke, patti, the for our original jersey girls and then monica gabriel

and orie, this incredible woman, beverly eckert who recently died tragically in the buffalo grass, these women almost single-handedly got the 9/11 commission to come to be. these women gave my book to governor kean and he is the one responsible for me testifying before the commission. i go back to why should we care. qc dufflebag, those of you that have been delayed at the airport knowing that you can't -- you can only take so many liquids on a plane. you know why? that has nothing to do with richard read the shoup bomber, that has to do with ramzi ahmed yousef. you'll hear why in a minute. the fact you can't carry liquid on plan and have to take your shoes on before you get on a plane, ramzi ahmed yousef. that's all going to be on folded in this story. and the spiritual icon in new york responsible for both the trade center bombing and 93 and

9/11 omar abdel-rahman on the, but he's also responsible for the 1993, excuse me, what was called the day of the terror plot to blow up the bridges and tunnels in manhattan. the embassy bombings in 1988 he was considered one of the spiritual icons and motivators of the plot even though he was in jail by 1993, the coal bombing, when bin laden issued his famous prior he said go to the spilling of blood, this is how important sheik is and literally within days of the 9/11 attacks, the taliban offered to exchange, blight sheik for christian missionaries they were holding captive. this is how the blind sheik works through like a hot circuit table. remember the famous presidential briefing august 6 of 01 when president bush gave in texas it mentions a plot to hijack a plane to free the blind sheik.

that is how important he was and he will hear the fbi got that information in 1996 from a mafia informant in the cell next to ramzi ahmed yousef and they basically buried and discredited that evidence. it was considered so important it showed up in a daily briefing to the president, ali mohamed. they even make reference to ali mohamed in the same daily briefing. now, when i told you we are going to go back you can't do this story, you can't tell this story nor could the 9/11 commission of a fairly judge this story without going back 20 years. we are now july, 29. i take you back 20 years. see the picture on the screen in the upper left corner that is a surveillance photographs. on four weekends in july of 1989 the special operations groups in the fbi, the number one black bat operation, black bag unit, the guys that got john gotti.

they follow bureau speak for middle eastern men from on cleantech avenue in brooklyn out to route 70 on the long island expressway, half an hour north of the hamptons and the middle of the summer season in long island. there is a big shooting range like a sand bar. mukasey and barbisan pate. and a lot of law enforcement guys use it. over four weekends the photograph these guys firing automatic weapons, ak-47s, machine guns and other weapons and they are all trained by ali mohamed, who at that point was at fort bragg north carolina, and active-duty u.s. army sergeant working from will say i'm coming up to new york on weekends and training these terrorists in all kinds of undercover commander techniques. now go back to the time line. we are now at a certain point for all along in the time line. peterlance.com if you want to follow this story because your job is going to start dropping.

i don't but i want to predict george rall will start lowering as we begin to tell the story. the story itself, the time line begins with the murder and more support in 81. anwar sadat had made peace with israel and won the nobel prize. some radical egyptian army troops were having a troup display. he was on the stage watching troops go by and this radical unit that ali mohamed was a member of that happened not to be there that day jump off the truck and shoot him down in cold blood and the leader says i have killed the faeroe, have killed the faeroe! all right? now who ends up in jail for that crime? one of several dozens and dozens of people walked up, dr. ayman al-zawahiri. when you see repeatedly these video broadcasts from al qaeda that keep showing up repeatedly with either bin laden he's the number two man in al qaeda.

little guy with a beard, spectacles. he's from an incredibly wealthy egyptian family. there's a street in cairo named after his family. one of his grandfathers was ambassador to saudi arabia and the other was the president of the oldest university in the arab world. he's a surgeon by training, incredibly educated. he was the head of the egyptian islamic jihad. see the picture of him talking to the are? every night they would have a press conference because he spoke english he became the spokesman for the murders of so what if you will he became a hero in nejib on the radical part of the egyptian brotherhood, and he then adopted this guy ali mohamed. when ali mohamed got thrown out of the military president mubarak succeeded said of anwar, this guy comes in, al-zawahiri looking for a guy to be a spy for this radical movement and he adopts ali mohamed and sends him to work for egypt so ali mohamed thrown out of the military gets

