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(12:05 p.m. EDT) MR. BLITZER: Earlier today, I spoke with Secretary Powell about his memories of Ronald Reagan and more. You worked for Ronald Reagan. You remember Ronald Reagan, Mr. Secretary. What goes through your mind? SECRETARY POWELL: I remember him very well and I'm very sad at his loss, but he's in a better place now. And he was such a great man. I worked for him as his National Security Advisor but I was also in the Army during those years, and so I watched him not only as the Commander-in-Chief but as the head of our foreign policy operations as President. And he was a man who brought such pride back to the Armed Forces and pride back to the nation. He was a man of incredible vision and he never varied or strayed from the vision that he had of a world of peace, a world where freedom was breaking out. And his first challenge was to make that happen in the Soviet Union, and he was able to work with a man by the name of Mikhail Gorbachev, who became head of the Soviet Union, and together they did historic things. MR. BLITZER: They changed the world. SECRETARY POWELL: They changed the world. The President always believed that the Soviet people deserved a better system than the system they had, and he was going to make it happen, not by war, but by peace, by showing the power of democracy. Every time Gorbachev would come to visit, Reagan always wanted to take him out to his ranch in California or to a factory where we made cars in Detroit. He didn't want to show missile fields or submarines or anything like that. He always wanted to show Gorbachev the goodness of America and how America works, and he wanted that same sort of system to ultimately persuade the Soviet Union that it should move in that direction. Gorbachev tried to restructure and reform the Soviet Union, but it couldn't be restructured. It had to be taken apart because communism was a failed ideology. Reagan knew that. MR. BLITZER: In the '80s, he managed to get this process going to see the end of the Cold War, to eventually see the collapse of the Soviet Union, ending 74 years of communist rule, without one shot being fired. SECRETARY POWELL: Without one shot being fired. But one of the reasons for that is we remained strong. Reagan knew that he had to rebuild the Armed Forces when he became President, and we were not in good shape. We weren't really proud of ourselves after the Vietnam War yet. And he restored that sense of pride in the Armed Forces and he gave us the wherewithal to become the best in the world again. And so he showed the Soviet Union that, look, we are prepared to do what it takes, spend whatever is necessary, so that America is strong. But we want to use this strength for peace, not to attack you, not to threaten you. Now that you know we're strong and you can't defeat us, let's work on a way forward where we can help you, where we can help the Soviet Union at that time. And Gorbachev knew that they could afford guns, but they couldn't afford butter. America could afford both. Therefore, things had to change. MR. BLITZER: It was just a lucky break that there was a leader in the Soviet Union at that moment named Mikhail Gorbachev? SECRETARY POWELL: It was a lucky break. It was destiny, if one can call a lucky break destiny. And President Reagan used to kid because, you know, he went through about three Soviet leaders. Two died very suddenly in front of him -- three of them. And he said if only, you know, one of these gentlemen would stay alive long enough for me to work with. And along came this vigorous man in his early 50s, Gorbachev, and he was that man. And Gorbachev had taken a hard look at the Soviet Union and realized it couldn't continue this way. He had to change it. Perestroika and glasnost -- you'll remember those words -- restructuring and openness. But that wasn't enough. You couldn't restructure a communist system to make it work in the 21st century. And openness meant openness, and once you opened it up, it was all going to come out and people were going to see what they were missing for all these years. And so Gorbachev and Reagan are two great historic figures, both of whom had a vision. They were slightly different visions. Gorbachev did not come in to preside over the death of communism, which is what he ended up doing. Reagan always knew that communism was a failed ideology. MR. BLITZER: But did he have the confidence, did he have the optimism, that what he was doing would result in that? SECRETARY POWELL: Yes. He knew. He didn't know what form it would take. He didn't know that the Soviet Union would totally break up. But he was absolutely confident in our system. He was such an optimist, such a believer in freedom and democracy and the rights of men and women, and he saw what it had