News

Great Seal

U.S. Department of State

Daily Press Briefing

INDEX
THURSDAY, JANUARY 14, 1999
Briefer: JAMES P. RUBIN

IRAQ
1-9,11-13New Initiative for Humanitarian Assistance to Iraq
2-3,8--UNSC Resolution to Lift Ceiling for Sale of Oil/Streamline Procedures
3-5,9-10
--Proposal Yesterday by French Regarding Iraq 's Weapons Programs and Sanctions
3-4,6-7--Iraqi Government's Refusal to Care For the Iraqi People
7Iraqi Parliament Renounces Recognition of Kuwait
10Enforcement of the No-Fly Zone
TURKEY
11,12US-Turkey Discussions Regarding Threat Posed by Iraq/Security Measures


U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING
DPB #7
THURSDAY, JANUARY 14, 1999, 12:40 P.M. (CORRECTED VERSION*)
(ON THE RECORD UNLESS OTHERWISE NOTED)

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QUESTION: Could we revisit - because there's a lot of speculation - revisit the matter of humanitarian assistance to Iraq? Now, there's a rumor floating around that the US is engaged in some effort to generate more revenue, and I'm not sure if that means expanded oil sales. Could you go over it again for us, please?

MR. RUBIN: Yes, in New York, we are pursuing a new initiative in this area. Since sanctions were first authorized in 1991, the United States has expressed our deep concern that sanctions should not harm the people of Iraq. Since that time, we have worked consistently to ensure that the Iraqi people receive the food, medicine, and other humanitarian supplies, which the government of Saddam Hussein deliberately denies them. We supported the establishment of the Oil-for-Food program in 1992 and played a leading role in expanding that program in 1997. Let me emphasize that sanctions have never prohibited the import of food and medicines. The Oil-For-Food program was intended to supplement -- not substitute for -- the Iraqi Government's owe spending in this area.

Unfortunately -- and sadly for the people of Iraq -- the Government of Iraq has chosen not to order important foodstuffs and medicines for its people. Furthermore, the Government of Iraq has rejected donations of humanitarian goods from other countries. In the face of the Iraqi Government's neglect of its own citizens, the Oil-For-Food program has made great strides in all parts of Iraq to improve the daily food intake, as well as to provide medicines and other necessary humanitarian supplies.

While we do believe the program has made progress, we believe there is still room for improvement, because of Iraqi delays in distribution of medicine, and because hundreds of millions of dollars worth of humanitarian supplies are sitting in warehouses in Iraq. One idea, which we are proposing today in New York, is to provide more funds for humanitarian supplies. We would support, the United States would support, eliminating the ceiling on funds from oil exports so that those funds can be used solely for humanitarian food and medicine. We would also support reasonable measures to streamline the UN contract approval process, including automatic approval of food and medicine contracts.

Let me emphasize, this is not a lifting of sanctions. It is an expansion of the humanitarian program known as the Oil-for-Food program. All present controls on the collection and disbursement of revenues generated by the sale of oil would remain in place. We call upon the Government of Iraq to use the Security Council's authorized mechanism to help its own people. That is what the initiative we are pursuing in New York is designed to do.

QUESTION: All right. Just to totally understand: When you talk about removing the limits or the ceiling, you're talking about the $5.2 billion --

MR. RUBIN: Correct: To create a situation where there is no ceiling on the sale of oil, provided that it goes into the Oil-for-Food program, and only the Oil-for-Food program, to be used for food and medicine.

QUESTION: All right, and when you speak of food and medicine, pharmaceuticals, that's short-hand, isn't it, for humanitarian? There are other humanitarian items.

MR. RUBIN: Correct. Food, medicine and other --

QUESTION: I heard today computers to help produce school books are permitted under the program.

MR. RUBIN: Food, medicine and other humanitarian programs, as defined through the system in New York.

QUESTION: And today it is -- what procedure? What are we talking about - introducing a resolution?

MR. RUBIN: Well, there's the resolution of the Security Council that puts the $5.2 billion ceiling on oil sales every six months. So we are saying we should work with our friends and allies in the Council and around the world to create a new system, requiring a new resolution that lifts the ceiling, and creates a situation where they can sell as much oil as possible to enable the program to provide food, medicine and other humanitarian supplies.

