>> thank you very, very much. [applause] >> on c-span tonight, secretary of state henry clinton announces a new aid package for the palestinian authority. former pakistani president musharraf discusses policy. later, the role of money in politics. secretary of state henry clinton announced today $450 million in aid to the palestinian authority intended to close their budget deficit, strengthen the economy, and help build infrastructure and palestinian-

authority ruled areas. secretary clinton is joined by the palestinian prime minister via videoconference. this briefing includes comments on israel's decision to authorize new settlement construction in east jerusalem. this is 20 minutes. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> good morning and welcome to the department of state. we have a global traveler back with us after 30,000 air miles in the asia region. but clearly, what the secretary will talk about today underscores our ongoing, significant commitment to the palestinian authority and to helping build the institutions of the palestinian authority as we continue to press the parties for direct negotiations. but without further ado, madam secretary. >> thank you so much, p.j., and good morning, everybody. now, are we going to have the prime minister on the screen?

[laughter] there he is. hello. well, i am delighted to see prime minister fayyad, and this link-up is the next best thing to being together in person. and i welcome our guests here in washington and say hello to everyone in ramallah. before i address the subject of my announcement today, i want to also address what i know is on the minds of many of you. the united states was deeply disappointed by the announcement of advanced planning for new housing units in sensitive areas of east jerusalem. this announcement was counterproductive to our efforts to resume negotiations between the parties.

we have long urged both parties to avoid actions which could undermine trust, including in jerusalem. we will continue to work to resume negotiations to address this and other final status issues. we, along with many others, are working every day, indeed every hour, to help create the conditions for negotiations to succeed. we still believe that a positive outcome is both possible and necessary. i will be seeing prime minister netanyahu tomorrow in new york and consultations continue on all sides and we will persevere. now, as prime minister fayyad understands so well, we have to move forward together simultaneously, and mutually reinforcing on two tracks the hard work of negotiations and

the hard work of building institutions and capacities. we need to work with the palestinian authority to support their efforts to build toward a future palestinian state that is able to govern itself, uphold its responsibilities to provide for its own people, and ensure security. progress on this second track gives confidence to negotiators, removes excuses for delay, and underscores that the palestinian authority has become a credible partner for peace. now, earlier this fall, i was able to visit ramallah and see firsthand the continuing progress that the palestinian authority is making under president abbas and prime minister fayyad. thanks to their hard work, the palestinian authority is reversing a history of corruption and producing results that actually matter and

improve the lives of palestinians. as a result, new businesses are opening, taxes are being collected, services are being delivered, security is much improved and the economy is growing. when you look around ramallah and other palestinian communities today, you see new buildings going up, professional police officers on the streets, and a sense of opportunity and purpose. in fact, the world bank recently concluded that if the palestinian authority maintains its momentum in building institutions and delivering public services, it is, and i quote, "well positioned for the establishment of a state at any point in the near future." so i want to congratulate president abbas and you, prime minister, on everything that your government has accomplished. it is a testament to your leadership and skill as well as to the talents and determination of the palestinian people themselves.

now, of course, the prime minister would be the first to say that all this progress remains tenuous and there is much more work to be done, and he would be right. unemployment remains high, especially among young people. smaller communities have yet to see the benefits of greater prosperity despite the increase in new businesses, the rise in tax receipts, and the generous contributions from the international community. the palestinian authority still faces a serious budget shortfall. but the united states and our international partners are committed to supporting the palestinian authority as it works to overcome these challenges. so today, i am pleased to announce that the united states has transferred an additional $150 million in direct assistance to the palestinian authority. this brings our direct budget assistance to a total of $225 million for the year and our overall support and investment

to nearly $600 million this year. this figure underscores the strong determination of the american people and this administration to stand with our palestinian friends even during difficult economic times, as we have here at home. this new funding will help the palestinian authority pay down its debt, continue to deliver services and security to its people, and keep the progress going. it will support our work together to expand palestinians' access to schools, clinics, and clean drinking water in both the west bank and gaza. and it will allow prime minister fayyad's government to build and modernize courthouses and police stations, train judges and prosecutors, and launch new economic development initiatives. strict safeguards are in place to ensure the money will be used responsibly. the united states, the world bank, and the international monetary fund all carefully monitor the use of donor funds

and we have great confidence in prime minister fayyad and his ability to provide accountability and transparency. i am pleased that a number of our other partners have stepped forward recently and also increased their support for the palestinian authority. saudi arabia recently transferred an additional $100 million. the united arab emirates provided a funding infusion in september and the european union also announced major new funding. on my recent trip to asia, i was encouraged to hear widespread support for the palestinian authority's state building efforts underscoring, again, the global resonance of this issue. the united states will step up our work with partners like japan, malaysia, australia, and others to find new ways to increase financial support for the palestinian authority. now, unfortunately the palestinian people still have some friends who prefer to support their aspirations with words rather than deeds.

but that won't put food on the table, create jobs, build credible institutions, or help speed the creation of a new state. palestinians need results, not rhetoric. and they need partners willing to invest in their future. and that is exactly what the united states is doing. and together we are moving forward despite the challenges, and there are many. we take confidence from the steady leadership and bold vision of president abbas and prime minister fayyad. so let me thank the prime minister for his tireless efforts to realize the dreams of the palestinian people and for being a consistent voice for progress and common sense. so now, mr. prime minister, it's your turn to say a few words. and we hope that our connection works better than it did the last time we tried this. >> i sure hope so. thank you very much. >> very good. >> we tested it. let me first introduce my party here i have with me.

first, consul general of the united states daniel rubinstein, head of director of usaid mission, here mr. michael harvey. i have also with me my colleague in government, dr. ali jarbawi, our minister of planning. documentation that pertains to the transfer has just been signed and concluded. so let me now begin, madam secretary, by once again thanking you for taking the time to be with us this morning your time, evening ours, to announce the transfer that you just announced of $150 million in support of the palestinian authority budget. we really appreciate this assistance because it is highly responsive to our needs in two ways. first, in terms of the type of assistance, it being of the form of budget support is the kind of assistance that we need the most, as it helps us deal with the needs that we have to deal with and actually meet the duties, obligations, the

responsibilities that we have to discharge in the course of doing the best we can in the interest of bringing about better life for our people. it also is highly responsive to our needs in the sense of its timeliness. as you well know, madam secretary, and we have talked about this a number of times, we have faced quite serious financial difficulty for the past few months that made our life extremely difficult in terms of meeting those obligations that we have in a timely fashion. so the money and the substantial amount it is, the transfer, that is, of $150 million and the timeliness of it, could not really be better. we thank you very much for the responsiveness and also for splendid staff work on your part both in washington as well as here to make this happen -- actually happen. it's an opportunity for me to once again reiterate the palestinian authority's deep

appreciation for the longstanding support of the united states of our common development and adjustment and -- our economic development and adjustment and reform efforts. as a matter of fact, over a period since the inception of palestinian authority, the united states has actually extended assistance in the total amount of about $3.5 billion over the period 1994 through 2010. about half of this money actually was made available over the past three years plus a few months. half of that is in the form of budget support. and to be exact, $800 million of this total assistance has been over the past three years in the form of direct budgetary support. and this brings me to the second point. apart from the volume, the magnitude of this generous transfer, the form in which it was delivered, the modality of its delivery, meaning directly to our budget, underscores the confidence which once again the united states government congress also have in the

integrity of our public finance system. we palestinians take this as a matter of pride, immense pride, in fact. and in fact, it reflects the kind of progress that we have been able to make over the past few years in trying to get our institutions in the state of being in the shape of being state ready. readiness for statehood is, in fact, the key objective of the program that we launched, madame secretary, in august of 2009 with the aim of completing the task of capacity building and also amass a critical mass of positive change on the ground in the form of maturing governance processes but also infrastructure of state. we are well on our way, also judging by that statement which you were kind to, as a matter of fact, read out today again by the world bank about the expectation of us being ready

for statehood at any point in the near future on the strength of what we have been able to accomplish over the first half of this three-year program. so we are well on track. we are determined to stay the course despite the difficulties and obstacles that we continue to have to contend with every day. nevertheless, we, as i said, remain hopeful that we are actually going to be state ready come summer of 2011. it's a goal that we are doing our best, in fact, to meet. i said what i said about the u.s. assistance that has been made available in support of our budget, the direct budgetary assistance, but that is in addition, of course, to other forms of assistance that you have mentioned, madam secretary, that went a long way toward supporting the palestinian authority in various spheres of government and also infrastructure. i can tell you for sure without much difficulty that there is hardly any sign of visible

progress on the ground in palestine today that does not have the caring fingerprints of usaid on it. i'm talking to you, madam secretary, and to your colleagues in washington about, for example, physical infrastructure, including water, electricity, road networks. i'm talking to you also about social services, importantly, education, health, social assistance. i'm talking to you also about the assistance that you have so generously provided to help us with capacity building in all spheres of government, including security. i can go on, but as i said, there's hardly a sign of visible progress that does not have a contribution of the united states government associated with it. we thank you very much. that has helped our effort, as a matter of fact. and over the past nearly three years now, just under three years, we've been able to implement some 1,700 small community development programs

that have contributed remarkably to bringing about better living conditions for our people in spite of the occupation and its adversity. as you mentioned, unemployment remains high. it has trended downward over this time period. it is lower than it was a couple of years ago, but it still remains high. it's a challenge and we're working very hard to reduce it further. poverty has declined by nearly one-third over the period 2007- 2009, so there are, as a matter of fact, signs of progress, signs that are strongly suggestive of this effort being on track. and if, in fact, we were to continue with it, as we fully intend to do, we believe that we are actually going to see the tangible results that our people started to feel throughout the country. i'm talking about not only dwellers of urban areas, but i'm talking especially about people in rural areas, refugee camps throughout, areas that have been long marginalized and areas that have been so adversely affected by the