a job at egypt air and what does he do? studies the air mt counterterrorism measures of an airline. he learns all the tricks. then 1983 we have the bombing in the spring of the u.s. embassy bombings like a truck bomb that would almost mary what happened five years later in tanzania and kenya. and then in october, the tragic marine barracks bombing where these beautiful boys in the morning were destroyed on a sunday morning by a bomb and then the kidnapping of the cia station chief in the region was mercilessly tortured by hezbollah. the cia needs recruits, so ali mohamed approaches them. they sent him into a mosque in hamburg where he supposedly covers the couple owes his cover and get on the watch list. he gets on the flight, linda sanchez, he meets her and ends up in santa clara. that is her home. there's another young egyptian he adopted by the way this story, egyptian, egyptian,

everybody around bin laden who is a saudi billionaire is an egyptian in the story and the hierarchy of al qaeda and all the key players are radical egyptians. so he becomes his kind of covert in this cell he sets up. he has a beautiful house living with linda and in lists in the army and ends up at the john f. kennedy special warfare school. now his captain & leader said and we did an interview with him : but it happened. and that was his commanding officer. okay? alright? now at the time we were fighting this war in afghanistan did anybody see charlie wilson's war? there was the good work when we were fighting the evil empire giving 3 billion in covert aid to what are called the

mujahideen freedom fighters. one of them was bin laden, one was dr. al-zawahiri. ali mohamed actually left fort bragg on vacation and fought and brought back to belts from the soviet special forces. he claimed them for war trophies of his active duty sergeant in a war. any military guy would be like aghast at this. why wasn't he court-martialed and immediately -- okay. so that war, however, raised millions of dollars for the mujahideen. look at this mosque in jersey city, the blind sheik had three mosques, the el salam, this three story. the mosque they followed the guy from 20 years ago on atlantic avenue for weekends in july. those are the guys they photographed. kepis men. the man in the upper right corner, redheaded, if those of

you to follow along on your program on your timeline. he sticks out like a sword from the call him al kifah made fun of him, chris batres blood meaning he had kristen blood that's how he is a red head. in this palestinian. they were not only in calvin, a bushel with multiple times. they helped ramzi ahmed yousef build the bomb in '93 and later were convicted. they were on their radar in 1989. the guy, the second to buy from the bottom with the glasses supplied the chemicals for the bomb also convicted. this other guy in american black muslim was convicted in his day of terror plot to blow up the bridges and tunnels and all of them trained by ali mohamed coming up from fort bragg on weekends. but now the first blood spilled by al qaeda on american soil was spilled by this guy, did i say egyptian? yes.

el sayyid nosair working as a janitor in the court building across the street from the criminal court like the law and order courthouse you see on tv. this is another one of the surveillance photographs. he's shooting like a nickel plated i think a 357 magnum, i am not sure but it was that kind of handgun photographed by the fbi. this is a picture of him. again, egyptian, egyptian. the blind sheik arrives in july of 1990. this is a year after the fbi has these guys on surveillance. rabbi meir kahane has radical views, he is so radical he's thrown out of the israel the knesset because he believes there should be no arabs living in israel. you may be radical but nobody deserves to die. certainly not at the hands of an assassin and el-sayyid nosair posing as a jew wearing a yondah came into the hotel when lexington avenue when meir

kahane was giving a speech and he gunned him down. that's the shot i got from an incredible by literally an eye witness. very few people have that photograph. there are two ambulances rushed -- el-sayyid nosair run still looking for the getaway car that the redheaded guy is supposed to be driving and it's on there so he runs down lexington and there's a postal inspector, bang, bang, there's a gun battle on lexington avenue and he's shot and two ambulances rushed, the rabbi dies and he lives. that night they are arrested in cliffside park new jersey and and get away drivers. the fbi brings 47 boxes of evidence out of the house including pictures of the world trade center, arabic writing that talk about we have to take down the white world buildings, the pillar of their strength. there is a receipt for 14 rounds of ammunition. if they had a red flashing neon

light pointing at the trade center it couldn't have been more obvious and clearly also defined top secret memos from the joint chiefs of staff. take a look at this memo. this shows the location of every single navy seal and green beret units worldwide december 5th 1988, latitude and longitude. the russians would have paid a million dollars for the document at the height of the cold war. ali mohamed split and gave it to his al qaeda brothers, that is his arabic writing. a member to the dacs, you know what that is? joint chiefs of staff and ali mohamed who doesn't even have security clearance is stealing this from fort bragg and giving it to the terrorists in new york. guess what? they try him as a lone gunman and let abouhalima go the next day. the shuffle between the nypd and the district office and there is no federal prosecution of this crime which is clearly the first blood spilled by al qaeda on american soil. now there's a guy in the mosque

