that will be a significant loss, although he will still be in town, and hopefully i will be able to consult with him on an ongoing basis. i think jonathan, coming in, will be terrific. he may deny it, but i have been trying to get in him -- in here for some time. he ran my transition office. at that time, i think he was still feeling he wanted to develop other organizations. john is a great strategist. he is as good as anybody on domestic policy. and i think he will be a huge boost to us and give us more bandwidth to deal with more issues. i suspect we may have additional announcements in the new year. there is a natural turnover that takes place. people get tired. people get worn out. sometimes you need fresh legs. but what i can tell you is that the team i have now is tireless,

and shares my values, and believes the thing i think i have repeated four or five times in this press conference, which is, we get this incredible privilege for a short time, to do as much as we can for as many people as we can, to help them live better lives. and that is what drives them. that is the sacrifice they make, being away from families, soccer games, and birthdays. some of them will end up working over christmas on issues like iran. the fact that they make those kinds of sacrifices -- i am always grateful for them. if they say to me after making those sacrifices for 3, 4, i've years, i need a break, then i completely understand. all right? have a great holiday, everybody.

appreciate you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> julian sanchez of the cato institute discusses the nsa surveillance program and recommendations from a task force that would scale back practices. schor talkselana about the current state of five prominent environmental groups. a look back at what was accomplished this year in congress. david hawking's joins us. we will look for your comments by phone and e-mail beginning live on c-span. >> if you're in middle or high knowl student, we want to

what the most important issue congress should address is next year. $100,000 in total prizes. at studentfo cam.org. moderate i have come to a troubling conclusion. the data broker industry as it is today does not have constraint does not have shame. it will sell any information about any person regardless of for 7.9 cents a name. it is the price of a list of rape sufferers recently sold. of rape victims,

domestic violence victims, police officers, home addresses. people who suffer from genetic illnesses. complete with names, home addresses, ethnicity, gender, and other fact there's. this is what is being sold and circulated. a far cry from visiting a website and seeing an ad. what it is is the sale of a person identifiable information and highly sensitive information of americans. your medicalnd, history, income, lifestyle. the senate commerce committee looks into data mining. thom hartmann argues that without a strong middle class the u.s. is heading for an economic implosion that will make the great depression seem tame.

by august 1945, it was becoming clear that a struggle for global dominance had begun. from world war ii cold war. coming up, saudi arabia relations in light of negotiations over iran's nuclear program and the city and --. civil war. now, discussion on relations between the united states and saudi arabia, and how it has been affected with the nuclear deal and civil war in syria. a half.one hour and

>> good morning. thank you for being here. we are going to go for an hour and a half year. we're going to speak for 45 minutes to an hour, then open for questions and answers. .hank you for coming to hudson thank you to our c-span audience. thank you for this wonderful panel. elliott abrams was debbie national security advisor for global democracy strategy. at the senior fellow council on foreign relations. brian is a senior fellow at the center for american progress focusing on the middle east and north africa. he is author of "the prosperity agenda. g"

in the meantime, i want mr. abrams to make a few comments and first. then we will have a discussion. thank you. for being here today. someted to start by saying of the discussion of u.s. saudi relations is over done in the sense of a hopeless crisis that will result in incurable differences. this is an old relationship. 75 years old. there have been a lot of ups and downs. what ever the challenges today, think of 1973. the arab oil embargo.

an act of war against the united states. think of 2001. beenelationship has through crises. and survived them. another positive point, the relationship is more supple, years inoday than in the past. there have been times when the relationship was king president. that is about it. you now have an institutionalized relationship. there is a middle middle relationship. there is a cia intel relationship. .bi a treasury, ministry of finance relationship. it doesn't just depend on one or two individuals.

obviously the relationship is based to a large degree on oil. even there, one should expand a little. there was a reliance on the cold union,- cold war on the and alliance against iran. there was an appreciation over the last decades of what i would call professional, reliable oil as theing of world swing oil supplier, and of andy by the saudi treasury investment authorities. it is been an alliance of two very different societies. hidden. be if you are an american official, dealing with foreign minister, you don't have the sense that you're dealing with someone who

cannot navigate your culture. very, these are two different societies when it comes to matters like religious freedom, treatment of women. that is a growing problem. it wasn't a big problem for many decades. we had a lot of allies that were different societies and that were in some cases dictatorships starting with joseph stalin. we went through a long. where the internal situation in a friendly country didn't matter to us. it matters more and more now as human rights values get globalized. overtime mores attention to those questions. we no longer say that is a

different culture. i think that is going to be more important because what has been missing for over the decades has been the saudi end of that. as we heard from the royal family, we did hear from the people of saudi arabia. because of technology. now there are blog posts. the saudi people appear just a little bit as actors. that has to increase, it seems to me. that will increase over years saudi oil is less important to us because of the trends towards north american energy independence. the influence will decline radical -- decline rather than grow. there is a crisis of confidence ,ere over egypt in particular and iran. the saudis have relied on this

to be in a confrontation with iran. we have been. they are worried the united antes will decide not to be confrontation with iran. our views on iran are fundamental a different than ours. our problems, if the islamic would disappear. it isn't clear the saudi's problems would disappear. i would add one other thing. the crisis we are having in relations now, the difficulties in relations, a lack of communication, which can be blamed on the administration, but of course several of the top people in saudi arabia are very old and sick. having the relationship we had

10 years ago would be far more difficult today. saudi arabia may in the next few years in terror a succession crisis. the king is over 90 years old and not in good health. the crown prince is apparently in worse health. we make it a succession crisis during the obama administration. since the establishment of this government have we not known who is next. it is not clear that the crown prince can take over. is well enough to take over. you have that succession problem at a time when they are reaching the end of the brothers tom and are going to have to confront the question of going to the next generation. that happens at a moment when tension with the united states is as high as it has been since 2001. our influence in saudi arabia is

as small as it has been in a long time. that is an unfortunate combination of events. i should stop there and turn the mic back. >> great. thank you. first, i want to say happy holidays to you all. especially those watching on c- span. if you are watching this, you should be watching it's a wonderful life. we hope to have a good discussion here. to the hudson institute for the work that you do. lot, but iee with a agree with everything -- i am enriched by it. today,the dialogue here yesterday i was reading the latest edition of current trends in islamist ideology.