construction of the separation wall as well as settlement activity. so we appreciate the assistance. we appreciate the vote of confidence that comes with that. let me also add, madam secretary, that we are doing this in addition to it being done in the context of this reform effort and adjustment effort and state-building effort, it also is important to happening in a context of declining need for external assistance. this is a key objective of ours and it defines very much the kind of thinking that we have insofar as economic viability is concerned, financial viability is concerned. i can tell you for sure that our need for exceptional financial support has already declined substantially from about $1.8 billion in 2008 to about $1.2 billion this year. that is a decline of about one- third in our reliance on external assistance and aid money. the prospect is for further

reduction in 2011. in fact, we look to 2011 as the year in which we expect to make decisive towards attaining -- progress towards attaining financial viability by end 2013, at which point we will no longer, we expect, need any mbe the kind of assistance that we are getting from you today in the form of direct budgetary assistance, which we hope will also be seen as a sign of maturity, maturing institutions of state, governments -- the kind of accomplishment and progress that you and delivery that you expect countries that have been around a long time to be able to do but without considerable difficulty. so here we are, madam secretary. we are well on our way trying to do the best we can in a highly challenging environment. the context is very difficult. i alluded to some of the difficulties that we have. i very much appreciate the statement that you made at the outset in relation to further announcement of yet another expansion of settlement activity in the jerusalem area

this time around, as it happened before. that remains a very serious challenge and a problem for all of us. so therefore, madam secretary, in the period ahead we certainly will continue to look to you for continued strong leadership as you continue to try hard to put together elements that are necessary to have a strong political process, a credible political process, one that is capable of delivering that which we all want to see happen, an end to the israeli occupation. and of course, the day will come when that state of palestine will be born so o people can live in freedom and dignity in a country of our own. that's what this is about, and we look to you again for continued strong leadership as we move forward down this path which has witnessed a great deal of difficulty. nevertheless, we are determined and we remain hopeful on the strength of what we've been able to accomplish here and the hope and expectation that those

-- along the path of state building and getting ready for statehood, on the strength of what that is expected to do by reinforcing the effort on the political process. once again, madam secretary, on behalf of the palestinian people, on behalf of president abbas, palestinian national authority, my colleagues in government, i thank you personally for the effort that you have made to support us and for your continued and longstanding support, for the efforts of your colleagues. i thank president obama, u.s. congress, and of course, the american people for this largesse. thank you so very much. >> thank you very much, prime minister. we greatly appreciate your efforts and your very gracious words about our country and our support for you. now i think i'm going to take a question here. is that what's happening? >> you've got the meeting with the vice president coming up. >> right. well, i can probably take one

question maybe. ok. >> madam secretary, we've seen all the controversy develop this week on settlements between the israeli government, the palestinians, and the administration. so what do you think you can achieve on that front by talking to prime minister netanyahu tomorrow? and how do you assess the hope of resuming the peace talks at all? >> well, i believe strongly that negotiations are the only means by which the parties will be able to conclude an agreement that will lead to a palestinian state and israel living in security with its neighbors. that is our view. that is our commitment. and i'm going to be speaking with the prime minister tomorrow once again about the way forward. i remain convinced that both

prime minister netanyahu and president abbas want to realize the two-state solution. like any very difficult political challenge, it is often hard to find the path forward. but we are absolutely committed to doing everything we can to assist the parties in doing so. thank you all. >> thank you very much. >> secretary of state clinton mentioned that she will meet with israeli prime minister benjamin netanyahu in new york tomorrow. they are expected to discuss settlements and stalled middle east peace talks. two egyptian envoys have been

sent to the u.s., also. >> "book tv" this weekend. in one of his first live tv appearances, george w. bush on his memoir "decision points." live from miami-dade college, sunday at 4:00 p.m. eastern on c-span 2. >> as the country marks a veterans day, learn more about the holiday with the c-span video library. oral history, authors, and veterans day commemorations through the years. all free on your computer any time. former pakistani president musharraf criticized u.s. foreign policy in southern asia in this event hosted by the atlantic council. he discussed u.s. support for

the farm at karzkarzai governme. president musharraf announced that he intends to form a new political party in pakistan and run for office in 2013. this is an hour and a half. >> welcome to the elected council. president musharraf, it is an honor to see you again. my last interview with you before i left "the wall street journal", where i was editor, to

run the atlantic council, was in january, 2006 in davos. i will give a couple of lines from the interview to illustrate how much can change and how little can change. we talked about something that had not made the news much until that time, and that was the notion of the gas pipeline that would run from iran to pakistan and potentially run to india. one of the things we are working on at the atlantic council in the southeast center -- southeast asia at center is how does one drive this kind of cooperation? we talked about drones. they're just been an attack on a village where al qaeda leaders were expected to a head dinner that killed pakistani women and

children and set off street protests in pakistani cities. you talked in the interview of how you had not been informed in advance and the pakist -- and told the u.s., "we do not want anyone to operate in pakistan, even if that meant a slow response to intelligence." mr. president, we established a seouth asia center two years ago because we recognize the centrality of these sorts of questions and the centrality of the bilateral relationship with pakistan in its regional context. you are an unusual man, talent that understands both the region and washington. and we have picked a leader for our center who is probably the most unique person in

understanding, he is an insider in both societies and an outsider, which is a frightening bit of schizophrenia to bring to the leadership of any organization. he knows how washington and pakistan works, and it gives us a leadership that has a position where the south asia center is not an american center. it is a global center talking about a region and bringing us real expertise that has put us at the center of this debate after just two years, less than two years in operation. only by understanding that the relationship with pakistan, with this kind of sophistication, can we move forward. there may be no more important bilateral relationship in 2011 for the u.s. than this one, president obama's trip to india,

notwithstanding. so, we want to talk about the geographic subcontinent in the center -- afghanistan, central asia, iran. we think this the lives -- a solution to the problems we look at will only come from this link. john kerry has called our work on u.s.-pakistan relations seminal. since the center's launch, we have published an updated report. the first report we did was in 2009. we did an updated report on the tenuous relationship, and we remain committed to our mission of waging peace. let me quote the first sentence from that report. "perhaps no bilateral relationship in the world matches that of the u.s. and pakistan when it comes to its combustible combination of strategic importance and perilous instability." so, that context is as important as is our speaker today, a man

who understands the context and the challenges as well as anyone on earth. few people in the world have an understanding of the inner workings of pakistan better than president musharraf. he worked his way up through the military and political ranks to become general and army chief of staff in 1998. he took over as president after a bloodless coup in 1999 and led until his resignation in 2009. his life story tracks the history of the country and the region. he is not only a person of history in the region but as we will hear today, he is very much a person also of the present. president musharraf, the floor is yours. [applause]

>> mr. kemp, president of the atlantic council, members of the council, it is indeed my unique privilege to be talking to all on a very important subject, the subject of our region, what is happening there. it is the happening place today and the strategic focus of the whole world is to our region. therefore, i would like to say that we must understand the region and there is no doubt that the world and indeed the united states coalition forces and pakistan must cooperate fully to be merged successful and what ever they are battling -- to emerge successful in whatever they are battling. therefore, i am going to talk to you on regional development, on the current situation there in the region, and also the ups and

downs of pakistan and the united states relationships. as you said, it's a strategic relationship of great importance, but may i very frankly say that yes, indeed, in words, but in actions, one would expect much more to show or to demonstrate the strategic importance that pakistan enjoys in that region. i will no annunciate debt to whatever i'm going to say. i would like -- i will not enunciate whatever i'm going to say. i will start -- from that, sorry. rings]l phone [laughter] shut it off. i take the historical

perspective, dividing into a certain periods, and with that, i will extract the relationship of pakistan and the united states and why there have been ups and downs. the first period is 1979 to 1989. since 1948, pakistan has been a strategic partner of the united states. and we have been with you all these years for 42 years, right up to 1989, very clearly. we launched a jihad against the soviet union, the united states and pakistan, because we wanted to withdraw mujahedin from the

world, 25,000-30,000 from almost all muslim countries. so this continued as a teacher relationship with the united states, and continued since 1948, especially in these 10 years, we fought a war together in afghanistan. for 10 long years, this jihad was wages. the elites of afghanistan abandoned afghanistan for the united states and europe. it was spearheaded by the militant groups. in a negative aspect, also, the glue that held afghanistan

together, the ethnic groups, translates into a national coventant. this group, after the king was deposed by the soviets, was no more. therefore, when we talk of political revolution, we are talking of a new national covenant, homegrown national covenant, giving the pashtuns the dominant position in government. for this period of 1979-89, ended in a soviet defeat in 1989, but what happened after 1989? the next. period is 12 years of disaster. firstly, pakistan and afghanistan was totally abandoned by the united states. not only abandoned, there was a

strategic shift in the united states towards pakistan -- against pakistan towards india. there were sanctions imposed on pakistan and cozying up of relations with india, starting in 1989, despite of the fact that we were the strategic ally for four years and we fought a war together for 10 years. this led to a sense of betrayal within the people of pakistan. which exists even now. so 1989, the abandonment of the region, was the first great blunder committed by the united states. not only these of the pakistan, but also the 25,000 mujahedin -- not only vis-as-vis pakistan but also the 25,000 a shot had been

coalesced into al qaeda. -- the mujahedin coalesced into al qaeda. for six years, battling each other -- even the pashtuns were divided into eight groups -- and they ravaged the country. the fighting was then between al qaeda on one side and the northern allianz, minorities on the other side. this then destroyed afghanistan years.anothehr six afghanistan yeasrrs, became of ghost country. i visited afghanistan.