another egyptian, egyptian, an egyptian, egyptian. i have nothing against people in egypt, don't get me wrong. i'm just talking about this focus. another egyptian moustapha shall lobby has been here for years and he is a cohort of the man who founded basically founded this network to fund raise the mujahideen. there is a guy -- if you go to peterlance.com and download little golden book of terror you can follow along. he is a convert to islam. suddenly he is afraid of blind sheik is threatening him now for reasons too complicated to mention. he's afraid and he calls ali mohamed you have to help me get back to egypt. he says don't worry i will take care of things you will be protected. well, she's found in his apartment brooklyn, i will go back, seedy apartment on the right he is found in his apartment -- that's okay, it is

inevitable. phones go off, if that is patrick fitzgerald calling -- [laughter] because you look like an fbi agent. if you're not, you should be. shalabi's house is in brooklyn. they find and bludgeoned to death, the body is melted, garate collis doud and bludgeoned. he's dead. suffice it to say he's gone and suddenly the blind sheik takes over that office and all the money in the office and collects all the moneys of the fbi is left. now wadih el-hage happens to be in new york that weekend and he visits el-sayyid nosair, the killer of meir kahane. where is the fbi? where is the fbi and all of this? now, i decided when i started this there were 45,000 pages of transcripts of the southern district of these cases that is how i began. i started reading every one of

the transcripts and i read every single book on the subject and i read all of the open source articles on 9/11 and created a database. 46 volumes -- it's up to like 70 volumes today 3 inches thick. my daughters are helping me file them. that body of work i created a little file using filed maker pro, google andy and i began to put in every radical named buy any variation and began to connect the dots. not a word by the way -- we are going to get to the trading in a minute. there's not a word on what i'm about to tell you about on the 1911 report on trading. so now ali mohamed is an informant for the fbi from 1992. when they prosecuted the plot in '95 they called this the jersey chehab office. ali mohamed used to give training sessions to the brothers in this mosque.

they showed tapes from fort bragg and would teach him how to clean weapons in this office. see the mosque? okay. nancy floyd is one of the heroic people in the story for all the films i've mentioned until now and their negligence you will hear about there were some heroic fbi agents and this woman, this little diminutive woman with the red hair from texas, a pistol if a woman if there ever was one, special agent floyd. she is working russian foreign counterintelligence trying to get the guys in the u.n., the russians and she was going around to hotels to see if they were. this is one of the first guys ever to get in the f.b.i. badge with a green having coming to america as an immigrant. she goes one might to a hotel and recruits this could ex egyptian officer.

he's a naturalized u.s. citizen, loves of our country and like ali mohamed who wants to bring the country down, and he is a desk clerk job at the sleazy hotel of times square and nancy comes in and meets him and he's making 500 a week and does a few jobs and says there's a man in this city more dangerous than the worst kgb you would ever meet and she says who and he says the blind sheik and she writes it down. he's in a nest of vipers in jersey city to get that's what he calls this mosque. so nancy floyd goes to her boss and asks them -- he's willing to risk his life, go undercover, infiltrate for $500 a week. what can we do it and they say sure, yes we will give them a shot, a couple of weeks. he does it in today's. this picture is a new direct times photograph with the blind sheik. he's driving around with a blind sheik and of and supplied by the fbi. the fbi now has a real asset

inside this al qaeda sell in new york. now, you see how nancy has recruited the sky. and by the way there are two guys you will get to in a minute, the agents supposed to be watching him on a durham around so me and see me and every night at t g.i. fri and takes down the information, goes upstairs and typeset and goes to connecticut and comes back to work the next morning again working. she's doing double duty. the plot that is going on at that point is called the 12 jewish locations plot. el-sayyid nosair is on charges of killing of rabbi. he has a cousin named abouhalima and he is giving him fuse is meeting with the brothers and he can get in the cell. so he offers to supply bombs, the guy from surveillance. john napoli and the -- excuse

me, special agent in the joint terrorism task force they are the ones supposed to be monitoring and controlling and meeting with him. he isn't wearing a wire. when you don't wear a wider undercover you have to talk every night and download this unless you will forget it. so nancy is coming meeting him at teaching on fridays by the 26 federal plaza and as i said doing double duty. she's typing up the reports that the men to the file. now carson dunbar shows up. carson dunbar index jersey state trooper who worked his way up in the fbi new york office and is the assistant director in charge of the paper by, the administrative by what do they make him the head of? and joint terrorism task force. no terrorism experience whatsoever. he suddenly apparently is threatened by nancy floyd's strength, threatened by salem and actual calls salem into his office and he says you can't do that, he's under cover. he's coming to my office and so