even if i don't agree with that, and helps enlighten my thinking. what i wanted to do was make three overall points to get discussion going. saudishot on u.s. relations based on the statements from saudi leaders. second, an assessment of what i see is saudi strategy, and, the u.s. strategy to structure it that way. just to start out, to show you in bad things had to come the u.s. saudi relations, three quotes. a letter from dash to the president of united states. at a time when people are at a crossroads. it is time for the united states and saudi arabia to look at separate interest. a saudi official here in washington saying that he

doesn't mince words like the president. if the u.s. doesn't do more to reduce the violence, here he was talking in the west bank and gaza, there will be consequences for u.s. interest. third, from from a diplomatic --le writing about a dollar abdulla. u.s. policy has given i rock to iran.- iraq to questioningto be u.s. policy. i highlight the statements because they come from 2001, 2002, and 2005. it has been a lot of chatter about the most recent statements. quite visible protestations about u.s. policy. to demonstrate that there has

been a consistency of criticism coming from saudi arabia. to those of you who speak arabic, when i read the recent phrase -- came to mind. in t talk. -- empty talk. there are still strong interest. i fundamentally agree with elliot that there is a value and disconnect between our two countries. ultimately, we have heard through the years a lot of talk. and overanalysis as u.s. policy was lasted, whether it decade or currently, trying to adjust to the complicated currents in the middle east. saudis have talked a lot. when you look at what they do, it is sometimes way different.

the second point, about the saudi strategy. i did two years ago, some of it is still relevant. the paper was interesting to look at how saudi arabian self to find its national security interest. ,e look at things from our lens and what you get out of this relationship? it was interesting to interview people not only in the government, but outside of the government in the ngo sector. my main conclusion was that saudi arabia touches below its , itst given its resources andentional military power, given its unique status in the islamic world. if you neutrally try to assess what it's objectives over the

last 10 years, it has not done a good job in presenting itself interest. we can talk about the islamist ideology. i hope we talk about it. it is an important one. quite simply, over the last 10 years, they have not wanted iranian influence to spread. is theey have seen spread of iranian influence. the saudi's have said they would like to advance the arab peace initiative. if you go to them and ask what is your strategy, what is your tactic to get that done, grumbles and complaints, but not a clear strategy. wealth, whenite you look at how wealthy the country should be and the dealing inequalities,

with a young population, protests in a certain part of saudi arabia. they have able to he the lid on this. if you look at the long-term trend, it is hard to see how this hangs together. how this is, men are he to elliott's point. -- how this is complementary to elliott's point. , and many mayght disagree, over the last 10 years i've seen a remarkable continuity of u.s. policy and u.s. saudi policy, from policy in the region. what has changed a lot is the

overall strategic context. was easiero 2003, it to define and discern what was the relationship. i will quibble with the title because it is technically not an alliance. we have alliances with european partners. israel is a major non-nato ally. arabia has been a marriage of answers. oil is at the core. for decades, the u.s. use saudi -- ia as an important .19 79, to the iranian influence. whenever you think about the containment strategy of the united states, when the iraq war happened, there is criticism of

it, but my concern is that a change the strategic paradigm in the region. this policy has created for the last 10 years the situation of strategic drift. one where there has been a lot of tactical reactive management. i'm not assessing this from the level of residential speeches. but in terms of actual u.s. policy. it has been a model and tactical . not certain of what it wants to achieve. back to the u.s., saudi arabia should and should -- back to the relationship. saudi arabia is one of many actors try to throw its weight around. the counterterrorism corporation is strong on some levels, but worrisome when you talk about syria and other things. we could talk for the whole session about this. the relationship is quite strong. another sizable anti-take ezell

delivered from , why they have been stating publicly their concerns, you ask them if they accept the , strip away the rhetoric and you'll see there is a pragmatism that is there. syria is a big divide. different.n, syria's which is where i will close. despite the tensions, there is common interest. divergence of values. we need to talk about its. if i have advice for this current administration, what i hear a lot is that there is nobody they perceive inside the obama white house as their go to parson.

somebody they can talk to. not because we love them and share their values, in terms of effectively advancing policy interests. that would be one recommendation. they want somebody they can talk to and listen to. their public statements are reflection of their own frustration with the advancement of their goals. user that is not a bad thing for u.s. policy. may be a potential for leverage if it is exercised in some sort of way. coming back to this broader point, i don't think we know what we want in the region. this a problem not only of the obama administration, but it's predecessor. we are at a complicated point. i do not see a major break coming, and it needs to be manage. >> that is terrific. there is a lot to go on with

those two statements. hearing you speak, one of the things we agree on when you talk about the different problems society,ng up in saudi the three of us agreed it would actually be a good thing, a positive thing if the united states of american policymakers had an active role to steer saudi society in a positive direction. >> in the old days, there were very many of them. he had unrivaled access to the white house. the british or french ambassador sayd call up on monday and is rate possibility i could see the president. he would call me to come over at 4:00. he used to annoy me a lot. why should they have that access?

said i'm noth influencing him, -- he is not influencing me, i am influencing him. this is how i get a reply. it was, it worked. a little bit of discounting, because you knew that some piece of the message was manned our. basically it worked. that tom donlin was the point man for the saudi's. the system is not been fixed of that there is somebody whom they and we view as the intermediary. that is unfortunate. we do want to influence them. they have a lot of influence in syria. they have an active syria policy. have an active bar rain policy.

-- they have an active bar rain policy. i completely agree with the instinct, but the devil is in the details of how you implement that. what i glided over, and the first year, the saudis felt they were on their heels. they lost partners. they thought the united states and thrown mubarak under the bus. crediblef the lack of economic and democratic reforms. yemen, they played a constructive role, a curious thing that a monarchy is playing a role in mediating a pathway towards what could have

potential for continued openness in the political system. yemen has terrorism problems. i think again, they have punch below their rate tried to contain iran. , they perceive that three certain lands. , they contain that there. cap, their perceptions about iraq remains a huge challenge carried it is connected to syria. when they saw the u.s. administration in september in particular walk away from what they thought would be even targeted, limited strikes, they ran a process of trying to [indiscernible] they and others are all in.

with presenting -- and dangerous groups. 2014, it is coming out in the press, this it ministration recognizing that the threat in northern syria are starting to rival some of the other security threats united states faces in the middle east. >> i'm sitting here trying to if i agree that they are punching below their way. i am thinking, the comparison miller make that best --saudi arabia and cutter saudi arabia and cutter. all there is is money. extremelybeen effective use of that money.

