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"NEWSMAKER SATURDAY"

**AIR DATE:** Saturday, September 16, 1989, 1:30 & 5:30 PM (EDT)

**ORIGINATION:** Washington, D.C.

**TOPIC:** COULD GORBACHEV LOSE HIS GRIP?

**GUESTS:**
ROZANNE RIDGWAY
Former Assistant Secretary of State
The Atlantic Council

Senator JOSEPH LIEBERMAN (D., Conn.)

HENRY KISSINGER (in CNN's New York Bureau)
Former Secretary of State and National
Security Advisor

**CORRESPONDENT:** Charles Bierbauer, "Newsmaker Saturday"

**EXECUTIVE PRODUCER:** Elissa Free

**ASSOCIATE PRODUCER:** Kevin Bohn

**PRODUCTION COORDINATOR:** Lisa Lawrence

**CONDITION OF USE:** Credit CNN's "NEWSMAKER SATURDAY."

(C) Copyright 1989, Cable News Network, Inc. All Rights Reserved.

**EDITORS:** This is a rush transcript provided for the convenience of the press. Print and broadcast media are permitted to quote this transcript provided credit is given to "NEWSMAKER SATURDAY," Cable News Network. Video and audio cassettes are available upon request to the media. For further information, please contact Lisa Dallos at (202) 898-7625.

**Transcript Inquiries only:** (301) 277-1661.

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CONDITION OF USE: Credit CNN's "NEWSMAKER SATURDAY."

MR. BIERBAUER: Welcome to "NEWSMAKER SATURDAY." In Washington, I'm Charles Bierbauer. The Bush administration is ready to turn its attention to East-West relations this Fall. Is Bush's Kremlin counterpart, Mikhail Gorbachev, in a mood to deal or a position of desperation? Is the exodus of East Germans a result of Hungary's opening the old iron curtain or a prelude to East Germany slamming it shut again? Questions for the president of the Atlantic Council and former Assistant Secretary of State Rozanne Ridgway, for Sen. Joseph Lieberman, Connecticut Democrat, and later in our show, for Henry Kissinger, the former secretary of state and national security adviser; all today on "NEWSMAKER SATURDAY."

MR. BIERBAUER (Voiceover): The Russians are here. Maverick communist Boris Yeltsin has been spreading a message of distress and an appeal to help the Soviet Union.

MR. BORIS YELTSIN, Soviet parliament member (On tape): "We have to, in my opinion, combine our efforts to rescue perestroika, which is in a super critical condition today."

MR. BIERBAUER (VO) And more Russians are coming. Soviet Foreign Minister Shevardnadze will drop by the White House Thursday en route to Wyoming and meetings with Secretary of State Baker. Shevardnadze comes grumbling that the US has been dragging its feet on arms control negotiations. US officials reject that on the one hand and, on the other, concede they are just now turning their attention to East-West relations.

Meanwhile in the East bloc, thousands of East Germans are fleeing west through the open gates of Hungary. The progressive Hungary is thumbing its nose at a socialist ally. East German leader Erich Honecker is believed to be on his death bed. Unlike Hungary and Poland, East Germany has resisted reform. A younger generation of East Germans is leading the exodus.

Kremlin leaders, with enough to worry about back in the Soviet Union, have not interfered in the East German

CNN's "NEWSMAKER SATURDAY" - 16 Sept. '89

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problem.

MR. BIERBAUER: Boris Yeltsin, once a member of the Politboro, now something of a maverick communist parliamentarian, was in town this week, met with a number of people, yourself included, Senator. And when he went to the White House, he -- he told the national security adviser that he represents an alternative leadership to Mr. Gorbachev. First of all, Ms. Ridgway, is he an alternative? Should we take him that seriously?

MS. RIDGWAY: He's not an alternative as we use the word; that is, he's another choice if a choice has to be made, but he does represent a group of -- of now-parliamentarians in the Soviet Union that says we have a different point of view.

MR. BIERBAUER: What does Mr. Yeltsin tell you about the shape of things inside the Kremlin?

SEN. LIEBERMAN: He's a very engaging man, certainly, and he conveys I think in his personality and in his words all the excitement and uncertainty that I suppose all of us feel about what's happening within the Soviet Union. The main message we got is that perestroika, as Mr. Gorbachev is carrying out, is -- is at a -- a very uncertain time. It's not moving quickly enough. When you -- When you ask Yeltsin what he would like to have happen, what the United States can do, he tends to suggest that we should send some of our capitalists over there to help them build apartments, produce consumer goods and move more quickly to

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MR. BIERBAUER: I don't see anybody lining up to go over there.