kabul was worst than somalia. so this was kabul, a ghost city. this is what happened in these 12 years after having won a victory in the soviet union. because the strategic focus was euro-centric because of the cold war, warsaw pact, reunification of germany -- all that gains went into york. what did afghanistan or pakistan get? nothing. for 12 years, pakistan bought 4 million refugees in the process into pakistan. we had to fend for 4 million refugees, warlordism in afghanistan. pakistan alone to protect its own interest in these 12 years. that was the -- of pakistan-

united states relationships. they thought the united states had used pakistan and abandon the spirited and kim 9/11 -- then came 9/11 and the terrible terrorist attack here in the united states. pakistan again becomes important. pakistan is needed again. and therefore, we again become a strategic partner. but then we became strategic partners, the question i was asked all the time, what makes you think the united states will not again use us and abandoned us? it is important, ladies and gentlemen, today when we are trying to take the decision whether to stay or quit, are we again to be abandoned -- question mark -- in the minds of

every pakistani. so now the next blunder that i will talk of which is very significant -- after 9/11. the taliban were defeated with the help of the northern alliance, because the minorities -- taliban dispersed, ran, al qaeda ran into the mountains and cities of pakistan. they were in total disarray -- taliban. afghanistan no was available for the political instrument to be used. [unintelligible] by giving -- we were forced and

the military dominant position in afghanistan. and now a political solution available to be executed in afghanistan. but, unfortunately, the political solution did not come about. what is the political solution? you cannot govern afghanistan with a minority dominating the government. they are only 8%. afghanistan has always been governed by pashtuns, 55% of afghanistan. now, he was the situation early in 2002, where we could have changed policy, taken pashtuns on board and put a pashtun- dominated government in kabul. unfortunately, we did not do that. the environment was available. we failed to do that. and therefore, the country is

governed by the minority, the biggest blunder with which we are persisting even out. now we are trying to talk to moderate taliban or taliman. what we should have done in 2002-273, from a position of strength, now we are trying to do from this position of weakness. that was the next blunder. and now we are in the pro cess of taking a decision whether to stay or quit. ladies and devin, this decision has to be taken very carefully. -- ladies and gentlemen, this decision has to be taken very carefully. we cannot commit a fourth blunder. in afghanistan, a lot of people ask whether we can win. i would like, my reply is, we must not lose. even if the answer to win in

maybe 50-50, but we must not lose. and let me say with 100% conviction, if we should resolve, we will not lose. and we are not losing. so therefore, my food for thought here is, ladies and gentleman, that we must not lose first and then work out the winning strategy. and i have said that pakistan is supposedly a strategic partner. i don't know. the people of pakistan are not to shore whether we are the strategic partnership -- the people of pakistan are not too share whether we are strategic partners. what are the sensitivities of

pakistan? integrity, our world being, of course -- our well being, of course, and the world showing us concern and giving us the importance that is due to us. the other is the kashmir dispute. it is important, not only that it is a dispute in the united nations but today, it is causing a lot of terrorism and extremism. -- within our society. in 1989, when kashmir erupted, dozens of mujahedin groups sprang up within pakistan, and thousands of people were volunteering to join to go to india, near kashmir, to fight

against the indian army. and all these maligned names of -- mujahedin, etc -- are products of the 1990's. now there is another intifada movement by people of the indian -held kashmir, and that is suppressed by the indian army and with the dozens killed. these mujahedin it groups again start rising and people give them support. its impact to terrorism and extremism must be understood by the world. and therefore, the significance of resolution of the kashmir dispute, not because pakistan wants it, it has been necessary for the region, for the world to fight terrorism and extremism. the other sensitivities are

nuclear capability. ladies and gentlemen, pakistan is as much as rogue nuclear state, islamic bomb. i don't know why india is not a -- bomb. [unintelligible] pakistan is nuclear as a defensive, existential threat exists on it. our strategy was of defensive military rate from 1948, and we quantified this into army-navy, air force. only conventional type. in 1974, india went nuclear. so, therefore, the strategy became untenable. therefore, pakistan had to go

nuclear. and when india started firing missiles in the early 1990's, pakistan had to make missiles to restore the balance and restore the strategy of defense, which we did. so, therefore, pakistan's nuclear capability is an existential compulsion which is with inida. dia. no pakistani will understand the logic of what pakistan's nuclear assets are disturbing the world. this is a sensitivity. our strategic assets is the pride of every man walking the streets of pakistan. so any indication of negativism coming from abroad, the threat

coming on the strategic capability of pakistan is viewed extremely seriously by every individual pakistani. so this is the compulsion. oto president obama's visit india. i do not want to talk much. i do not believe in caucus and indo-an being centric. i believe in the bilateral importance of relationships. the united states president was to go to india, absolutely. he has all the rights to do everything. but if pakistan is the strategic partner, pakistan has strategic significance, pakistan is suffering because of so many bomb blasts, hundreds if not

thousands of people dead. the army has suffered 2500 dead. isi has suffered 300 dead. and then we had this flood, massive flood, unprecedented. so many casualties. i thought president obama should have shown some concern for this small strategic partner and visited pakistan. no mention of kashmir. i have explained the issue. it is sensitive in fighting terrorism and extremism. the concern of india is that no third party is to be involved. yes, indeed, it should not be involved, and we should resolve

the kashmir dispute bilaterally, which we were doing in my time, and we were near a solution. but certainly from the sole superpower, one expects concern for pakistan being a strategic ally of importance and also sensitivity to terrorism and extremism, because kashmir does contribute negatively toward terrorism and extremism. while there is concern in the united states or interest in the united states, because india wants to purchase $45 billion of arms purchases, yes, it is of commercial and economic interest, but i remember in my time, pakistan -- there was the question of the european union and united states for a free

trade agreement or preferential trade agreement on additional market access. i believe in trade not aid. it means opening of factors, job creation, poverty elimination, unemployment reduction. unfortunate, it was not given. lastly, ladies and gentlemen, i talk of the political scene and pakistan. here in united states, all said, pakistan's strategic significance. therefore, we are to be concerned what is happening in pakistan and what the future holds for pakistan. we must ensure that pakistan's integrity, its solidarity, is stability is maintained, because we have to fight terrorism and extremism and defeats it.

and if we want to do that, we look at the political realities in pakistan. today, pakistan is on a downward turn. its economy, its government, political turmoil, and of course, terrorism and extremism. in this situation, let's look at the future. one has to look at the future. otherwise, -- react when it is too late. we need to see is there light in this darkness that pakistan is facing today? and that light will come through the political alternatives. i do understand that democracy has to be maintained, but through democratic, to the process of elections, is light visible? we will have elections in 2013, hopefully, when the government

completes its tenure. some people are saying midterm elections or whatever. what will be the result of those elections? will we have a government that will deal with -- that will take pakistan forward in this darkness to light, fight terrorism, and sure the solidarity of pakistan? i don't see that light, unfortunately. therefore, ladies and gentlemen, i personally thought that i need to get involved. maybe there is a chance that i will produce an alternative that may be viable for pakistan. and therefore, i joined politics. one has to analyze the future of pakistan. we must insure the stability of pakistan for the stake of contain further turmoil in the region.

i know i have less time. i am open to any questions you may want to ask. [applause] >> thank you, mr. pres ident. as usual, there was a sweeping vision that you reflected in your talks. i'm going to pick up on some of the points you raiasesed, particularly on the u.s.- pakistan relationship. i am reminded of a quote of the ambassador. he said that being friends with america is like living on the banks of the great river. every four years, it changes course and it leaves you flooded or high and dry. and one could get that flavor

from your commentary on the u.s.-pakistan relationship. tepn you took the fateful se of joining the coalition of the course after 9/11, you agreed to provide access to the united states to pakistani territory, to launch the attack on afghanistan. and there is enough evidence that some of the drone attack, which led to public outcry, were launched from pakistani airfield originally. there was no -- taliban in pakistan at that time. resulted largely of -- because of the army into the border region. looking back, do you think there was too much haste aceding to

the u.s. request? >> this is the argument many people have given. i have faced this question many times. first of all, pakistan's decision to join the coalition and the united states. the first question i asked myself before joining -- what is in pakistan's interest? does pakistan want a talibanized government in pakistan? and do we believe in and the views of islam that the taliban holds? the answer was no. 99% of pakistanis would say no. we do not want that. with all that confidence, it was not in our interest to be supportive towards taliban. notas pakistan's interest,

u.s. interest. then i went further. if we did not join, what could happen? and my answer, which i do not want to elaborate, was that it would be dangerous for pakistan. because india was ever prepared to join and certainly the united states would attack afghanistan. how did the attack afghanistan from india? pakistan's sovereignty and aerospace or land. from all points of view, bravado is good at a personal level, but when it nations and states are involved coppe, bravado is not the solution. i took the decision. in hindsight, most of the pakistan is believe it was the right decision. ttp was not there.

