News

Panel Discussion with Gary Milhollin
American Enterprise Institute

September 28, 2004

Excerpts

. . .

MR. MILHOLLIN: Sure. Thank you. I’m very pleased to be able to talk about the IAEA. As those of you know who followed my, I guess I could call it a career–I’ve been at this for a long time–in this area, I’ve been quite critical of the Agency over the years.

I thought I’d talk a little bit about the history and then make some points and leave it at that. But since I’m here and since I’ve had my coffee, I would like to make a commercial announcement. Right here among us is Valerie Lincy, who’s sitting right over there. She is the editor of Iran Watch, our new Web site on Iran’s WMD program, which already has 8,000 pages and a beautiful home page. Which is in your folder. Valerie designed this, she conceived it and she’s populating it. I just happen to remember the Website, it’s called iranwatch.org. If you didn’t get that, I’ll repeat it–iranwatch.org. It’s a sequel to our iraqwatch.org, which was quite successful and, well, did not cause the war.

The history of the IAEA is an important and interesting subject which I worked very hard to lay out some years ago. So you now hear the second commercial announcement. I did so in the New Yorker magazine in February of 1993. And I’m going to repeat a few of the things I said then.

You can find it on our institutional Website, that is wisconsinproject.org. And you can find it if you look in February of 1993.

What did I say about the IAEA back in 1993? Well, I guess I pointed out something that Joe said and that is that the IAEA really is a historical relic in a sense. That is, it was invented under Atoms for Peace, at the same time as our old Atomic Energy Commission.

We divided up the old Atomic Energy Commission into the Nuclear Regulatory Commission and DOE because, we, the United States, perceived that the public wouldn’t accept the idea that the same entity was in charge of both promoting nuclear energy and regulating it.

That, unfortunately, however has not happened to the IAEA. And so the IAEA is still in charge of both promoting and regulating nuclear energy. In fact, it’s an international entity whose official mission is proliferation.

And so, that puts it in a strange position. If its inspectors find that nuclear equipment is leading to the bomb somewhere and was exported under the assumption that it would be peaceful, the conclusion would be that it might not be such a good idea to proliferate this stuff in the first place, and therefore that the Agency’s other function shouldn’t be carried out.

Thus inspectors really have an institutional incentive not to find things. That’s important. And I think that attitude was primary in the early days of the IAEA’s history. The inspectors didn’t want to find things. That is literally true. When David Kay and his band of inspectors in Iraq discovered the Iraqi nuclear weapon program, they had to do so by violating the IAEA’s rules of engagement.

The IAEA was giving the Iraqis 6 to 12 hours notice before they went to a site, during which time our satellites were watching the Iraqis clean things out.

So Kay took his guys in with no notice and they found the calutron program. The IAEA was unhappy about that. They told David that he was not going to be welcome on any more inspections in Iraq, as a result of his not following the rules. I’m not making this up, this is true.

The agency had a definite credibility problem before the first Gulf War. But, because its failure was so obvious-literally, it was inspecting parts of a site where bombwork was going on in other buildings- it had to change. It had to change its attitude. And I think it has. I think in Iran it’s doing a much better job.

It’s engaged in the same iterative process that the UNSCOM inspectors used successfully in Iraq. That is, the inspectee (the country being inspected) has an obligation to tell the truth and to present a coherent picture of what its nuclear program is.

The inspectors can poke at that picture and find holes in it and demand explanations and do just what the IAEA is doing now. One can get closer and closer through this process to a coherent statement you can believe. In Iraq, it was never possible to get to the end because the Iraqis had an official policy of lying, which revealed the basic problem or limitation with inspections.

Inspections are meant to verify things. They’re not meant to create agreements or to find things that have been hidden. They’re meant to verify statements. You cannot verify a lie. You can only verify the truth.

And so, if you’re inspecting a country that is lying, it’s not going to work. The only cases that I know of where you’ve had successful inspections have been cases where the country being inspected had an incentive to be truthful and to prove that.

When you get those conditions, inspections are going to work for you. But when you don’t have those conditions, you can inspect all you want, but you’ll wind up sooner or later with a conclusion that look, these guys are not telling the truth. In Iraq, we couldn’t find out whether Iraq actually had stuff or didn’t have stuff. All we could find out at the end was, whether they were presenting a coherent picture of what they claimed that they had.

And the answer was that they were not. It was clear that that was the answer.

In Iran, I think there are a lot of lessons to be learned from Iraq, because we seem to be going down the same road. The Iranians don’t seem to be telling the truth. And so, where are we going to come out with inspections in Iran? We’re going to come out sooner or later with the statement that what these guys are saying just doesn’t add up. These guys aren’t telling the truth.

A group of inspectors cannot guarantee that there is not something hidden in a cave or a building somewhere. But what they can tell you is that the reality that we’re seeing doesn’t square with the country’s declarations.

