MR. CASEY: Okay. Good afternoon, guys. I don’t have anything to start you out with, so let’s see what might be on your minds.

Yeah, go ahead.

QUESTION: Do you have any update on the case of Mr. Levinson in Iran? Apparently, his wife was going to be meeting with some State Department officials on Thursday.

MR. CASEY: Well, as you know, we’re approaching the one-year anniversary of Mr. Levinson’s disappearance. We still continue to work closely with the FBI as well as through our protecting power, the Swiss embassy in Tehran, to try and locate him and find out what has happened. We do maintain contact with the family on a regular basis and I know the FBI does as well.

Unfortunately, what we still don’t have is a good understanding of what happened to Mr. Levinson or where he is currently located. We are continuing, again, to work this issue. This is something that we raise both by formal diplomatic note via the Swiss as well as in their discussions with Iranian Government officials. And Mrs. Levinson and her son went to Tehran in the end of December to discuss this issue directly with Iranian officials. They promised at that time that they would cooperate with her in trying to find the whereabouts of her husband and we certainly would hope that they would do so. To date, however, of course, they have not been able to provide us with any information that does give us an accounting of what happened to him and where he currently is.

QUESTION: Is this meeting just a routine meeting or is it --

MR. CASEY: I’m not sure – I’m not sure who exactly they may be meeting with, but I would consider this part of our ongoing regular discussions with them. Unfortunately, I don’t think, at this point, I know of any new information concerning his case.

Go, Barry.

QUESTION: Okay. Two AP, back to back.

MR. CASEY: Well, double trouble, I guess.

QUESTION: There are at least a couple of members of Congress who are asking Rice to reconsider her decision to eliminate the position of the USAID auditors, investigators based in Baghdad. Do you – is there going to be any rethinking of that?

MR. CASEY: Well --

QUESTION: It’s Berman and Norm Coleman.

MR. CASEY: Well, I’m sure – I’m not sure what correspondence there may have been from the members on this, but there’s certainly no intention or desire to eliminate the Inspector General’s function – AID Inspector General’s function in Baghdad. Frankly, Barry, I think there is – this is people who are trying to elevate what amounts to a pretty small bureaucratic dispute over office space into some kind of broader policy concern. I think this issue is something that’s going to be resolved in the not-too-distant future and I think people will be fully satisfied that the Inspector General from AID will be able to fully perform their functions in Baghdad.

QUESTION: Well, listen, I come at this without, obviously, background, but I think that’s a straightforward answer. There is no elimination. Is there a winnowing down of, however, the representation there of aid? Could they be --

MR. CASEY: Barry, as far as I know --

QUESTION: You did say office space.

MR. CASEY: Those – yeah, I mean, the determination of, you know, how many staff the Inspector General will have from the USAID on the ground, at the mission will be determined by what the needs are according to the Inspector General. And of course, any final decisions on personnel assigned to the embassy in Baghdad will have to be run through the ambassador as well, but it’s a normal procedure. There’s no specific desire on our part to reduce or eliminate their staff.

QUESTION: To reduce or eliminate?

MR. CASEY: Yeah, yeah.

Lach.

QUESTION: Given that Venezuela and Ecuador have sent troops to the border with Colombia, is the U.S. urging restraint or making any special message to them?

MR. CASEY: Well, there’s a meeting, as you know, taking place at the OAS today to discuss this issue. We have strongly encouraged Ecuador to work diplomatically with the Government of Colombia through the offices of the OAS to resolve any of the outstanding issues that remain related to this question. We also think that it’s important, of course, that Colombia continue to do what it needs respond to the threat posed by the FARC, which is a terrorist organization. We’ve supported do to their efforts over the years and we continue to do so.

Certainly, part of this discussion needs to be what all parties in the region can do to make sure that the FARC and other terrorist groups are not able to use territory of any state to be able to conduct their operations. But we would look to the parties to be able to work this issue through in the OAS. Certainly, we believe that it’s appropriate for them to handle this discussion diplomatically and again, I think it’s possible for them to do so.

QUESTION: How far is Colombia’s reach permissible as far as you’re concerned? Can it cross the border to look for FARC?

MR. CASEY: Well, Barry, the important thing is there needs to be regional cooperation on these issues. This is not a problem that is new. Again, the FARC has been out there making things difficult and making people’s lives miserable in Colombia for more than a couple of decades. We want to see all countries cooperate with Colombia to be able to deal with this problem. But you know, at this point, what we have is a individual military incident that’s raised concerns with Ecuador about – you know, the – about the actions involved by the Colombians; understandable that there are questions there, understandable that these are issues that need to be worked out, but we do believe that they can be worked out diplomatically and we would hope that all countries would work with Colombia again to deal with the FARC.