he goes to the office and reportedly according to the sources has his shoes off and this guy has his shoes off and we know what the significance of shoes can be to a muslim as you recently found out with president bush i think found out, and anyway, the point is he says you have to wear a wider and salem says i'm not wearing a wire i'm sleeping on the floor in the mosques with these guys, that wasn't the deal. so salem withdrawals. now the fbi loses their eyes and ears inside and what does the blight sheik-mcnichols pakistan, gets hold of bin laden and gets in touch with -- a suitcase of recipes. he's got like passports, swedish passport with his picture basted with scotch tape meant to be busted, okay? and he starts screaming and

carrying on. ramzi ahmed yousef slips in and goes into an interview session with a woman who is a great agent, another woman. do you know how many times when an almost stop this from happening and were thwarted? this is another female on a ns agent. these guys came in first class on pakistan airlines. this guy, ramzi ahmed yousef, claims he's an iraqi refugee. he's got an iraqi passport and the boss says we just gave the last to this other nut case so i'm sorry. grant him a hearing. grant him a hearing. she stamps it and ramzi ahmed yousef, the mozart of terror walks into the night, heels a cab and at jfk where does he go? the al-farooq mosque where all these guys that are on, you know, that were on the surveillance of the fbi in 1989. now what do they find -- okay, by the way with no one ever

translated that into tuna with the basic rule meant? the base, al qaeda. and the name al qaeda comes from the fact the database of all the guys that came to fight with mujahideen and ali mohamed and bin laden copied all their names down and the guys from the philippines, south africa, chileans and they dispersed after the war against the soviets and the data base of brothers willing to die for allah became al qaeda. and this guy has a book that says al qaeda if the fbi 1992. now, ramzi ahmed yousef is a new york city and a bomb factory and is building this fuel yield device 1500 how the bomb to go up. he wants to block talwani to tar were to. he tells the fbi he wants to and injured 50,000 people killed. okay. and so they are building this

thing. now, salem, remember the good egyptian, the goodbye? they gave him a couple of months to find a new job and kept paying the 500 so he meets nancy at the subway sandwich shop, one of my favorite in use by the way whenever i am in manhattan, and he meets her there and she gives him the last $500 in the presence of another fbi agents and he says nancy, somebody's in town. there's something going on. i had to back away from this. he told the brothers the fbi was watching the way they wouldn't suspect. what is this says nancy? i am telling you there's something going on, just do me a favor and follow abouhalima and salem. she says i have no credibility. dunbar will talk to me. i will pass it up the food chain but he says nancy, the last thing he says to her -- by the way, i want to remind you just so we can -- photographed by the

fbi in '89 and arrested by them and 90 the night of the murder napoli and anticev -- they would lead them on a wild goose chases, and they actually subpoenaed these guys to come down to the federal plaza right after ramzi ahmed yousef came into town they were going to believe these guys and subpoena and they were like, do know, these guys were going like this to the fbi, yeah, sure. now, abouhalima and -- salem says do not call me if the bombs do not go off. what happens with your 26, 1993? by the way, before we get to that i said when i did this book i called luke and napoli and said how come you didn't follow them, how come you didn't follow

abouhalima and salema? the searched his house once people understand what abouhalima is doing. he's making calls from the world trade center payphones, surveillance to a pay phone right in front of the bomb factory while the fbi had to get a title iii wiretap warrant on abouhalima with a hat on the radar since '89 and he would have let them write to ramzi ahmed yousef and i can't even tell you how visible these guys work. ramzi ahmed yousef was photographed at atm and got -- the had three separate accidents. he is ordering chemicals from the bomb from a bogus pay card, at&t from his hospital room. i can't tell you how visible these guys were and what does lu say to me? we couldn't follow them because they beat feet to new jersey. i said what? yeah, they went to new jersey across the hudson river. we a minute, don't you watch the

sopranos? you're the fed and you're telling you can't go to new jersey? that is absurd. people close to nancy floyd -- they have all kind of offsite locations in jersey out of new york. that is a ridiculous excuse. what happened is don barr wouldn't approve the surveillance of these guys and donner board approved the surveillance they would have been in the middle of the world trade center bombing conspiracy. okay? now, i've already told you how visible these guys were. in fact by the way he's up in federal prison in otas board new york and he gets on the phone and calls ramzi ahmed yousef at the phone and says -- they are talking in code and he says remember those bomb books you need i need to refer to one of those, building a bomb and ajaj ziz i will make the motion to get the books. he makes the motion to get the books and the federal judge grants the motion even though he's a terrorist.