That’s where we are now. The Iranians have not told the truth up to now and so the IAEA’s job is to report that. They’ve done it, but they haven’t said the magic word that takes the case to the U.N. Security Council.

One of the big issues is whether they’re going to do that. Because once they say that word- and Blix was in this position in Iraq- once they say that word, it goes out of their hands into somebody else’s hands.

So if you’re an inspector, if you’re the IAEA, if you’re even the Director General, you’ve got a problem, because if you say, “look, I’m not being told the truth, I can’t get any further here,” then you’re going to lose the case to the U.N. Security Council and, in effect, you have dropped out. That was Blix’s problem.

A final note. It’s often said that the IAEA’s job is to verify the NPT. That is not true. The NPT is a treaty with no verification mechanism. There are many Articles, such as Article 1, which is not verified by anyone. All the IAEA does under the NPT is make safeguards agreements with countries. And then the IAEA determines whether those agreements have been fulfilled, and that’s it.

It’s a very narrow function. You can’t expect anything other than that. But you can expect that. When the IAEA runs up against that brick wall and can’t get any further and is not being told the truth, you have to expect the Agency to report that. Because that’s really the Agency’s job.

Thank you.

MR. MURAVCHIK: Gary, thank you very much. And now, I said I’m not introducing anyone, but I must say that Mark Groombridge has been a colleague here at AEI for a number of years and it’s really nice to welcome him back. Mark.

MR. GROOMBRIDGE: It’s good to be back. People ask me, you know, would I ever want to come back to AEI. And my standard response is, ask me in 2017 after the second Cheney Administration and then we can have that discussion. Although, as a U.S. government official now, I can’t be provocative, but if I were, Joe, I thought that was a rousing audition for the Kerry Administration you gave just moments ago. But I can’t say that. But, nevertheless.

No, thank you very much, Josh, and I’m going to agree with most of the comments that have been made here today.

Let me clear, though, about the lens through which I view this problem. I’m Mr. Bolton’s advisor on Asia. And so, I’m going to limit my problems primarily to the case study of North Korea. Although I’ll be happy to discuss some of the broader issues.

I think one area, though, where I would have to disagree with Joe is the idea that the Administration has done nothing or that we have sat idly by watching the problems of Iran and North Korea go. I think the best evidence I would have to support to the contrary to that is the fact that I received my United mileage-plus one K card just two weeks ago, basically, because I’ve been shuttling back and forth between Asia and the United States, engaging in very serious and rigorous diplomacy with North Korea’s surrounding neighbors about this very serious problem.

It’s not simple. It’s not easy. And I would say that, in this case, although I can’t really comment about it in contrast to Iran and, perhaps, to Iraq. The IAEA has actually played a very positive role in the case of North Korea.

Primarily in the sense that if I had to pinpoint what I thought was the most serious miscalculation North Korea probably made, it was in the last two years with the recent developments that we’ve had with the uranium enrichment program and the six-party talks.

It’s that North Korea has underestimated the degree to which the international community views this as a problem. I think that–I think Joe was correct to point out that, yes, there were some serious risks on the Iraq issue. I think North Korea might have looked at those risks and said that the international community would be equally divided on the North Korean situation.

In fact, that has not turned out to be the case. The IAEA has played, I think, an important or not just technical role in the past in North Korea, but I’m going to go further and say there have actually been some political benefits, as well. Even though I agree with the previous speakers that their primary role has been focused on technical issues only.

Let me just begin with a very brief history about the IAEA’s role in North Korea, which is to say that it’s had a very long and deep history. They have been interacting with North Korea now for close to 27 years. North Korea–the initial safeguards agreement, was signed in 1977. Then North Korea ceded to the NPT in 1985 and then the next safeguards agreement was concluded in 1992.

Unfortunately, at that point, discrepancies began to arise almost immediately. And it was actually Hans Blix who, at the time, who was Director General, who was in charge of inspecting the North Korean situation or handling the situation, who called for special inspections, which North Korea–which then led to the crisis in ’92/’93, subsequently to the agreed framework.

But it was sort of the rigor which the IAEA wanted to investigate and verify the completeness and correctness of the initial declaration that North Korea offered, which they presented to the IAEA. Which, initially helped expose the problem and began North Korea’s, I think, period of intense intransigence, beginning, initially, in ’93/’94 and then culminating after the failure of the agreed framework was made clear with the exposure of the uranium enrichment program by Mr. Kelly in October of 2002.

Ironically, it was the IAEA, itself, which criticized or was one of the sharpest critics of the agreed framework signed in 1994 by the Clinton Administration. The reason, and here, I’m quoting Mohammad El Baradei, himself in an April 27, 2003, interview with Walt Whitzer on CNN, was that the agreed framework was, quote, “not comprehensive enough in terms of verification and that any new agreement should give the agencies” the IAEA, included, of course, “as much authority to make sure that we will not be cheated once more in North Korea.”