Kirit. Yeah.

QUESTION: What do you make of these reports that the Venezuelan Government was supporting the FARC financially at least?

MR. CASEY: Well, I talked a little bit about this this morning. I’ve seen the press reports on this. I can’t confirm them. I can’t deny them either. I’m sure this is an issue that people will look at. We would certainly hope, as I just said, that not only would countries not support a terrorist organization and its activities, but would work with the Government of Colombia to confront this problem and confront an organization that has been responsible for kidnappings, for acts of violence, for killings, for participation in drug trafficking and all the other kinds of ills that it’s been associated with. So I would certainly hope that neither Venezuela nor Ecuador nor any other government would be providing material or financial support to this organization.

QUESTION: Have you sought clarification from the Venezuelans and have you asked for – to look at the evidence of the Colombian Government?

MR. CASEY: I’m sure that we’ll have an opportunity to discuss this with the Colombian Government and then if there’s a reason to pursue it with other folks, we’ll do so.

Arshad.

QUESTION: Can we change topics to Russia and Ukraine? There’s another dispute, it appears, brewing over shipments of Russian gas through Ukraine to Europe. Russia has said that it will cut deliveries to Ukraine because of a payment dispute and the Ukrainian gas company today said that they would – they reserve the right to take appropriate action if Russia cuts supplies to Ukraine, that they may cut supplies going to Western Europe, so as to divert some to their consumers. And obviously, you remember the history of this in 2006.

MR. CASEY: Yeah.

QUESTION: Is the United States in any way involved in trying to make sure that gas supplies actually make it through to Western Europe? And does it seem to you that Russia is again using its gas supplies as sort of a political tool in its dealings with its neighbors?

MR. CASEY: Well, we would urge Russia and the Ukraine to resolve this dispute over gas shipments in a transparent matter and in accordance with commercial realities, rather than any other principals. You know, one of the things we talked about is that at the G-8 summit in St. Petersburg, the members all agreed to what’s called the St. Petersburg Energy Principles, and that specifically commits all the members to act transparently and refrain from using energy for political purposes, among a number of other things.

I think that what we would like to see happen here is a resolution of this in an appropriate way in accordance with the commercial needs, but I think this dispute underscores the need for greater transparency in the Russian-Ukraine gas trade and also highlights again another general point that we’ve always made, is that there needs to be a predictable flow of energy for Ukraine and the rest of the European market, and cutting off or reducing the flows of gas wouldn't appear to be the best way, I think, to resolve those differences. And we hope that both sides can agree on a payment arrangement and a settlement of the outstanding arrears and other money that’s required.

Also, I guess would point out, too, that this is why we continue to stress the importance of having multiple routes and sources for oil and natural gas to avoid the kind of potential problems that we’re seeing here.

QUESTION: I mean, can I just follow up on this one?

MR. CASEY: Sure, and then we’ll go to Barry.

QUESTION: You know, the chairman of Gazprom is Russian President-elect Medvedev. Is it disquieting to you -- and I know he has not yet taken, you know, office -- but is it disquieting to you that a company with which he’s affiliated should, you know, threaten to cut in half supplies to a neighbor?

MR. CASEY: Well, you know, Arshad, regardless of who has been, is now or will be running the company, the general principle is we never want to see these kinds of commercial disputes escalate into the kinds of cutoffs that cause problems for not only Ukraine but potentially for Western Europe or other countries. And again, we certainly -- while I’m not saying it’s the case in this particular dispute, we certainly would never want to see anyone use gas or oil shipments as some kind of political weapon. So we will continue to make those points both with the current Russian Government as well as with the new one.

QUESTION: And do you have any reason to believe that this -- that that is what they’re doing in this case: They’re using gas shipments as a political instrument?

MR. CASEY: Well, there’s a legitimate commercial dispute here and we’d like to see that resolved in a commercial way. I think there have been concerns raised in the past, and I think those concerns remain, about a lack of transparency in how this is proceeding. And I think that raises legitimate questions in people’s minds.

QUESTION: Can I go back to the AID thing?

MR. CASEY: Sure.

QUESTION: I looked a little closer to Berman – Congressman Berman’s statement. And he said, “USAID currently has nine auditors and investigators working full-time to prevent waste, fraud, et cetera. The Office of the Agency’s Inspector General confirmed that, citing security, the State Department notified USAID that it’ll be left with two temporary duty officers who would serve in Baghdad on a rotating basis.”