done in the United States. And he kept saying to himself, "Why shouldn't this happen elsewhere?" He saw what had happened in Europe after World War II, he saw what happened in Japan and other parts of the world, he saw what was happening in our own hemisphere: the sweep of democracy. He truly believed in the sweep of democracy. And he said, "Why shouldn't it happen in the Soviet Union? Why shouldn't it go behind the Iron Curtain? Mr. Gorbachev, come here. Tear down this wall." What he was saying -- we all remember that speech. MR. BLITZER: Of course. SECRETARY POWELL: And people said -- you know, there's been debate about that speech and debate about that line. But what he was essentially saying, "Come tear down this wall," and people said, "Well, you've offended Gorbachev." But Gorbachev needed that kind of statement from the West that said, "Open up." MR. BLITZER: Remind our viewers, how did he come -- you and him. How did he come to pick this officer in the United States Army to be his National Security Advisor? SECRETARY POWELL: Well, I came into the White House as Deputy National Security Advisor in January of 1987, after the Iran-Contra problem, and Frank Carlucci came as National Security Advisor to get things going again. The Administration was in very great trouble at that point, as you recall. MR. BLITZER: Right. This is after Poindexter and McFarland were in deep trouble. SECRETARY POWELL: Exactly. And Frank Carlucci -- an old, dear friend of mine, my Godfather as I call him, my mentor in political life -- he asked me to come back from commanding my corps in Germany to be his Deputy. And I said, "I don't want to do that." Well, President Reagan called me and said, "You've got to do it." And I did. And then, 11 months later, Frank Carlucci went over to the Pentagon to replace Cap Weinberger, who left after a distinguished period of service. And one day, Frank walked into the Situation Room and he had a little scribbled note, and he handed it to me at the beginning of meeting. And I opened it up and it said, "You are now the National Security Advisor." President Reagan had picked me. I had gotten to know the President very well by then, of course, and I treasured that friendship. And after he left office, we stayed in touch. I stayed in touch with both President Reagan and Mrs. Reagan. I have fond memories of those days. But to show you, if I just have a minute, what it was like. MR. BLITZER: Sure. SECRETARY POWELL: Two quick vignettes. After he retired, I went to see him out at his home in Beverly Hills. And I had retired, but a young sergeant had been assigned as a courtesy to drive me to the house. As we were pulling up to the house, the young sergeant said to me, "Would you please tell President Reagan how much we appreciate what he did for us?" And I said, "Okay." So I got to the door, rang the doorbell. President Reagan answered the door, welcomed me, "Come on in, say hello to Nancy." And I said, "There's somebody I want you to meet." And I called the sergeant over. I said, "Sergeant, you tell him yourself." The sergeant was stunned. He couldn't say a word. He just did what sergeants do. He came to attention, saluted President Reagan. President Reagan returned the salute. We went in the house. The sergeant went back to the car. The door closed, and President Reagan said to me, "Colin, is it still okay for me to salute?" I said, "Mr. Reagan, don't you ever stop saluting. It means so much to us." Another story of his optimism. In the '88 period, there was a lot of concern about how much the Japanese were investing in the United States, and we had these debates within the Administration. Is this good? The Japanese are buying golf courses, they're buying buildings, they're buying up all our real estate and whatnot, and we ought to do something about it. And Reagan sat in the Oval Office listening to this debate one day, and he smiled and said, "No, we're not going to do anything about it. I'm glad they know a good investment when they see one." You know, that just blew us away. MR. BLITZER: His optimism. SECRETARY POWELL: His optimism. I'm so proud that people think America is such a good investment that they're sending their money here. MR. BLITZER: It was instinctive on his part. SECRETARY POWELL: It was instinctive on his part. But it wasn't just instinct. He had thought about these issues. He had studied them. He had such a belief in our system, our economic system and our political system, that it gave him an azimuth to sail on that he never varied from. MR. BLITZER: Coming up, more of my interview with Secretary Powell. I'll speak with him about the President's trip to Europe. Is it enough to reconcile the split over Iraq? Then a conversation with two former Reagan cabinet secretaries about what it was like to work with the man known as the Great Communicator. Our special Late Edition live from Normandy, France, continues right after this. (Break.) MR. BLITZER: Welcome back to our special Late Edition live from Normandy, France. We return now to my interview with the Secretary of State, Colin Powell. Mr. Secretary, let's talk a little bit about U.S.