QUESTION: Put down streamlining. Does this mean there will be no more holds on particular contracts; and indeed, do you have the history of this? Has the US, to any extent, really delayed any of these exports?

MR. RUBIN: On the sanctions committee, what we're trying to do is create a greater level of automaticity in the program. So still having a system -- to be sure, we're talking about food and medicine and humanitarian supplies here - eliminate any slowdowns that are perceived to slow down the arrival of food and medicine to Iraq. That doesn't mean we're going to let anything in; it just means we're trying to streamline the procedures, create greater automaticity, so that Iraq cannot claim that it is the Security Council or the sanctions committee that's holding up the arrival of food and medicine.

QUESTION: Is there a history of the US putting holds on --

MR. RUBIN: The reality is that we're talking about a situation where the vast majority - 95-to 98 percent -- of the contracts put before the sanctions committee are immediately approved. Occasionally we look into the source of some of these contracts to make sure they're not going to be used for nefarious purposes.

QUESTION: So, just because this could be important, they would be allowed to pump as much oil as they wanted, provided it was used for humanitarian --

MR. RUBIN: Provided it went into the escrow account and was used pursuant to the existing program for food, medicine and other humanitarian supplies.

Let me emphasize, that is not a lifting of the sanctions; that is an expansion of the humanitarian Oil-for-Food program.

QUESTION: How does this - other than the fact that the money would be put into escrow accounts, as it is - I guess escrow account is the right word. How does this differ from the French proposal of yesterday?

MR. RUBIN: Well, the French proposal is addressing a broader question of UN monitoring, of addressing the inspection and verification regime, of addressing the question of what would happen in the event that the oil embargo were lifted in such a way that it was outside, necessarily, of food and medicine exclusively. They're looking at: How can we get to a point where Iraq provides the necessary work on the disarmament and weapons of mass destruction side, so that there can be action on the formal sanctions process, as opposed to a narrow program, where the oil funds go directly into the escrow account.

So they're addressing both sides of the equation; that is: What if there were steps by Iraq to provide assurances on the weapons of mass destruction side? What would be done on the sanctions side commensurate with that? This is something separate from that, and solely humanitarian, saying: Whatever happens on the weapons of mass destruction side -- which we believe one of the clear signals of recent weeks and months is that Saddam Hussein does not intend to fulfill the Security Council resolutions on disarmament, and therefore, we need to have a longer term process in place to care and feed and clothe and provide medicine to the people of Iraq, because their leader is not going to take the steps that would allow this to take place outside of that.

QUESTION: Just a quick follow-up - maybe not so quick. Yesterday you described a situation where pharmaceuticals are sitting in warehouses and basic supplements are not being distributed. From that description, it would appear that they have pretty much what they need. Why would you propose expanding this program, when they're not even distributing it or following the procedures that -

MR. RUBIN: Okay, what I just suggested to you is that: That behavior on the part of Iraq has been part and parcel of their refusal to care about their people for the last several months, and before. We believe that in light of the fact that we don't see Iraq signaling a willingness to comply on the weapons of mass destruction side, that we need to create a more improved system, that may need to be operative for a long, long time; as opposed to just the current one that was created in a situation where -- at least, originally -- there was some hope that Iraq would comply.

So we're now dealing with a situation where the chances of Iraqi full compliance have greatly reduced, with their refusal to allow UNSCOM to do its work, and we need to think more expansively. That doesn't mean we don't have to resolve the problems, and make sure that it's clear to Iraq that the current problem in the humanitarian area could be improved by not holding back on the distribution of medicines. But we need to think bigger, over the longer term, because the prospect of their compliance and the lifting of sanctions has greatly decreased.

QUESTION: Doesn't the French proposal, both in its proposal to lift the oil embargo in a very broad sense, and then in a narrow sense, to allow - I actually lost my train of thought. But the point is, doesn't the French proposal on lifting the oil embargo, in and of itself, strike at the very heart of what is the US policy all along; that is, keeping Saddam Hussein in his box? And as such, doesn't it make it completely off the table as far as the United States is concerned?

MR. RUBIN: First of all, let me say, as a spokesman, I believe a train of thought is a terrible thing to lose.

(Laughter.)