there was dnsm. which was more serious. he was the leader. and he is the man who's stronger in this malikahn divison. ion. then there was notheanother leader. these are products because of what has been happening. these are products because we defeated after 9/11, taliban and al qaeda were defeated. then 2003, or in 2004, we had a two year period to execute a political solution in afghanistan acceptable to the people with pashtun. i coined the term that all taliban are pashtun, but all

pashtun are not taliban. --'s get them o noun our side the pashtun. now that was not done, so therefore, taliban emerged in 2004. they are starting out to go towards taliban. they are few in numbers, but taliban have emerged. you cannot put that on mine, that i did something -- and then kashmir, yes, indeed, as i said, kashmir, freedom was -- this at all this dynamics. some religions militancy in afghanistan, and after 9/11, yes, they turned it

towards me. so, therefore, our national establishment -- the extremism went on the rise occurred because of the. so i think we need to heed the history but see the future, the realities of today, and battling in the future and winning. i think we should concentrate on that. back to the drone, s, every single person on the streets and pakistan is opposed to them. then why allow the drone attacks to cross your sovereign boundary? >> yes. you did ask. now, drones. there's a dilemma here that we share with you.

the dilemma is that these drones are militan. t. i know that. at the same time, indiscriminate use of drones causes >> in my time, i never allowed [unintelligible] we needed drums of for giving us information about targets. where is the target? that is the main thing. surveillance is important to spot the militants.

you can send your helicopter gunships, or we have created a force called special operations taskforce for the special services group. there are various methods. i was for the use of armed forces. i think that there were only a few grown attacks in those times. i've always objected to them. the use of drones is causing in- a negative. that is the dilemma. the pakistan armed forces.

united states law comes into play, and these are unusual circumstances. >> this is the element of distrust that prevails between the strategic partners. let me take you back across the border and say something quite important about afghanistan. can we win? your response was, we must not lose. it has been almost 10 years since there were connecticut operations in afghanistan. what, in your mind, is that missing strategy? >> first, i check the important part. do not lose. when we talk of quitting, it has

terrible impact,-on both sides. -- impact, negative on both sides. every partner in the coalition including pakistan would like to evaluate the situation. certainly, i am reminded of 1989. millions of refugees in pakistan, so pakistan will have to think. the sphinx -- must think. negative. the enemy is very clear. if i was a taliban commander, god forbid, time is on my side. or the -- what a negative thing.

ladies and gentrelemt -- gentleman, in tribal culture, chivalry is respected. this is never expected. therefore, stay there. now we have to certainly win. what is the winning strategy. how can we do it? we first have to be in the military dominant position. never speak from the position of weakness. how do we do that? our forces, the u.s. forces, coalition forces, they are diluted because there is too

much space. think of going across the pakistan border, it is increasing space. you will be defeated. you will suffer more casualties. never make that mistake. therefore, how you do away with the dilution of space. do we know that the national army today -- what a blunder. 50%, 55% is ethnic. how can you do this? there has to be a balance in the army. there has to be more. secondly, is then any other element? i think there is, even now. we should have done it in 2002.

if you see a tribal culture, to things that i want to highlight. their confined to their mosques. over the centuries, where are they? they are supressed. but they are tehre. -- there. everyone here is a weapon. each side has its armory. it is a weapon culture, weapons and good weapons. let us look at tribes that have no ideological affinity with

taliban. and tribal maliks that have some -- i don't want to use the four- letter words. [laughter] they are raised, armed, give them their pride. let them fight the taliban. tribal people have always fought with the pakistan army against india. let's create those. this is to gain military dominance, and the political instrument, the military will never give you a solution. so a political instrument.

we have to get them on board. term ofagree with this moderate taliban. do what you can to get them on board. they are not a monolithic. they have good command structure like the army. there are a number of groups operating. in fact, let me tell you [unintelligible] their people hvae -- have clashed with each other. 150 dead, killed by the group. they ambushed them. there is -- it's very good that there are a number of taliban.

managing political affairs. but from opposition. >> thank you. one last question before i share you with the audience. this is picking up on your point regarding the 2013 elections. you said you had decided to join politics, and some said that you joined in 1999 when he took over the government. what has changed from the time that you left pakistan that would allow you to go back? and the obstacle that you face, the legal challenges. that is a question of the presidency, but the national

assembly members voting for the office of the president. it has only just been launched. the think there is any realistic chance? -- do you think there is any realistic chance? in a journey starts with the first step. -- >> any journey starts with the first step. you think of it as too big. you don't have that leadership in new -- you. i presume it's not too big. because, number one, i left not because my popularity was rock bottom. i was the most popular man in pakistan since 2007. there is no doubt in my mind, i know that. i understand the people and the

masses of pakistan. it was in 2007 the political turmoil took place. for which there was a reason and i don't want to get involved in that. it is not that pakistan was going down. the socioeconomic development of pakistan was not going down. it was not that the condition of the people, the welfare and well-being of the people was going down. the poverty in pakistan according to the [unintelligible] the 2008 figures were reduced from 32% to 17%. the people of pakistan no way. -- know it. now, this is one. my popularity did go down, but it was n rock-bottom. i was popular and a lot of

segments of pakistan. the other point is, pakistan is suffering today. is that the reason for the gain? i said, in the darkness, the people of pakistan are not seeing the lights. what is the choice? i don't have to elaborate. everyone knows what is happening in pakistan. the alternative, twice and failed miserably. in 1999, pakistan had $300 million in the foreign-exchange. all our indicators, it might be

a little better than the united states today. and it was -- the economy was in a terrible state. people were crying, i was a chieftain. i know how many women and men came to me and asked when i was going to take over. if i gave the names of some of them, even those at this gathering would know them. they told me to take over before pakistan has gone in 1999. this condition now is almost the same. people looking to run away, inflation, people committing suicide? people in the streets. now they are remembering what they missed. the important items, sugar is

one of the sanctioned items. in 2006, the sugar price went from 21 to 23. i called the sugar mill growers, why is this to be increased? today is 115. this is what will happen in two years. it is just one thing. the pakistan people are yearning for deliverance. that is why the first step has a lot of relevance, and i think there is a chance of success. i cannot be sure, but i believe it is better to try and fail and then to not try at all.

>> i will open it up. i will start at the frontier. if you could please wait for the microphone and identify yourself. >> welcome back to washington. very fond memories. also the first meeting that you had with president bush at the united nations, our official residence in new york after 9/11. my question build on what you were just talking about, the economic situation. i remember the economy was growing. it was something like 7% per year. i stand corrected. and i recall we were talking about different ways of economic cooperation including trying to

create reconstruction opportunities so that we can give preferential treatment to pakistan products that would come to the united states. can you elaborate on what your -- getting pakistan back on its feet economically, given the opportunity? >> a cherished my memory with you, sir. your very frank in your approach and i appreciate that. you also appreciated by frank s. -- my frankness. for the development of the socioeconomic development of the tribal aras. -- areas. nothing came about. that is the negative.

what i want to say is, we have to be fast. we have to be trusting. we have to move fast, delivering and doing something for the people. today, the economy of pakistan is nosediving downward. why is it going down, sir? immediately after 2008 when the elected government came into being, one thing that happened, [unintelligible] pakistan is running away with their money. the dollar was held at 60 rupees for 8 years. today it is 87 rupees.

fbi has gone down considerably. the reduction in fdi. exports have half the effectiveness. revenues have gone down. your balance of payment deficit increased. i don't know the latest figure. these are the negative trends, why? because of lack of trust and confidence in the government. i personally think that if people have trust and confidence in the government, without doing anything, there will be a reverse flow of money.

pakistan wants to invest in its own country. why should they take their money out? halo bring their money back. -- they will bring their money back. i believe that the policy and relations mostly, interstate relationships have to do with interpersonal relations. i am very sure that everyone will be -- could be persuaded. the economy will start doing well. i have no doubt on that. our position today, before an exchange reserves are there. from $300 million to $18.50 billion.

it is there. it is not $300 million. and also, we raise revenue collection to one trillion. it can certainly go down, but not that much. the stock index had gone to 14.5000. 14,500. -- gone to 14,500. what is required is confidence of the people in the government. i have a simple definition. it is my own definition for any leader or any government.

ensure the security, progress, and development of the state. this is the definition i have. it can be ensured. all other things are secondary. i know i am talking to a u.s. audience. democracy, ladies and gentlemen, it is a tool to deliver the progress of the state and the welfare and well- being of its people. it is not in and of itself, it must deliver to the state and to the people. if you have a democratically elected government running people down to the ground, i don't think that kind of democracy is the democracy that any state or once -- wants. the welfare of the state, the well-being of the people. that must be ensured that

pakistan can deliver to the people. >> we have a question there. there is great demand for questions. >> i apologize, i am giving long answers. >> thank you for coming. i agree entirely with your analysis, but where i respectfully disagree is that i don't think we can wait until 2013. i recently returned from another trip from pakistan and i believe the situation is far more dire than the people in this country appreciate. the dialogue only procrastinated the inevitable which will be a collision between the united states and pakistan because of a profound misunderstandings. what, if anything, can the united states or pakistan do in the short term to turn around what i believe is going to be this collision?

