Question: It looks like you're pretty close to a deal for the U.S. on 22 percent for the regular budget, somewhere around 27 percent on peacekeeping -- still not exactly Helms-Biden -- and there's also the issue of legislative demand for a zero growth budget. My understanding is that early in the next year, you'll be asking for some more money to go over the zero growth level, you know by $30-$40 million, to cover Brahimi and some other things. Any sense as to what the likelihood is that Congress is going to support this, and what are you going to do precisely in the next couple of days? Are you going to go to Washington or visit these guys at home?

Ambassador Holbrooke: I think given the specificity of your question and your reporting this morning, you should give the briefing. First of all, I am extremely pleased to be able to stand here this morning on the day set a year ago as the final day of the Fifth Committee negotiations -- the budget committee negotiations -- to be able to report to you that the budget has been done. There is a little bit of clean-up left, but it's been done and we met our deadline. And it was a very near-run thing. Yesterday at this time, we had no idea if we were going to make it or not. That was not low-balling for the press, yesterday. We knew we were in American football terms -- fourth down and goal to go on the one with no time-outs left. We needed a touchdown. But we really didn't know if we'd get it or not. And we did.

It is absolutely true, as Colum Lynch has just said, that we are going to get 22 percent as our assessment of the regular budget, and on peacekeeping -- we don't have the exact figure yet because there are a few things to work out -- but it looks like it will start out in the 27s for 2001 and then move down over the next two years.

This is a tremendous achievement for the United Nations. For the first time since the original 1973 peacekeeping structure was put into place, there was a review of it. Changing it was not easy. Everybody had to make concessions; everybody had to make adjustments. But in the end, we got a deal. I'm not going to pretend that I think that every country was equally supportive and equally generous, but that's not at issue. What we have is reform. For the first time, many of the so-called developing countries -- I say so-called because some of them are very poor and aren't developing and others are fully developed but they like to group themselves into a single group in peacekeeping and that's where they have grouped themselves for the last 27 years -- for the first time, those countries in that group which have incomes above the world average income level -- the world income average level that we use at the U.N. is $4,797 per year -- and everyone argues about that, but that's the number the UN gives us -- for the first time countries above that level will start to give up part of their deep discounts. Some of those countries will give them all up -- Israel, Cyprus, Malta, Hungary, Slovenia -- other countries will give it all up right away. Other countries will give it up in stages -- some countries will give it all up and some will give part or most of it up. We had to take into account -- I'm talking now only about peacekeeping, bear in mind, everyone gets peacekeeping and regular budget confused -- we had to deal with individual circumstances, ranging from the fact that some countries felt the data was lagging behind recent declines in their economy to exchange rate anomalies to special cases. Some countries were very generous and other countries were less generous, but it came together in a new system with progressivity. A periodic review is built in. Remember we spent the first six months of this year simply trying to get enough countries to agree to review the thing. It took us six months to get it agreed it would be on the agenda. And then it took us another six months to agree to the decision which came at about 5:00 this morning.

On the regular budget, there was of course intense resistance to the fact that the U.S. wanted to go down three points from 25 to 22. We knew there would be resistance from the beginning. The resistance came from the countries that feared they would have to pick up the extra money. As the year drew to a close, the resistance became more and more intense. It just kept growing and growing. Countries that said early on, "We'll support you," didn't anymore when they said, to use the European Union's mantra, "We don't want to pay more so you can pay less."

Into the mix stepped Ted Turner six weeks ago. After I had briefed him and some of his associates on the problem, Ted Turner, with his characteristic combination of vision and energy and a profound understanding of the leveraging effects of a dramatic bequest, said if the $34 million difference that this amounts to is the make or break, I will contribute that money on a one-time-only basis to ease you through the transition.

