Moderated Discussion with Secretary Hagel at Beth El Synagogue

Press Conference

ENNETH FEINBERG: Thank you very much, Rabbi, and thank you for that -- for those introductory comments.

Now, you'll see I have no notes...

(LAUGHTER)

Now, there's a reason that I have no notes. This is a concentrated session with a very good friend and it's 45 minutes to try and delve into all the surface issues that bedevil the country.

And to have the secretary of defense here, even for 45 minutes and informal Q&A, to talk about a series of issues -- you don't need notes. Everybody knows what the issues are; but hearing it straight from the secretary -- very, very important.

I just want to say one thing about Chuck Hagel, and that is it's not by accident that we've invited secretary of defense here honoring the 50th anniversary of the death of President Kennedy.

Now, why do I say that? President Kennedy was a very big believer in public service and a commitment to public service -- to give back to the country.

I know of no public servant that has given more to this country than the secretary of defense -- both as a solider in Vietnam and his entire public service. It's fitting, it seems to me, that we have tonight, for a brief time, somebody who exemplifies, I think, what President Kennedy asked all of us to do -- and that is give back something to your country.

It doesn't matter that Secretary Hagel -- red state, blue state; republican, democrat; liberal conservative -- it all gets -- it all is subsumed by his sort of philosophy of public service.

And I'm very, very grateful that somebody who I've known for 35 years couldn't say no to me.

(LAUGHTER)

So, 45 minutes, the two of us; and then the rabbi is screening written questions for a few minutes and that's the evening; but it's an evening that I hope will enlighten us all on some of the key issues confronting the American people, Israel, the Middle East and other issues that I plan to raise.

So, with that very brief introduction, we start off with the obvious: the budget.

I read -- Mr. Secretary, I read in the newspaper -- Walter Pincus today wrote that the Defense Department budget will likely be proposed for 2015 around 530 billion, or something like that; if you project what the Bush administration would have ended up with, it's like 150 billion more.

Does the Defense Department -- in this era of mushrooming deficit, shrinking budgets -- does the -- do you feel that the Defense Department can be adequately funded to protect America here and abroad, and why?

SECRETARY OF DEFENSE CHUCK HAGEL: Ken, first, thank you.

Rabbi, thank you for having invited me tonight.

As Ken said, I am, and have been for many years incapable of saying no to him for...

(LAUGHTER)

For any reason on any basis. So, it's just like another lunch that we used to have every three weeks because he would guide me, counsel me, inform me -- especially with all the things I was doing wrong.

(LAUGHTER)

But that's a good friend, as -- as we all know.

I -- not unlike many of Ken Feinberg's admirers and friends -- he is a pretty unique individual and I know you all know that and I'm very proud to be here with him tonight.

As to your question, Ken, the first -- as the rabbi read and defined, my role -- my responsibilities as secretary of defense -- I would not advise the president of the United States on any budget that would be inadequate for defending the interests of this country.

The constitutional responsibilities, as you delineated those, in Title 10 of our U.S. military code for our uniformed military also makes it very clear they have a responsibility.

And it's particularly challenging to choose a staff who is both the president's chief military advisor as well as the secretary of defense advisor. They have a responsibility to ensure that the Defense Department has adequate resources to defend this country.

So, the short answer is the budget that the president will propose and I will testify to coming up here in a couple weeks, as well as Chairman Dempsey, chairing the Joint Chiefs of Staff, will be the budget that we can forcefully defend that will, in fact, protect the interests of this country.

MR. FEINBERG: What areas, Mr. Secretary -- what areas do you see post-sequester -- what areas do you see where the military has to tighten its belt in order to move forward?

I saw, for example, this almost symbolic one percent cut in certain veteran benefits that Congress enacted and now it's trying to cut back on. And yet, Senator McCain said, "It's nothing. It doesn't -- it ought to be more than that."

And I'm wondering what areas you think in this -- in this modern world of deficits and budget constraints, the military has no choice but to seek certain savings that, in the old days, might not have been necessary?

SEC. HAGEL: I'll address that question, but let me go back to reference something you said -- post-sequester -- sequester period.

I think most of you know what Ken's talking about -- the Budget Control Act of 2011 between Congress and the president put into effect certain budget limitations.

And those went into effect in last -- March of last year. And they are automatic, across the board cuts in every department in the federal -- in federal government.

I suspect -- and I wasn't part of that deal -- that no one really thought that was going to happen when the agreement was reached; but it did.

Now, that said, when you say post-sequestration world, well, not exactly. What we are living with here is as a result of a bipartisan budget agreement in December, which the president agreed to with the Congress and the president signed a law.

We have a period, this year, 2014; we're in this fiscal year of 2014. And then next year, fiscal 2015, which I will be presenting the president's budget on in a couple of weeks, there -- there are new numbers that are better in the way of money back than the sequestration numbers.