Essentially, what the agreed framework did was it limited the IAEA’s role to only monitoring specific parts of Pyongyang and keeping certain facilities under seal.

The problem with the agreed framework, though was that it froze the problem or it postponed the problem. I often get upset when people say that the agreed framework solved the problem. And it was intransigent or I should say, blustering Bush Administration, which ignite the crisis in North Korea.

North Korea’s uranium enrichment program was going to be exposed at one point, if they didn’t declare it themselves. So the point being was that it was incumbent upon the Bush Administration to confront the North Koreans about this problem. And I would hasten to add that the uranium enrichment program began interest he Clinton Administration.

Now, I’m not faulting the Clinton Administration for ignoring this problem because the true intelligence or the intelligence that we got on this matter, didn’t really come to light until the summer of 2002, though it’s difficult to know exactly how a Gore Administration would have handled the problem.

We felt it important, though, to confront the North Koreans, declare that they were in material breach of the agreed framework.

Complementing that role, though was the IAEA, though. And I’d like to go back to some of the political benefits that the IAEA Board of Governors was able to provide in its various resolutions and in reporting this to the U.N. Security Council.

After North Korea kicked out inspectors on December 27, 2002, the IAEA Board of Governors took this issue up almost immediately. They issued an initial resolution in early–I think, January 6, 2003, calling upon North Korea to readmit inspectors and to come back into compliance. And then on February 13, they reported–they formally adopted a resolution of noncompliance of North Korea’s safeguards agreement with the IAEA, which reported it to the Security Council.

This, I think, helped bring the international community on-board to recognize that this is a serious problem; one which needs to be confronted by the entire international community.

So, I find it deeply ironic when people accuse the Bus Administration of sort of maverick cowboy unilaterlism when, in fact, we have been championing the efforts to adopt a multilateral or to bring a bunch of nations together in a coherent and cohesive way to address this problem.

The current way that it’s manifesting itself is in the six-party talks in Beijing, which, unfortunately, as Mr. Bolton indicated earlier is something that the North Koreans at least seem to be stalling a little bit on. Perhaps they’re waiting for the outcome of the U.S. elections. They’ve also cited the case of the South Korean example.

I think it’s impossible to know exactly what is going on in the North Koreans minds.

In terms of the future role for the IAEA, specifically, in the case of North Korea, I would say that the situation is unclear. It’s difficult to know, because North Koreans have specifically accused the IAEA of being, quote, “a shaggy dog,” of the United States or a “cat’s paw” of the United States and has specifically referred to El Baradei as a lacky of the United States.

I, certainly, would disagree with that characterization and assessment by the North Koreans. But the North Koreans have indicated that any future verification regime, they would want to exclude the IAEA from this.

I think that is a mistake on their part and it would be difficult to envision a verification regime outside of at least some role for the IAEA. The reason is, of course, that the IAEA brings some degree of international legitimacy to the issue. It enables us to say that we aren’t engaging in a double standard as North Korea suggests in the case of South Korea.

So, let me just wrap up by saying that I know I focused my remarks more on sort of the positive externalities, if you will, or some of the political side benefits of the IAEA, in terms of raising the consciousness in the international community of the North Korean issue.

It’s not to say that there aren’t some technical problems with the ways that the IAEA can be improved or strengthened, that’s not my area of expertise.

But one thing I can tell you having now, at least, racked up the miles to show that we aren’t completely ignoring the situation, Joe, is that when we can point to the IAEA Board of Governors resolution that helps with others to say this is a serious problem. It’s something we need to address. And it’s not just a U.S./North Korea problem. I’ll leave it at that.

MR. MURAVCHIK: Thank you, Mark. Before we turn to questions are any of the panelists that want very much to respond to something that one of the other panelist said? If not, the panelists were very self-disciplined about keeping within their time, so they have time for lots of questions.

Before I open the floor for questions. We are very fortunate to have Henry Sokolski here who’s the head of the Nonproliferation Education–what’s the C stand for, Council Center and they have a new report hot off the presses or maybe not even off the presses, maybe it’s a preview. And we put it in your packets and I asked Henry, if he would just take a minute or two and flag it for you. Henry?

MR. SOKOLSKI: I’ll try not to do that. It’s in the package. It’s a report entitled “A Fresh Examination of the Proliferation Dangers of Light Water Reactors.” It’s about a two-year investment of time by a number of engineers and weapons designers. I recommend it and it goes directly to one of the things that’s going to be a bit worrisome in the future, and more worrisome over time.

We got a peek at this with regards to Bushehr. And that is, one of the conflicts of interest which each one of the panelists raised is that the IAEA really is in the power promotion business, nuclear power promotion business. And their key lead candidate is something called the light water reactor.

Now, it turns out, everyone, including many U.S. officials over many administrations, both Democratic and Republican, have said that these machines are proliferation resistant.

And, indeed, compared to other machines, there are ways in which they are. But this study examines how, in fact, they’re not as proliferation resistant as they’ve been sold.