if you compare the last 10 years of diplomacy, use of money with the saudi's, you absolutely conclude they punch below their weight. iran, i ranre it to has three times the population of saudi arabia. the percentage of the population that is involved in the life of the country, that has a decent education, our professionals, women active in some way in the economy, i ran is a much more modern country in saudi arabia. it isn't surprising that the saudis would have a hard time taking on a country with three times the population, and is much more modern. it is true. really, if you look

at the country with its wealth, the amazing achievement is the countries. if you take them out of the equation, i do not know if they are punching below its weight. are punchinghey above its weight, when it was spending all this money to ideology.remist you had wahabi mosques and indonesialling off in and malaysia. that was not a good thing. >> i'm not casting judgment. in terms of the article, if you measure those resources, and you share those goals, you certainly could do better. again, i'm saying -- i'm not saying that would be good for u.s. interest. i'm trying to clinically analyze

it. thatportant point is especially since 2011, but it preceded this, the region has slipped into this multidimensional competition for power. that is just one feature. role andat turkey's how it did not punch above its weight. we are at transition. it is not simply who was backing who. it is using money, it is the use of media. -- it is staking a bet. those that are divided cold wars ofre the

the region played out in places like yemen or lebanon. he continues to go on. syria is the most dangerous place. >> let's talk about syria right now. it fromways, looking at a saudi perspective, what is the real issue. the united states appears to want to rebalance the region? basically rebalancing the israelis off of each other? -- problem is that the accurate ofbe more what is happening around the region. like what the iranians are fighting for and how the iranians are fighting. if i could just eat your thoughts. >> it is pretty clear that king

-- americans handed them a rock. this is a quote that brian read. they still have that view. you're not doing anything about hezbollah. you have troops and expeditionary forces in syria fighting. shiais a matter of the becoming the dominant force in the region. what are you doing about it? you don't even recognize it. i think that is the fundamental view. they are fighting to win. you guys don't even seem to recognize this is a fight with the shia. that is not the american view. >> the problem is not the shia. they are really that upfront about saying the front in. the think these are not

speeches that officials may, but i think that in addition to the problems with the saudi's under any management, there is the deep religious conflict here. rivalry, a conflict may be a better word. there we have obviously an american, saudi gap. our problem is with the islamic nefariousnd its foreign policy. our problem is not with shia or persians. case,, another example of how saudi arabia has a stated goal. they would like to see assad go. it is in alignment with u.s. policy. u.s. policy actually is not in alignment with that statement.

2013, any serious neutral analyst will say this has been a good year for the assad regime in terms of its ability to stay in power. a horrible year for the syrian people. even for people who were part of i would go back to what the missions are. the analyst that i figure credible, the absence of any strategy to advance their goal. maybe it is the saudi strategy. it is similar to the u.s.. you get in terms of knowledge , thisama administration reticence to go into -- so you

can evaluating and say we don't have any strategy that will meet our goals, but the saudi's are doing that. they are doing things in ways that maybe not topple the regime, the creates the security problem that could quite rival the challenges we see in yemen or northwest pakistan. i fear and 2014 the situation could slip rapidly. in some of the recent visits talking about, gcc arrive at support to these militant groups, the recent leaving,h madurese this is not an encouraging sign. you can criticize u.s. policy. there is a gap between what the

policy is doing on the ground. the gap is even greater given .audi's self-interest they are not being terribly effective with undermining the regime. >> i agree with that. if i were a saudi spokesperson, i would say to you that is the fault of the americans. right. >> we're trying to fight. we're doing what we can with help from others in the region. very hard to do with americans on the sideline. but we have cap assad from winning. we have kept the rebellion alive. heis true that the non-jihad elements are declining versus the jihad elements.

that is your fault. you come in with us in the beginning. we would have had this power vacuum that has led to be a magnet for jihad around the world. assad not prepared to see win. that means that hezbollah has one in our country. we are not prepared to see that. you handed them iraq. majority shiais country. we are not per power -- we are not prepared to see the shia take over. >> i will ask you both. at what point do the saudis have a point when it if there with american policy, and at what point when brian challenged , it isle of the panel not alliance in that way.

it is relationship. it seems to be a problematic relationship. insofar as a lot of it has to do with oil for security. it is been a lot of times the saudi's screaming at the americans do this, do that. before that, it is best to leave them, influence them. at what point when they are saying this are they right? when they are talking about syria or iran? we need you as a superpower leading, or you are wrong on syria. how do we distinguish the noise from when they are correct. >> you could argue they are already right in this regard. , backd respond in terms to strategic interests and how having a clear plan of how this this go, if you wanted to go into in all in strategy, i don't

think it won't happen. i won't say for certain base in my own assessments. you look at the fallout from what would have been a failed vote in congress on very limited strikes. selling this case to the selling public firm -- this to the american public will require a fundamental change on the ground. >> the president has been policy and syria for 2.5 years. >> what i'm suggesting here is that they will have a wake-up call until they have something that directly affects u.s. interests, like the collapse of jordan. something on that order would require the administration

primarily, but also the united states to wake up and say middle -- iafter 10-12 years testified in congress, and why should we care. the practical case for engagement, if i were advising the administration in a clear assesssyria, it would be what these actors are doing right now. we have a london 11 group. who is doing what on the ground. that is going to convene. god bless them. diplomacy does not have much of a chance of an impact unless it is willing to power dynamics on

the ground. -- lack of what is missing is regional contact, difficult though it may be. the bush administration, when iraq was at its darkest moment, took part in regional diplomacy conferences. maybe it didn't do much practically. but it was one of those pieces in addition to a military surge that led to a chromatic -- that led to a pragmatic dialogue to into some of the worst behaviors . if that makes sense. there is no regional strategy as far as i can tell. >> we are on complete agreement. you can negotiate a deal that doesn't reflect reality. if you want to do the deal, you have to change reality on the

ground. we are not doing that. >> the more i'm hearing you yourself. distinguish we are agreeing on a number of different things. >> the point where i might it is easy enough to say here is what you would do to map out a case of balance of power on the ground. people i secretary kerry might there was a delay in doing that and there is a slowness in that. part of it was a low appetite amongst those in congress. i'm not blaming them. but there is just not an appetite. great appetite and power that shape with the u.s. could do in this part of the

world. it was squandered. it continues to be squandered in , we because we believe this but wede mistakes, believe that we can't do anything. that is or is me the most. i hope to continue to work on this. the sense that we do not have power to do anything, which we talk about all the time on egypt. demonstrates that they think they don't have much influence. it becomes a self fulfilling prophecy. point.uld add one i do not know if this is just a are of life, but they

critical of u.s. policy, but unable to do anything about it. it is striking. you do have the influence within the administration. they do not have the influence in the u.s. with the public. they cannot move public opinion. .aybe that is asking too much at times the british have been able to do it. at times the israelis have been able to do it. though they spent a ton of money on pr firms in washington, they can't do it. feuding andt effectively. half move the needle. >> one interesting thing. i did want to come to this. when people have been saying that americans are the picture, societies will look for other options. i'm not sure exactly what that looks like. heard the things we have

about his excellent coordination of secrets, between the israelis and saudi's. one of the things that struck me is the criticism of the interim people areran, many used to writing critical appraisals of this administration. it is not good for our allies and israel, but also not good for our allies in saudi arabia. this is different. in some ways, the saudi's might be benefiting from the fact that they and the israelis are in line. this couldsuggest lead to something else. there are inherent limits to whatever cooperation that could be on iran. ther biggest issue with we arab israeli conflict.