To give you an example, the Department of Defense is looking in the area of $40 billion cuts -- and then on an annual basis, $50 billion cuts a year over a 10 year period on sequestration.

The agreement that was reached in December changed that to lower those numbers to essentially about a $30 billion cut this year, and then 40-some next year, which is a buyback putting some money back in, which is obviously a DOD benefit.

But it gives us some budget certainty for two years. We were operating under continuing resolutions -- we didn't have a budget.

And so, to give us and all the departments of the government some certainty so you could plan -- like, all of you know about budgets. We didn't have that.

And so, it was even worse for us -- but every department was facing the same thing -- huge cuts, but also no budget -- uncertainty to plan for the future.

Now, in 2016, we go back to sequestration; so, we're not out of sequestration, because that is the law of the land right now. Except for this budget agreement reached in December gives us essentially a two-year reprieve with new numbers.

Now, that said, your bigger question -- when you look at history of our armed forces -- let's just go post-World War II.

When you had wars and you had large build-ups and you had different environments -- security environments -- different threats, different dynamics -- nothing, as we know, stays the same; the world's dynamics, society's a big dynamic, opportunities are a dynamic; threats are dynamic.

We are living at one of those times. We have come out of, a couple years ago, one long war -- Iraq, eight years. We are coming out of the longest war we've ever been in, in Afghanistan.

So, of course it's going to shift the priorities and the balance of forces and where you invest your money to be able to assure readiness for your forces, capability -- that's modernization, technologic edge -- and capacity -- be able to do the things the American people want to be assured that -- that we can do to protect the American people.

But the president needs to be confident. Our allies, and our adversaries, need to know that, as well -- both of them. And because the Congress is a partner in this, they need to be assured that we have.

And so, that's the kind of world we're living in in this kind of post-two-war world with new kinds of threats.

Just one example -- I mean, you can go onto another question -- but cyber; cyber warfare. I doubt there were many people 10 years ago that thought too much about cyber warfare.

We're at cyber warfare -- oh, there's cyber isn't there? Doesn't that kind of correspond with all these new technologies; so, what's the threat?

Well, cyber warfare is a significant threat to the security of our country or any organized society or nations because it has the risks for all the obvious reasons.

And it's particularly insidious because it is stealthy, it's unseen -- you can bring down literally an economy of a country -- wipe out an electric grid, or paralyze your banking system; you can go after computers on national security platforms with ships and planes.

You don't know where it's coming from. There's not one bullet fired and it is a very dangerous prospect.

So, my point, using that as an example, is that's a new kind of threat that's very real. So, we are adjusting, you know, our asset base, our technologic -- our technology and other special forces and operations -- intelligence, reconnaissance, surveillance.

We've always needed surveillance and reconnaissance and intelligence, but now it is a far more sophisticated game. Point being, to stop terrorist attacks before they happen, before they start, you need intelligence, you need surveillance, you need reconnaissance, you need assets that, 10 years ago, weren't the -- weren't -- weren't the same.

So, all that's shifting now, again -- we have to adapt to that -- to adjust to that. We've got to apply our resources to make sure we can complete our mission and the objectives.

And a big part of that is technology. That technological edge is something the United States of America has dominated in every field since World War II.

There are adversaries who are moving in different directions who are advancing with the emerging technologies which are threats to our security. So, we have to factor all that in, scope it out, and then adjust and apply resources that are required in order to meet those threats and prepare our institutions to defend this country from fugitives.

MR. FEINBERG: Now, the philosophy of the Defense Department -- what's your personal view, Mr. Secretary, of this notion that in a modern world, the military can be used in what we call nation-building; that the military's objectives -- the goal of our military, unlike World War II, World War I, Vietnam, even -- that in this modern world, the military has been given this additional responsibility of trying to build nations, reach the hearts and minds of people in foreign lands -- is this an appropriate function, or is this asking too much of our military serving abroad?

SEC. HAGEL: Ken, I think a couple points, to address your question.

One is your reference to this nation-building -- I think probably people would isolate on our efforts during the Iraq War and Afghanistan to assist in institutional building of those countries and build their capacities to govern, to protect themselves, defend themselves and support themselves.

It evolved into -- partly that it was -- I don't think the initial mission going -- going in -- in those two countries when we invaded Afghanistan in the fall of 2001 and went into Iraq in 2003, they were for different reasons, as we all know.

But I don't think they set out -- the intention was President Bush, in both cases to assign the Defense Department the mission of nation-building. That comported with the overall objective of stabilizing, securing and so on.

And it probably got beyond the initial mission, and I'm not going to go back and replay that. But I use that as somewhat of a reference point to fast-forward to where we are today.