And, in particular, the machine, for example, in Iran will, as the footnote which you heard John Bolton explain about lightly enriched uranium being very close to highly enriched uranium, will, in fact, have many hundreds of tons of lightly enriched uranium sitting next to the machine, which can be diverted and very quickly turned into bombs.

And it will also generate material which is called spentfield, that will contain material that will be near weapons grade in the first 15 months.

The reason this is important, all of these examinations, and they go into greater depths–charts, even learn about weapons design, everything else is in the report–is that it turns out the one ace-in-the-hole that everyone here has indirectly applauded is the–they call it the additional protocol, in fact is going to reduce, in most instances the amount of attention paid to these diversion possibilities. And that, I think, at a minimum, needs correction and attention.

And, in addition, I think we’re going to have to deep inflict ourselves as members, politically, and start saying that machines that have no economic justification aren’t simply enough in the case of light water reactors. They ought to be resisted. And some neutral rules with regard to this kind of matter need to be established so these things don’t go just anywhere.

MR. MURAVCHIK: Thank you. That wasn’t a question, because it wasn’t intended to be. I wanted to get a chance there to alert you to the NPC’s new study. But any of our panelists want to comment on or you’re certainly free to, if you wish to before we open to other questions. Gary.

MR. MILHOLLIN: I’ll make a comment. Henry, I just got the document so I haven’t had a chance to read it yet. But, I, like you, have been concerned with the statement, particularly in connection with North Korea that light water reactors are proliferation resistant.

And, technically, that’s not true, every reactor makes plutonium and all plutonium can be used in bombs. And any reactor, any light water reactor, as you well know, can be operated in such a way that the plutonium it produces can be optimized for weapon use. And so, it’s just not true that light water reactors are inherently or necessarily less likely to be diverted to weapons purposes than, say, heavy water reactors or graphite reactors. It’s just–I’d just like to say that it’s a good thing that you did that study.

Ito debunk this idea that light water reactors are somehow more benign than others. I say that as a former administrative judge at NRC. I’ve spent a lot of time worrying about reactors.

MR. MURAVCHIK: We’ll put it out for questions. We even allow comments as long as they’re brief. And please remember to introduce yourself.

MR. HORNER: Dan Horner, from McGraw-Hill again. I wonder if I could raise a country that hasn’t been discussed much, which was Libya. And particularly in the context with the IAEA, because it seems–it just proves the hypothesis that IAEA seemed to be tougher in this case than the U.S. And I say that because in the last report, the Board of Governors, the IAEA Director General noted there are still questions about the weapons design information that Libya has and contamination on centrifuge components. But in spite of that the U.S. lifted sanctions on Libya or some sanctions on Libya citing the progress on weapons of mass destruction and it was justified in testimony on the Hill last week.

I was wondering, if maybe Mark could lead off and the others could comment on that.

MR. GROOMBRIDGE: Well, sure, I’m happy to. I don’t know that I would characterize it as the U.S. or the IAEA was tougher than the United States. We made a specific agreement with Libya with regard to WMD, various other aspects, particularly after the PANAM 103 and terrorist bombing of the airplane was solved, those difficult questions.

We have been very clear that we still have issues with Libya, particularly on the human rights front. We’re still investigating claims and press reports that, perhaps, Mr. Kadafi was interested in assassinating various Saudi leaders. So, but it’s more just–I think what I’m trying to say is that it’s not so much that I would say it’s tougher versus weaker. The United States had a specific agreement with Libya, in conjunction with the U.K. We’re biding by the terms of that agreement.

We see the IAEA’s role in Libya as important and more in terms of long-term verification.

MR. : There are other issues, other than weapons of mass destruction that are still not resolved and the new administration has been very clear about that. But it would seem that the way the lifting of the sanctions was framed was because of the progress of mass destructions.

MR. GROOMBRIDGE: Sure, there’s been tremendous progress.

MR. : There has been progress, but there still would appear to be some pretty major open questions, though, so I’m just–that’s what I’m trying–weapons of mass destruction–with terrorism and other issues.

MR. GROOMBRIDGE: There are still unanswered questions, we are still in conversations with the Libyans on this issue and until those questions are fully resolved, you will not see, at least from what I understand, a complete lifting of sanctions.

MR. CIRINCIONE [?]: Let me just comment very quickly. I think the Administration has done exactly the right thing hereon Libya and handling it the way they did, they really have laid out a model for how we expect other countries to behave.

The Libyan model is how disarmament should be done. And the U.S. has been very creative and flexible in combining both the international inspectors under the IAEA and U.S. officials and U.S. inspection personnel working side-by-side with them hand-in-hand. As you are probably aware, there are some issues there, the IAEA wants more authority. But it’s going more like–and the IAEA’s really proving its value here. It’s doing its work. It wants to dot the I’s and cross the That’s and these are important dots that they want to make here. There’s real questions about the contamination of the centrifuges that would be obtained from a, quote, “foreign supplier.” That is, Pakistan. And they want to do sampling in the Pakistan named here as a supplier state–not names in the report, but everybody knows who it is–they want to do sampling in Pakistan to verify that the contamination, that the isotope that they found on the Libyan centrifuges were, indeed–did indeed come from the Pakistan source.