-French relations right now. Certainly, the words that were uttered by the President of France, the President of the United States, were encouraging. But are there still serious differences over Iraq that separate these two allies? SECRETARY POWELL: The differences that we had last year are not going away. It was a major disagreement. They thought we shouldn't have gone into Iraq, and we were determined to do what was right and get rid of Saddam Hussein. So we shouldn't say that disagreement has gone away. It's there. But we have come together again in the recognition that the Iraqi people need the help of the international community, so we have been working very closely with the French Government. I think we're very close to a final resolution at the UN in New York to be passed in the next several days. And we have worked out differences over a short period of time. We've just been working on this resolution for 13 days. MR. BLITZER: What's the major issue that divides the U.S. and France? SECRETARY POWELL: There aren't any major issues left in the resolution. We're working out details. We're doing some language checks, as one always does with such a resolution, but I think the resolution will pass over the next several days and it will be a resolution that recognizes that full sovereignty is being returned to Iraq. MR. BLITZER: June 30th. SECRETARY POWELL: By June 30th, no later than June 30th. And it recognizes that the international community has to keep a military presence there, at the request of the Iraqi sovereign government. And we've worked out the arrangements on how that military force will work with this new sovereign government. It calls on the international community to help build up Iraqi forces as quickly as we can to provide additional assistance to Iraq in any way that we can, through reconstruction efforts, additional troops, military trainers, police trainers, anything a country can do to help the Iraqi people. MR. BLITZER: Do you see the possibility that France, or Germany for that matter, would deploy troops to Iraq? SECRETARY POWELL: No, they've made it clear that deployment of troop formations is not something they are able to do. But keep in mind, we have French troops in Haiti working alongside of us, French troops in the Balkans working alongside of us, French troops in Afghanistan working alongside of us, German troops working with us in Afghanistan and in the Balkans. So we had this disagreement last year over Iraq. Now we're coming together. And remember, the last three UN resolutions with respect to Iraq since the war all passed unanimously, and I hope this coming week we'll see another resolution pass unanimously. MR. BLITZER: Will this resolution have an end date for the U.S. deployment, the U.S. coalition, -led coalition in Iraq? SECRETARY POWELL: It will say that at the end of 2005, when this political process has run its course and we've had a constitution written and free elections, at that point this mandate probably should come to an end. But the more important point is not what the resolution says. It's what the Iraqi sovereign government wants. We have had troops in sovereign nations for, you know, the last 50 years. We've had them in Korea. We've had them in Germany. We've had them in the United Kingdom. And so we will be there for as long as we are needed. I hope it is not a long period of time. But we're there with the consent of the sovereign government and we've made arrangements with that sovereign government. That sovereign government wants to see us leave. Why wouldn't they? They want to build up their own forces, their own police forces. We're going to help them do that. So, as soon as they are ready to take over their own security, sure they want us to leave. MR. BLITZER: So is Colin Powell -- put on your general's hat for a second -- suggesting there is an exit strategy now for U.S. troops? SECRETARY POWELL: There is an exit strategy, a political exit strategy and a military strategy, because we've made it clear that we are there at the request and with the consent of this new sovereign government, to help them do what? To help them get ready for elections. That's what the first mission of this government is. To help them build up their own forces so they can be responsible for their own security and for their own political and military destiny. But I can't give you a specific time when there will no longer be a requirement for a military presence from the United States or