SEN. LIEBERMAN: Well, for obvious reasons. The ruble is not convertible, it's hard for American businesses to go over there. He left me with the impression that he feels that -- that the Gorbachev regime is at an unsteady position and if changes do not go as rapidly as he thinks they should go within the next two years, in fact, there might be a return to what he called the "old swamp" of Soviet leadership.

MR. BIERBAUER: How unsteady is he?

MS. RIDGWAY: I think not as unsteady as emerged from all of the conversation with Yeltsin this week in Washington and elsewhere. We've always known that Gorbachev had set a lot of things in motion as he began to -- to institute change. There are people who make a business of predicting that he's just about on his way out. I think he's more firmly in power than the impression left. He has problems, but I don't think he's in a precarious stage.

MR. BIERBAUER: Well, following on Mr. Yeltsin's heels, the foreign minister, Mr. Shevardnadze, who's -- who's more the establishment man than -- than Mr. Yeltsin is -- is coming to town in the days ahead. He'll meet with the president on Thursday and then -- and then head out to Wyoming for a meeting with Secretary of State Baker. Shevardnadze has -- has thrown out the suggestion that the US has been footdragging on getting particu-

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larly into arms control. Do -- Do you think they have been foot-dragging or is that just a little rhetoric to set up this meeting?

MS. RIDGWAY: What surprised me, Charles, was that while we've come to expect that kind of statement on the eve of every major meeting, it hasn't always come from the foreign minister. There have been Soviet spokesmen who have given a press conference and sharp words are put out into the air waves. The fact that Shevardnadze said it suggests to me that the Soviets are concerned. I don't think it's entirely fair, these are tough issues.

MR. BIERBAUER: What about on the Hill?

SEN. LIEBERMAN: Well, there's a -- there's a feeling, certainly among Democrats and some Republicans, that the administration has not moved as aggressively as it might have to take advantage of the opportunities we have for arms control agreements with the Soviets. And I take Shevardnadze's statement as significant.

Obviously, we in the United States have to do what is in our interest, but it seems to me that it may be in the interest of both great powers to achieve conventional arms control agreements. Gorbachev has recommended a 13 percent cut in the Soviet military budget. For him to carry that out and -- and free up some money that he needs to get his domestic economy moving, he really I think needs conventional arms reductions.

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It's an opportunity for us to -- to save some money ourselves and if -- if we can do it in a verifiable way, not risk security. But all the uncertainty in the Soviet Union I think gives all of us reason, including people in the administration, to want to not miss an opportunity, but not to go ahead recklessly because people are uncertain about what life will be like with the Soviet Union --

MR. BIERBAUER: There's surely no sign that the Bush administration is pushing ahead recklessly. A senior administration official this week said that they're just getting started on examining the START proposal, the strategic arms proposal, which was 70 percent done when the Reagan administration was finished with that. You worked on that.

MS. RIDGWAY: We did work on that, but there were some very major issues left and they are issues which also are tied up in the American political debate here at home. In which direction should we go with respect to our strategic forces that will take us into the next century? And until those are settled, it's very difficult to complete those negotiations.

MR. BIERBAUER: Alright. We've got to take a break here. We'll talk about some other things, particularly in Eastern Europe, when we come back. Stay with us please.

(Commercial announcements.)

MR. BIERBAUER: Sen. Lieberman, I want to come back to this question about economic help for the Soviet Union. Mr. Yeltsin

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talks about investment, he talks about most favored nation status. One of the things that stands in the way of that is, of course, the Jackson-Vanik amendment, which -- which says until you change your emigration laws, don't expect a whole lot of help from -- from the United States. Two things. They're -- They're, what, a 100,000 Soviet Jews leaving or in the process of and, at the same time, we have within the Bush administration a move towards putting a cap on the number of those Soviet Jews who can come into this country. That's a big complex question, but where do things stand?