Why was that so important? Well, as the year grew on, country after country passed its national budget based on the assumption that we'd still pay 25 percent. And so countries all over the world came to us and said, "You know, we've already budgeted the money and we can't pick up the extra." And we'd say, "It's only a million dollars." And they'd say, "Well we're not going to do it." So, with Ted Turner's offer in hand, in secret -- we agreed we wouldn't reveal the source of it -- Colum Lynch figured it out yesterday and I congratulate him on that -- we would have announced it this morning anyway because we're not going to pretend about it -- but with Ted Turner's extraordinary offer in hand, we began to talk to individual countries and then, two days ago, the group, and said, "Look, if you will take the U.S. assessment to 22 percent, effective January 1, 2001, we will in turn defer the consequences for a year." That put $34 million on the table which hadn't been there. Then came a brutal discussion of how to distribute the money.

Some countries who were very accommodating said, "We by rights of a pro-rata distribution, we would get a million or two million dollars, we'll kick it into the pot to the countries that need it more. Canada, for example, was very supportive of this process and was very helpful in doing that. So were several other key countries. Every time I single out one country I get into trouble from the others who say, "Why did you ignore me?" I only mention Canada because I had just been talking to Ambassador Heinbecker.

Other countries moved significantly. China is going to go from 0.995 of one percent in the regular budget to 1.55 percent of the regular budget and in peacekeeping they'll go up to about 1.94 percent. So China is going to go up 55 percent in the regular budget and I think over 60 percent in the peacekeeping budget. So this is a tremendous achievement.

Now in regard to zero nominal growth. That was part of separate legislation. We fulfilled that legislation. There is no current legislation on that issue. If the Brahimi report is implemented and to the level agreed upon by the Fifth Committee -- 95 additional slots -- if that dictates an increase in the next budget, the Administration, I hope and assume, will take that into account. But I stress that that was a separate issue.

Question: Ambassador, have you had any kind of assurance from the incoming Administration or from the Republicans in Congress that you can actually get through Congress the additional peacekeeping funding you're going to need?

Ambassador Holbrooke: What do you mean by peacekeeping funding?

Question: At the moment, U.S. legislation caps the U.S. contribution to peacekeeping at 25 percent and you've just said it's going to be 27 percent. So how are you going to make up legally that extra two percent?

Ambassador Holbrooke: Well, first of all, it's easier to deal with a two percent gap then a six percent gap, which is the current gap and which has led to the arrears problem. But beyond that I can't speak for the incoming Administration or for the new Congress. I have discussed the issue twice with Colin Powell. He is very understanding of it. He has said that he hoped the issue would be resolved as quickly as possible. I look forward to briefing him in more detail next week. He is an old friend of mine and I think he's going to be a great Secretary of State. He will have my full support. I look forward to talking to him about it. But I can't make any comments about how they're going to react.

As for the Congress, we've briefed all the relevant people in Congress. The Ted Turner offer was known to them in advance. It is completely consistent with U.S. law and U.N. regulations, provided it is done in the correct way which it will be. We've worked out all the details. Ted Turner sent Secretary Albright a letter this morning formally making the commitment. So we'll see. I'm hopeful and I look forward to talking to Senator Helms and Senator Biden about it directly. Neither of them was available this morning but their staffs were fully briefed and I have talked to both of them last week about it.

Question: Senator Biden when he was here last week suggested that he would be willing to try to get some kind of a change in the legislation if the peacekeeping didn't come down to 25 percent. Did that help you?

Ambassador Holbrooke: Yes, very much so.

Question: Presumably, then the E.U. is still pressing for some kind of conditionality to insure that the other arrears come through.

Ambassador Holbrooke: Oh that is a very important point. Of course, Senator Biden's comments from this microphone last week were helpful because they indicated to the members of the U.N. that if the U.N. helped the U.S. he would lead the effort for the U.S. to help the U.N. more. However, we will not and cannot accept anything in a U.N. General Assembly resolution that binds the United States on the basis of what you called "conditionality," and you're using one of the code words in this building so you obviously know what I'm talking about. I'll just be very clear on this. That is against the Constitution and it is against the separation of powers and we cannot and will not accept it. And I think the membership understands that.

Question: What changed between yesterday and last night for the deal to be struck?