>> think you, sir. i am surprised and glad to hear what you say. well, what the united states can do is to help pakistan. helping pakistan, i have been very bluntly indicating that what is happening is not really helping pakistan. we have to help pakistan economically. but concerns of corruption, there is no doubt. you ask a difficult question, frankly. if i were there, i would have asked for market access so i can

create jobs and open factories. i can reduce unemployment, i can reduce poverty. that is certainly a thing that the united states can certainly do. immediately. remaining -- i think pakistan on the law-and-order side, we are being -- a the the term is extremism. the united states needs to develop a better understanding of the army instead of blaming the army for collaborating with terrorists. i don't understand why this is done. the army has suffered 2500 dead

at the hands of them. they are killing the army men, and you're blaming the army? i don't understand. they are killing the personnel, about 300 dead, officers all over pakistan. we are collaborating with -- there is a mismatch. please try to understand. i will leave micromanagement to pakistan. be concerned with their intentions, that they do not want taliban and al qaeda. be concerned with strategic delivery and don't micromanage for them. they understand who to talk to, how to talk, what enemies to

take on. and we will leave this micromanagement to the people of pakistan. the this is the second, i think. we need internal stability in pakistan, political stability. i don't know if the united states can contribute and to bring in political stability. that is the ultimate requirement because the political stability would bring about economic stability and good governance. i don't know if the united states can assist. >> thank you, mr. president for your very candid presentation. if i might draw you out on what seems to be a tension in your

presentation. he spoke to the president's visit of the region and or resentment in regards to depictions of pakistan that your assessed with india. you spoke of the fact that a nuclear capacity of your region is a compulsion, it is an existential come posen. does it have to do with india or something else? how do you reconcile the comments, please? >> if i were to tell you very briefly, and indian forces today are based on 33 infantry divisions. 25 of them are oriented towards the pakistan border. there are about six armored and mechanized divisions.

all six are organized at pakistan's border. they are used for an offensive. the navy, may be oriented towards pakistan's shores. the incidents like the attack on the parliament, the whole army came on to the borders of pakistan. the situation developed. or do you x -- what do you expect pakistan to do? there force is three or four times bigger than pakistan. and when incidents take place, the politicians in india are crying for punishment, attacking pakistan, it is a trifecta.

what can the leadership do? it has an existential threat. the military strategy is of manila and defensive deterrents in the conventional and unconventional. previously, it was conventional with india going nuclear. >> thank you for your frank comments. stepping back from the immediate issues you have been discussing that are very important, those like myself have lived in pakistan, where are very concerned about the educational system there. i have been the many villages where it says that there is a school there, but there is no school there. you helped initiate a good program, but international

measures say that only 40% of kids that are school age are in school. how we get pakistan to head towards those goals that are so crucial. for the long-term benefit of pakistan? >> i could not agree with you more, sir. the long-term strategy. education, poverty, unemployment. this is a knowledge-based economy. that is a long-term strategy. i understand we have to do something. what needs to be done, more allocation of funds for education, how do we talk about allocation of funds? we increased the budget from

2.9% to 4%. a 1% increase is 170 billion rupees. that is the kind of money that is a 1% increase. the total of pakistan between 88 and 99 used to be about 90 billion rupees for the public sector development project. it was to 520 billion. out of this 1% increase, therefore, the difficulty and money requirement. i agree with you that government has not been performing. your 100 percent right about those schools. 20% of teachers in pakistan are

ghost teachers. it was 1996 or 1997. there is a corps commander in my region. the total survey, 20% schools. teachers are ghosts, only on paper. we have to do something more than the government. and we create -- he was a doctor here, having a very good practice. he gave me this idea of education and helping at the grass-roots level. he gave me the idea that we would have freer schools. the spending of money. we take schools from the villages. the teachers from that village, girls and boys, and i told him

to come to pakistan. he did that. since 2001, its red to many districts of pakistan. thousands of adult literacy centers. there are a lot of philanthropic activities involved in collecting money, donations, and opening schools. they are the best because they do it with a passion. i personally think that the government should reinforce the philanthropists because they do things with passion. and make them expand. i think it a multipronged

strategy to educate the people of pakistan that is so important, not only from economic development, but also fighting off terrorism. i could not agree with you more, sir. >> when you were in power, you came across as a leader that genuinely wanted a solution, and he made many efforts to reopen the debate, think outside the box. it was reported you were very slow to doing an agreement with india. is that true? >> get me elected and i will revise its. [laughter] the issue, i think you are right. i used to be called a man of war, which i was.

i was in uniform. i call myself a man for peace. i say that with conviction because i have seen the ravages of war and all of the confrontations with india. internally against the uprisings. my own best friend has been killed. my son is named after my best friend. nobody understands the ravages of war as much as i do. i am a man for peace. a lot of people ask me if i have a military man, and not everybody understands that. i initiated the process, and i initiated the process, i'd probably say that i initiated. it is proceeding well.

there are three qualities required in a leader. i have said for some agreement. one is sincerity. sincerity to resolve the dispute from the heart. the other is flexibility. accepting someone else's point of view. the third one is called us and courage. why is required, where will we be on an issue -- i don't believe the two sides would be naive enough to give everything. so there has to be a give and take. india has to give, and pakistan will have to give also. if there is a leader who buckles

under pressure, that he will be thinking that his political clout will go down and his popularity will go down and the people, that interferes in that movement. it is reasonably fast in fact. we were drafting an agreement. i think it is a pity that and we can't reach conclusions, fleeting moments come in the lives of leaders, and the key to success is to grasp the fleeting moment and don't let it fly past. >> we have about 15 minutes left, and we have a number of questions i will try to go through them quickly.

the microphone is coming to you. >> you talked about the blunder's made in afghanistan. by the u.s.. i wanted to ask you why you allowed the taliban leadership safe haven? were you really in control of isi? there was an evidence thatisi -- that isi was helping hte tali -- the taliban. >> i have to be very careful in answering to you unless you write something that disagrees with us.

which you live done before. [laughter] i have forgotten your question. [laughter] >> the taliban -- >> if you think that i provided safe haven to caliban -- taliban, what can i say to you? people that attack me, i am providing safe haven to them? --an't answer anything again people talk. there is an office. have you identified were the of this is?

if is a big statement. their refugee camps. the biggest camp is 100,000, about 90,000. i have flown in a helicopter around the camp because i thought maybe one day you would put in the military action, there are lanes inside where men cannot -- is so close and so congested. 90,000 people live like this. it is a nightmare if there is any military operation in this area. now, all of these refugee camps, there are dozens in pakistan. all of these refugee camps are used for various purposes.

and they must be people who are harboring them. but that i am allowing this to happen is not the case. we introduced checks, and germany has thousands of vehicles coming every day. including the isf. we introduced biometric systems there. and the system, so we can control the movement across the border. on the other side, in spite of my best efforts to introduce a similar system on the other

side, nobody has done that. so we have been trying our best to control movements, but on the other side, there is no response. so therefore, i would say that while these refugee camps might be a safe haven for any kind of activity, it is not a government sponsored. there is no safe haven created -- after all, all of the leaders of significance, tell me what has been caught in afghanistan. all have been caught in pakistan. and by whom? but pakistan law enforcement agencies and intelligence. in cooperation with the cia, yes

indeed. these are sensitive materials which really disturbed everyone in pakistan when we put all the blame for movement across the border. i don't understand why. why is pakistan only responsible when the coalition forces are not responsible. can we share the blame? i don't understand. this is what really develops the mistrust and lack of confidence in each other. gosh let me join the others and welcoming you.

i like to ask you about afghanistan and the role of pakistan and india. many people say that the countries are engaged in a proxy war, and since you were just talking about peace, is it possible for india and pakistan to wage a proxy peace? of countries have interests. pakistan has strong security interests. what would you do to move away from proxy war to proxy peace? >> whos initiating a proxy war is the first question. what is happening in afghanistan, i am from pakistan. please do not think i am saying all of this just to protect pakistan. i know there are many indians who might be sitting here.

unless we fight this terrorism with unity of action, we will fail. what is happening to pakistan, i would just like to enunciate. everyone knows. why is it there. why are these to there? is there an indian community there? are they doing trade there? what is the interesting of india? nothing other than aiding and abetting terrorism in pakistan. i have documentary evidence. i know indian intelligence is coming, i of the construction activity that they are doing, and i have been telling the

president not to give construction activity to indians on our border. you can go anywhere in the interior. we will build a road for you. but no, they must build their. they want to call terrorists into pakistan. and who is against the interbreeding of pakistan, he said on television and in the media. they don't believe in pakistan. he is sitting in kabul, sir. he is -- i have seen photographs. let me say this to the others.

the training of diplomats, military intelligence, it takes place in india. i have been offering everything to karzai. nothing in pakistan. only india. we are being stabbedn the back. what should isi do? it is supposed to protect pakistan's interests. therefore, the united states must understand what is happening. and i say this very openly to everyone. help pakistan stop all this. there must not be a proxy war there. i totally agree with you. but please understand who is doing it. and why it is happening.