And this is important because they want to match it up with–

[Technical interruption. Tape change.]

MR. CIRINCIONE [?]: –the United States could be working more closely together to get a major nonNATO ally Pakistan to cooperate with us in running down the truth behind the origins of these centrifuges and to get at a better understanding as to whether the Iranian, the contamination at the Iranian sites came from Iran producing it’s own highly enriched uranium or if it is, in fact, as the Iranians claim, the result of contamination of used centrifuges, basically, that they bought from the Pakistanis.

A key issue is–this is the key issue in Iran, it’s intimately linked to what’s going on in Libya, the IAEA and the Administration are doing a good job but they need to do a lot more to get that, as the report says, the cooperation of other member states, which remains essential to the successful completion of these inspections.

MR. MILHOLLIN: I have one comment. You know, when you look at the history of what Libya’s done, what strikes me is that for a number of years, Libya was a member of the NPT, supposed to be a nonweapons state, but had already imported things that it didn’t report; it was in clear violation of its obligations. And it was being inspected by the IAEA at all those times.

And the IAEA didn’t find any of that activity. It was only when the Libyans decided to come in from the cold that the information started coming out. And so, I think this proves a point I made earlier, which is that if the country you’re inspecting isn’t telling the truth, inspections aren’t going to work. When they really become useful, as Joe says is when the country starts telling the truth. And then you can kick in all of the scientific capabilities and forensic capabilities and you can begin to verify what you’re being told. And that’s happening in Libya.

MR. GROOMBRIDGE: Could I just–

MR. MILHOLLIN: But it didn’t happen previously. And so, we had a case where, like Iraq, Libya was in violation of its NPT allegations and wasn’t being discovered.

MR. GROOMBRIDGE: Could I just follow-up on that? Clearly, in the case of Iran, Iran has not been telling us the truth. Or let me put it another way. They’ve told us various versions of a story about their activities. And, yet, what we find in this 18-month process of inspections is that they’ve been–the inspectors have been getting–have been unpeeling this onion. And so, here we have a case where Iran appears to be lying to us and we are getting closer to the truth.

So, I’m not sure that it’s true that we can’t inspect a country that’s lying to us.

MR. MILHOLLIN: Well, I guess my point is that inspections only can work up to a point in that case. You can never reach the point where you are content–that you know enough to feel secure if the other country is not telling the truth. You can get from point A to point , which we did in Iraq. I mean, in Iraq, we discovered a tremendous amount of stuff. We destroyed tons of chemical weapons. We found out about their missile programs, destroyed missile engines.

We made a tremendous amount of progress in Iraq, but because Iraq’s policy was not to tell the truth, we could never get to the end where we said, okay, this problem has been solved. I think, unless Libya changes its attitude, we’ll get there in the case of Libya, but we’re not going to get there in the case of Iran unless Iran has a change of policy.

MR. GROOMBRIDGE: I mean, I would agree with that, but I think the point to bring home from this is that the IAEA can serve powerful and different roles and varying roles depending on the country, which is to say, I mean, look, you know, PSI is Bolton’s baby, you know, it was the instigator or I would say the impetus which caused Libya, I think, to help make their strategic decision to allow inspectors in.

But the IAEA can play a long-term and positive role in terms of increasing the international community’s confidence over the long-term that Libya has, in fact, come in from the cold.

In the case of North Korea, where they’re not allowed in, they can signal that the international community is deeply concerned about this problem and it’s not just a simple, you know, U.S./North Korea problem.

I think–but I would have to agree with Joe here that in the case of Iran that you might say that it is, you know, only peeling away some layers of the onion, but it is, in fact doing that. I think that’s helped us with the Europeans, in terms of convincing them that, in fact, they do have a weapons program and I am confident that in November, regardless of the outcome of the election this will be referred to the Security Council at that time.

MR. NELSON: Chris Nelson, Nelson Report, again. Can’t let Mark get away with all this. North Korea, in a strange way, seems to be telling the truth, right? They told Jim Kelly something about an HEU program, which somebody, sort of witnessed a couple years ago. And yesterday, at the U.N., they said something about they have not-they took the statement about having a right to have nuclear weapons another step, apparently, saying things that could be interpreted as we do have them.

I’ll confess, I’ve managed to be thoroughly confused for the last three years on this subject. You’ve tried to help me out to understand why we say we’re willing to talk, but when they say they’re willing to talk, we say we won’t talk because that’s paying blackmail and that sort of stuff.