What we are doing today, very consciously -- it's in the president's defense strategic guidance -- it's everything we're doing now, and I think it's the smartest value added to our investment of the department -- is that capacity.

Being -- we're not the United States of America true Department of Defense; there are other agencies -- USAID and so on who -- some of them -- our role is not to go into and nation-build.

But what we're doing is -- is assisting our partners and our allies as they build their capacity to defend themselves and be partners around the world -- if for no other reason so that the burden doesn't always fall back on us, the United States of America, which is the only great military power on Earth today, to continue to have to carry a load, which may be disproportionate than what we should be doing.

But to help our partners with their capacity -- that's in our interest; it's certainly in their interest. It certainly balances power structures in the world. And we're doing that.

I mean, you look at what we're doing in the Asia-Pacific; we're doing it in the Middle East; we're doing it everywhere. And how we have refocused our bases, and our rotational basing -- to give an example, is rotating marines in and out of Australia.

Now, Australia doesn't need capacity-building; but you look at those other nations in that area of Southeast Asia -- the ASEAN nations that we're doing some work with on allies and partnerships and so on and so on -- joint exercises with many of these -- these countries; we don't have permanent bases there.

We're not going to have permanent bases there. We don't want permanent bases there, because that also connotates something that's not in our interests, because it -- it does connotate a certain throwback to colonial days and so on.

There's a way we can accomplish all these by joint exercises and so on -- partnering. And that's really what we're doing in many ways.

That's forced presence, that's projected power, that's using -- in a smart way, and I'll give you one other example and we'll get out of this question and get to another one -- but -- but using all the instruments of our power; that's diplomatic, that's economic, that's trade, that's defense, social, exchanges, education -- all ways societies can communicate with each other.

Now, the example I'm going to use -- this is in today's Wall Street Journal, the Asian edition. There's an op-ed that Secretary of Commerce Penny Pritzker and I wrote together -- it's a joint-op-ed.

And it talks about how the Department of Commerce and the Department of Defense are partnering on certain areas to enhance our relationships, in particular in the Asia-Pacific -- so, that this is not a zero-sum game.

Security enhances stability. And nations cannot prosper unless they are stable -- unless they are secure.

And they won't trade with each other; their people have very little opportunities to develop themselves and educate themselves -- look for opportunities for the young people who live out there. So -- so, we can partner with them in doing different things different ways.

I'll give you one other example. I'm -- I've invited all the ASEAN defense ministers -- there are 10 members of the Association of Southeast Asian Nations -- to the first ever defense ministers meeting in Hawaii, first week in April.

And in addition to that component of our minister of defense meeting -- number of meetings, Secretary Pritzker is going to be involved on the commercial trade piece; we're going to bring in the USAID piece and -- into this, asking how can the United States help and be partners with and use some of our opportunity institutions to partner with and work with our -- our allies to do things that are joint -- building the, helping build their economy; good for us, good for them; security, stability.

So, a lot of different ways we can do things. But the times demands -- again, this is a different world. We all know -- this is 2014; this is not even 2000; this isn't 2005.

And so, as leaders of institutions or leaders of our country in dealing with capacities, we have to be creative in how we use resources and how we use the taxpayers' money -- how we employ that for -- for our benefit, certainly.

But let's be smart -- let's use smart ways for wise investments.

MR. FEINBERG: You talk about capacity-building. I know no area of the world where I am more pessimistic, and frankly, perplexed than the Middle East -- and the Greater Middle East region.

When I pick up the newspaper each day, I don't know what to make of what's going on in Egypt, Syria, Libya, Iran, Iraq. It's seeing Israel -- it seems that every day, there's another gloss, another slant.

There was a period there in the -- in recent editions where if what you read is true, you were talking more with General Sisi every day than anybody else in the administration.

And what do you make of the Middle East, in terms of capacity? We know our number one ally there, of course, Israel -- you know, and you're a great proponent of that support for Israel -- but in terms of defense and our foreign policy not -- I don't want to encroach on Senator Kerry -- but in terms of defense...

SEC. HAGEL: It's Secretary Kerry, though...

MR. FEINBERG: Right.

(LAUGHTER)

In -- in terms -- in terms of defense, how do you see capacity-building going on in that region of the country where every day, you have to be surprised by the latest events?

SEC. HAGEL: Well, I don't think everybody brought breakfast...

(LAUGHTER)

But we could be at this for days. And a lot of smart people in this room have written many things and this is a subject that's -- it's constant, and should be.

But let me see if I can bring it down a little bit and figure -- coach and answer is the best that I can do.

You -- you just ticked off an inventory of countries where if you -- if you look at each of those countries -- you delve into each one of them, that each has its own different dynamics and challenges and issues.