And I confess, it's happened to me. On your specific question, let me say that the UN Security Council resolutions require Iraq to disclose, disarm and destroy its weapons of mass destruction, and mandate that this disarmament be verified by the Security Council. Iraq has not fulfilled these resolutions; and until it does so, UN Security Council resolutions mandate the maintenance of international sanctions. That is our view.

While we see certain positive elements to the French proposal, we are concerned that it does not take fully into account the fact that Iraq has not fulfilled the requirements of the UN Security Council resolutions in the area of complete disarmament. And precisely because he is not disarmed, there is an ongoing need to ensure that Iraq cannot use the revenues from the sale of oil for the purposes of rearmament. The French proposal needs to be further elaborated in this regard.

As I indicated yesterday, the positive elements include a recognition that inspection and monitoring to protect against rearmament, and try to ensure disarmament, is a positive element. Secondly, the French proposal recognizes the importance of controlling revenue, so that Iraq is not in a position to use those revenues to pump back in money to its weapons of mass destruction programs.

But we believe that the issue of making sure that the French proposal takes better into account the fact that Iraq has not fulfilled its Security Council requirements is something we need to talk to them about. Secondly, in the meanwhile, we are working on this humanitarian initiative that I just announced to you, and that was laid out first by the Vice President in his speech yesterday in New York. That is a recognition that we're not anywhere near to a time where sanctions are going to be lifted; and we need to make sure that, in that period when sanctions are not going to be lifted, that we have put in a place the maximum program for easing up on the system that will ensure better food and medicine for the Iraqi people.

QUESTION: A couple of questions. First of all, how do you feel about the fact that the French proposal does not address existing weapons, but is purely looks towards the future and which attempts to develop weapons programs; do you find that unacceptable?

MR. RUBIN: We are concerned that the French proposal does not take fully into account the fact that Iraq has not fulfilled the requirements the Security Council laid out with respect to past programs to disarm.

QUESTION: Right. Okay, a lot of people, including the Iraqis, say that your proposal is meaningless, because they don't have the means to produce any more oil for the foreseeable future. How can you convince us that this isn't just a kind of empty promise to undermine the French proposal?

MR. RUBIN: I would hope to convince you, first, by asking you to think -- long and hard -- before making any judgments based on what the Iraqis tell you. Secondly, I would ask you to look at the fact that we are willing, in the Security Council sanctions committee, to look favorably upon measures to allow the equipment necessary to increase the sale of oil, and we always have been. We will now look at greater flexibility, and greater streamlining of those procedures. The fact that we, the United States, want to improve the humanitarian program is something that's quite familiar to you, because you because you know that Ambassador Pickering, Under Secretary Pickering, talked about this well before the French proposal was put out.

So I think that the United States has been at the forefront of those countries trying to deal with the humanitarian crisis Saddam Hussein has caused. And when Iraq complains that it can't pump the oil, or Iraq complains that the food and medicine aren't getting to the people, I would hope that you would look at the facts. The facts are that they're not distributing food and medicine as quickly as they could. The facts are that they are failing to order and distribute food and medicine that would alleviate the problem, and that Iraq plans to order less food and medicine for the Iraqi people than in previous times. So those are the facts.

If you want to listen to the Iraqi explanation for why they're not feeding their people, and this proposal isn't real, there's nothing I can do about that.

QUESTION: Jamie, in addition to Iraq's failure to buy and distribute what its people need, there also seems to be an unwillingness to sell as much oil as they are entitled to sell under the $10 billion a year Oil-for-Food program. Will the lifting of the ceiling, under those circumstances, make any difference? And do you have, in addition to the proposal you've outlined, any plans to coerce, or to impose upon Iraq, a purchase and distribution system that actually might work?

MR. RUBIN: Mark, it is impossible for us to coerce Iraq into selling oil. The suggestion is simply fantasy land. You cannot coerce another country into selling its oil. What we can do is to make available the ceiling and increase the ceiling so there are no limits on what they can sell. What we can do is make available the equipment they need to increase their capacity to pump oil. But we can't make them do it; we can't coerce them and compel them into selling oil. I've never heard anybody, before you, suggest that we could.

QUESTION: Can I follow up? Given all the circumstances, then, that you have laid out, can you offer us any assurance that your proposal will actually make a difference? And will it entirely be up to the Iraqis to voluntarily comply?