You know, it seems that we deliberately chase our tail, let them chase their tail. They’ve done everything except fly over here and say, let’s make a deal. Help me out. What am I missing about truth telling and a desire to negotiate.

MR. GROOMBRIDGE: There’s a difference between a willingness–Chris, you have to choose your verbs carefully. We are willing to talk to the North Koreans. No preconditions whatsoever, okay? We will sit down with them. The mantra after the first six-months of the Bush Administration, when we had the Korea policy review was, anytime, anyplace, no preconditions.

But there’s a difference between sitting down with someone at the table and talking with them versus what you are saying, which is that where you bring in the blackmail part. What you say at the table also matters and what we have been very clear about and I think is absolutely the right policy is that we are not going to give North Korea incentives. We are not going to reward their bad behavior for coming back into compliance with obligations that they have violated.

I mean, they have violated pretty much every single international agreement they have ever signed. So, we will talk to the North Koreans about how they can come back into compliance, but the idea that we’re going to offer them carrots or give them rewards to do so, is an entirely different question.

[OFF MICROPHONE – UNINTELLIGIBLE]

MR. GROOMBRIDGE: Well, we tried rewards. Chris, we tried your route once, it was called the Agreed Framework of 1994. Where we did offer them rewards and carrots. They rewarded us, then, with not just a plutonium program, but a uranium enrichment program, as well.

MR. MURAVCHIK: I’m not going to let a colloquy go on endlessly.

[OFF MICROPHONE – UNINTELLIGIBLE]

MR. GROOMBRIDGE: Just very briefly, quick 10-second answer. That’s why we have adopted a truly multilateral form, the six-party talks, to address this situation, so that it brings all interested parties to bear because we are interested in a lasting solution, not a temporary freeze where North Korea can kick out inspectors again, we had to confront them on uranium enrichment, they were in material breach.

MR. DINMORE: Thank you, Guy Dinmore from The Financial Times. I’d like to ask the panel if they think the IAEA has the capacity or the ability to discover whether or not there’s a Brazilian onion that can be unpeeled and whether there is a link there with A.Q. Khan and his proliferation services.

MR. CIRINCIONE: That’s a very interesting point. Let me start with that so Mark can think how he’s going to answer this.

MR. GROOMBRIDGE: My answer is, no comment.

MR. CIRINCIONE: There’s been rumors about this, that Brazil is, in fact, one of the customers of the A.Q. Kahn network. We need Brazil to allow the IAEA inspectors full access to their uranium enrichment program so we can understand the origins of that equipment.

It also raised–Brazil is not cooperating sufficiently with the IAEA inspectors. This is a serious problem. It produces this problem of double standards, that the really bad guys use to deflect the international spotlight and inspections.

We see already, as the undersecretary pointed out, that North Korea is using the problems with South Korea as a diplomatic or propaganda excuse to justify it’s program. Iran is fully aware of the example that Brazil is setting and is already talking about double standards. And they have a point. And the undersecretary raised it. You cannot allow new nations to acquire the ability to enrich uranium that can be used to make fuel rods one month and nuclear bombs the next.

And if we can’t allow Iran to do it; we can’t allow Brazil to do it, either; we can’t allow South Korea to do it, either. The President of the United States has set the right standards in his February 11 speech. We have to put an end to these programs, no new nation should be allowed to acquire these capabilities. The problem we have is figuring out how to do that; how to get that agreement; what’s the path forward?

The President has proposed using the nuclear supplier group to do that. Simply stop exporting this material to these new nations. that hasn’t worked so far. No action on that front. Can’t get the supplier’s group to agree with that.

The Director of the IAEA, Mohammad El Baradei, has proposed internationalizing facilities, placing all uranium enrichment facilities and plutonium reprocessing facilities under international control. And idea, certainly worth pursuing, but it hasn’t advanced much since the director said it.

This is a serious problem, this is why we at Carnegie came up with this universal compliance report. We think if you’re going–and as Brent Scowcroff pointed out in a very useful op-ed several months ago, in order to solve the Iranian problem, you have to solve the Brazil problem at the same time.

And this drives the Brazilians nuts, by the way. They don’t like being put in the same sentence with Iran and I completely understand it. They’re not identical, it’s not the same case, but it’s the same problem. Reforming the fuel cycle. We have to get serious about this. It’s going to take a lot of heavy lifting to do this. There’s billions of dollars invested in the fuel cycle, we have to find a solution that is acceptable to all the parties in order to do this.

A good place to start with that is for Brazil to come clean on the origins of its uranium enrichment program and to be open to the idea of discussing not pursuing that program and seeking the fuel for its reactors through other means.

MR. MILHOLLIN: I have a comment on that. I think it’s fine to tinker with the international regimes, but they’re pretty much irrelevant in the case of Brazil and Iran, because Brazil and Iran have what they need.

The Brazilians have a large commercial-size enrichment plant. The problem is, that they’re not going to let the IAEA look at it to the extent the IAEA wants. And, as I understand it, it raises the possibility that there could be enrichment that would be undetected under the arrangement that the Brazilians are proposing.