it still is an important issue. point, when people talk about the u.s. about the presence in the region, that is highly inaccurate. you go as i did this fall, and like in the it is states. if you read secretary hagel , it is quite clear there is no other military force. i see no sign of retreat of the u.s. in the region. also, there's been talk about major shift here.

this issay that probably more modest than has been portrayed when you look at not only the fact that the security threats that iran , their support for terrorist rips and other things, the fact we've been there for decades in the region, i don't see us retreating in any way. if we were going to do that, we might have done that in by rain -- bahrain. even if dealing with the sanctions on iran, and made , there is nooints naïveté about that, that will still remain in place because of iran's ballistic missiles program and support for terror and is asians. just my cold calculus, i don't

think this debt represents anything but an attempt at diplomacy. >> i think if you go back to 2009, president comes office wishing to engage. the theory that part of the problem with countries like serious and iran was the bush administration, or bush policy. that he could not do because of the events in iran in 2009. the uprising in the rate was crushed. the engagement is not with iran. the engagement is with the regime in iran. ok, so in 2009 you can't do that. flash forward.

now it looks as if there is a possibility. there was first official engagement. there were negotiations. region who are scared of this, we have lived in a world where higher -- weather has been iranian u.s. confrontation. if they believe they can and it single-handedly, believe that iran is change enough so that there needn't be a confrontation, attitudes are going to get scary. view, the point of ministration is concerned about one thing. saudi's, and others, that is just one issue. there is terrorism. there is subversion. there is the eastern province. -- so i can understand

why even in the context of having an agreement with nuclear interest of the program, they see that the orted states has a different fundamental difference with iran. >> the people talk about the .ranians we have had problems with home, but if you need more evidence, look at what they've done in syria. it is an expeditionary force. , saudier what happens concerns there makes sense.

>> i think they would echo those concerns. actions to have an impact. this shift from a strategic , probably not a good time sustainable strategy in itself, but it had consequences. it had consequences me talk to people inside of saudi arabia and iraq. is the wholeesting region is in this time of competition for implements -- cop petition for implements. i think the fracture in the middle east, because of the sunni axis is itself fracture. i go to places which our reliable partners, when they

look at their regional arabption, we used to fear spread incoherence. now we fear is weakness. this model picture, it is a model -- i think it is a model picture in the middle east. thereeasier for me to sit and write papers. when you're trying to -- >> this is good. let me ask you then, i want to ask questions, but let me ask you both since you mention this. if you think the strategic vision has fallen apart, what do you think is a clear and farsighted strategic

vision in the middle east? what world is saudi arabia play for the foreseeable future? in a clear-sighted, american strategy. >> i would say talking long- term, i would start with it depends on the type of saudi arabia we are talking about. future the of saudi most reliable partners are countries like israel and jordan. you want societies to have a fabric of more inclusive that he and openness. people like to malign the freedom agenda. i was in the middle east working as democratic promotion. i believe that. one thing is how to elevate that pragmatically. we are not going to be the ones

to steer the change. there was a strategic dialogue in the bush administration. >> it made us feel better. >> yes. so more critically, what strikes me, this is a problem that cuts across the administration. go, and the discussion , theree is consent forms could be a more practical lending to issues. -- the would say societies are destructive. being more adept at trying to guide that, look at how weak the state department's are.

what the otherf states of done, the main point would be what can we do in terms of the lessons learned. there has been a lot of that criticism. while also attending to our day- to-day interest. that is easier said than done. i do not know if elliott has a reaction to that. >> you could rephrase your question. ?hy would herman con saying you are looking 10 years, 50 years. independenceican on oil will decline. i agree that one of the key

variables here, tell me what is going on in those societies. we didn't predict the turmoil in so many arab countries that we have seen since 2011. what will saudi arabia be like 5-10 years from now? will it be a generally calm society? a revolutionary society? issues aree of the the internal issues that we haven't talked much about. work for senator monahan. the most disruptive thing in any society, including the united states is unemployed young men. unemployed young men are dangerous. the saudi arabians have a large number of unemployed young men.

whose education is such that the idea that they are going to find a job next year is hard to believe. that is a big area bowl. .- that is a big variable we are in the final years statistically speaking of the rule of the king. what kind of king will he be? performance where there be? a big variable. the other one i would throw in, it is the islamic republic. that is the security issue. someday, the islamic republic will fall. the people will get what they want, which is a decent, just democratic society. it may take 35 years. who knows. until that day comes, the strategy needs to be the main

bulwark against the extremism, subversion, terrorism, aggression of the islamic republic. this administration has at best, and unclear policy with this respect which is made our friends nervous. bit.will disagree a little there is more continuity and that policy. when you look at u.s. policy since 1979 and the islamic revolution, the iranian influence. under the bush administration, the last two years, there were different strategies that both containmentamp up through global economic sanctions while also engaging the p5 plus one. when i talk about continuity, that is there.

theparadigm what possibilities are. the architecture, our intelligence and has not fundamentally changed. that is where we will disagree a little bit. people over read the engagements and attempts at diplomacy. the fundamental architecture is quite consistent. where it goes is a big question. this whole issue of containment, the bargains we met, the partnership we built, with some of these actors like saudi arabia -- the soft of our talk. what were the calls and benefits -- costs and benefits? to me, i think that is where the issue of long-term how society treats other people as sense of isency and standards terribly important now for the region itself because the

regimes understand. they cannot turn back the tide. all of the criticisms of the attempts at reform in the region and what i think, my main criticism is too much of it became militarized from the u.s. standpoint. our engagement post-iraq. there has been an under analysis of what would've done with our economic policies and what could be done with our diplomacy to foster better change. if you want to give up and go home. i think the real downside to the whole paradigm is we would build alliances with regimes is self. it lives in bubbles is self. agree on one point of continuity. you have this extraordinary event of iran plotting to blow ambassador in georgetown. the american reaction to that

was nothing. that is continuity. the are ready and have been killing americans and plotting to kill for decades under several presidents of both parties. the american reaction is almost always nothing. we have seen and i dentist and and iraq and saudi arabia -- and afghanistan and saudi arabia. we do not reply. that is unfortunately proof of your point. the outrages have paid no price -- iranians have paid no price under administrations. unfortunately, it emboldened them. you like to think there was a debate into iran on whether it was wise to blow up a restaurant in georgetown. some people, saying it is crazy. it's the acts of war and other saying nothing. the latter was right. >> a pretty good idea. the americans will not do

anything. why don't we open it up for a few questions. the gentleman in the front. i believe we have a microphone. the microphone arrives and introduce yourself. please try to keep it brief. so we get an answer to your question. a minute? >> one variable none of you talked about is the economic impact of the relationship with saudi arabia in terms of jobs. if you look at the relationship quantified, we benefit from job creation by selling arms and goods and services. over 30,000 americans and saudi arabia. of whatuestion authorities think we are leaving. believes -- what today

are concerned about is the power changing the status quo. they know what is in there. they need us there. finally, brian mentioned the fact they're so coordination. would you talk to the saudi's, they talk about bush 41. a great relationship. they consulted with us. we were aware of what was going on. now, they will tell you about the negotiations with iran and turkey and france. they said we should be included in the negotiations about nuclear weapons. [indiscernible] >> can rephrase that as a question? >> just to respond, those linkages we do not explore. economic. they are vital. they are in worked.

