Money and Markets – Topic: War on Terrorism

DAVID HAFFENREFFER, CNNfn ANCHOR, MONEY & MARKETS: The Saudi suicide bombings are once again raising fears about terrorist attacks in the United States and against its citizens abroad. Joining us now to talk about where the war on terror goes from here is David Silverstein, deputy director for the Foundation for the Defense of Democracies and former Clinton administration National Security Council official P.J. Crowley. Mr. Crowley is a retired Air Force general and current vice president of the Insurance Information Institute. They both join us today from Washington, D.C. Welcome to you both.

UNKNOWN: Good to be with you.

HAFFENREFFER: David, as you watch this coverage, certainly this is shocking and took a lot of people by surprise because of the area within Saudi Arabia that this was, in the area in Riyadh, I guess, a very well- protected area there. And this is raising fears not only among the American population in general but also obviously in the investment community as well, wondering about this war on terror that the U.S. is currently engaged in and how effective it’s been. What are your thoughts?

DAVID SILVERSTEIN, FOUNDASTION FOR THE DEFENSE OF DEMOCRACIES: Well, first of all, I have to disagree. I don’t think this is something that should have come as a surprise. The fact is that we hardened so many American military facilities in Saudi Arabia over the past few years precisely because we suffered attacks against them. We should have known that eventually, sometime in the future there would have been an attack against American positions, civilian positions. And as you know, this compound in particular, these compounds were surrounded by walls, they had guards, but what’s really unique here is this is the first time where suicide bombers shot their way into a compound where armed guards were manning the premises and then detonated their explosives. That portends ill for the future of foreigners in general, not just Americans, operating and helping the Saudis.

HAFFENREFFER: And the timing of it, Mr. Crowley, certainly after the war in Iraq comes to a close but just hours before our secretary of state is to show up on the site, is discouraging.

P.J. CROWLEY, FMR. NATIONAL SECURITY ADV. SPKS. Well, it’s certainly not a coincidence. I agree with David wholeheartedly that we look back at the genesis of al Qaeda, one of bin Laden’s primary objectives has been to undermine the U.S. foothold in the region. It’s a relationship with key allies such as Saudi Arabia. I do think it also shows the limitations of intelligence now. The fact that we should have understood in the aftermath of the military action in Iraq that in the short to mid term we could actually make the war on terrorism more difficult, not less difficult. I think the administration oversold the link between Iraq and terrorism, but now we are reminded that the war on terrorism is something that is still before us and obviously this does remind us that al Qaeda’s still a potent force.

HAFFENREFFER: Some 35,000 Americans live in Saudi Arabia, we understand. What should be the government’s responsibility at this point to them now? Should we be doing our best to maybe pull these people out of there or what are your thoughts on that?

CROWLEY: Well, I think that we are reminded in the context of the war on terrorism that we need partners to win it. And it does call into question the unilateralist tendencies of the Bush administration, you know, in going it alone in places like Iraq, in fracturing international consensus on the Iraqi policy. It has potential implications on the larger war on terrorism. That has always been I think the larger piece that we have to keep focused on, Iraq and having a military victory there is useful but it’s not decisive in the larger war on terrorism. We need to re- establish cooperation and support around the world if we’re going to win this.

HAFFENREFFER: David.

SILVERSTEIN: Let me jump in there if I could. The fact is that we’re missing the larger issue here, which is that Saudi Arabia, the country which gave birth to the 9/11 hijackers, which continues to fund al Qaeda and other terrorist groups around the country, did not get its act together even in the wake of 9/11. We asked them for cooperation in the Khobar (ph) bombing in 1996. It was never forthcoming. We asked them for help with 9/11 and to help round up their militants who are funded by in some instances members of the Saudi royal family. It didn’t happen. And so the larger context must be examined. What threat does the Saudi government by its inaction pose to Americans, to other foreigners, and indeed to itself and our interests in the region? Unilateralism can be debated one way or the other, but America needs to be active in that region and needs to defend its interests. And if the Saudis won’t assist us in accomplishing that goal, then clearly we need to reassess the relationship.

HAFFENREFFER: David, why doesn’t the U.S. government take the Saudi government then to task if they are in fact funding al Qaeda and other terrorist acts?

SILVERSTEIN: Well, it’s a great question. The bottom line is that the Saudis have a great deal of power in this country. They exercise it on a daily basis. And in addition, we still have 5,000 troops in very sensitive military facilities there. We want to keep them until such time as they will be withdrawn. That I’m told will be as early as the end of this coming summer. So there is a balancing act. They need us, we need them. But in the long run we will no longer have the same kind of relationship that we’ve enjoyed with the Saudis, and it will be largely because the Saudis failed to assist us, number one, in defending our citizens as well as our interests, including regional peace in the middle east, in Saudi itself.

HAFFENREFFER: All right. We have to leave it there, gentlemen. Thank you so much for joining us today. David Silverstein and from the Foundation of the Defense of Democracies and P.J. Crowley, Insurance Information Institute.