So, what we have in Brazil is really a challenge to the inspection regime. And if Brazil succeeds then, obviously, the Iranians would demand equal treatment.

MR. CIRINCIONE: Right.

MR. MILHOLLIN: If for no other reason than simply because it would be too insulting not to. So, the Brazil issue is an issue of the integrity of safeguards. That’s the issue the IAEA is contending with. The larger issue in Brazil is whether Brazil should fall in the category of countries that don’t really need enrichment, such as Iran.

If you look at the economics of the Brazilian situation, it doesn’t make any sense for Brazil to enrich uranium. The uranium Brazil will enrich is going to cost a lot more than it would cost Brazil to buy it on the world market, which Brazil is doing now. So, why would you do that? Why would you waste money enriching uranium? There must be some other motive. The burden of opinion is that Brazil is not going for the bomb. Instead, Brazil wants to enrich uranium for national prestige.

If you take the position that Iran’s enrichment effort is illegitimate because it’s unnecessary, uneconomical, and doesn’t make sense, then you almost have to take that position with respect to Brazil, because Brazil’s excuses for enriching uranium are no better than Iran’s. In fact they’re basically the same and it’s diseconomic in both cases. But Brazil has an additional element, and that is the challenge to the inspection regime.

Thankfully, however, we have a tremendously able state department, and they’re going to work this out. And so that’s, that–now, I’m going to pass to my next panelist. And he’s going to tell you how the government to handle this.

MR. : No comment.

MR. MILHOLLIN: That was a joke.

MR. : Right. No. Right. No, I know. Well, but I think probably our colleague from Brazil is itching to respond to that. So I will–

MR. : If there’s a colleague from Brazil here, it would be great to have that comment. And by the way, I’m very interested in going down to Rio to investigate–

[Laughter.]

MR. : December, January–

MR. COSTA: I’m Bran Costa [ph.] from the Embassy of Brazil. I just want to make a comment on what Mr. Milhollin just said. I am afraid I don’t agree with him when he says that Brazil is a challenge of the inspection regime. I think this is not the real problem. This is not the question here.

The problem with the Rosan [ph.] Plant in Brazil, and everybody knows that, is not about if there will be safeguards, if or whether the IAEA is allowed to inspect that plant. The problem there is only a question of technology, new technology. What means the IAEA is allowed, inspectors are allowed to check what is coming in the reactor and what is the outcome. The only thing they are not allowed right now to see is the technology used to produce this outcome. That’s the difference. So with the sophisticated equipment of the IAEA, it’s very easy for them to check if Brazil is enriching uranium in a higher grade or not. It’s easy.

And I don’t think the reasons for Brazil wanting to produce uranium are the same of that of Iran. On the contrary, the reasons may see the same, but the credibility of each country is different. The credential of each country is different. So I think the international community can be assured of the allegations of the declarations of the Brazilian Government. I cannot tell the same thing about the Iranian Government. But it’s not for me to say anything about another government. So I just wanted to make it clear for everybody here that there is not a problem of inspection. We’re not preventing IAEA inspectors to see what is happening in the Rosan Plant. We’re just safeguarding our new technology. And that’s all.

MR. MURAVCHIK: Anybody want to comment on that? Okay.

MR. : The problem is not enriching above a certain concentration of U235. The problem is unmonitored enrichment at whatever level. And if, if this problem were so simple, as you suggest, then why hasn’t the IAEA agreed?

MR. COSTA: They just want to see everything, including the technology.

MR. MURAVCHIK: We’re short on time. I’ll try to squeeze in a couple more questions if they’re brief questions. And we’ll try to give brief answers. Mario, you haven’t had the floor?

MR. LOYOLA: I just–

MR. MURAVCHIK: Introduce yourself, please.

MR. LOYOLA: Mario Loyola. Our friend just said that it’s easy to monitor, for inspections to monitor what goes into a reactor and what comes out. That’s true and that’s the justification for the people that have proposed the light water reactor programs that Mr. Sokolski is worried about in his study. It is a lot more difficult to, if a country develops indigenous enrichment capabilities and indigenous reprocessing capabilities, it is much more difficult for the IAEA to exclude the possibility that those capabilities have been used for illegal purposes. And that’s why the establishment by non nuclear states of a complete nuclear fuel cycle is so worrisome. And since it’s technically legal under the NPT, we’re struggling with a way to solve that problem.

So we’re talking about sort of several degrees of, sort of several layers of problems. Because Mr. Sokolski points out a problem with the light water reactor programs. The NPT makes the nuclear fuel cycle essentially legal, which is 90 percent of the way to a bomb. But even what’s clearly illegal under the safeguard agreements, which is disclosure violations, we’ve established over the last year and-a-half that disclosure violations are not going to be subject to enforcement. So from a lawyer’s point of view, there’s a question whether even if the NPT makes certain things illegal, whether enforcement isn’t so weak that these treaties and safeguard agreements don’t really constitute international law at all and are just voluntary norms.