>> you made some remarks earlier of regarding the conduct of military operations in afghanistan. can you make some suggestions regarding the local tribes, leaders, etc.? it seems to run the country to the least official strategy of building of the afghan army and the national police. d.c. a possibility of your ideas or similar ones of them powering tribes and local leaders could take place? is there anybody that will listen to this? where are we doomed to fail because of this idea that we need to build national institutions? >> it is not in conflict.

the conflict -- the national army and police, we can raise them to a level, that is a good course of action. but i said that there is the added possibility. if we can't have the possibility, the police and the national army is the answer. ultimately, they are to take over. i hope ethnic balance is being maintained. i am afraid you're pushing more to the taliban. there is the war there. total war. the revival of 89.

we must have ethnic balance, and we must have people and the dominant position. not in having the water to ministers giving useless portfolios. under his nose, how is this happening? we must -- and the police and the national army is being raised in large numbers, enough to police the border and the talents, that is very good. i think that is the right strategy. >> we are getting near the end of our time. this is in the order that i recognize.

and then, at the back. >> very nice to see you again. i would like to ask about a different militancy problem, not one coming from afghanistan, but one coming from within the country, particularly punjab, particularly, l.e.t. pakistan faces a dilemma of how to deal with groups that have been very helpful in the past with india and it will even offer again to join the army against india if necessary. they are causing havoc. i heard from officials as recently as yesterday that l.e.t. was a fantastic success because it destroyed some many promising chances for peace. because you banned so many of

these groups, but i would like to ask you about your own time in office. given everything that has happened since july of 2007, did you make a mistake? >> [unintelligible] >> attacking. and the brothers. >> l.e.t. and i have hinted at the history that 1989, the freedom struggle started. [unintelligible] because the suppression of the indian army iran and pakistan, it came about. and left europe in the early

90's. evenother names i don't remember, frankly. groups can about in pakistan, and it was such -- there was a lot of sympathy, no government really did anything about it. and also, they were going to fight to the indian army. it went along with the psyche of the people of pakistan and everyone. india was refusing to even people in -- table it in any form. it did not allow pakistan any room towards resolution. it went along this activity and went along with the psyche and the thinking of the entire

population. then comes 9/11. now rejoined the coalition -- we join the coalition. there is taliban, al qaeda, everything. [unintelligible] they developed a nexus with taliban and al qaeda. these are problem areas involved with terrorism in pakistan. i have banned almost all of them. it is easier said than done. the pakistan government and the intelligence organizations, allow them -- you can rock the boat so much that the boat capsizes.

there are things that need to be done. allow gradual action for the strategy that does not disturb the entire law and order situation in pakistan. this is what i would like to say. by the way, [unintelligible] they did the best work with the earthquake. they did an excellent job in the relief operations. you are dealing with a situation that has popularity with the people. when they went to fight, it is very popular with the people of pakistan.

they are being killed, so we must help them. it is a difficult situation for any government in pakistan. that is the root. that is my concern that president obama -- [unintelligible] you have a responsibility towards everyone. i thought maybe it least he should have mentioned that you need to resolve this. certainly, i did not do anything wrong. it is in the hearts of -- heart of islamabad. the women, another 2,500 with explosives and suicide jackets inside the mosques.

we were being humiliated. the government was being insulted. the government was challenged by these. i remember the alarm that was caught in the diplomats. they sent their families out. these people were beating them up inside of that moscow -- mosque. before taking action, i did everything to bring them to an understanding. i used all religious lobbies, the consul of islamic ide ologies. and when everything failed, we succeeded in getting thousands out.

pakistan cannot be declared a banana republic when the goverment is challenged. at least not under me. >> in the back. >> if you become the next leader of pakistan, will you stop all drone attacks? and allow them to exist for intelligence? >> we will cross that bridge when we get there. [laughter] first, get me there and we will see what we can do about it. we have to resolve this dilemma. we must target militants. we must not do something that disturbs public opinion massively. so we must get to some

solutions. the dilemma has to be resolved. it has to be resolved. >> mr. president, on behalf of my colleagues at the atlantic council, i would like to thank you. [applause] >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] a discussion about campaign finance and the role of money in politics. the department of health and human services introduces a new initiative to reduce tobacco use. later, secretary of state clinton announces a new aid package for the palestinian authority.

on tomorrows "washington journal, a look at the deficit commissions recommendations. former congressman duncan hunter has a new book about the war in iraq will talk with american legion executive director about issues affecting veterans. "washington journal is live beginning at 7:00. >> to learn how the plot is serving a first lady use the media to communicate her ideas. marking the 150th anniversary of the civil war, on the experience of in slaves and free african americans. november 20, a daylong symposium

on the civil war. american history tv, all weekend every weekend on c-span 3. >> a discussion on the role of money in political campaigns. we will hear from charlie cook. they spoke at this event at the national press club organized by the non-profit advocacy group common cause. this is an hour and 10 minutes. >> let me describe briefly the formats of the event, then i will make a couple introductory remarks and introduce our first guest. charlie cook is sitting just to my left and he will give some brief remarks and we will open it up to questions. he has to run to a previously

committed events right after that. then we will introduce our panel. each of them will speak briefly and we will open up for more questions. we have about an hour. we look forward to the conversation. on behalf of common cause, i am delighted to help frame this conversation and hope we can get a rich guy look on the importance of this issue. just a couple of facts to put this in context, the 2010 midterm election last week was the most expensive one ever. when all the spending reports are finally tallied, the spending on that election will probably exceed $4 billion. that compares to $2.6 billion in the 2006 midterm elections. of that, almost $300 million came from groups operating independently of the candidates and political parties. paris recalled -- they were free to spend without limits and

except unlimited donations from wealthy individuals, corporations, trade associations, and unions. about half of that money, it came from groups not required to identify their donors. and it worked. independent expenditures donated in this last election were important to the results in seats that changed hands, democrats, republicans, independent groups spend an average of $764,000 on the winner. those supporting the loser only spend $273,000. this was an important topic and we look forward and engaging in this conversation and what follows the money. i would like to introduce a man that i am sure you already know. is charlie cooke. he is the publisher of the cook political report. he writes regularly for the national journal magazine.

he has a regular column for the washington quarterly. he is a political analyst for nbc news. let me turn it over to charlie. [applause] >> when they ask me to do this, i was delighted to do this. i do not consider myself a hard- core reformer, but i do see somebody -- i am somebody sees the problems with the system as terrifically flawed. i do not have solutions, but i think the dialogue is important. i am not going to give my normal spill on what i would do. i want to rest of this topic. some of the lessons that we have learned again is that money is

hugely important, but it is not determinative. in fact, there are times where there is a law of diminishing returns or where the public just says, no mosque. with the meg whitman's spending in california, it seemed to be working, working, working. and then suddenly, people to said know. they kind of rebelled against it for a little bit. there may have been a little bit of that with conn with linda mcmahon. it did not happen every were obviously. money is hugely important, but there does seem to be some limits to what it does. i confess this whole area sort of unlimited/undisclosed money is discomfiting for me because

frankly, i was not comfortable when we saw a lot of that on the democratic side in 2006 and to doesn't aid and i am not so comfortable with it on the republican side. i think it is important for every ready to be consistent. i do not know what the solutions are. i really do not. in the absence of amending the constitution, i do not know where we go. i think we cannot assume that there is a problem. because of the importance of money has gone to the point where i think it really is creating -- and i am not from the selling outside as much as it is harder and harder for elected officials to maintain any kind of connection with the voters when they are chasing money so hard. there is not the time. i sat in on some focus groups

and were watching a video dominant of some focus groups with a wal-mart moms. just sort of average and working place -- working-class mom suit all shops at walmart within the last month. the level of abandonment that they felt from both parties and washington was really telling. this one woman, a schoolteacher in denver, she was passed -- the focus groups were done by walmart, but they had a democratic and republican pollster overseeing it. one of the questions they asked was, if elected officials in washington understood your lives, what would they do differently? this one in london, the schoolteacher in denver, said, i cannot and imagine the elected officials in washington understanding my life. another one, i think it was in

st. louis, another woman said, too bad this is not like on tv that shows of undercover boss. were elected officials could, live with us for a day or two and see what our lives are like. just sitting there, this was not a conversation about campaign money or anything, but it did reinforce a message to me of how abandoned and isolated so many americans feel. the thing about it is that i do not think in most cases these elected officials, these politicians are selling now some much as i do not think they have time to talk to people in informal settings. you remember back in 1976, when jimmy carter was running for president.

he would sleep on the sofas of families of homes to save money, butlso to establish a connection. how quaint that sounds today when these folks and these terrific figures of how much a typical member of congress has to raise every single day of their two years of the house term or six years of the senate term. i do not have solutions, but at least i am encouraged that the biggest money does not always win. the biggest money does when a lot more often than not. there does seem to be limits for of voters on how much or how much of a disparity they are willing to pluck up with before they sort of rebel. i think we did see that.

this was obviously a huge election. i tell people that it -- typically, they are kind of ragged. they are not uniform. some parts of the country are worse than others. some demographic groups were worse than others. in terms of -- i would describe using the starbucks vernacular. that is the 20 downsized. the senate and governor's were grande. there were big wins for republicans, but not as much as they wanted to get. the biggest win for a party in any election since 1948. the biggest midterm when since 1938. obviously, the economy played a huge role, but there was a lot

more going othan just a horrible economy. to me, what i would look at it is independent voters and these are the voters that are the most disconnected from politics. look at what is -- what has happened the last three elections. in 2006, those independent voters voted by 88 -- an 18. margin for the democrats. in 2008, they voted by an a. margin favoring democrats. this collection, they voted by an 18-point margin in favor of republicans. at 56% for republicans. 38% for democrats. when you were talking about a 36 point swing from one midterm election to another, or a 26- point swing just from one election to another, that is absolutely enormous.