SEN. LIEBERMAN: Well, first, Charles, let me say that there's sentiment on Capitol Hill that this movement of people within the Soviet Union, both in the Eastern European countries and out of the Soviet Union -- many of them wanting to come here -- is an indication of -- of the reality of glasnost, that there really are changes going on. It's very exciting and it's one of the measurements that we should apply in judging whether a country really believes in human rights and, at least to this extent, the Soviet Union under Gorbachev seems to believe in it. For that reason there is real sentiment to keep the doors open I find on Capitol Hill and some skepticism, resistance about the apparent desire of the administration to limit the number of Soviet emigres, evangelical Christians, Jews, Armenians and others coming into this country.

I think also because of the real changes, allowing

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7 people to move, there is substantial sentiment -- I share it, I'm part of it -- to wave the Jackson-Vanik restrictions for at least a year, to grant most favored nation status to the Soviet Union, which would be an indication of our appreciation of their changes and, hopefully, a real help to Gorbachev in trying to move his economy.

MR. BIERBAUER: From your experience formerly inside this administration, is that a practical move?

MS. RIDGWAY: It's a symbolic move. The implementation of most favored nation status on a one-year basis is hardly any basis for an investor and it doesn't work, in any case, without a follow-on trade agreement. Nobody has told me that it's going to be possible to get a good clean US-Soviet trade agreement through the Congress without it being -- beginning to look like a State Department authorization bill with 80 amendments conditioning it.

MR. BIERBAUER: In the few minutes we've got left, I want to talk about East Germany and this other outflowing of -- of emigres through Hungary. Do we look upon this as -- as simply an opportunity for these folks -- What I hear when these people come out is they're not talking about oppression so much, as they're talking about economic deprivation and -- and flat out boredom in the East -- East Germany.

MS. RIDGWAY: Yes. It's a colorless society. It's a very carefully organized society and it can only be described as repressive. These young people are -- are saying that's not going

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to work and change is occurring in Eastern Europe and if the
party leadership in East Germany thinks that it can opt out of
change, it's wrong and some of its very best young people are
going to leave.

MR. BIERBAUER: Is there a role for the -- for the US in
this other than just to be encouraging?

SEN. LIEBERMAN: Well, there's -- there's only so much we
can do. I certainly think whatever we can do to help the -- the
Polish and Hungarian governments to succeed economically is a
step forward because it -- it may create a model for the Soviet
Union or how a country can reform it -- a socialist state-
controlled economy can reform itself economically and still make
a -- make a go of it.

This movement of people -- this is really ideology
expressed by -- by feet -- may be the most optimistic sign we
have in this country that the changes in Eastern Europe are real
and have some permanence to them, because it's hard to resist
that force of -- of -- of movement. And I felt when I talked to
Yeltsin that while he doesn't represent the Soviet government, my
instinct is that he does, in his way, represent the aspirations
and hopes of the Soviet people, who absolutely don't want to go
back to the way things were.

MR. BIERBAUER: You also served as ambassador in East
Germany. What is it going to take to make changes there? We've
got about 30 seconds.

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MS. RIDGWAY: A younger leadership, it -- it would seem
because the --

MR. BIERBAUER: Well, Honecker's on his deathbed apparently.

MS. RIDGWAY: Well, and among all of the names of the
successors, I don't -- I don't see any excitement around any one
of them, somebody that takes the system to throw up somebody new,
unknown to us.

MR. BIERBAUER: Are -- Are the Hungarians, in effect, doing
themselves a service simply by ridding themselves of this
problem? They just can't tolerate having thousands of East
Germans there?

SEN. LIEBERMAN: I -- I think they're making a statement
that they want to come into the modern world, they want to be
part of the -- the community of civilized and -- and free
nations. They and the other Eastern European countries have a
ways to go before they really achieve that, but it's a -- it's an
extraordinary time of opportunity for the world and certainly for
people who've lived for too long under repression in Eastern
Europe.

MR. BIERBAUER: Alright. Sen. Lieberman, Secretary Ridgeway,
thank you for being with us. When we return, we'll be joined by
Henry Kissinger, secretary of state during the Nixon and Ford
administrations. Stay with us please.

(Commercial announcements.)

MR. BIERBAUER: Joining us now in our New York Bureau is Dr.

(LC)

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Henry Kissinger. Dr. Kissinger, thank you for coming in.

You've been secretary of state, you've been the
national security advisor. In terms of the meeting coming up
between Mr. Baker, the secretary of state, and the Soviet foreign
minister, put yourself, if you would, in -- in Mr. Baker's shoes.
What would you want to accomplish in the week ahead?