And I would suggest, one more comment, if the credibility problems of a single administration and a single member of the board of governors can lead to a collapse of enforcement at the IAEA, then the problem is probably more institutional than political.

MR. : Henry, but I appeal to each person for brevity, and we are out of time.

MR. : And you asked Henry?

[Laughter.]

MR. : The sum of all your fears.

This discussion highlights something that the state department, big important non profit groups that get lots of attention, and ones that have tremendous integrity should all be trying to answer. Why is it that the burden of proof for a violation is placed on the board of governors and they have to make the determination, rather than the inspected party? What is it that makes us not want to get behind even a French proposal that the burden of proof should be on the inspected party and when the board cannot clearly agree that someone is in full compliance or fully cooperating, some minimal, automatic action should be in play?

MR. MURAVCHIK: I’m going to take one more question and then you can all get a chance to answer one or the other. This gentleman is the last one. Briefly, please.

MR. MIASARA: Mr. Milhollin–

MR. MURAVCHIK: Say your name once again.

MR. MIASARA: I’m Mike Miasara [ph.].

You said you cannot verify a lie. You can only verify the truth. In retrospect Saddam Hussein told the truth. And Rivaldi [ph.] was very close to verifying the truth. And, yet, one country didn’t like it and therefore it invaded Iraq. If you were a leader of those inspected countries, what would you do? Tell the truth or tell a lie?

MR. MILHOLLIN: If I’m the leader of what?

MR. MIASARA: One of those inspected or suspected countries?

MR. MILHOLLIN: Do you want me to go first?

MR. : Go ahead.

MR. MILHOLLIN: I’m sorry. I just didn’t understand the word you said.

I think what you say depends on what your goal is. And if your goal is to prove that you’re innocent, you tell the truth if you are innocent. And if you’re not innocent, obviously you don’t tell the truth.

As far as Saddam Hussein goes, Saddam Hussein was in the curious position of telling lies to conceal the fact that he did not have the bomb. He was judged by all the inspectors in every branch, that is chemical, biological, missile, and nuclear, to have told lies. And I followed it closely and he did tell lies in every one of those disciplines, consistently told lies to the inspectors. He said that documents didn’t exist that they knew existed, that things had been destroyed that there was no evidence of having been destroyed. There were lots of reasons why the inspectors knew he was lying. That’s clear. That’s history.

MR. MURAVCHIK: Mark, John, do you want to respond to either of the last two questions?

MR. : I’ll just respond very to Henry. Henry, and I’ve given you this answer before. You know my training. I’m a political scientist. The reason why the burden of proof or that there’s not this universal objective rule, it varies by each case, and politics interferes in nasty complicated ways. In the case of North Korea, you know, China’s interest is also in stability. And so in the case of Iran you might have different levers because other countries have different economic interests. And so the reason why, I know you’ve been pushing this universal standard in a variety of institutions in terms of country neutral rules, it’s difficult because politics intervenes and that there are different levers and different interests that nations hold.

MR. SOKOLSKI: You realize that the only nations that violations have been found has been when there have been confessions. That’s quite a standard.

MR. MURAVCHIK: Joe, do you want the final answer or comment?

MR. CIRINCIONE: Yeah. I want to close by saying that there’s a lot of agreement among conservatives, liberals, neoconservatives, neoliberals, institutions on the need to do more on non proliferation policy. There’s already a lot of agreement on some of the tools. Mark, under Secretary Bolton, the American Enterprise Institute deserve a lot of credit, for example, for bringing the focus back to the enforcement of existing agreements.

You heard the under secretary talk about it. They’re absolutely right. We were paying more attention to the signature of treaties, rather than their enforcement. And this has been a needed corrective that this Administration has introduced. The PSI is a great idea. It was dreamed up by neocons in this Administration, you know, but liberals in the former Administration should certainly embrace it. It’s a good tool, necessary addition.

Everybody, after this election is over, everybody is–you are going to see a flurry of activity for a new non proliferation policy. You heard, you heard secretary–whoever is, whoever is the President. You heard Kerry talk about it on the stump, how he wants to do it. You heard President Bush talk about it February 11th. Everybody agrees what we’re doing isn’t working well enough. We have to do more. There’s going to be a lot of room for these kinds of discussions. I look forward to coming back to AEI, no matter who is President. Thank you, Josh.

MR. MURAVCHIK: I’d like to thank each of our three panelists for what I thought was a very enlightening and interesting discussion. And I want to thank warmly Karen Nicols-Barrett, who did most of the work putting this on, one of my two wonderful assistants, the one who was responsible for this event. And I want to thank you all for coming. These panels will continue. I expect we’ll have our next one in November after the election. And please check out the AEI website for the details. Thank you very much.