we often think about the middle east just as saudi arabia and its relationships. what struck me at strikes me is the growth linkages not only to chinese energy but the whole golf as saudi arabia. and saudi arabia. those linkages are quite important as well. well the stovepipe discussion about our policy. they view this is very important. i agree with the rest of your comments. i sympathize. back?the a microphone is coming. does it work ok? somebody had a little trouble. >> hello. i want to thank everybody for this discussion and for the accommodation.

i guess my question really is for brian katulis. i guess it starts from your dissatisfaction with our syria policy at the moment. saidhe president has now that syria is somebody else's civil war. i wonder what you think is the argument for why it is something else that would be persuasive within the administration or to the american public? it would seem to me that the argument would be it is not merely a civil war, it is a regional civil war. a sunni-shiite war. we have concern about that. iran, elliott suggested, that side is winning. issue thatbe the

would have to be raised. i wonder how you make that argument would we are embracing iran. i agree with you. i would add to the fact the spillover you are seeing in terms of -- it seems fairly contained. the regional implications. they are rolling out as we speak. thing -- ibably the am talking about the american public. fromr political leaders president obama and members of congress. they are reacted in a sense. especially after 10 years of what i think erroneously was seen -- we made mistakes. that engagement had we stuck with it would have lasting impact. i think the only thing that would be a wake-up call unfortunately would be a major

terrorist event. something emanating from northern syria. what i am suggesting is it is not conceivable. -- theway the bombing attempted bombing in december 2009 on christmas day. a wake-up call, my fear. not to my hope but my fear that something similar. that provoked a response from the administration. people can agree or disagree -- it was a brutal response. it was effective. >> i am concerned c-span viewers will take matters into their own hands. >> not a recommendation. a were brief. when you look at the plots. focused.

less so than the regional argument. a regional argument flies over the had a many congressmen testifying recently. the public, especially those who serve in some of these places, people are in a cool. what it did we achieve? was it worth the squeeze? that's unfortunate. i am not calling for -- my fear is income-producing wake-up call giving we are going to a midterm election and we so internally focused on giving hyper dysfunction we have seen. agree evenay, i public -- ithe think that had the president done it a government tv and did one of these last night and said

to the american people, we do not want to leave our children in a world where chemical weapons are used and parts of the everyday arsenal. we cannot allow that. i have done the following. he could've got a substantial amount of support. in reality, where things are going with the deal that was struck, you would've had the open question. the weapons are not secured. i am arguing. i do not think it was a well- thought-out strategy. had they done that, i was was, itd as limited as is inherent risks. the assumption that you have deterrent value. i think it was one that needed to be questioned. not only once from the u.n. report, many more.

it produced more of an incentive. for all the zigzag, quite a confusing and messy period. israelsrael -- u.s. and -- everybody is happy it seems to be a pathway for elimination and secure. if anything, the conflict is still a raging. the chemical weapons, we should not undermine what an accomplishment that was. but let me undermine that. -- >> let me undermine that. [laughter] i do not get a side giving up his weapons. sad is giving up his weapons. assad'st sensible from point of view. neither do you have to. the weapons we are taking and

distorting are taking and distorting our the weapons the regime has identified. secondly, the price we pay. used to have a policy of getting rid of a thought -- assad. you do not hear people saying he must go. people close are doing ipads assad -- op-eds saying may not be as bad is the alternative. -- i wouldve meant amend. [laughter] >> the gentleman over here. >> thank you very much for putting together this excellent panel. i like to talk. i am from the iraqi embassy.

it's good to see a discussion on saudi arabia. a few things you mentioned. argument that the 70% of the population -- it is not a good idea to have gobbled up by 30%. a strong argument sending troops. 30%.mo ruled by -- iraq east peace --iraqis [indiscernible] equal ifrule seeing as not such a bad idea. it depends. point, i think is more consequential, the idea is the saudi problem is more a strong

story -- state than an american problem. even if iran was to change the conflict, from the perspective of the country who live in the shadow of this conflict that has been distrust of whether lebanon or syria or iraq and the list goes on, it is almost one guy mention a function of a saudi- hibernian conflict. they will always be having this problem from the side of the saudi. where to take the stability of the region? brian, your work is known -- just a quick answer. on the minorities, i agree with you.

that theto me situation is quite unstable. just as the situation in syria was unstable where you can debate the numbers somewhat. clearly, a minority rolling the majority-- ruling the in the minority does not like it and will not up with it anymore. different waysan that governments have not responded by saying less -- by saying let's negotiate. , agree with the second part the long run, let me charge to cheer you up. once upon a time, the united states had a strong alliance with particularly saudi arabia and wen under the shah were able to mediate. if the republic falls which i

hope and pray, will have a good relationship. maybe, we can go back to the days, where the united states was able as the strongest military power in the region to be a buffer between saudi arabia and iran and try to help maneuver the relationship between them. doctrines the nixon that appointed the shah as the sheriff in the region. [laughter] ok. i think a different -- the united states could be in a position to do that once we achieve a decent relationship with iran. that cannot happen. >> if i can make a comment on iraq. --ld've not talked about will not talked about as much.

your view as you read my papers is quite clear. i probably drop disagree stop i q war was a rock -- ira a huge mistake and all the mistakes after. some woulders that say was shape where we have gone. i was in favor of strategic deployment. if you look at the papers and talk, the 2007 1, about the need for a continued and robust relationship. that's what i think and i thought was understandable the hard government demanded a deadline. there was a suresh and dutch assertion -- assertion of serenity. giving advice to the government. i understand it. my clinical analysis was looking at trends instead of the rock --

iraq. the strategic framework agreement which sent a bureaucratic but cuts to the issue, ward u.s. strategy -- what would you as strategy to? --u.s. strategy do? it is a living document. it had the full length of cultural, diplomatic cooperation. the absence of follow through. this is in part because of inattention at the top of the administration. and the fundamental bureaucratic problems that somebody's agencies. and problems and 70 rock. -- and problems in iraq. i am a pragmatist. i went in and work on the ground. you do what you can. that is what you got. to this day, a missed opportunity.