But at the same time, it is all part of one region, as you had noted. So, you can't separate, as the United States of America -- you can't separate each of those countries and what's going on necessarily from the region, because these are regional issues.

And Syria's a good example -- what's -- what started in Syria has bled over to Jordan, Lebanon; obviously it continues to be a threat for Israel. Iraq -- a lot of Iraq's problems in the western part of Iraq are because of what's going on in Syria; you've got -- you've got Turkey.

So, that's just one example. So, you've got the religious dynamic of sectarian war that have streams throughout these countries. You've got other factors in these areas; so, that's first.

Second, then -- well, what do you do about it? What -- we'll start with Israel, and I want to kind of go around, very quickly, Egypt and some others.

If you -- if you step back for a moment and you see where I just talked with him today -- Secretary Kerry; what Kerry has going on here -- the Israeli-Palestinian issue that he's working on very diligently, Syria -- Geneva II -- Syria, these chemical weapons on Iran, P5-plus-1.

On a good day, just take one of those; but these are four different tracks. Now, I don't believe that you can disconnect, necessarily, each of those from the other. There is some overlap in some way in all of them -- in some way.

Not one of those missions' efforts is going to solve problems in the Middle East; not one of those is going to bring peace to the Middle East.

But if there's enough progress made to get these areas on some higher ground to get us to the next stage of -- for example, on the framework issues on the Iranian issue, P5-plus-1 -- that's a framework; that's a six-month framework to try to get to the negotiations and there are -- there are very clear dynamics laid out -- expectations laid out -- and things that have to be accomplished in six months; and if they -- if they're not, then that deal's over.

And I use that specifically to kind of just remind everybody -- these things don't go on and on and on and on, either. Now, let me -- let me get back to a couple points, see if I can knit this together, maybe, a little bit.

You mentioned Egypt. I've probably spoken to Field Marshall Al-Sisi -- I don't know -- 35 times. And I probably have spoken to him more than anyone else in the administration -- that doesn't mean that Secretary Kerry doesn't or others or ambassadors.

But I'd mentioned earlier, nations use older instruments of power. And it happens that the Defense Department -- the military-to-military relationships -- in some situations, just because it's what it is -- security, and security is a fundamental -- our military-to-military relationships with Egypt have been pretty good over the years; partly because of Camp David, of course; the peace treaty with Israel.

And that's actually holding quite well. I speak with Israeli Defense Minister Ya'alon on a regular basis, just so I'm -- a couple weeks ago -- and I spent some time with him.

So, I mean, we keep our arms around all this. But the military-to-military relationships sometimes can bridge some differences. Now -- now, that should never, ever get out in front of the principles of a nation.

We are a country -- the United States of America; Israel -- functioning democracies who believe in liberal rights; believe in freedom.

And so, what you try to do using those different instruments and relationships is try to encourage a nation like Egypt as they go forward now into elections, as they have just finished referendum on new constitution, with whatever influence that you have, to move in the direction that they refer to it an outright roadmap for inclusive freedoms, democracy, imperfect problems, issues.

But -- but -- but then you say, well, what's the alternative? Well, the alternative is just to stop any engagement. Well, I'm not sure, for example, in that case, that actually is beneficial to Israel, except maybe (inaudible).

I don't think it's particularly beneficial to anybody just to try to -- just cut off everything with -- with no opportunity or influence. Sometimes, that is probably the only alternative you have.

So, what we were trying to do is work all these different problems and issues, to some extent, on individual basis; but also, with a regional understanding that these are scoped out in -- in the entire fabric and they are all -- they're all woven in that -- that fabric.

And recognizing one last thing -- and I'll end this way -- that each country, each society, each culture, each history, each religion has to be respected. And nations have to have that kind of stability recognizing the -- you're talking about terrorists.

That's the -- that's obviously an insidious, vile threat to any organized society, because they don't believe in anything, other than destruction and their own -- their own needs.

So, you try to work in the independence of each country's culture into what you're trying to do to assist -- and USAID, State Department diplomacy -- same things I talked about in Asia-Pacific; you use all those thing.

So, you know, it is complicated. It's working. But -- but you can't retreat from it; you -- you got to be smart; you have to be wise.

You have to manage it. You have to manage through storms. And -- and we do know, through history, when you become isolationists, if you, you know, turn your back on -- well, that's their problem, not ours -- there are consequences. There are big-time consequences, which we saw in the first half of the 20th century pretty clearly; and so, we don't have that option.

MR. FEINBERG: What, instead -- you talk about a constantly changing Middle East -- and it does seem to be daily changing.