that's okay. and then finally because the books were in the custody of the fbi office they didn't wisely go after the books, but nonetheless they talked about it and why weren't they tapping their phone calls from the prison. you don't even want to do that. now, the red of living openly in new jersey, wife and five kids in the same complex as a 6-foot 2-inch brother. that's his brother, another red headed egyptian. how many six-foot to redheaded egyptians could be in new jersey? it's like where's waldo. and this would not be fairly easy? okay. this guy and ayyad types on his computer the call it the fifth battalion liberation army and took credit for the original -- that's what they call this and they mailed these letters as they left the trade center that day. february 26. you will see how ramzi ahmed yousef only by misplacing the bomb, not because of the power, blew through four floors of 11-inch thick concrete literally

went down. if he put that against the 3 feet bathtub's the world trade center sat in, the entire hudson river would have interdicted lower manhattan and would have made 9/11 look like a disney movie. just through an active on heat -- through the act of god he put it in the wrong place. he's watching it smoldering anger he didn't put the bomb and the white place and that might does the fbi lockdown the airports? no. they're singing serbian terrorists, that is the fbi theory. so from first-class lounge he calls and says i want you to do any new threat letter. i'm going to get the fire marshal ronnie by the way who is a key player in the story he goes in. that's a picture he took with his own camera. that is the edge of one of the levels looking down into the pit. now, ramzi ahmed yousef calls ayyad.

this is a revelation i had in the book. the review other authors have this. the fbi within one week of the bombing fines this note on his computer. the trade center will be one of our targets. and the fbi had that within days of the trade center bombing in 1993. did you know about it? of course not because you are in the public and it takes investigative reporters like me to find this stuff below the surface because you are now going to get it in a press release from the department justice. back to the timeline. peterlandstuhl, if you are still awake and falling along, go back to the time line because i am going to tell this story. this is one of the most astonishing revelation as i have in triple cross and i can across this because remember i told you i had a 45,000 pages of transcripts from the southern district cases? they were kind of easy because i could search them but the case was tried by the manhattan d.a. on morgan fall.

i actually worked in that office in law school as a preface the great dea retiring this year. now, that office i had to get three stenographers to come together on the transcript and i reading the transcript and says he has a mailbox the store at this check cashing place in jersey city and i say kennedy boulevard? is about where the blight sheik ayyad mosque is? so that is number one is the fact that this sphinx trading company eight killing of a world figure has a mailbox and the fbi knows. now number two, in 1994, patrick fitzgerald who we will get back to in a minute and andy mccarthy the two federal prosecutors, they are now trying what is called the day of terror case. i they're sitting in the office of the director in charge of the new york office and mary jo white, the feisty little -- u.s.

attorney, feisty, pacing back and forth, a month into clinton ayyad presidency a terrorist bomb has gone off on u.s. soil. what are we going to do? he says we had a guy -- ward? she stops. let me hear this. within minutes, you had a dog inside of the cell you think is responsible for this? yeah, this guy was the six will get him in here tonight. he's probably going to want $1 million because we really did not treat him well. i don't care what it costs, get him in here. and guess what they paid salem, $1.5 million to do what he was doing for 500 a week before the bombing and in three months he said that testing on these guys in this day of terror plot and the wired the warehouse and they mailed the blight sheik and 11 others. patrick fitzgerald was the prosecutor. that is what i call the makeup

case for failing to stop ramzi ahmed yousef the first time in. why is that important? you will hear when i talk about the significance of ramzi ahmed yousef in this whole story. you will understand why that case happened. so, now mccarthy and fitzgerald have a list of 172 unindicted co-conspirators. who is on the list? osama bin laden, ali mohamed, al kifah, the brother, and ali mohamed, who as i told you from 1992 as an fbi informant. now, ali mohamed at the time, the ali mohamed ayyad if you will control which in fresno is a guy named john who is involved in a grisly like in cold blood like murder case involving this family. the kid on the extreme right literally hired the guy to kill his entire family in cold blood. mother father and sister very famous case in fresno. see him locked up by the two great copps.