when you look at some of the other things -- what we are looking at is a house of representatives that is sort of a lot more aligned -- there will be a lot less fish out of water in this next congress and there has been. there will be very few -- only a dozen democrats. about 62 republican sitting in districts that barack obama 1. keeping in mind that the big john mccain was not exactly the high water mark for the modern republican party. this was not about turnout some much. democrats turned out a little bit less than before. republicans turned up a little bit more. it was not about defections. democratic voters voted 93-7 in favor of democratic candidates. .'m sorry, i got that wrong 92-7. republican voters voted 95-4 in

favor of republican candidates. it was the independence swinging making the biggest difference for this. i think that the great thing about making changes 10 years out is that it does not apply to most of the current people. it is easier to convince elected officials to do the right thing if it will not apply to them or a fool not apply to them anytime soon. getting over the next two or three years, getting people to focus, giving states and voters in the media more focused on redistricting reform and to do it for a time frame looking at the 2000 -- 2021 redistricting

process. that would have accomplished more than almost anything we could do right now. why don't we stop and open it up for questions? whenever i can help talk about, i would be happy to do. thank you very much. [applause] >> thank you, charlie. i will open it up for some questions. we do not have microphones in the audience, so i will repeat the questions. make sure it is a question and not a speech. >> [inaudible] could you talk a little bit about its public opinion -- there is been a lot of back and forth about whether voters care about the money. >> what is the view of

independent voters about reform? what is your feeling? >> they are the only ones to do really care about reform. democratic and voters are favor of reforming republican and republican orienting groups. republican reformers are in favor of performing democratic groups. no one wants to go -- to do anything to cut in on their own side the independents are the what one sadr most disaffected from the political process. they are the most cynical. they are the ones you are a lot more open to ideas of reform, of honest reform, as opposed to trying to take advantage of the other side under the guise of reform, which is what partisans on the republican and democratic side too often do.

i think there is a constituency for that. i think -- what is coming out of -- what will come out of this election is because there are so few liberal moderate republicans left, because there'll be so few conservative moderate democrats left in congress, the american people are sort of of an ideological and shape of a bell curve. slightly more right then left. most americans are between the a 30 yard lines. congress is now -- it is like a camel with to hopes -- to hans. the homes are getting further and further apart. there will be nothing left in the metal in terms of congress. -- nothing left in the middle in terms of congress. the ideological nature of the

parties is such that the feeling of estrangement that people in the middle have is enormous and it will be growing after the selection, even worse than a was before. -- after the election, even worse than it was before. >> [inaudible]

>> i am not a lawyer and that is not my field. i have never seen any felony committed in my presence. i think there is no chance of any reform measures being done during the lame duck session. that is really not what lame- duck sessions are for. i cannot respond to that because i think the system is screwed up, but it is not felonious behavior. >> you talked about the independencys. nts. [inaudible]

could you talk to that? could that encourage participation across the political spectrum? >> i think the american people have long been open to the idea of a third party. i think they are increasingly would love to see that happen. i think a fundamentally do not trust and have good reason not to trust either party. they are incredibly open to it. the problem is that it is rare that you find an independent or third-party candidate setter not sort of fringe characters that cannot get broadbased support. most cases that i've ever seen are not deserving of broadbased support. in 1996, if colin powell had run, that would have banned aid -- an interesting case. he was a major figure, someone

who could draw a broadbased support and someone who would be worthy of a great deal of support. >> [inaudible] >> excuse me? what ministry to bloomberg. -- let me go straight to bloomberg. i do not want to get into -- i think there is a thin line between independent and flaky. independent is a good thing. i do not think anybody has referred to michael bloomberg as flaky. you can like him or dislike him, i spent an hour with him one time and he is one of the most impressive people i've ever met in my life. to hear them talk about what he is doing in new york city is amazing. the fact is, i cannot come up with a single other name of

someone who could be incredible, a formidable third-party candidate in to a dozen 12. -- 2012. if there is another name, please let me know, but i cannot think of one. i think that with the economy, we will be looking at economic growth of probably somewhere between 2 and 3% through 2012. unemployment and a 8.5 or 9% range of 32012. economic climate is going to be a very, very difficult one for president obama seeking reelection. the honeymoon period will run out early next year. there is a possibility of problems on the -- with the afghan war. he is going to be in a weakened condition and lord knows what

republicans will come up with. if i were president obama, i would be on my knees every night prank for the afghan surge to work and forarah palin to get the nomination. >> [inaudible] >> to be honest, i have not looked much at the environmental -- the ballot initiatives on the environment. i cannot speak to that. the thing is, at timing in politics is critically important. there is a good time when people are open to debate and dialogue and new ideas on things

like climate change and then there are unfortunate times. i do think that cap-and-trade played a very significant role and what happened in this election. when i go back and looked at where did he will star wobbling on the democratic party, it was before the focus shifted to health care and it was soon after the cap-and-trade vote. one member started coming back from the fourth of july recess of 2009, that was the first sign that things were going wrong and that was preceding the real focus on health care. last year, i think the american people would be open to a conversation about health care reform. they would be open to discussion on climate change. but when you've got unemployment that was heading up toward 10%,

at they wanted a laser beam like a focus. it was a matter of -- there is a time and a place to focus on things, but when unemployment is skyrocketing, that was not the time. i think it was -- cap-and-trade was a contributing factors to that election. in the midwest heartland, and south. in terms of the ballot initiatives, i cannot address that. in another time, that would of been a conversation that people would have welcomed. it is not that they're close to

the idea of addressing the problem of climate change. don't do it in the face of a recession. >> we have time for a couple more questions for charlie. >> [inaudible] >> do you see and the 2012 time frame a large surge n independent groups on the democratic side as well? >> i do not think it is the beginning though. we have seen in the last decade -- i do not know that there is a difference between george soros

and peter lewis on the left or the brothers on the right. to me, and there is a sense in this country that money spent on behalf of the people i like is an investment in democracy. money spent on the against people i like this special interest and corruption. well, that is a framing that i don't care for. to me, democrats exploited the law and a left exploited the law to its fullest extent in 2004 and 2006 and 2008. republicans did this time. -- did this time. it is like an arms race. beachside is pushing -- each side is pushing. this was a cycle when it was

republicans that raised the bar of how far to go over democrats. before -- it is just going to keep getting worse. i look point is the system so it strange -- at what point does the system so strained? >> [inaudible] >> there was a lot of big money. go up to wall street and look around at how many people wrote a big checks to the democratic party. they got -- the idea that this was fuelled by a small donors -- know. that is delusional.

i really do. it was money going into -- to narrow the focus down on just one into which campaigns. i do not buy that. i do not buy that at all. the democratic machine -- both parties apparatus has been funded by large donations. you know, i do not buy that for a second. [applause] >> we have an opportunity to have a conversation with a distinguished panel of folks with real experience and campaign finance issues. i will introduce them briefly

and ask before opening remarks. to my immediate left is sheila who is the executive director of the center for responsive politics. she has been the executive director since 2006. prior to that, to serve as the research director and oversaw the analysis for -- was the assistant editor for their flagship magazine. to her left and in the center is a butler derrick. he is a south carolina and washington-based lawyer. he is a former u.s. congressman, serving 20 years in the south carolina house before that. he is also a member of the national governing board. to his left its peers sen. he was the direct vice- president of programs for common

cause. he has had experience of the citizen of leadership fund. with that, let me turn it over to our distinguished panel. sheila, we will start with you. [applause] >> good morning, everyone. let me just at the many of the same comments that charlie made. money was certainly a big story in 2010, but it was not -- outside spending is not new. it was just more free-flowing after the citizens united and speech now decision. more of that was hidden this time around. it is not a guarantee of

success. they are relying too heavily on their money and not enough on their own candidate skills. once again, we saw not just record fund-raising but shattered records. far, far in excess of the rising inflation. where will this end? what will this mean for democracy? let me start by saying that crp has been predicting that the election would cost $3.7 billion throughout this year. based on the numbers that we're seeing, and expenditures, we appear to be at least on target to meet that $3.7 billion and likely exceed that. for that matter, there is little doubt that spending is much higher than what is included in the reported expenditures. when you looked at to -- if we

could look at the unreported expenditures by outside interest groups, some of this is for issue advocacies, some of it is going to be termed operation costs, but additional large sums were directed at influencing politics. only the sources of this camp -- of this money will never be disclosed. even the expenditures themselves will be reported. day of announce that they have raised $71 million in these elections, way beyond their target. they only disclose expenditures for half that amount, $38.6 million. pbs funding sources for political ads remain anonymous. that an anemone was critical for their ability to raise that 71 -- that anonymity was critical

for their ability to raise that money. more than $3 billion have been spent. we will not know what the final tally is and where that money was coming from for the last several weeks before the election and until early december. a great deal of focus has been justifiably placed on these outside groups that have grabbed the spotlight and drive considerable fear and loathing. this spending amounts to $437 million. a 13% of that total of $4 billion. all spending is not created equal. this is less valuable to the candidate, this outside spending, it is not money in their pockets. it is not money they can control. it is far more negative, less accountable, often misleading, and even containing an outright lies. of course, people want to know

who put up this money. they also have an obligation to note, to guard the democratic process. a huge chunk of this was bankrolled by anonymous donors. of the $293 million, alt outside groups have reported spending about 47% came from groups and are not required to disclose information. 52% has been on a general election, communications. 47% of been on independent expenditures that overtly advocate for a candidate. some of these groups, it is logical to assume -- and there has been anecdotal evidence that

corporations are providing the bulk of the funds. the u.s. chamber has received a big contributions from a small number of large corporate donors. companies that can give an have given millions of dollars at a time. in the last cycle, the chamber received a gift of $15 million. we're not talking chump change right here. this is serious money. the bottom line is that this is pretty big money. between $400,000,000,000.1783793664 dollars. -- $400 million and $500 million. the overall also spending was a balance between liberal and conservative groups. when you separate the primary

from the general, there was much more balance between the groups. most of the gop advantage was an election and communications. the real imbalance was and the primary. a lot of the messaging happens prior to the general on hot- button political topics played a critical role. these to play a role in how campaigns were waged. what the messages were that were emphasized during the election, what messages were hammered hundred groups may save a exists to educate the public, but then their messages are highly political and they limit their spending to immediately before the election. how the suspect, i think. this money played a role in expanding the territory that the

democrats had to defend the cycle. it had a big influence in specific races. much of it is anonymous. it is hard to quantify the effect of the enemy. money is not the be all and end all of politics. this is one that has enormous significance because of the huge dollar figures. this is a warm-up for a much bigger onslaught in 2012. it is not just the donors, but the groups themselves, that are unaccountable and hidden and secret. no bricks and mortar presence. the persons that can be contacted. because these groups are often irresponsible actors, flooding the airwaves with half truths, and because their message to grace the level of discord and obscures' more important policy matters. to the anonymity has to be

public enemy number one for campaign finance. if you did not have the chamber, the topics would of been different and the outcomes would of been different, too. the biggest concern is not known who is funding these efforts. the impact of anonymous sources is difficult to quantify. how might things have changed if we knew the source of cash? americans have a right to know. i want to turn now to looking at the harvard by industry. a very quickly. lawyers and law firms lost. the biggest winner and the senate was retired people and the house.