But to what extent do defense cooperation on sales, defense interaction with the generals and the government in Egypt, the Saudis -- to what extent is defense -- upon -- not farm policy as such, but defense upon cooperation with certain Arab states -- and of course the Israel, but certain Arab states -- to what extent is that an important lever and a vehicle for promoting the long-term -- believe it or not, I guess I'd say the long-term peace in the Middle East?

How does the Defense Department's relationship with generals in Egypt or the -- the royal family in Saudi Arabia -- how does that promote Israel and the region's view that it is an important step that will hopefully be approved?

SEC. HAGEL: Well, I'll give you an example. The second trip -- foreign trip I took as secretary of defense was to the Middle East -- Israel first. My first trip was to Afghanistan. Soon after, I was starting by air.

And just weeks later, I took a week trip to the Middle East, starting in Israel -- went to Saudi Arabia, all the way around. And one of the objectives and missions that I had on that trip gets to your question -- was to finalize an arms package with Israel, because the United States has always reported absolutely, equivocally Israel's qualitative military edge in weapon technology; and we're committed to continuing to do that -- everyone knows that.

And for example, when I was in Israel during that trip, I announced that we were going to go forward with the V-22 Ospreys. So, that -- that was a big announcement.

Consulting with the prime minister of Egypt -- which he knew why I was there -- defense minister and all the senior security officials in Israel -- they knew I was then going on to Saudi Arabia and other countries; mainly in the Gulf, but I also -- and that was also to work through some arms deals with them.

And you ask, well, how is that in the interest of peace and stability or in particular, how does that help Israel?

Well, if the United States continued and continue to be part of the equation and everybody who knows what the deal is, then -- then I think -- and I think this has been the case -- for the American president has felt this way since 1948 -- Congress, many people -- that we have far better prospects and assisting Israel -- assisting peace and stability and helping stabilize that part of the world, you might say, well, it's not a joke in the Middle East today -- it's a mess.

Well, that's true. But if -- if the United States wasn't involved and didn't have some capacity to appear with other allies and I think -- I think not only would at least be far worse -- probably would've been a regional conservation or a complete regional war with very sophisticated weapons that -- this isn't 1967. This is a different kind of world now.

And we have more influence to help bring that together with hope and security and stability.

And so, it's like all of foreign policy -- it's like all of these tough decisions and the issues that you find. They are never idealistic options you have -- approaches.

You have to factor in national interest, you factor in allies' interest; you factor in where you think you have the best prospects to influence peace and stability and a better world. And I think that really is -- is the general answer, Ken, to your -- to your question.

MR. FEINBERG: Two more questions before we ask for the cards -- two more questions.

First, I'd love your military take on -- you hear a lot, in the United States and elsewhere, about the necessity of a military solution to Iran's nuclear capability. Do people really understand some of the logistical and practical problems that would have to be addressed before you could solve the Iranian problems with some sort of military striving?

I think it must bedevil all of you guys at the Pentagon even to come up with a military plan to be able to do something about that.

SEC. HAGEL: SEC. HAGEL: Well, first, you know the policy of this administration -- the same policy of the Bush administration; that Iran will not be allowed to develop the capacity for a nuclear weapon. So, that's -- that's the position of this administration; it was the position of the Bush administration -- that's unequivocal. That's stated -- it's clear.

Now, obviously, the United States considers all options. And President Obama has said -- I've said it, Secretary Kerry, has said it, Vice President Biden has said it, Bush administration's officials have said it -- we have to explore and prepare all options.

And where we are today, as the president has enunciated, I clearly support it -- if we can find a peaceful, smart way to accomplish that policy, isn't that smarter and better than a military solution?

Military solution and options are always part of the -- of any equation. And that's part of the role -- is fundamental as any role -- for the Department of Defense -- is to always have options for the president of the United States.

But he's got a lot of tools. He's got a lot of instruments to use and a lot of options to use.

MR. FEINBERG: Final question -- of all the -- I just wanted to leave the Middle East for a minute; and there may be some questions on that that we'll consider.

My final question of this part of the program -- of all the issues that I, as a citizen, saw that you would have to deal with in becoming secretary of defense, I must say, the one that I underestimated -- if you had said, "Ken, what do you think Secretary Hagel will have to deal with -- budgets and the Middle East and Iran and capacity-building?"

The one that I didn't see myself that would loom so large in the public mind is this whole sexual harassment, women in the military, gender discrimination, sexual abuse -- it is a -- it appears to be a huge problem. And did you see it coming and what do you -- what -- what have you done, or what are you doing, to try and deal with these allegations, which are just terrible?

SEC. HAGEL: Well, I think most Americans are aware enough to know that sexual assault in the military is an issue. And what I did -- though I didn't see some of these issues as I ascended into position -- now what we're doing -- it's an issue that I have taken on as secretary of defense, and I have taken that on personally.