MR. RUBIN: It has always been up to the Iraqis to work. We can't force Iraq to sell oil and buy food. That's the first principle that you have to understand. That has always been true. Iraq and others made similar comments about the original Oil-for-Food proposal, and spent a lot of time complaining, in much the same way that you and others have cited people's complaints. Yet we made available billions and billions and billions of dollars in food and medicine that have been real; that have gone to real people, that have improved real people's lives; and that have made real people less hungry and less sick.

We cannot force Iraq to sell oil and purchase food and medicine. What we can do is eliminate every one of their objections. If they choose to use the facility we provide for them, if they have any concern whatsoever for their people, clearly they're not going to spend their own money on this, because Saddam Hussein wants to spend his money on weapons and palaces.

But if new money is made available to him, he has, through this program, acquiesced in the distribution of food and medicine for his people. We are now talking about a situation where there are no limits on the amount of oil he can sell. We're prepared to look at ways to make the equipment available so he can increase the capacity of oil to sell, and we're prepared to look at ways to streamline, and make more automatic, the distribution approval in the Security Council. That is about as far as one can go, before it is up to the Iraqis to acquiesce in this program. But again, we can't force them to do so.

QUESTION: You've answered it; you can go on.

MR. RUBIN: For whatever reason -- and it's true -- what you're saying is that the Oil-for-food program did not work as planned previously. Let me finish the question, okay? So some of these horrific stories that we've been hearing about Iraqi children starving to death for years seem to have some basis in fact, for whatever reason. The question is, why does this proposal come forward now; why didn't it come forward some time previously?

MR. RUBIN: You make me feel as if none of the work I do here has any impact. The Oil-for-food program has worked. I just explained -

QUESTION: But -

MR. RUBIN: May I finish the answer? I let you ask the question. In response to the last question, the billions of dollars of food and medicine that has gone to the Iraqi people -- for the people who receive those billions of dollars and thousands of tons of food and medicine, I can assure you they think the program has worked.

If the question is, why do we need to expand the program if it worked? I've given the answer in response to Sid's question. We're now looking down the road at a time when there's no prospect that Iraq, based on its actions and its words, is going to take the necessary steps to allow the sanctions regime to be lifted. So we're looking at a time when this program needs to be bigger and better, because we see no prospect of Iraq fully complying. So we're setting the groundwork now, and it may require many months of negotiations and discussion -- as it did in 1994 and '95 and '96 -- in which food and medicine and humanitarian supplies that would not otherwise have gone to Iraq, went to Iraq to people who need it.

That is the motivation, now, is that we think that in the current context of Iraqi behavior and Iraqi intentions, that we need to plan for a future where they're not prepared to take the required actions to get sanctions lifted.

QUESTION: My question is simpler than that. If this makes sense now, why didn't it make sense previously when these reports were coming in of vast hardships in Iraq?

MR. RUBIN: We have cared about the Iraqi people. We have created programs to allow that problem to be alleviated. It can never be completely alleviated, if the Iraqi regime won't spend it's money and spend its effort on its own people. The rest of the world can't solve the problem of the people of Iraq. What we can do is try to improve their fate. That is what we have done through their Oil-for-food program; that is what we're trying to do by expanding it, knowing that the future doesn't look like it holds, in the near term, a decision by Iraq to comply with Security Council resolutions and thus get sanctions lifted.

QUESTION: Also on Iraq, you say the Iraqi Parliament has again renounced the recognition of Kuwait, and talked about Kuwait belonging to the Iraqi people. Are you taking this seriously?

MR. RUBIN: Well, whether it implies an indication of further action or not, it clearly demonstrates a frame of mind in which the Iraqi leadership is disregarding Security Council resolutions, disregarding the cease-fire, and showing why it is such a danger to its neighbors, and why the regime constitutes such a clear threat to our interests and the interests of the region.

QUESTION: Is there anything different legally or in any other sense by the statements made --

MR. RUBIN: Well, it's in a newspaper article, so it's hard to make a legal conclusion based on a newspaper article. But I will get our lawyers to take a look at the actions and statements of the Iraqi leadership and its parliament in recent days, and get back to you.