iraq has opportunity. to serve in the future as a bridge in the region -- a constructive bridge. i will criticize the government for not following up sufficiently a bilateral engagement. i would say the u.s. is at fault. this is a missed opportunity to take a sad song and make a better for u.s. policy. >> the gentleman in the fourth row with the dark shirt. >> i am a student. irancally u.s.-saudi arabia- have a rivalry. would there be a way the tensions could be put at ease arabia -- and saudi as it is right now? could it be eased? if so, what role does the u.s.

have to play? say,mean, look, if i could dolly way in the long run is it that -- the only way in the long run and the conditions are present. if you look at the strategic theregm, the leaders, looks to be our seems to be a compatibility. at times, they cooperate and have meetings. there's nothing naturally inherent. this seems soft or 10 years after the agenda incomplete and nobody can do anything about it. these societies will evolve. ordinary talk about iranians or saudi's, nothing inherently -- and make them at thoughts. right now, it does not seem like. i would notioned,

-- serious divergence has made obvious. even they haven't quite a different view of sally's. when it comes to -- even they have a different view of sally's -- saudis. it was cut off by the sanctions that the of bush administration and obama and mr. should continue to work. , your general question is somewhat of a general answer. in this short run, i do not see a clear opportunity for cooperation but in the long term, if they evolve in the way that it difficult to predict but any trajectory of an open and inclusive view, there's more opportunity for them to cooperate. presently, no. >> gentleman in the second row. >> i'm an ordinary citizen.

who has keenly observed the media and the analysts characterized this administration's policy as a model and reactive -- muddled and reactive at anything but positive. if you could wave a magic wand and established u.s. policy, what would it be? and how would you execute? >> 25 words or less? >> whether trying to focus on the per se issues especially the saudi arabia. maybe it does not make sense to region --eople in the this a big generalization. people in the region see the united states as a declining power in the region. some like it, some hate it.

it characterizes most people in the region. me, the fundamental change needed is to change that. that is to make it clear that not only do we retain the basis, but we are going to use our power. it is hard to do that. that is the place where the struggle is most right now. that would be the largest change that i would make in the short term. very deepg run, a question about how the u.s. relates to changing societies and governments in the arab world. behare brian's view that to israeli criticism of president obama as completely wrong and unjustified. there is a big question of how do we relate that on the

spectrum are pretty far over toward the free? they may be friendly to the united states, what have to work that out of the next 25 or 50 years. if you want to, prove to people in the region that the united states is not a power receding, we cannot do that with a have a different syrian policy. >> let me answer. as an outside analyst, my first job is a constructive critic of policy. ofet my criticism get ahead what is decent policy from the obama administration and go from there. this is what i would do differently. i would characterize it as pragmatic. andn the realities complexities of the situation. to my taste, it links back.

in.much and we should lean ,he fundamental is the strategy the two number one priorities from secretary kerry's time in office stopped attempting -- office. attempting and advancing which is that the successive administrations have done. whether they will succeed or not, everybody is clear given the challenges with the palestinians and israelis understandable position. those are two pillars that you can criticize. i happen to believe those priorities are not important. third, the bush administration, bashar folks on counterterrorism in places like yemen and around the world. i again, i would highlight this

is one place where we need to think more clearly. libya has fallen off the map. it is a particular challenge. the overarching saying that is missing and has been missing from u.s. policy not only in this administration but the bush and clinton and backwards, the broader focus on how do we actually use the tools of diplomacy and economic statecraft? our military strong. we may disagree. i do not see it leaving in the region. how to actually help ourselves in terms of building partnerships with these countries that have job crisis? fundamental issues? i wrote a book and it talks about -- it dabbles into smart power. i happen to believe we tend to undervalue those components of u.s. power and we do not know

how to bring them to bear. , all ofy point on iraq those tools, no matter what china and india looks like, we are still very strong and people look to us as a place to invest and to get investment from. those tools are underutilized in the middle east. -- combine and forte -- interlinked reform. to the broader point after 30 years of the u.s. investing so much and the terms of security footprint, glad we did that. it is still seen incomplete. the region still fraught with problems. we build alliances that were not economically or politically sustainable. thing. the inc. --

it seems like an academic case. after the last decade of amongment, the pessimism democrats and republicans, educating them if we cannot have .he money for a marshall plan what i fear is nobody cares. i fear elliott and i and delete and who get paid to write this, we are a smaller community in terms of who was paying smaller attention. we'll squandered that a bit after 9/11. i hope you get it back. our leadership could be important. >> i am going to ask the final question and you can both give an answer. 4 minutes left. we talked about how the saudi's are concerned they no longer have a go to guy in washington. imagine you are the go to guy in washington, what did you tell

them? what did you tell them that they need to do and that you believe the united states needs to do to cement a relationship, to make a healthier and more functional as it may or may not be right now? brian, start and elliott. >> three top items. iran. if we are going into the next ,ear, the request for a p5+2 not practical but ways to buy them and to say this what we are going to do. if you take a hard look of where is, it seemsiran difficult to bridge. what i saw as

hyperbolic concerns. even getting questions about where is the secret annex in syria, it is easy enough. the iranian front, we are trying this. that is what secretary hagel was trying to do. syria, assessing who is doing what on the ground? i am skeptical it will succeed. you did a sense of the ground game and the powers on the ground. i would not leave egypt off the map. it is the largest country in the middle east. my most recent report with michael hanna on this. oniott and i have walked each of a lot. -- worked on egypt a lot. moving in a direction that is worrisome. i would keep that on the agenda.

is,last thing i would say may be taking lessons learned, getting saudi arabia to continue the subsidy regions on energy. wrote little bones are not -- throw a little bones are not likely to sustain your position. the elevation of human rights agenda in a way that is not productive. i would have is part of the discussion. probably more private but the most egregious cases, calling them out. in a way that is in their self interest. we wanted to build a partnership. with had a partnership for a wild. point, not only with those countries we shares teaching interests but have a greater overlap of value.

as a potential in saudi arabia and is there. it needs a considerable amount of work. >> i do not disagree with any of that. i think that is wise. i would add that i think we should be talking to the saudi saudis more. this is about extremism. this is dangerous. they should've learned the lesson already. to some extent, the government has been marked her full -- more careful than asia and africa in a way the government money is spent. i do not see any serious effort to control vast amounts of private mining that is going to to some the worst parts of the world. i want to have that conversation with them. we come back to something that brian said and we are in agreement.