the coalition. Keep in mind that when this sovereign government takes over, Ambassador Bremer, having done a terrific job, a brilliant job, will go home and the Coalition Provisional Authority will cease to exist. Ambassador Negroponte will be there representing the United States, but he is not the government the way Ambassador Bremer was. There will be an Iraqi government. We've already seen the president of this new government and the prime minister of this new government making positive statements about their vision for their country. MR. BLITZER: The new prime minister, Iyad Allawi, certainly he expressed his gratitude to the United States for helping to liberate Iraq. We didn't hear that expression of gratitude, though, from the incoming president. SECRETARY POWELL: I have -- we have talked to the incoming president, and I can assure you that he is very grateful for what we have done. He is grateful for our continued presence. I think all of the ministers are. They know that they are not yet able to run this country without our help. They also know that they wouldn't be able to take this -- these positions of leaders of a sovereign government if Saddam Hussein had not been eliminated. So I can assure you they are grateful. President Ghazi Al-Yawar expressed that to the President in a phone call that I was able to hear, sitting in the Oval Office with the President, about a week and a half ago. And so I am confident that they are grateful for what we have done. They respect the fact that we put American lives and coalition lives at risk and lost a number of our youngsters. MR. BLITZER: Mr. Secretary, how serious are these allegations against Ahmed Chalabi, from the Iraqi National Congress, a member of the Iraqi Governing Council, that he may have provided top secret intelligence information, code-breaking information, to Iran? SECRETARY POWELL: Well, you know, Wolf, I'm just going to have to let the intelligence community deal with this. It's a matter that's best left to the experts who know what might or might not have happened. MR. BLITZER: But this rise and fall of Ahmed Chalabi, it's been an amazing situation. The State Department, as you well know, always concerned about him, as the CIA, but he had strong allies, as you well know, at the Pentagon and over at the Vice President's Office. SECRETARY POWELL: We have to acknowledge that Mr. Chalabi spent, you know, decades fighting for freedom for the Iraqi people and for the demise of Saddam Hussein. Saddam Hussein is gone, and I don't think we should overlook the role that Mr. Chalabi played in that. But what his future role should be in Iraq, and what he might or might not have done to achieve the position that he's achieved, I will let others make judgments on that. MR. BLITZER: We only have a minute or two left, but the President, last night when he met with Jacques Chirac, spoke of the Israeli-Palestinian problem and he spoke about a two-state solution, Israel along Palestine, and he spoke about Palestine being contiguous, a contiguous Palestine, the West Bank and Gaza. What exactly did he mean by that? SECRETARY POWELL: What he meant by that is that in the West Bank you've got to have a coherent, contiguous land which, joined with Palestine, would -- with Gaza, would constitute the state of Palestine. He was making the point that you can't have a bunch of little Bantustans or the whole West Bank chopped up into noncoherent, noncontiguous pieces, and say this is an acceptable state. The President wants the Palestinian people to have a state of their own, which would include Gaza and significant chunks of the West Bank, with some alignment of the armistice line, as he has said previously. But he is going to be doing everything he can to help Mr. Sharon with his plan of evacuating all the settlements in Gaza, beginning with the evacuation of settlements in the West Bank, and then get back into the roadmap and help the Palestinian people put an end to terrorism that comes out of Palestinian communities and help them reform their political system and their security system so that Israel can feel comfortable leaving Gaza and turning it over to Palestinian control. And we're working with the Egyptians, who will be helping with the security in Gaza. So an opportunity is being presented to us, and the President fully intends to take advantage of that opportunity. MR. BLITZER: One final question on the resignation of George Tenet, the CIA Director. You went over to the CIA before the war and studied weapons of mass destruction, the intelligence information, but clearly, some of that information was wrong. What do you make of his decision to resign now? Because, as you know, there's wild speculation, a lot of speculation out there, that he was coming under so much criticism he really had no choice.