There are new questions this week about whether Saudi Arabia has been funneling millions of dollars to organizations that allegedly have terrorist ties. Joining us now to talk about that, the price of oil and much more, Saudi Arabia's foreign policy adviser Adel Al- Jubeir.
Welcome, Mr. Al-Jubeir, back to "LATE EDITION." Thanks very much for joining us.
ADEL AL-JUBEIR, SAUDI ARABIA'S FOREIGN POLICY ADVISER: Always a pleasure.
BLITZER: The new issue of Newsweek magazine just coming out today writes this, among other things: "A federal investigation into the bank accounts of the Saudi Embassy in Washington has identified more than $27 million in suspicious transactions, including hundreds of thousands of dollars paid to Muslim charities and to clerics and Saudi students who are being scrutinized for possible links to terrorist activity, according to government documents obtained by Newsweek." Is that true?
AL-JUBEIR: Oh, absolutely not. We are aware of the investigation. In fact, we are working with the U.S. government on it. We have provided them with a list of all the students in the U.S. who receive money from Saudi Arabia, as well as all the support that Saudi Arabia has given to various institutions in the U.S., not only over the past two years, but over the past 20 years. We want to know if any of them are not legitimate so we can take action.
With regards to the story in Newsweek, it's unfortunate that people tend to sensationalize things. Just like a year and a half ago, people accused Princess Haifa of giving money to terrorists.
BLITZER: She is the wife of the ambassador.
AL-JUBEIR: Of the ambassador, correct. And accused al-Bayoumi of being a Saudi agent. In fact, Mike Isikoff did that himself in Newsweek. The story played up very big. People's names were maligned. And it turns out that there was no "there" there. The FBI investigation of Bayoumi concluded he did not give money...
BLITZER: He was a Saudi in California.
AL-JUBEIR: Correct. And nor was he an agent of the Saudi government. But I don't see Newsweek or Mr. Isikoff apologizing for the mistake they made.
BLITZER: Now, among other things, they also write in the new issue that the Riggs bank in Washington, D.C., one of the major banks in Washington, is so concerned because of these allegations that they have dropped the Saudi embassy as a client.
AL-JUBEIR: I would argue that it was the other way around. We had some issues with the bank that pertained to loans and lines of credit, and the ambassador made the decision to terminate the relationship.
But I want to also emphasize, Wolf, that when it comes to this issue, this investigation has been going on now for almost nine months. There is absolutely nothing that was found that was suspicious on the part of U.S. -- either the Federal Bureau of Investigations or the Treasury Department officials, and that's also pointed out in the Newsweek story you just mentioned.
BLITZER: Why, though, is this a problem still, presumably, if Newsweek is writing about it, other news organizations are still raising questions about Saudi Arabia allowing certain funds to go to various charities with questionable results of that money. Given what happened in Saudi Arabia, the terrorist attacks in Riyadh itself, why a year later is this still a problem?
AL-JUBEIR: It really beats the hell out of me. I don't understand it. Anything that involves Saudi Arabia automatically is suspicious. I don't believe that this is fair. I don't believe that it is accurate. We have taken tremendous steps, in terms of regulating charities, in terms of freezing bank account, in terms of putting in place financial control mechanisms. We've had international institutions audit our systems. We have gotten a clean bill of health in this area, and yet the suspicions continue to linger.
BLITZER: The suspicions linger in part because there's a sense that I've heard myself from various U.S. officials in the executive branch, the legislative branch, that there's a split still within the Saudi government; that some, like Crown Prince Abdullah and others, are anxious to get to the bottom of all of this, but others, perhaps in the defense ministry and the interior ministry, others are still holding back, resisting these efforts.
AL-JUBEIR: I think that's more stuff for novels than reality. As a government, Saudi Arabia's committed to fighting terrorism, because the objective of the terrorists is to destroy the Saudi state. The government works as one hand. The citizens are very concerned about this issue, and they want action. And the Saudi government is giving them action.
We are arresting terrorists. We're killing terrorists leaders. We're freezing bank accounts. We're cooperating with any country in the world that was willing to cooperate with us in this area, because our survival depends on it. And we're determined to win this battle.
BLITZER: Listen to what Richard Clarke, the former U.S. counterterrorism adviser who's very controversial now, what he testified before the 9/11 commission about a week or 10 days ago. Listen to this.
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RICHARD CLARKE, FORMER WHITE HOUSE COUNTERTERRORISM CHIEF: The Saudi Arabian government did not cooperate with us significantly in the fight against terrorism prior to 9/11. Indeed, it didn't really cooperate until after bombs blew up in Riyadh.