MR. CASEY: Barry –

QUESTION: That sounds like a reduction.

MR. CASEY: Barry, I can assure you that the USAID’s Inspector General will have the staff they need in place to do the job. And I think that quite frankly, you know, when all the bureaucratic arguing is done, that it’ll be an effective operation that everyone will be able to agree is what’s needed to serve the purposes at hand.

Yeah.

QUESTION: But you’re not – you can’t – I’m not going to – you know, interrogate you --

MR. CASEY: Barry, I’m not going to tell you – I’m not going to commit Ryan Crocker to have X number of people in his political section, economic section, public affairs section or the Inspector General’s office.

QUESTION: No, no, I’m only pressing it because – for two reasons. You said the State Department has not recommended any reduction. And that sounds like a reduction.

MR. CASEY: Barry, you know, I’m sure that there will be lots of things offered here. I am not aware, having spoken with Pat Kennedy and others that there is any effort to reduce the size of anybody’s staff at the mission right now.

QUESTION: Just to go back to the Russian-Ukraine gas thing, do you know if – I may have just missed it -- if the Gazprom has actually cut off gas supplies? I think they had planned to do so by about noon our time.

MR. CASEY: I understand that they have said they intend to do so and that, in fact, they are moving ahead with implementing it. Whether that’s halfway there or all the way there at this point in terms of the cuts they announced, I don’t know, Arshad.

QUESTION: Thanks.

MR. CASEY: Yeah, in the back.

QUESTION: Nick Spicer, Al Jazeera English. I was wondering if you might possibly comment on a Vanity Fair article alleging to lay bare a – I quote it – a covert initiative implemented by Secretary of State Condoleezza Rice to provoke a Palestinian civil war. I know that’s pretty strong language. Could you react to that, please?

MR. CASEY: Well, I can reprise the lengthy comments that I made this morning. I can also point you to the answer the Secretary gave in Cairo on this this morning. Look, first of all, let’s be clear about what U.S. policy has been and will be. U.S. policy is to support a two-state solution to the Israeli-Palestinian conflict. It is to support the legitimate government of the Palestinian Authority, specifically, working with President Abbas and his cabinet.

The U.S. policies in this regard have been transparent and open. They’ve been discussed publicly by the President, the Secretary of State and many others, both in public fora as well as in testimony to Congress. That policy includes, very specifically, a desire to help support, build and enhance Palestinian institutions.

We made it very clear when Hamas came to power that we would continue our no-contact policy with Hamas and that we intended to continue to work specifically with those institutions that were under the authority of the president. As you recall, we also had to have a very extensive review of all U.S. aid, not only direct aid but also that provided through NGOs, to make sure that none of that money was going to Hamas so long as Hamas refused to comply with the Quartet principles, meaning requiring it to recognize Israel’s right to exist, to recognize the validity of the very instruments by which government was allowed to form for the Palestinian Authority, also eschewing violence as a matter of policy.

So all that is prelude and let me just say this: The story alleges that there was some kind of secret plot on the part of the U.S. Government to create a internal conflict within the Palestinians, specifically an armed conflict. That’s absurd. That’s ridiculous. I said this morning that I think Vanity Fair should stick to arty photos of celebrities since clearly, at least in this instance, their efforts at serious journalism leave something lacking.

And on that note, how do I really feel? Yeah.

QUESTION: Cancel your subscription.

MR. CASEY: Unfortunately, don’t have one. Anything else? One in the back. Got two. Got one in the back and one in the front.

QUESTION: I hate to be the bad guy.

MR. CASEY: That’s okay. Barry, you’re never the bad guy. We are glad to see you back here.

QUESTION: Thank you. Now, it’s one thing to deny that the U.S. is working to create conflict between the two Palestinian factions. That’s absurd, you say.

MR. CASEY: Mm-hmm.

QUESTION: It’s another thing to say, as you also said, U.S. supports Fatah institutions. The military, security, is a Fatah institution. Is the U.S. trying to help Abbas’ people be stronger? And, of course, they use their strength partly in civil conflict with Hamas. Follow me?

MR. CASEY: Barry, our goal --

QUESTION: So it’s not an airtight denial?.

MR. CASEY: Sure, but our goal was, is, and I suspect will continue to be building Palestinian institutions so that when you get, as we hope to get --

QUESTION: Right.