Like any institution in life -- unless it starts at the top, the leader of any institution, you're not -- you're not going to get it solved and I'm not going to solve it. It has to be solved in the institution.

And every military leader, from Chairman Dempsey on down to the chief is absolutely committed to deal with this problem.

And I have for -- just to give you some examples of what we're doing and have been doing for months -- over the last few months, when this issue first hit, I started a whole new sexual prevention office.

And that office reports to my staff and my level at the secretary of defense's office. I meet once a week -- it's -- it's one of the things I have on my schedule weekly.

We have one hour. We go around the table -- the vice chiefs of staff are there; the secretaries are there; senior leadership of every service. We have the two-star billet -- two-star general leader of that office -- so, it's high enough up to get some attention.

We go around that table and I get a report on what's going on. I've issued, over the last few months, 16 new directives on victims' rights council -- victims never had council. Every victim that comes forward today is assigned an attorney -- never happened before.

There are a number of other things. We've got a tremendous amount that was never, ever done before.

We've not have been able to make the progress we've made so far -- I think it's been really significant -- without the chiefs, without the military leadership buying in. I -- I assure everyone that it had to be that way -- I went to the chiefs. I went to the uniformed military.

They're nervous too; they feel that they've let their people down, let their families down. And we've become transparent. We've opened everything up.

We have whole new reporting regimes now. We have new educational regimes, training regimes; it's subject matter in all the academies.

Everywhere there's posters, there's rescuers. It doesn't make any difference. All these things -- not one thing -- fixes the problem.

And it is a cultural kind of attitude that -- and we see it in society, too. The president, as many of you know, just formed a task force -- a sexual assault task force for college campuses. He announced it about a month ago.

So, it's not just in the military. We are products of society. Men and women who join the military are coming from society.

So, it's not a matter of somehow they get better or they become more evil or they become evil in the military. Our people are -- are Americans. It comes from all over America.

Now, that's not an excuse, by the way. We're an institution that holds itself to higher standards. We do that for a reason.

Now, if you're going to -- if you're going to hold yourself to a higher standard, you -- you better live it and you better comply with it.

We've got some other issues going on, too -- some ethics issues that I've taken control of -- setting up an ethics office at the secretary of defense's own office, so.

But, you know, again, there's only one way to deal with any issue and everybody in this audience knows it -- you take it on. You don't apologize for it; you take it on.

You admit it -- we've got a problem; we're going to fix it. But it has to get fixed in the institution. And it will get fixed in the institution.

We're now doing reports we've never had done before. I want to know everything that's going on. I meet once a month with junior enlisted alum for lunch; I see them all the time when I go out and I travel all over the country and I meet alum -- the junior officers; I meet with everybody.

And we talk about these things. Be honest with me -- I want to know what you think. What are we doing wrong, what are we doing right?

It's amazing -- the first two months when I started to a lot of these young enlisted men and women -- all services -- nobody else knew. One of the things that was consistent on sexual assault -- they'd say, "Well, Mr. Secretary, the so-called training we get -- everybody kind of laughs it off and everybody kind of sleeps through it. It's just not a priority."

It wasn't a priority for anybody. It's just -- if somebody asks you is that -- is sexual assault wrong, brother? Yeah, it's wrong -- but a lot of things are wrong. You can't fix a problem that way.

So, we're doing a lot of the right things -- the good things; the Congress has been helping us; the White House has been helping us. We've got a tremendous number of outside people in for advice on this -- but you got to manage it. You got to deal with it and that's what we're doing.

MR. FEINBERG: We have about 15 minutes, at the most, for questions. The rabbi has -- has some questions, but he has completely dropped the ball...

(LAUGHTER)

He's now walking up the aisle here.

Q: (OFF-MIC) Syria -- how fierce is the debate -- the military intervention you mentioned there?

MR. FEINBERG: The military debate over Syria.

SEC. HAGEL: Well, I'm not sure if there's any military debate about it.

I mean, if you're talking within DOD, our role is to provide the president with options. We continue to do that and we give the president our best and most honest advice.

I met with him today, for example; I have a weekly meeting him. I see him often aside from those meetings during the week. We have the necessary council meetings on all these big issues.

But on Syria, as I mentioned, two tracks -- we're looking now, is to meet the two. We're -- Secretary Kerry's put a lot of effort, as well as the chemical weapons track.

The president himself has talked about this. We're constantly searching to be smarter in how we do this with -- with partners. I -- I think the president believes -- I believe -- that there's got to be a political solution to this.

Humanitarian piece of this -- we would -- beyond doing anything anybody else is doing -- and that's not enough. That hasn't stopped it, obviously.

But in order to stop this and bring about some kind of arrangement in Syria -- because it's spread out, as I mentioned earlier, over all these countries -- it's going to have to be some kind of political solution some way. And that's -- that's what we're all about.