QUESTION: You may have touched on this a few moments ago, but this humanitarian proposal - would you describe that as sort of on a fast track path and -- kind of a time line for the Security Council to act and implement it?

MR. RUBIN: We believe that right now the Security Council is discussing this matter and Ambassador Burleigh is presenting these ideas the United States has that I signaled to you yesterday, that Vice President Gore announced last night. We hope that the Security Council can quickly get together and move on those measures that can be moved on.

In that regard, let me suggest that, in response to some of your suggestions that Iraq doesn't have the money through the oil exports, that we're also looking at ways to find additional funds. That could mean, first of all, permitting donations that Iraq has said it doesn't get, or has refused, and allowing those donations to go straight into the Oil-for-Food program accounts. Secondly, we're willing to consider other innovative ideas for supplementing the funds in the Oil-for-Food account, including borrowing funds that would be repaid once exports increase.

So for example, right now the way the program works is: A portion of the proceeds goes to compensate those whose property, or otherwise, or their lives were taken during the invasion of Kuwait, a portion goes to the funding of the UN Special Commission and a portion goes to the sale of food and medicine. What we're looking at is since the compensation fund - the first category - has money in it, that we would allow the program to borrow money in the compensation fund to spend on food and medicine that could be replenished later with further oil exports.

In short, we are trying to be as creative as we can, as helpful as we can, eliminating as many roadblocks as we can, in our effort to assist the Iraqi people; all the while trying to ensure that the program, which is an innovative, unprecedented activity, doesn't allow Iraq to abuse the program, and assist its WMD.

QUESTION: Is there any thought being given to allowing the UN workers to more directly distribute the food and medicine, so that there is less of a chance that these backups at the warehouse? I realize Iraq being a sovereign nation, you don't want to override that sovereignty, but --

MR. RUBIN: I think that is a question that ought to be directed at the secretariat that's running the program. What we can do as a nation in the Security Council is try. The Security Council put a series of safeguards into the program that we are now -- as it's working more effectively, and it's clear that we can, and there's clearly a need for the future - we're trying to relax those safeguards that we think we can relax. But we don't want to relax safeguards that we think we can't relax.

So the areas where we think we can relax some of the provisions are in the area of the ceiling on oil, and the area of how other moneys could be created, in the area of ensuring that there's an automatic approval for food and medicine contracts. As far as the distribution itself of the food and medicine that gets there, that would be something that you should address to the UN. But we would be in favor of anything that would make it more likely that the people of Iraq would get the food and medicine.

QUESTION: Considering that the United States has always said that it has never wanted the Iraqi people to suffer and that is why, years ago, it initially proposed an Oil-for-Food program, which Iraq finally accepted in '96: Why was there ever a ceiling on the amount of oil Iraq could sell?

MR. RUBIN: Again, this was an unprecedented action; it had never been taken in the history of sanctions: To impose these comprehensive sanctions on Iraq, to have them be comprehensive. I think people regard them as relatively leak-free, with some problems on the margins. I don't think, initially, anybody envisaged they would be on for seven years. When we first put this proposal forward, that was five years ago, and there was obviously hope that Iraq would comply. We always said when we first put the controls on, in terms of the ceiling, that we would review these as the program evolved.

So we have always envisaged the possibility of increasing the ceiling as the program demonstrated its effectiveness. I think it would have been foolhardy in the extreme to start with no ceiling until you are confident that the escrow account system would work, that the money would be controlled tightly, that it would only be used for food and medicine, and that as confidence built in the effectiveness of the program and as the prospect of Iraq living under sanctions longer and longer becomes clearer and clearer, because Saddam Hussein won't comply, one is expanding, improving the program as we go along, because we want to be flexible and meet the objective, but we don't want to see the funds go to the wrong place.

QUESTION: Leaving aside the question of food and also the question of past weapons program, what does the United States think of the aspects of the French proposal which cover an alternative arms control system? Do you think that their proposals are assertive enough, vigorous enough, obtrusive enough?