MR. CASEY: -- to the conclusion of a peace process that establishes a two-state solution, that there are Palestinian institutions that we and the Israelis and others can rely on to be able to implement and carry out the law, carry out the terms of the agreement. And our support isn’t for parties; it’s for the legitimate institutions of the country that are willing to work towards that end. And that’s always been our policy. It’s been open and transparent and above board. The security assistance we provide, as well as humanitarian and others, has been out there for people to see. So arguing that there was some kind of, you know, plot back there, or what my Spanish friends would call a mano negro, is just silly.

QUESTION: That comes down to supporting Fatah since they’re the legitimate group supporting U.S. goals --

MR. CASEY: Well, again, remember where we started this movie. After the election and after the Hamas-led government came to power, the position of the Quartet, including the United States, was very clear: We would not be able to support or engage with that government as long as it refused to acknowledge the basic Quartet principles. We’ve said, and you’ve heard from the Secretary many times, it’s hard for us or anyone else to ask the Israelis to engage with a “partner for peace” who denies that nation’s right to exist, who believes and continues to support the use of terror against it, who denies the fundamental agreements with which they have been established as a government and which refuses to act in any kind of good-faith manner. So again, the policies here are quite clear. But the fact that we and the Quartet thought that the Hamas-led government ought to acknowledge those basic principles in order for us to be able to work with them and have them engage legitimately with the Israelis as a partner for peace is, you know a totally different matter.

QUESTION: Tom.

MR. CASEY: Charlie.

QUESTION: You know that the Congress prohibits giving lethal aid to the Palestinians, and therefore you couldn't actually arm Fatah to take on Hamas.

MR. CASEY: Right.

QUESTION: Do you know of any discussions between the Administration and the Saudis that the Saudis would pay the bill to fund the rearming of Fatah?

MR. CASEY: Well, Charlie, I know there has certainly been a lot of discussions with other countries in the region and those discussions are ongoing about how you work to support President Abbas and Prime Minister Fayyad. You know, in terms of the details of who said what to whom over time, I honestly don’t have them. I can’t guarantee you there was never a conversation like that. But you know, the bottom line is an argument that says that the legitimate efforts of the Palestinian Authority president to develop his institutions, including his security institutions, is the cause of or the reason for Hamas violence is one of the worst examples of blaming the victim I can come up with in recent memory.

QUESTION: Tom, I’m not quite sure I follow that.

MR. CASEY: Okay. Well, let’s do some more of it.

QUESTION: Let’s try again. You don’t know of any -- you don’t know of any specific discussions between the Saudis and the Administration wherein they would what you can’t do legally, which is to arm Fatah?

MR. CASEY: Charlie, I’m not aware of any particular conversations in that regard. I can’t speak for every institution of the U.S. Government. What I can say is we have made it a very open and transparent issue that we wanted to work on behalf of the government of President Abbas and work for him and with him to be able to strengthen the legitimate institutions of the state and work with those institutions that were willing to be a partner for peace. And again, I don’t know how many times this was discussed in public in open settings by the President, the Secretary, by other members of the Administration. And to, you know, call that policy a covert plan is just -- sorry, it doesn't pass the reality test.

Yeah.

QUESTION: Tom, excuse me. KCNA, the North Korean news agency, is reporting various foreign ministry officials as saying that the most recent rounds of U.S.-South Korea military war games are going to upset and derail the six-party talks and denuclearization prospects. Does that worry you at all?

MR. CASEY: I’m not familiar with that. But look, as you know, we have a, you know, multi-decade defensive alliance in relationship with South Korea. We conduct exercises all the time. We have throughout the course of the history of that relationship. I certainly expect that whatever else happens, there will continue to be a very important strategic relationship between the United States and South Korea. I’m not aware that any previous exercises of the multiple ones conducted since the six-party talks began have affected or changed the outcome of the six-party process. And I don’t have any reason on the surface to tell you that I would expect there would be any impact from whenever the next ones are scheduled. And you can check with the Pentagon to find out when that is.

Yeah.

QUESTION: Well, North Korea is always upset by these exercises, so was there any effort to perhaps postpone it in the light of the troubles you’re having with North Korea?

MR. CASEY: I would – you would have to talk to the Pentagon, but again, as I pointed out, I think you’ve got a multi-decade history of these kinds of things going on. And we’ve had the six-party process throughout. I understand that it is normal for there to be concerns expressed by the North Koreans, but I don’t have any reason to believe that these exercises are different than any of the previous ones.

QUESTION: All right.

(The briefing was concluded at 12:58 p.m.)

DPB # 39