Ambassador Holbrooke: That's a very tough question because there were 30 or 40 different issues on the table, some of such mind-boggling technicality or mind-numbing complexity, that it is hard for me to quite answer. I think that Ted Turner's offer -- although I stress that the membership didn't know the source of it the way that you now do -- Ted Turner's offer provided us with the flexibility that he had intended it to. It was as I said earlier, an extraordinary demonstration of how to use philanthropic money for leveraging effect. This was not simply the case of a rich person giving money to build a building; it was money to change a situation.

The issues were incredibly complex. Do you use a three-year base period or a six-year base period for the economic data? Within, for example, the European Union -- which tried to have a unified position -- that issue cut both ways. Some countries were helped by three and some were helped by six. The middle point -- 4.5 -- I need to explain the 4.5. Four point five doesn't mean the economic data for four and a half years -- it means you take the six-year data and you take the three-year data and you average those. That again helped some and hurt others. A tremendous battle about it.

The question of whether newly-rich countries would give up their full discount divided the membership. Some volunteered; I mentioned them earlier. Others said no, we still want a little discount to show that we're not fully developed. There were some issues like the gradient and debt flows and debt stock that are really too complicated for me to try to explain even if I understood them.

But in the end what I think drove the process was that we were facing defeat. This would have been the first time in U.N. history that we didn't have a budget on time. And everyone had agreed for months reform was necessary. And everyone in the end cooperated. I need to note the Russian position here. The Russians voluntarily took a much higher amount of money as their responsibility in both peacekeeping and the regular budget than the economic statistics for their country dictated. So we note that too. And I already noted the Chinese. And I note Brazil and Argentina's efforts to find compromises that reflected their effort. And Turkey's decision to voluntarily start increasing. And Korea -- Korea is the country in the U.N. that faces the largest increase over time. So they asked to space it out over a number of years, which we thought was reasonable. There were many countries with special circumstances. But in the end everyone came together.

It was a very long and very tough week. And I commend everyone. I especially commend Ambassador Gert Rosenthal who ran the Fifth Committee. And on my own staff, Ambassador Hays, Ambassador Cunningham and Suzanne Nossel who have gone without sleep for several weeks. Joe Connor who came in and spent the whole night with us last night at the U.N. And a whole host of other people at the so-called experts level who never stopped working on this until they finally found numbers that worked so that everyone could accept them even if no one is entirely satisfied.

Question: Has General Powell been informed of this? Is he going to help you lobby Congress?

Ambassador Holbrooke: On the first part of the question, as I said earlier, yes, he has been informed. I talked to him twice this week and will see him next week. And on the second part of the question, I did not ask him to do that and he will speak for himself.

Question: Is he satisfied with the deal though?

Ambassador Holbrooke: You'll have to ask him. As I said yesterday, I'm not going to characterize my private conversations with him except to say that Secretary Albright and I have kept him informed and he said that he would like to see this issue resolved and I think that we can report to him that this mission has been accomplished.

Question: Can you explain the rationale behind the U.S. government accepting money from a private individual in budget negotiations? Was there any opposition to this?

Ambassador Holbrooke: It's perfectly legal, let me stress that, I'm not sure you heard my opening comments. The rationale? To get the deal to save the U.N. It was Ted Turner's offer which was contingent on success. He didn't just give the U.N. -- let me be clear on this -- Ted Turner didn't just give the U.N. $34 million. He said, "I will make available $34 million if those $34 million will make it possible for us to get the deal and reform the U.N." It was the most sophisticated use of philanthropic funds for a larger purpose that I can imagine. And I cannot imagine that anyone would question the value of it or the extraordinarily thoughtful -- I think visionary -- way that it happened. And I commend Ted enormously. I talked to him this morning. I thanked him on behalf of our Administration. I asked him if he would come to New York and allow us to thank him personally before we leave office. I am deeply moved by what he did. People give money all the time and I commend them for it but you have to go a long way to find a gift that made as much difference as this one. Don't you think? Really. Any other questions?

Thank you.