(END VIDEO CLIP)
BLITZER: Is he right?
AL-JUBEIR: To a large extent, yes. But that applies to any government in the world. Our people argue the U.S. government didn't cooperate with us in the hunt for bin Laden until after 9/11.
BLITZER: What are you saying? The United States didn't try to help you try to find Osama bin Laden before 9/11?
AL-JUBEIR: I'm saying, Wolf, that what we had before 9/11 is, there's a lot of blame to go around. And we all have to accept those responsibilities. Could more have been done? Absolutely. We see this in the investigations of the 9/11 commission here in the U.S. Are we doing more now? Absolutely we're doing more. Are we learning more? Yes, we're learning more. Are we learning how to cooperate better with each other? Yes, we are. And that's what we're determined on further...
BLITZER: Because you still have a problem, when Richard Perle, for example, the former Reagan administration Pentagon official, still very influential among certain circles here in Washington, writes in his book, "An End to Evil," he writes, "The Saudis qualify for their own membership in the Axis of Evil." Those are strong words from him.
AL-JUBEIR: Correct. But Richard Perle is a partisan, he's always been on the other side when it comes to Saudi Arabia. And with all due credit to him, he's been very consistent in being a hostile critic of Saudi Arabia. So I wouldn't take what he says about the kingdom at face value.
BLITZER: The Economist, in the April 3rd issue, ranks democracies, the level of democracy in the Arab world, one through 18. Morocco, Lebanon, Iraq, the new Iraq after Saddam Hussein, one through three. Sixteen, 17, 18 -- 18 they list as Saudi Arabia, in terms of democracy. And only in the past couple of weeks, the U.S. Secretary of State Colin Powell was in Riyadh. I want you to listen to what he said in Riyadh after his meeting with the Saudi Prince Saud al-Faisal, the foreign minister. Listen to this.
(BEGIN VIDEO CLIP)
POWELL: We have concerns when people who are trying to express their views and do it in an open way and a democratic way are not able to do so.
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BLITZER: Is there any progress of democracy really taking hold in Saudi Arabia?
AL-JUBEIR: Absolutely there is. We have opened up our press, we're building institutions. We're moving toward holding elections, beginning at the municipal level. We have human rights organizations that have been set up.
With regards to the comment or the issue of the quote, unquote, "reformers" who are detained in Saudi Arabia, what people don't realize is, they were detained because they submitted petitions with names on it of people who did not want to have their names on it. And when those people complained, the government brought them in for questioning, and asked them to make a promise that they will not put people's names on petitions without their permission. Those that did were released, and those that didn't were not. I think we may have one or two that are still in custody, but all the others have been released.
This is not about detaining them because they wrote a petition. It's detaining them because they put people's names on petitions who didn't want to be on that petition.
BLITZER: Let's talk about the price of gasoline. OPEC met this past week and decided to curtail, to cut back on the supply of oil, despite the fact that here in the United States the price of a gallon of gasoline is now at record levels. We'll put up on the screen what some of these levels are around the United States. $1.77 an average for unleaded self-serve gasoline. $2.00, $2.50 in parts of the country, in various parts of the country. Why is OPEC, of which Saudi Arabia is a key member, cutting back on the supply of oil right now?
AL-JUBEIR: Wolf, the relationship between the price of crude and the price of gasoline is not as direct a relationship as people think. The oil markets, in terms of crude oil production and crude oil demand, are in balance. In fact, there's a slight surplus, and that's why OPEC cut back. The reason you have high oil prices in the United States, to a large extent, has to do with refining capacity. I mean, there has not been a refinery built in America in the last 20 years.
And so, if you produce more crude oil but you can't refine it, it's not going to translate into gasoline. And that's why you have a run-up in the price of gasoline this year. Next year, expect another shortage of gasoline, unless you find ways to deal with the refining capacity.
It is also difficult to sell gasoline into the U.S. market because the U.S. has something like four dozen different formulas, mixtures or blends for gasoline, and it confuses the seller. Where do you sell your crude? There's a refinery in Springfield, Illinois, that cannot supply gasoline to the Chicago market because the formulas in those two regions change or are different. So unless the U.S. begins to simplify this area, and unless the U.S. deals with its refining shortage, there will always be a problem with gasoline.
BLITZER: On that note, we're going to have to leave it, because we're out of time. Adel Al-Jubeir, thanks very much for joining us.
AL-JUBEIR: My pleasure.