But the president knows he's got other options. He's asked for those options and we're prepared to do whatever he wants to do if he's -- if he wants to exercise any of those options.

MR. FEINBERG: A few questions from the audience -- and I'm trying to -- I have a few here. The rabbi screened a few, which is good, but he ...

(LAUGHTER)

A few questions that have been -- sort of different.

Mr. Secretary, saw the CBS excerpt last light regarding your reconnecting your African-American platoon comrade in Vietnam -- very moving. What a historical question -- what were race relations like in the military in Vietnam, especially after Martin Luther King's assassination?

SEC. HAGEL: They were terrible. I was in Vietnam in 1968. The reference to the CBS piece last night -- which I saw, which was a very nice -- nice piece -- it was about my brother Tom and my former commanding officer and our company.

My brother Tom and I served together in Vietnam in 1968. And 1968 -- most of you remember, just to go back to that time, was the worst year of Vietnam. We had over 16,000 dead Americans that year -- one year. It's hard to believe today -- that's what we had.

It's also the year that Bobby Kennedy was assassinated, Martin Luther King assassinated. There were race riots all over the United States. And that -- that spilled over into race relations in Vietnam in the Army. It was very, very bad.

This young African-American lieutenant from Chicago -- who by the way, had been drafted and went to OCS, became second lieutenant in Vietnam was my brother Tom and my company commander.

He did more to change the racial relation problem within our company and within the other companies than -- than anyone personally. Fair, tough, smart, disciplined and took it on personally; as I said in that interview last night, he would just go into these tents and on base camp, he'd say, "You're going to fix this. This doesn't stand because I'm your commanding officer."

He said that -- he said, "You'll deal with me, Jerome Johnson, personally." That was -- that was a pretty gutsy thing to do; pretty tough thing to do.

Just in that story, as my brother Tom and I for years had wondered whatever happened to Jerome Johnson, because we admired him so, so very much. And we really became like brothers -- Johnson and my brother Tom and me.

And when I was a United States senator, I tried to find him. But as secretary of defense, I can find anybody.

(LAUGHTER)

MR. FEINBERG: Mr. Secretary, do we still support U.S. bases in Europe, and what percent are they of the respective deficit defense budget?

SEC. HAGEL: Well, first of all, they're a very, very small percentage of the budget -- the deficit -- but because, for example, we closed 80 percent of our bases in Europe in the last few years.

And we still need bases. We still need operations because when you think about it, the problems in the world are not the United States.' The problems in the world are elsewhere.

And we need some bases so that we have got platforms and assets and forces that we can respond -- whether it's the Middle East or -- or whether it's North Africa, or wherever these problems are -- to protect our embassy.

So, you -- so, you need some. And we've done a tremendous job on this, I think, of closing these places down that we don't need, using the ones that we do need.

You know, the relationship we have in Korea, Japan -- I think most people know that the Japanese government, South Korean government not only let us use all those bases -- yes, we protect them, too; and so, it isn't just a one-way street. But they also add a lot of support, in terms of funding for those bases.

So, we're trying to get the right balance -- what we need -- we need for forward presence and for those forward operations. We need some bases strategically located, smart -- and we're doing that; but Europe -- we've closed about eighty percent."

MR. FEINBERG: I've got three more questions before we call it an evening. And this one -- this first of the three -- I guess falls into the direction of foreign policy. But you can put a defense gloss on it.

Could you explain why China doesn't take a more aggressive posture in tempering North Korea's nuclear ambitions?

SEC. HAGEL: I'm going to call Secretary Kerry on that one...

(LAUGHTER)

What the hell's wrong, John?

(LAUGHTER)

You were just there.

As you know, Secretary Kerry was just in China. As you all know, that was a rather significant part of the conversation.

I never tried to figure out orders of other countries or other people, but I think it's becoming clearer and clearer the Chinese -- that this very, very dangerous, unpredictable young leader in North Korea is capable of almost anything. And that is not in China's interest.

And so, I think we're making some progress -- not because we say so to the Chinese -- in country -- but it's clearly in China's interest to help us with -- with this problem. And they're going to have to do more. They can do more and I believe they will.

MR. FEINBERG: Question number two of three. Are we creating more terrorists than we are capturing and killing? A 2004 Defense Science Board study concluded that our counterterrorism strategy at that time was on balance making the problem worse.

Since then, we've added counterterrorism activity to Yemen, Somalia, Pakistan, Libya with pressure for more in Kenya, Syria and others. Are we creating more terrorists than we are capturing, or has our policy improved?

SEC. HAGEL: Well, it's a fundamentally important question. And it's one that we constantly ask ourselves.