DR. KISSINGER: Well, of course, I was never in exactly
these shoes because this is the most fluid situation that has
existed in the postwar period.

MR. BIERBAUER: Well, try the shoes on, see how they fit.

DR. KISSINGER: I think that what I would try to do is to
see whether we can come -- whether we can come to some under-
standing of how the Soviets view the evolution in Eastern Europe
and also to convey some of our basic attitudes with respect to
what we foresee, 'cause I believe that the military approach to
East-West confrontation that has characterized most of the
postwar period is coming to an end and we're now seeing Europe
returning to a more traditional pattern and we have to avoid that
-- that -- the Soviet Union reacts in a sort of convulsive
fashion to the changes that I believe are now inevitable.

MR. BIERBAUER: What -- What does that mean in -- in the
short term? What are we looking for the few days ahead?

DR. KISSINGER: Well -- Well, what I believe is almost
certain to happen is that some of the East European countries
like Hungary, maybe Poland will slide into a status very similar

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to that of Austria or Finland. That is certainly what their governments will want. That will put -- And I think even Czechoslovakia is going to begin to move in a reform direction. On the other hand, the East German government of regime does not have the same options that these other countries have, namely of using nationalism in the service of -- of the reforming their economy because patriotic Germans are not likely to be in favor of the East German regime. So, we really -- recent events, the evolution in the Soviet Union, the various arms control treaties have moved Germany back into the center of international discussions and how to relate East Europe to West Europe is -- Western Europe is become -- going to become a central issue. But that is what I believe ought to be discussed.

MR. BIERBAUER: Well, you -- you mention arms control treaties. We understand that the Soviets, and Mr. Shevardnadze has -- has been a bit vocal on this, grumbling about the Americans dragging their feet towards an arms control treaty that was 70 percent complete, the START treaty, at the end of the Reagan administration. Do you think the Americans are dragging their feet?

DR. KISSINGER: No, I don't think the American are dragging their feet. I think the Americans are trying to come up with a sustainable position, something that reflects the realities, rather than make an agreement just so that we can say we have -- we have an agreement. And I don't believe, in any event, that the

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pure arms control agreements, as they characterize the more mili-
tary period of East-West relations, are as significant as they
used to be, because I think that the international tensions are
being reduced in any event and that the political factors are
becoming more important than the military factors.

MR. BIERBAUER: So, they should pursue that dynamic and --

DR. KISSINGER: Well, they can continue working on the arms
control issues, but I don't believe that the Soviet Union in
their present state is in any condition to launch a surprise
attack, an all-out surprise attack on the United States and I
don't believe that any American president will ever launch a
surprise attack on the Soviet Union. So, this is a problem that
has been dealt with in previous arms control negotiations and I
don't say we should stop those negotiations, but I do not think
that they will deal with the central problem of our time, which
is the political change that we read about in newspapers
everyday.

MR. BIERBAUER: So, the -- the measured approach that --
that Mr. Bush seems to be taking, whether -- whether deliberate
or not, is nothing that -- that troubles you.

DR. KISSINGER: Not at all. I think that the approach of the
Bush administration, of Secretary Baker has been very prudent
and, in the long term, in the best interests of both the Soviet
Union and the United States.

MR. BIERBAUER: What about the two principals themselves,

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President Bush, Mr. Gorbachev sitting down together? Now over at the White House officials keep telling the press that we -- we love summits too much and that we shouldn't get so enamored of them. Would you agree with that?

DR. KISSINGER: Well, I think summits can be useful to create a -- a general understanding of the basic concepts on which base -- both countries operate and I would be -- wouldn't be surprised if there were not a summit meeting between President Bush and President Gorbachev within the next six to nine months. But until the lower level discussions at the -- the foreign ministers level have reached a certain point, I don't think we should rush into it.

MR. BIERBAUER: Well, is -- is time a factor? At -- At some point people start saying why don't they meet, why haven't they gotten together?

DR. KISSINGER: Oh, I don't think it should reach that point and my impression is that -- I would be surprised if some progress were not made towards a summit meeting at that Wyoming encounter between Secretary Baker and Foreign Minister Shevard-nadze.

MR. BIERBAUER: And -- And Mr. Gorbachev's position -- I wanted to ask you about Mr. Yeltsin's comments this week, that -- that Gorbachev himself only has six to twelve months.