john is the control officer interfered with the police investigation and then later coming years later when dannel was on trial literally a character witness and she of course was convicted, he just missed getting the death penalty, guilty as sin and this fbi agent supposed to be controlling ali mohamed, his daughter is the fiancee of the killer and he felt as for the guy as a character witness at the trial. what kind of judgment does this guy have? that's telling you something. and he's supposed to make sure that ali mohamed is on the straight and narrow? that is his daughter, monica. okay. now i didn't give you the whole pay off on a sphinx. what we go back, you will understand the payoff. on this list of all unindicted co-conspirators there is another name at the sphinx trading. so he killed the rabelais, 94, fitzgerald and mccarthy, think of the colin are so important to put him on a list of bin laden.

i will get to number three in a minute. now, ali mohamed, 1993 the system works. he's trying to bring this guy in from vancouver. the royal canadian mounted police, the great mounties, they grabbed him. the system works and they put him in of will and sweat in the 12th hour was finally at midnight he writes the note call this guy. he gives them a phone number of john zent. he's okay, they let him go. where does ali mohamed go? kenya where he starts to take the pictures for the africa bombing and 93 weare bin laden plants 94 pictures and the bombs go off for years later. he wouldn't have been released from the custody of the mounties' of the fbi agent had and vouched for him. these questions are as old as watergate. what did the fbi know and when did they know it when it comes to bin laden and al-zawahiri? ali mohamed is such a key figure in this story he moves bin laden ayyad entire entourage from

afghanistan to khartoum in 1991. okay? he lives in bin laden ayyad house, trains his personal bodyguard in '94, gives a little idea how the trust this guy. he writes and translates most of the terror manual that showed up in manchester england. now we have got by 1994 while he is with bin laden and khartoum, yousef his three plots. first they are going to try to kill the pope. let me go forward here. the three plots, they are going to kill the pope was going to be there in january, they're going to put bombs on the parade route. they wanted thousands dead because they are like 50 people deep. that is the first plot.

och place that is an issue.

remember the ogletree senter? he put the bomb 3 feet below the tank and gets off. now the plan is on its way to japan. a boom over the sea, blows a hole through before they can see the water below, kills the japanese national but now they know and the plan as her quickly landed by the filipino pilot about the know we have to do is put forward 3 feet we will blow these planes. that is plot to. now, the night of january 5th, they are cooking chemicals in the bomb factory. who is in the crew? ramzi ahmed yousef, khalid sheikh mohammed who goes on to do 9/11. and they have a smoke incident. this woman remember i kept telling you how many times when an almost interdicted the plot? this juggernaut of al qaeda? this woman is a cop, but the

most decorated policemen in the philippines only she's a woman and she's literally sleeping in her might code nearby because that is what they do, they sleep at night like the firefighters and she sees this and sends a call over and he comes back the gorgeous playing with firecrackers. we are going back. she knew the pope was coming and there are problems with terrorism. so she's posing in front of the apartment showing me how he was starting to balk backing to get to ramzi ahmed yousef ayyad laptop and he is hiding in the shadows and they grabbed him and he shoots across. he's running and the called the bends down like she's showing and takes a shot, shoots one flight past his ear and she said peter, he tripped on a route, if god hadn't had that negative the -- i love this woman. [laughter] anyway, they grabbed him and slammed him against a wall. he said i have 2,000 amex checks

in my sock, that is a year's salary for many in my country. what do you have upstairs? and honest woman. she goes up and her jaw drops because she sees pipe bombs, scan die, hair dye, contact lenses so they can pose as religious works in the plot, all of these bombs, she freezes. have the philippines police show up at night and grab morad and the state to islamabad where ramzi ahmed yousef is captured a month later but morad, this handsome devil and he is a good looking guy but not case terrorist treen and for flight schools from 91 to 92. why? this is important because he was going to be the lead pilot on the failed plot. the third plot was 9/11, it was conceived as hijacked airliners flight and into buildings.

.. they called it the plane's operations. what did the fbi know and when did they know it? this is colonel mendoza, showing clearly that the fbi and have this note forness to get this

memo clearly showing that the fbi that the information from the philippines police. in 1995. you see, this details, read my timeline and read my book. i didn't knowárbrbj"rbrb credit on 60 minutes for capturing yousef, he happened to shop at the donna joseph departments late.

at the guest house, the ceccacci guest house. there was only 20 rooms in this guest house. yousaf is continuing his bombs and little toys that he is going to smuggle on planes. he is like the energizer bunny of terror, and they grabbed him and they render him back, he is screaming. at. i name khaleej sheikh hangs around long enough to be interviewed by a stringer for "time magazine." i started screaming and they called to-- you are telling me that khalid sheikh muhammad gave an interview to "time magazine" and he called himself khaleej sheikh pakistani businessman and he is hanging around before the fbi shows up to give an interview and then he is in the wind. the guy they say is the mastermind of 9/11 and yet and fbi agents took credit for capturing yousaf. yousaf this captured and ran it back to america. fayyad back to the timeline, we are now in 1995.