MR. RUBIN: I know that you're looking to write: US disagrees with these aspects of the French proposal. I understand that motivation, and sometimes I have it myself. But in this case, I would like to leave my comments to be that: We are encouraged that the French proposal recognizes the importance of inspection and monitoring to deal with the disarmament task. But we do want to make sure, as I indicated, and have concerns that the French proposal not misunderstand the fact that Iraq has not complied with the requirements to disclose its programs in this area, and that Iraq has not come clean on its weapons of mass destruction, that the Security Council has therefore been unable to certify that they don't have biological, chemical or missiles.

QUESTION: If Iraq is, like you said, not complying with the Security Council on weapons inspections, if Saddam's army is still pretty strong and if the US is proposing --

MR. RUBIN: They're weaker now.

QUESTION: A little weaker. If the US is proposing to lift the ceiling on oil, can you explain to me how sanctions are going to be stinging Iraq?

MR. RUBIN: I think, first of all, the clearest evidence of that is, if you look at every statement coming out of Iraq, the first comment usually is that the sanctions have to be lifted. They very much are desperately seeking the lifting of sanctions. So clearly, they believe they are stinging.

Remember what sanctions are - they're a ban on imports and a ban on exports. The primary export of Iraq is oil. The imports could be anything from food and medicine - which we're permitting under the humanitarian program - to high-tech items, cars, television sets, building equipment, telecommunications, all the elements of a modern society. Those are not allowed to be sold to Iraq. They have to go to extraordinary lengths to try to get around the sanctions to buy simple consumer goods, that the average person in the world can go -- simply order from a foreign country.

So on the import side, the embargo, the sanctions have been extremely effective. That is why they are so concerned. On the export side, what we are saying is that, because we see that Iraq will not spend its scarce resources on food and medicine, and instead takes all the money it has, seemingly, and focuses it on building palaces and trying to rearm its army, or work on weapons of mass destruction, another revenue stream needs to be created if the Iraqi people are not to be without food and medicine. We've created another revenue stream, through the Oil-for-Food program, but made sure that the only thing that can be purchased with that, is what was always permitted to be purchased, which is food and medicine.

Meanwhile, they can't use their money for all the purposes they would desire to do so. And the fact that Iraq regularly, continuously, and pre-eminently point to the sanctions as something they want lifted, I think demonstrates the pain that the regime thinks it is causing. What we're trying to do is keep the pain on the regime, and minimize the effect on the civilian population.

QUESTION: This week, one of the Kurdish groups made a statement in Washington that they hope to see the no-fly zone in the North to be expanded. Number one, what is the likelihood of such desire? And number two is, lately daily skirmishes in the North are taking place. What do you think that is going to lead us to?

MR. RUBIN: On the first question, I know that people are considering many different aspects of issues related to Iraq, and I don't want to preview any one, or signal there is any focus on any one. I don't have any new information for you on new plans we have in the military area.

On the second question, I think all I can tell you is that we are determined to use the military force we have available to enforce the no-fly zone. The Pentagon has made clear that they are going to take the necessary precautions to protect their pilots. Beyond that, it's a matter for the President to discuss any future decisions that we might take.

QUESTION: The Turks announced today that they're going -although they did it three weeks ago - they've notified you that they do want the extra Patriot batteries that you've offered them. Do you have anything to say about that?

MR. RUBIN: On that subject, let me say I've seen a news report to that effect. Let me say that the United States and Turkey are working closely to address the threat that Iraq may pose to Turkey; that obviously we undertook the Desert Fox operation, in part, because of the threat that Iraq poses to its neighbors. We're in intensive discussions with the Turkish allies about many security measures that may be necessary, including in this area, because we want to ensure that we've been prudent and taken the necessary precautionary steps.

But I wouldn't be able to specify any final decisions, or make any announcements in this area.

QUESTION: Well, they've already announced it today. My understanding is they actually accepted it three weeks ago. So why is there so little detail on it?

MR. RUBIN: Well, there is an elaborate process here, and although you would consider a deal done the first time someone shakes hands, and it would be enough for many, for us all I can say is that we're in intensive discussions about precautionary security measures, including in this area; and those discussions continue.

QUESTION: Okay, well, there are some officials - not American officials - who say the reason for this move is a couple things. They fear a follow-on either to Desert Fox - they're anticipating that and they think there may be some retaliation; so they need more Patriots than just the ones they have around Incerlik. Secondarily, they fear what might happen if an American pilot is actually downed in Northern Iraq. They would have no ability to - although they've asked you not - although they've refused to give permission to launch offensive operations, they fear there would be no ability to stop the United States from staging an operation to rescue a pilot; and again, they would fear retaliation. Can you comment on any of those?