the challenges saudi arabia faces. you can look at from the human rights point of view or from the point of view more palatable that it is going to be an increasingly unstable situation. they have not effectively dealt with it. the educational system. you have experiments like king abdullah and the university which is great for people go there but has a limited impact on the rest. the thing that worries me is we want to have this conversation, but we are doing it to go back -- at a time of potential instability over the succession and saudi arabia. -- that probably limits our ability even now. something we should've been

doing over the past decade and it may be we are not void to have another good chance to do may not have another chance to do it. for 10 ord be a king 20 years. that's they worrisome diagnosis. it could be unfortunately true. >> thank you. that will conclude the panel. i want to thank you brian and elliott. thank you hudson institute. thank you for coming. happy holidays. looking at the weekend schedule, a hearing on marketing by data information brokers. from the senate commerce committee. :00 starts saturday at 10 a.m. eastern. digital privacy and open source from chicago ideas

week. saturday night at 8:35 p.m. eastern. newsmakers, the top republican on the environmental and public works committee and discusses some of the recent climate change initiatives. watch sunday at 10:00 a.m. at 10:00 a.m. and 6:00 p.m. eastern on c-span. bring public affairs events to you and you enter the room at congressional hearings, white house event, refuse, and compasses and offering -- conferences and offering gavel-to-gavel coverage. created 34 years ago and funded by your local provider. you can watch us in hd. >> navy secretary ray mabus spoke to reporters and answered questions about contractors and

the global defense investigation. u.s. prosecutors allege leonard swapped prostitutes for information. in a memo, ray mabus instructed strategies toview see a proper procedures were being followed. this is half an hour. >> good morning. first, i want to apologize for my voice. i have caught something, and people have suggested it is because i stood out for six hours in the freezing rain at army navy, but i'm pretty sure that was not the reason it happened. as john kirby said, i'm going to make a few remarks and then take questions. he noted that the admiral and mr. branch are here if you want to go into greater detail at greater length.

prevention, identification, and action against fraud against the government has been a focus of mine since i first entered public service in mississippi as state auditor, and i have continued putting an action. lately, our efforts to go after contracting fraud have produced some headlines. while we are obviously not pleased about the conduct of those involved in the case, i do believe that the discovery of the allegations are indications that our efforts are working. i have not spoken publicly about this case before, and i am still restricted in what i can say now because of the ongoing prosecution because -- by the united states attorney in san diego.

i want to say the office has done a tremendous job with a difficult case, and i want to express my thanks on behalf of the navy for their work and for their support of what navy and its eis -- and ncis has done. it's important that the people know the role may be played in discovering suspicious activity, in developing the case, and in working closely with other agencies to address it. the naval criminal investigative service along with the defense criminal investigative service and the defense contract auditing agency did and is doing incredibly impressive work to ferret out the alleged fraud and corruption carried out by gdma. yes, allegations against naval personnel as well. ncis opened this investigation in may 2010 against gdma based

on suspicious claims and invoices the company submitted to the navy, claims that insurance processes navy had set up help to reveal during this investigation, ncis uncovered critical evidence that directed one of their own agents to the suspicious activity, and ncis deliberately planted bogus information in reports in order to protect this investigation and did so without any leaks outside the investigation. information gathered during this investigation was eventually turned over to government prosecutors and led to recent charges filed in federal court. according to the u.s. attorney's office, shortly after ncis filed a false report to mislead the agents suspected of involvement,

this report said that the investigations against gdma and its owner, leonard francis, were about to be closed, he traveled from singapore to san diego for a meeting with navy officials, which allowed law enforcement officials to arrest him. i was briefed for several months before this case became public. by necessity, the number of people who knew of the investigation was kept very small. throughout this time, i repeatedly instructed ncis agents to take the investigation wherever it led. although the criminal investigation was and is being conducted independently by law enforcement, i understand that they have pulled no punches and will continue to pursue any and all leads. and it was ncis that announced the first arrest in this case. this occurred on september 16. the day of the washington navy

yard shootings. some have questioned why gdma won a contract after the investigation was opened, and i think the answer is straightforward. first, information about the investigation was restricted with few exceptions to prevent leaks. as i have noted, even that precaution was not enough for a time because an ncis agent was actively obstructing the investigation by helping leonard francis avoid detection. second, contracting officers certainly were not told because that could have compromised the investigation. finally, if the navy suspends the company's ability to compete for contracts or refuses to award a contract to a low bidder, we are required by federal law to give that contractor a reason.

in this case, a notification would have tipped off gdma that something was wrong. this is a very serious case, and it is a serious issue. i am making sure that navy leaders everywhere understand how deeply concerned i am about it, and i have already spoken with a chief of naval operations, our fleet commanders, and our component commanders reiterating these points. but i think the public discussion today sometimes misses the fact that the concerns were first raised by people inside the navy, that the navy acted on these suspicions by building a case against the company, its own, and implicated navy officials, and that the navy partnered with government prosecutors and assist in the current prosecution.

without the navy and navy actions, there would almost certainly be no story today. the conduct and behavior alleged to have occurred in this case is absolutely incompatible with the standards we require of our officers and civilians. it's as a result of this investigation criminal prosecutors decide not to pursue criminal charges but instead refer cases to the navy for disposition, i am announcing that those cases case is will be reviewed and resolved through a consolidated disposition authority. this cda will be a four-star admiral and a team of professionals, all of whom will be fully vetted to have had no part in this case. this cda will ensure that allegations are substantiated, individuals will be held appropriately accountable.

i want to talk briefly about efforts this department has taken to prevent or act against contract fraud. soon after i took office, i made several changes to our acquisition procedures to crack down on companies and individuals who attempt to defraud the government. some examples -- we have dramatically increased suspension and department proceedings to address conduct and poor performance by navy contractors. since 2009, navy has suspended 254 contractors and d bart 400 d bart -- debarred 400. more than 120 of these were for periods longer than the three- year default period where situations warranted. to improve accountability, we now require navy commands to refer termination sport default to our acquisition integrity

office, which in fiscal year 2013 resulted in the referral of about 11 contract terminations. next, if there is an illegal gratuity or bribery under government contract, there is a special statute to terminate those contracts and assess punitive damages regardless of whether criminal conviction has occurred. in 2011, i directed a change to establish the tail procedures for cases involving this type of criminal activity. gdma may be the first case to use those new procedures. finally, as an example, i have also provided detailed guidance to assist contracting officers to determine whether a contract award is appropriate, and to do so beyond checking just to see if a contractor has been suspended or debarred. the government accountability