DR. KISSINGER: Well, you know, Mr. Yeltsin is an interesting figure, but he does not seem to me the stablest visitor we

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have had from the Soviet Union. But if it is true that Gorbachev
has only six to twelve months, that is really his problem, not
our problem. We cannot be driven by the internal Soviet interne-
cine conflicts and I don't believe that whether or not there is a
summit will affect the survival of -- of Gorbachev, which is
driven by the Soviet domestic situation, how to relate centrali-
zation -- decentralization to the future of the nationalities,
what to do with these millions of communist functionaries that
will be without a job if the planning mechanism is reduced. Those
are the problems of Gorbachev.

MR. BIERBAUER: Dr. Kissinger, we need to take a break.
We'll be back with the wrap-up question in a moment.

(Commercial announcements.)

MR. BIERBAUER: Dr. Kissinger, the other thing that Mr.
Yeltsin was asking for was aid in investment in the Soviet Union.
You've got a lot of corporate clients; would you encourage them
or advise them to invest in the Soviet Union now?

DR. KISSINGER: I think that the conditions are -- are very
unsettled in the Soviet Union and if they do invest in the Soviet
Union, they should do so with the understanding that there will
be many alterations before things settle down, but there may be -
- there may be groups that for political reasons believe that one
should invest in the Soviet Union in order to create the maximum
ties between the West and the East, and that would be another
reason.

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MR. BIERBAUER: I need to -- to ask you another question.
The Wall Street Journal Friday has an article that concerns --
concerns you. It suggests that you mingled your analysis of
events in China with your business interests there. Would you
care to respond to the Wall Street Journal?

DR. KISSINGER: I have -- I was involved in the opening of
China. I have a record of 20 years of -- of writing and speaking
on China. For four years after I left government I did not do any
commercial activities. For six years I did not do any -- any
consulting activities. And for me, national government service
and serving my country has been my principal objective and to
assume that any commercial consideration could affect the -- my
judgments that I expressed publicly is an outrage and it is a
form of intimidation by which people who disagree with me are
trying to keep me from expressing my views.

MR. BIERBAUER: Alright. Dr. Kissinger, thank you very much
for being with us. Thank you for joining us on "NEWSMAKER
SATURDAY." In Washington, I'm Charles Bierbauer.

(End of broadcast.)

The Washington Times

MONDAY, SEPTEMBER 18, 1989

Kissinger
denies
conflict
of interest

FROM COMBINED DISPATCHES

Former Secretary of State Henry Kissinger insists his private business dealings in China do not affect his statements on U.S. foreign policy.

Mr. Kissinger's comment on Cable News Network's "Newsmaker Saturday" came in reaction to an article Friday in The Wall Street Journal dealing with his business interests in China.

"Serving my country has been my principal objective," he said, "and to assume that any commercial consideration could affect the judgments that I expressed publicly is an outrage and it is a form of intimidation by which people who disagree with me are trying to keep me from expressing my views."

The Journal reported Mr. Kissinger has extensive business interests in China, including the establishment of a $75 million fund to be raised from U.S. investors for joint ventures with the merchant banking arm of the Chinese government. In addition, his consulting firm, Kissinger Associates, counsels several businesses on how to conduct operations in China, the Journal reported.

A spokeswoman for ABC News said Friday that the network would not have used Mr. Kissinger as a paid expert on a China special in June had it known of his business ties there.

However, L. Paul Bremer, a Kissinger business associate, said there was no conflict of interest in Mr. Kissinger's appearance on the broadcast. On it, he was asked about possible U.S. sanctions against China for the violent crushing of student-led demonstrations in Beijing.

In his reply, the former secretary of state in the Ford and Nixon administrations stressed the importance of U.S. relations with the Beijing regime. "I wouldn't do any sanctions," he told anchor Peter Jennings.

Under his arrangement with ABC, which dates to 1982, Mr. Kissinger was paid as a consultant and gave ABC the right to interview him first on any of its broadcasts. includ-

ing "World News Tonight" and Ted Koppel's "Nightline," but only on breaking stories.

He wasn't paid for appearances as a guest on the shows when his interviews didn't concern breaking news, said ABC spokeswoman Elise Adde. And if ABC News had known of his business ties in China, she said, "we would not have had him on that broadcast" in June.

Mr. Kissinger's remarks on the June special were "not motivated by commercial concerns," said Mr. Bremer, a former ambassador and now a senior partner in Kissinger Associates.