mohammed caleaf.com i'm going to whip through this quickly. he is the brother-in-law of osama bin laden. the system works again. this guy is coming up to steve emerson believed to be ali mohammed in california. they love apple products by the way. they happen to love the apple product and get the newton pda full of information on the new york and then allyssa. he has been laden brother-in-law and funding the manila cell. he is called a terrorist in a memo from a guy in the state department. he has, warren christopher nga bee really the secretary of state and the deputy attorney general literally push this guy out of the country. the jordanians have him convicted of a murder case and that doesn't lose its hanging over his head. he is that the death sentence and jordan. he has been laden brother-in-law. even if you argue that in 1994 there wasn't that much knowledge about bin laden, alright, and by the way he was heading back to

manila. they just had this fire in manila and this other stuff going on. connect the dots. warring christopher on behalf of the jordanian says we should get rid of him and jamie gorelick supports a man they basically move this guy out of the country. a witness recants in the end up running a secret restaurant and was recently murdered. i wonder why the man who knew the secrets? gehring this extradition period, jamie comes up with the famous while memo which he admitted was not legal necessary which separated the fbi agents investigating future terror, criminal agents trying to make cases. literally taking the two parts of the brain of the fbi and the al qaeda part, totally unnecessary and it was blamed by fitzgerald and others for this. no mention by the way in the 9/11 report of mohammed caleaf.

does it surprise you not a mention? 1995, a couple more things and then i will move forward. 1995, dr. ayman of zawahiri, this is an early picture is smuggled into america and as the tour of maust to raise money. this is in my opinion at the height of world war ii. if jim lehrer had, if the german spy had smuggled heinrich himmler for one of the head guys in the third reich and interred german churches in world war ii, ali mohammed did it. i am not saying i admire the guy, i am saying how the hell did the fbi miss this? is i'm going to make quick. yousaf is back in new york. they bring murad back to new york and in the jail sale, this could only happen in new york, in the middle of the jail cell is a guy named craggs garver.

they start moving notes back and forth earl victual paulson the walt and this is an fbi memo documenting this. on my web site. i have dozens and dozens of these memos that you can download at peter lance.com. this is a schematic of the watch that yousef used in bojinka. up in the corner it says c1 of 60, they call that the signature of the trial in august of the bojinka case. this is zalmay vince this wise guys getting this stuff for defense. first and give him a camera to photograph the nose so yousaf can make outside calls and the things that is the mob but it is really the fbi listening in. this is the series the fbi took this. it is all documented. that was from the manila search of yousef's bomb factory which shows you we are talking about the same thing. this is a note from greg with a facts number and the phone

number for yousaf dhakal rhama. hugh is president? who knows about this initiative? patrick fitzgerald who is co-head of organized crime and terrorism in the southern district. dietrich snow pro-prosecutor in deitrichs now is one of the guys that its diplomatic security agent told me got the material for manila from camp cramer from mendoza and went to the embassy and side address to an enveloper to the southern district. dietrick snow clearly that this evidence in the opinion of the agent and pelley caproni. this is an interesting name. she is running karen of cases in the eastern district in brooklyn. they are all going in to meet greg scarpa, not snow but fitzgerald and petrone on a regular basis. they describe an act of the qaeda cell in new york. they don't say al qaeda but-maggie plot to blow up the

plane and free the blind sheikh. very important, i told you the texas memo ed later showed up. that is some port and the blind sheikh was. august 11, 2006 remember the plot to blow up the airliner plot that is now the reason you can't carry, where is my little peg of stuff you can carry on the plane? each of these articles, the "new york times" articles, threats and responses, they talk about a mirror image of this plot in 06 that the britain covered on the atlantic is the mirror image of the bojinka plot and they talk about acetone peroxide and yousef has a memo that he says, talks about how to have a plan to blow up a plane in the talks about in this memo as the town peroxide, that is essential ingredient in the bomb ten years later, the al qaeda boys and england were going to use. this is how important is the evidence was. while this is going on, and if