office grated navy as having one of the top acquisition fraud programs in government -- graded navy as having one of the top acquisition fraud programs in government, but it is also apparent that we need to do even more to prevent fraud and corruption in our contracting process. so i am announcing a series of additional initiatives. first, i directed the assistant secretary of navy for research, acquisition, and development to review acquisition strategies for husbanding and similar contracts worldwide. we now have the preliminary results of this review, and based on those, we are taking some immediate steps. the so-called red team of experts from across the fleet and from naval supply assistance has been formed to scrutinize the process from end to end and recommend changes to correct deficiencies in those procedures and provide maximum effective oversight of the process. when their work is done, and

based on that work, the assistant secretary will issue a revised acquisition strategy that will be used on all husbanding contracts globally. second, we will further standardize requirements, further standardize contract vehicles, further standardized administration, and increase oversight of husbanding contracts and contractors. one way we will do this is to increase the use of firm, fixed price line items and minimize the use and improve the oversight of underpriced line items. third, we will remove pay functions to husbanding service providers and provide better guidance on requirements and more contracting support to ship co's when overseas. fourth, we will incorporate standardize processes. a final report is due in june of next year to identify

improvements in internal controls. we will also continue implementing reforms we have already made, and we will keep looking for additional ways to strengthen provisions. as long as we are aggressively pursuing allegations in the gdma investigation, i expect we will continue to see headlines resulting from the discovery and disposition of these cases. the navy has a long tradition of transparency when we uncover allegations and misconduct, particularly against high- ranking officers. because not only can the spotlight act as a deterrent, but mostly because it is the right and to do. i would rather get that headlines -- get bad headlines than let that people get away. but fraud prevention is only part of the problem. i want to briefly mention we are

also radically changing the way we manage contracts which consume an increasing percentage of our top line. in closing, i want to stress three points. first, the navy is a leader in combating procurement fraud, and we are seeing the results as the allegations in gdma demonstrate, but the job is not done. second, we will continue, as we have done since i came into this office, to identify ways to protect our acquisition processes against those who would criminally or otherwise take dollars away from our war fighters and those war fighter'' ability to protect our nation. last, i think it is vital that we do not let the alleged, conduct, and criminal behavior of a few stain the reputation of the navy sailors who are ethical, honorable, and who

strive everyday to keep our navy the strongest, most credible force on the seas. i am very proud of them and their families, and as long as i am secretary, i will continue to do everything i can to preserve the integrity of the institution we serve and we love. >> ok, folks, if you could just identify yourself before you ask your question. >> two questions. you alluded to it in your statement -- do you expect further arrests of serving u.s. navy officers in this case? second, you mentioned that since 2009, you have suspended 250 and debarred 400 contractors. i assume those were cases where it is not just a billing dispute but the navy feels it is ripped off. that is a large number. is the navy such a soft target?

>> one, i think it is better to say that there would be more disclosures coming in gdma. what kind of disclosures those are, i'm not at liberty to say, but i certainly do not think we have seen the end of it. second, i think that the numbers that i have put out there actually speak to the opposite conclusion, that we go after them. we have set up procedures to try to prevent fraud, but any time you've got this kind of money, there are going to be people trying to steal it, people trying to defraud the government. you can do two things, and i think we have done both of those things. first is you can set up procedures to try to prevent it.

but that is always a race because every time you set up a rule, someone tries to figure out a way around it, but the second one is to hold people accountable. to go after them very aggressively, and that is not just for defrauding government. that is also for not performing or signing a contract and just not performing on that. i see that as an example of the transparency that we need because we publish these things when we do these. these suspensions and these debarments. we are actively looking at everything we do to make sure taxpayer money is being used well. >> mr. secretary, one striking case -- maybe the public is not surprised at a contractor might

try to take advantage of the government, but there have been 16 navy officers implicated one way or another in this case, plus a senior ncis agent. how much of this is a contracting problem and how much is an ethics problem with senior officers in the navy? >> i think at least part of it is a contracting issue and is making sure that we do that, but i also think that -- i'm going to go back to what i said -- it is very important to note that people inside the navy were the first people to raise the suspicions. people inside the navy went after this case and don't this case, and when naval personnel were involved -- people inside the navy went after this case and built this case, and when naval personnel were involved, we announced it. we do that all the time. i have spoken to our fleet

commanders and component commanders to make sure that they are personally interested, but this not only goes against all the ethics rules that we have -- these few people that are alleged to have done these things -- this goes against everything you should have learned at home. everything that -- i mean, everybody knows it's wrong to take a bride -- bribe. everybody knows it is wrong to get paid to give a contract. that's why i said the thing i did at the end. we have a third of our fleet to ploy today -- deployed today all over the world. we have navy officers contracting for those ships to go into port. the vast, vast majority are doing it honestly, honorably.

i do not want the actions of a few who -- not just ethics, it's in some cases -- i mean, it's criminal -- to tarnish the actions of the many. we are not going to stop. i told ncis when i was being briefed on this case -- the one consistent thing i told them every single time we met was, "take this investigation where it leads. it doesn't matter. take it wherever it leads." >> you noted that any time you have got this amount of money involved, there might be problems. do you have an estimate -- how much money are we talking about with gdma? how much may have been defrauded? >> i cannot say because it is in prosecution right now.

>> mr. secretary, when you step back from the bribery and you look at the whole husbanding process, can you talk about why the navy in the way it structures these contracts and polices them seems to leave itself open for fraud? and why the supply guy on the ship is reluctant to go and deal with these husbanding agents to try to negotiate deals on the fly to try to get a ship out of four? >> number one, there are rules we have to follow. for example, because one employee leaves one company and goes to another one, it does not mean we can take action against that second company.

if we do, or if we say we are going to pull all the contracts and start over, a couple of things are going to happen. one, we are going to be sued real asked -- fast, and they are probably going to win. it's like if we had taken this contract away from gdma before the investigation was finished and did not have enough evidence to prove it. gdma would have gotten the contract back. second, we are global, and we do have a lot of these contracts out there. i think right now, there are 14 regional contracts that were all done by did -- by bid. that is the thing i will keep going back to -- is the tripwires that we have set up,

the procedures that we have set up are the things that are leading to these discoveries. again, i would rather have some of the headlines that i get the cause -- because we are actively doing these things and pursuing these than not be here today because there is no story. because you or i or anybody else does not know about these things that are going on. >> can you talk a little bit more -- you mentioned in your remarks changes in the contracting, in the husbanding, changes in the supply officer role. and a lot of that was recommended in the 2007 study that we referenced this morning. the idea that you have a certain number of fixed items, and if the ship shows up and the

husbanding guides do not have appropriate supplies but can give others for way more money, somebody is really monitoring that, and it is not the kind of centralized ordering you see in the commercial shipping world.