Leon Panetta, Bob Gates -- for me, Don Rumsfeld before them; constantly had to ask that question. And what you're always doing -- you're always adapting and adjusting to counterterrorism tactics -- to first assure that you're focused on -- on the really bad people who are plotting to do very bad things to the United States and other countries surrounding it; but at the same time, be smart enough not to create more.

And how we do that -- we're -- you know, we're a lot smarter today than we were in 2004. You know, we all go back, just one moment, and think of what happened September 2001. That was, in Churchill's famous words, a jarring gong in the United States of America.

We had never, ever had anything quite like that before. We had Pearl Harbor -- that wasn't continental U.S.

But right -- right here, in Washington, New York, the Pentagon, Twin Towers -- the symbols of the great strength of America -- and it knocked us off balance. It knocked our country off balance.

So, we responded; we reacted. We made mistakes. You're going to make mistakes. And we've, I mean, corrected them -- a lot of those.

We've tried to adjust. We've tried to (inaudible). This is an imperfect world -- it's a dangerous world.

And so, you need counterterrorism -- if for no other reason than to break up terrorist plots to try to get the terrorists before they strike you -- New York or somewhere else. You -- you need them.

But how we do it -- we're a lot smarter today than we were. We've put a lot more focus -- as I mentioned earlier in the change of capabilities -- on intelligence and our capacity -- intelligence and surveillance, reconnaissance.

And we're going to partner -- we're -- really important to work with partners in all these countries.

And interestingly enough, if there -- if there's probably one thing that has done anything else since 2001 -- to bring together countries that usually weren't always of the same interests when we have big difference -- differences, in relation -- China -- and it's terrorism.

Terrorism has been a common denominator -- now, maybe for different reasons. Authoritarian leaders -- dictators -- they don't like terrorists.

Well, we're not authoritarian dictators; we don't like terrorists, either -- basically, for the same reasons, but for different political reasons, too.

And that has driven our -- our common interests in a way that very few things do; trade, commerce do -- trade motion does; those kind of things do, because it's good for everybody. It raises the standards of everybody.

And we don't have the blitz in all that -- what's fair and not fair and so on. The terrorists -- the threat of terrorism has probably brought more common interests to countries in the last 15 years than anything else.

MR. FEINBERG: And the last question that will close out the evening -- from a student in our audience.

SEC. HAGEL: Smartest person here.

(LAUGHTER)

MR. FEINBERG: And -- and it's something you did discuss briefly earlier. As hacking and cyber warfare have the capability of destroying the economy and much more and is currently largely untrackable, how does the U.S. government and the Defense Department plan to decrease the amount of hacking as the internet becomes more of a foundation in the economy and more important than in it has previously been? Thank you, a student.

(LAUGHTER)

SEC. HAGEL: Well, that very smart student who asked that very smart question -- I want them to give me an answer...

(LAUGHTER)

On this. Well, it is the essence of so much of our challenge, as everyone in this audience knows.

How do you do this? We're constantly working on this. We have the NSA, which has primary responsibility for this. We have the Cyber Command within DOD.

And I, the secretary of defense and one of the principal officers from NSA -- I was just recommended president of the new NSA year, and Admiral Rogers, who will replace, if the Senate so chooses, he will replace General Keith Alexander.

So, we have many institutions built to deal with these kinds of things. One of the biggest challenges we have is we have tremendous capacity in our government in NSA and DOD, Homeland Security -- and by the way, Homeland Security has the most significant responsibility by statute to deal with these things here in the United States.

We set up the Department of Homeland Security and rolled 22 agency departments together a few years ago. I was in the Senate at the time. That was a responsibility they had.

But -- but DOD has probably the most significant set of assets. But one of the complications we have is there's a line -- a thin line, and there should be -- between privacy -- the private sector versus government in our capability.

So, it isn't like one department communicating with another. You talk about private sector companies -- electric grids, individual rights. I know a lot of focus on -- on that issue with Snowden and so on.

We're -- we're constantly trying to work through these complex issues. But again, I go back to the point I made earlier about we have increased and will increase the budget -- increase in cyber capability as we have to. And the budget I present here in the a couple weeks will show that -- special operations is going to be seen.

But it's -- it's a tough, tough issue. This young student, wherever he or she is, is going to be dealing with this in their careers, because it isn't going to get solved by -- by one administration.

It's a constantly evolving -- as technology evolves and becomes more sophisticated and these emerging technologies -- for good, but also for -- people could use it for evil. That's not new; history of man.

But I prefer to think we are still in a world almost entirely of good people. That isn't blind; not clear-eyed. I have to be, as secretary of defense -- what's going on in the world.

But this is a pretty decent world, overall; and I don't think we should lose sight that we deal with all these sort of big issues. Thank you.

(APPLAUSE)

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