you go to peter lance.com and click on the playboy bunny he will see an article i wrote this week that details everything i'm telling you because it is complicated and i don't want to give it short shrift. i don't want to pretend you can read the headlines. but, while all of this is going on with scarpa jr., the good wise guy but he is helping the country in between the two terrorists. this is his father, greg scarpa sr.. he is one of the most bloodthirsty killers in the history of the mob. his protéges said in a trial that he stopped counting after 50 homicides. he is the father and he has been an fbi informant since 1962. he only did 30 days in 30 years in prison. because the bureau gave them a pass repeatedly and this guy over here on the right is devecchio. len devecchio, they called the mr. organized crime. he was the senior organized-crime agent. he was the key witness in rudy

geolaunius commissioner in case. retaught i.t. quantico. he was a legend and he was the control agent of scarpa sr.. later, it was during this period, while the sun is doing all of the sting of the terrorist over here, over here they are a bunch of maud cases in brooklyn that involved two things, the star of the outcome of the old man's testimony and devecchio testimony is an expert witness. if scarfone is discredited. his kid who is now helping the government on the terrorist is going to testify that my dad was in a corrupt relationship with devecchio and four fbi agents redican not. their own boss then they started a two year internal affairs investigation. like the size of a phone but can't what this len devecchio do? he takes the fifth amendment. he refuses a polygraph test. later in a trial after use

granted immunity dance recital recall 66 times. if you and i were granted immunity and we said i don't recall once, contends, jill. that is why they give you immunity. the fbi is so worried that these mock cases over here going to go down, if scarpa jr. talks about his father and his relationship that day in my opinion now, and this is underscored by, this is a memo from james kallstrom to louis freeh. andy talks about how the failure of the fbi to wrap this investigation of this casting a cloud over the nyo, the new york office and threatening a series of cases in the eastern district of brooklyn and is basically telling louis freeh to shut it down brother. and guess what happens? they shut it down, they left devecchio, despite all this treasure trove of the evidence i'm telling you about, 11 months

treasure trove called a hoax and a scam. the fbi and the feds come up with a story that is a fabrication. they so they kala the spokesmen the scam. what motive would ramzi yousef have? why would he give this to the fed and could scarpa jr. i guy with the tenth grade education delays grammatic bomb like that? no. this material is so authenticated. i have 2 inches thick of the fbi documenting it. that is the story they came up and then they buried gregg 40 years in the supermax for violations, not one murder. this kid was not convicted of one murder at the time and they gave him 40 in the worst federal jail in america. devecchio opr is closed, he retires with a full pension, takes the vet and patrick fitzgerald i'm in terrorism. he is the principal official in the southern district goes along

with this discrediting of the evidence. in fact, if you look in the appendix of this book, which i hope some of you will buy today and i'm not doing this for book sales. i am doing this because i believe in it. on page 590 of this book, there is an appendix and john you have go to in your hands there. this is a six page sworn affirmation under penalty of perjury by patrick fitzgerald in which he says, we really thought the scarpa materials as they were called for a genuine, but we later found out they were a fabrication and their principal source is the guy named john no-opoly. this is worn under penalty of perjury by patrick fitzgerald. you see, under penalty of perjury. he is saying that this is a hoax and a scam. here is the deal. he happens to be on the tear with greg scarpa jr. mons-- he

started this thing in march. upton december. i interviewed napoli from security. he said the saddam, bin laden and bojangles sunsetting bojinka but however when i asked him if he tell the fed that this was a hoax and scam, in no uncertain terms i said greg asma to lie but amock case but when it came to ramzi, he was risking his life, 100% aye. never told the that they are relying so patrick fitzgerald, i am not saying he knew because i can't get into his mind but they did in "vanity fair" called him the bin laden brain. patrick fitzgerald signed the affirmation and 99 discrediting this evidence. you get a little sense of why he might not want to have this book see the light of day. why should we care, coming back. by 96 gollies perfecting the embassy bombing flock. fitzgerald from january on this

directing, you read the book the looming tower, a pulitzer prize, he talks about 49 only only tells of the story. god bless them and someday maybe i will win a pulitzer but it is doubtful. anyway, lawrence wright telsat of the story, and his story is a laudatory. i am critical of the squad. peckford sphincteral this running, jacqueline in, dan coleman. these delete agents in the squad. i told you khalid was extradited to jordan. he is trying to the indictment of us some of the blood which is a valid purpose. in the fall of 19907, this guy, in 1996 jamal el fadl, also known as jr. there is no picture of him. he walks into an embassy in africa and is himself up. he embezzled $100,000 from bin laden and bin laden said you