did ready for part reform. -- gets ready for tort reform. >> thank you very much. it is good to be here. i think the greatest issue for us to date is money. it -- if you take any problem that this country is having today end trace it back to the rates, you will get to the money. i do not care if it is military, private sector, government, or what it is. i will tell you that as we have elected 68 new members, -- 60 new members, and having been there myself for 20 years, they have absolutely no idea what they're about to face. i had no idea when i came. and i only spent less than $200,000 and half of that i

mortgaged my home to raise. i said no idea that one of these days, i would become a money raiser and nine to a congressman. i went back to south carolina this past weekend and i went to my son is " class. it is mostly small businessmen and a carpenter or two. i tried to get the sense of what they were thinking about. what i found out is that most of them voted for obama. two years ago. most of them voted for a democratic ticket. he is a retired chief and the navy. he said, those people are ruining my country. who are the people? he was not sure who it was, but he knew one thing, that it was obama and nancy pelosi.

you give me enough money and i can turn the bible into pornography. did enough money and you can make anyone into what you wanted. unfortunately, that is where we are today. i hated raising money. hated it. that is after 20 years, i did not run again and that is one of the reasons i did not. it just got to the point where it was simply ridiculous. congress is a microcosm of our society. most of the people, with the exceptions of a few bad apples, are very decent hard-working people who are trying to do the best to represent their

constituents. they came to congress with a wonderful idea. all the sudden, they met this wave of -- that came over them where they had to spend half of their time raising money. most of them hated it just as i did. this past election, i go back and i think about teddy roosevelt. he busted up the trust back in the first part of the 20th- century, but he never got elected to another public office. i think the business community has turned on those who helped them when they were drowning. they turned on those to save their lives. of course, when you talk about a

free enterprise society, we do not have a free enterprise society. we never have. what we have is a free enterprise society that is regulated. throughout our history, depending on which party was can and what particular the situation was, the regulation was listened. provincially, we into pretty much in this situation the we are in today. those of us to are close to the system here in washington did not think a whole lot about it. but i will tell you that the average person out there is convinced that to this is the corrected -- crookedest city in the world. no one up here is honest.

they keep sending people appear and they keep getting dishonest. they pull them back and they send another one. we know that is not true. we have to do something to stop this flow of money. i thought about it a great deal and i have equivocated from time to time about what we need to do. there is no perfect answer to it. i think the best answer that i can think of is that we need some form of public financing. when i say public financing, i mean the financing together with a limitation on the amount to of the nation. think how wonderful it would be if a congressman in a perfect world did not have to go out and raise all this money until

obligated. when i raise money, i consider myself a very honest person, i've never been accused of being otherwise. when somebody gives me a big check for my campaign or right solicited a donation, i am not going to tell you that i did not feel a little bit to -- a little bit not exactly what i had in mind for my future. i ended up having to spend too much time do not. this past year, the supreme court ruling on an opening the corporate treasuries of this country was like pouring gasoline on our roaring fire. i think public finance is not a perfect answer to the problem.

but i think it is the only answer that is reasonable to expect that the congress might take seriously and do something with. although that is wishful thinking. >> can i get you to wrap up? >> you want to hear one of my long speeches. [laughter] anyway, common cause -- we are headed in that direction. on the leadership of our -- of bob edgar and hopefully, we will be able to bring some sort of final resolution to this problem because it is a big problem. i think it is close to being the biggest problem that we have. thank you.

[applause] >> ok, so now we know what a $4 billion election looks like. it was not pretty. i think this one goes in the record books. it is not only the most expensive election in american history, but it is our first secret election since the watergate scandal and is our first election since 1907 were corporations and unions were allowed to spend unlimited amounts of money to influence the ouome. i do not think anyone really believes that people were better served as a result. airways were flooded with attack ads. what does this mean for our democracy? first of all, to paraphrase thomas hobbes, our elections

will become a nasty, brutish, and very long. karl rove have already started planning for the kid doesn't fall election cycle. bait -- for the 2011 -- to doesn't fall election cycle. we are in an era of a new arms race. the end result is going to be that the people who were sent to washington to grapple with our nation's problems and serve the american people are going to spend more and more time fundraising. the conflicts of interest revolt -- resulting from that will become more intense. within the next year, we may have to start a liberation program for the members. it there will be locked -- they will be locked in the cubicles, dialing for dollars.

the biggest problem with -- what happens after the election is the biggest concern to us. we spent the last two years documenting how the major industries in this country target their millions of dollars of campaign cash to members of different committees. pick any one of those industries, all parts of $1 million a day on lobbyists. you had to that, -- u. add to the climates of conflict of interest. add to that a new fear factor. those who vote their conscience in this next session of congress on the tough challenges that face us know that they will be

persecuted by two dozen 12 from unlimited spending. this is clearly not what american voters want. i think charlie painted the picture there. we have seen big swings last three elections. we've had three change elections in a row. it is safe to say that the voters are not looking for one party over the other. they're looking for a change in how our government works. i am not optimistic about what they're going to see this time around. we have done a lot of falling over the last year. you have one of the memos to your press packet that tries to summarize it. what we found repeatedly is that large majorities of people, 75% of people from across party lines, want to see spending

limits. they want less special interest influence. in almostthe party's equal disregard. they have completely lost space and congress. the exit polls in 2006 -- those issues pulled strongly in the last two elections as well. we did a poll on election eve and found that three of four of voters were very concerned that all this was yttrium -- just as many want to see congress take immediate action. what is next and where do you go from here? i will lay out our 20-point plan. [laughter]

the challenge here is that the roberts court made it extremely difficult to have any impact on political spending from a regulatory approach. we need to be looking for new solutions. solutions that raise up the voices of small donors instead of focusing on trying to hold down spending by other straight common cause is going to be working for the next several months by pulling folks together to generate a another grass- roots uprising. i will mention three things that i think our key to that effort. one is no more secret elections. it is time for the parties to get together and put an end to what we saw this year and make sure we have full transparency

moving forward. second, we need to change the way we pay for elections. it is a grossly inefficient system. it creates huge conflicts of interest. we have worked hard on a model for small donor public funding that change is how that operates. third, i think it is important to say that the citizens united decision just cannot stand spread like the dread scott decision, citizens united is based on the ideologies that has no basis in reality. it will eat away at the soul of our democracy if it is not changed. corporations are not people. their role is to maximize profits, not to serve the national interest. it may take a constitutional amendment to win this fight ultimately, but it is a fight that we must win. thank you very much. [applause]

>> we have time for about 10 minutes of questions. it wants to go first? -- who wants to go first? >> i am not sure of what percent of the reform our community is engaging in this constitutional amendment activity to change what the corporation [inaudible] >> will be efforts to try and make a constitutional change delayed efforts or is there a way that can be done to get

attention on the other reform topics? anyone to answer? >> they do not need to be in competition with each other. they are all part of a comprehensive solution and there is a natural time sequence do that. we could do something about sensible action. we could do something about the disclosure issue right away. we have worked for years on a model for how the elections can be run that is different from the way there are now. we have successes and the states. the constitutional amendment is clearly a long-term proposition. it is having that discussion is part of what it takes for people to come to a shared understanding of what the problem is. to be ready to move forward. >> i think it would be a positive thing.

i do not see it as negative. >> what effect does citizens united actually have? [inaudible] >> the customer is about the effect that citizens united has. >> there was a psychological effect that voters no longer had to worry about illegalities. it is possible that disclosure would not be an issue for the irs, but mating taxes would. if they were an organ that -- but pay in taxes would. there were spending too much of their expenditures on political activities, the threats just kept growing smaller and smaller. it opens up the field for new players to spend and these are players with deep, deep pockets.

there was a sense of -- they could look at a more ample set of opportunities for them to have -- >> [inaudible] >> we of god pretty much -- we have pretty much a sense of what has been spent. i do not think there has been enough of a race by race analysis on whether or not they played a role. some of the action really took place before -- in determining who will win the primary. >> i should point out that the citizens united decision was a

combination of a series of decisions that has deregulated campaign finance. that started with wisconsin right to life. the constraints on all sides spending have been chipped away. but we have seen is an escalation of that spending. i do not know if we can quantify that because a lot of it is not reported. there is been some good reporting work done going back in it from the other end. if you look at what the chamber of commerce spent, it is hard to tell how much of that was money that was freed up under citizens united. short answer.

>> [inaudible] [inaudible] [inaudible]