MR. RUBIN: No.

QUESTION: You said before that one of the proposals for funding the Oil-for-Food program was to let Iraq borrow against this one fund for compensation. Can you give me an idea of how much money is involved in that?

MR. RUBIN: Well, again, it's not exactly Iraq borrowing; it's the program borrowing. In other words, the oil is sold, and the money generated goes into these three accounts - one for compensation, one for food and medicine, and one for paying off things like UNSCOM.

What I'm suggesting to you is that the compensation fund could be used to lend money to the food and medicine fund, so that increased food and medicine could be sent. As far as an order of magnitude here, I can tell you that, basically, the compensation fund has roughly a third of the money going in that area. Maybe it's 30 percent; I would have to check the details. So we're talking about billions of dollars that have been generated in the whole program, a third of which would be earmarked for the compensation fund, roughly. So I think it would be fair to estimate we're talking about at least hundreds of millions of dollars here that could be available, in theory, for loans.

This is something we're prepared to consider. Depending on how it would work and how you would ensure that further oil sales were going to happen so that the compensation fund could be replenished, we would be prepared to look at it. But it would be hard to get more specific about an idea that I am now first telling you we're prepared to consider.

QUESTION: Just one follow-up. Is this something that could go a long way towards solving the problem, or is this just one small element of getting enough funds to --

MR. RUBIN: I would like to think it would be somewhere in between those two - that it would be an important element if it could be worked out, but that there are other elements that need to be worked out as well.

QUESTION: I want to go back to this Turkish thing, because it's important. The Foreign Ministry has gone public, saying they've accepted your offer for Patriots. What I don't understand is, are you saying that we just have to cross the T's and dot the I's; or is there somehow some shift in Washington's position on the Patriots?

MR. RUBIN: No shift in Washington's position. We don't normally announce things like that from here, nor do I normally respond to other countries' announcements until we're ready to talk about an important military-to-military program, until we're ready to do it, regardless of what another government decides to do.

QUESTION: I just want to be sure. You're not denying the Turkish announcement?

MR. RUBIN: I know you have a job to do, and your job is to try to find a story to write - usually by trying to find the truth. My job is to provide you the information that is true, the best I can. It isn't always as much information as you would like, but I am not going to go beyond the information I was given; which is that we are intensively discussing the military-to-military relationship as a precautionary measure, including in the area of air defense systems. Beyond saying that, no matter how self-righteous you get, I can't help you.

QUESTION: I'm not trying to be self-righteous.

QUESTION: On the borrowing proposal, would this delay compensation to any of the victims of the Persian Gulf War? Have you gotten any kind of agreement from the potential beneficiaries?

MR. RUBIN: As I indicated, we said we would consider this idea. There are a number of legal issues that need to be addressed, including the ones that you mentioned. We obviously wouldn't be taking money away from legitimate victims who were about to receive compensation.

So we want to see if there's a way to use the program for things that have not yet been earmarked for compensation, knowing that it could come back into the program in the future.

QUESTION: Does it require any kind of agreement from Kuwait?

MR. RUBIN: Well, there are a number of legal issues that we'll be addressing. At this point, all I can say is that we are considering this idea as another innovative way to get more money for the Iraqi people.

QUESTION: One more. If this proposal of yours is accepted, one likely consequence would be that more oil would be sold by Iraq into the world market, presumably affecting the world oil price, which is already dragging bottom. Have you been consulting with other oil producers, such as the Saudis? Have they signed off?

MR. RUBIN: We have been talking to other countries about different ideas we have to improve the humanitarian situation with Iraq. The Saudi Government has some of its own ideas, as you know, and some of you asked me about in recent weeks. Certainly the consultative process on an initiative in this area would include governments in the Arab world and will so include. As far as how they would react to this proposal, you would have to ask them.

QUESTION: I mean have you already bounced it off them?

MR. RUBIN: I do not think there will be major surprise by the relevant Arab countries about our ideas to enhance the humanitarian program.

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(The briefing concluded at 1:40 P.M.)

[end of document]