Ethical Leadership: A Conversation with Chuck Hagel

RITA HAUSER: Good evening. I'm Rita Hauser. I'm a member of the Council here. I know many of you. It's my pleasure to welcome you as well and to introduce my friend and my colleague, Chuck Hagel, who will be with us this evening.

It's too long to tell you everything about Chuck. I think you know he was the immediate past secretary of defense. He was the first enlisted man to serve in that august position and he was the first Vietnam vet to serve in that position.

On those two points, I would like to stress Chuck's great service to America: first in his business life, where he was founder of one of the cellular telephone companies; and, once he had made his small fortune, he decided to dedicate himself to public service. Chuck ran for office and was successfully elected, overwhelmingly, for two terms in the Senate from Nebraska, and he served on the Intelligence Committee and the Foreign Relations Committee and a host of other committees, and was a terrific, terrific senator.

He and I have been friends for a long time. I had the pleasure of serving with him under President Obama's Foreign Intelligence Board, where we worked on lots of questions with moral and ethical components, which you may be interested in asking him about, like targeted assassinations, drones, things of that sort, which now confront us as a nation.

His most important service, I think, as secretary of defense was his devotion to the rank and file. That was known and shown to everyone—his care for military families; he started the first serious study and action about sexual assault in the military, which is a big ongoing problem; and he has dealt with the human side of the department, as well as the obvious issues that a secretary of defense engages in.

He was a very active chair of the Vietnam Memorial Commission and a host of other such activities during his time in Washington. And indeed, way back when—I forget the exact years—he served as the president of the USO [United Service Organization]. So he has had a long and abiding interest in the welfare of our soldiers and sailors and veterans, and was of course a highly decorated wounded vet in Vietnam.

I could say a lot more about you. He's a great guy. He's a lot of fun. He is going to talk to you about whatever it is David asks about.

DAVID SPEEDIE: Thank you very much, Rita.

I'm David Speedie, director of the program on U.S. Global Engagement here at the Carnegie Council.

I want, obviously, first to join our good friend Rita Hauser in welcoming Secretary Hagel. It's a great honor, as well as a pleasure, to have you here, sir, as this overflow audience will attest.

DAVID SPEEDIE: Let's start with speaking of U.S. global engagement. In the election campaign of 2008 that brought President Obama to office, every candidate, including Senator McCain on the Republican side, was talking about "restoring America's moral authority," "reengaging with the world," and so on and so forth. Seven years on, in what the president describes as the fourth quarter of his presidency, how do you think we have done on that score, reengaging with the world?

CHUCK HAGEL: I think you begin with, as always you must, a clear understanding of the world that a president is dealing with. You began, in January of 2009, with the kind of problems that this president inherited, which I think are still today, and certainly were then, as significant as any president in the history of this country. I think you'd have to go back to probably the days of FDR, and certainly Lincoln, to really catalogue and inventory the kinds of issues that this president had to deal with when he came into office. I would start there, David.

This is true for every president. Every president inherits problems. But you ask for the job, you want the job—you get the problems.

If you begin in 2009, we were unwinding two unprecedented long wars, one the longest war we have ever been in, 13 years eventually of unprecedented two wars—America has never been at war that long.

Probably more significant than that, the unprecedented dynamic as to who fought those wars. America had never fought wars with an all-volunteer force. The consequences of that force and that dimension on our young men and women today is still severe. There is a manifestation of that clear across the board, whether our men and women are out of uniform or still in uniform, the stress that it has put these people under. You cannot take these young people, as smart and good and disciplined as they are—and they are—and send them back into combat situations five and six and sometimes seven tours at a time. Human beings are human beings.

I bring that out, too, because it gets to your question about engagement. This president is an individual who I served with in the Senate for four years, served on the Foreign Relations Committee with for four years, who has believed in engagement. But where it becomes even more complicated is, when you talk about a president reaching toward engagement, then there's the optic of what does the world think. Has America engaged more or less under this president? History will have to take some time to sort that out.

But the reason I started with the answers I did, not just the inventory of problems but with the two wars that we were coming out of—and, obviously, we are still in Afghanistan; we're back in Iraq—is those are important dimensions in answering your question.

Through one lens there is a view that, because we unwound and worked our way out of two wars, that that was less engagement. Well, the reality is for the two years I served as secretary of defense, up until February this year, that we're in more places today, our American military, than we have ever been in before. We either are more forward-deployed or have troops stationed in over 150 locations in the world.

Now, one of the standards that, unfortunately, the uninformed judge this by is: Well, we have less numbers than we've ever had and we have less numbers in the Army, and we'll bring those down based on where we were even prior to World War II. But, first of all, you can't compare a soldier's capability, capacity, training, weaponry of 1940 to an American soldier today of 2015. I mean they are universes apart on the training, the leadership, the capability, the quality, the weaponry, the sophistication.

So I think by any measurement that you approach engagement this country is still very, very much engaged.

I'll give you another real-life assessment of this. When I was secretary of defense for two years, I made six major trips to the Asia-Pacific area. When I say "major," at least 12, 13 days. As you all know, when you go that far you stay. I actually took more trips to the Asia-Pacific and spent more time than the secretary of state did.

I wasn't there to build up navies or air forces. What I was doing is, in confluence with President Obama's rebalancing and shifting of asset bases based on our interests through Asia-Pacific—and by the way, that rebalance, I often said, was not in any way a surrender or an abdication from any other part of the world. We're just as involved in other parts of the world as we've been for 30, 40 years.

But I use that example, Asia-Pacific, because what I was doing was engaging, helping build more capacity, more structure, more capability for our allies, building and developing stronger, and in some cases new, alliances.

For example, in Australia. Some people find this hard to believe because Australia has been such a tremendous ally of ours. Australians and Americans are truly in every way cousins. We all started as a bunch of horse thieves. But we now have a rotational presence in Australia for Marines. We've never ever had, other than World War II, any troops on Australian soil.

What we're doing in Singapore—with our littoral combat ships, a new port there, rotational—is we have been able to reengage the Philippines and use those bases again, when the Philippines ordered us out of there 20 years ago, not stationing troops.

So by any measurement you look at engagement, I think we are as engaged in the world today as we've ever been, certainly post-World War II. It doesn't mean we're back in wars or in different measurements of that. But I feel pretty comfortable where we are.

The last point I'd make goes back to the first point. The world is so much more complicated today. I don't have to tell anybody in this room. Every issue today is connected somehow—socially, economically, politically, militarily, security. Just look at the threat that we have seen not just emerge but move to a sophisticated level of terrorism since 9/11. In the words of Winston Churchill, 9/11 was truly one of those defining, jarring gongs in our history. It changed everything, and it is still changing everything. The sophistication, the social media, the ability for non-state actors now to play significantly dangerous roles—we really have never seen anything quite like that.

And then, all the other dynamics that are in play. We don't have any choice as a great power. We are the greatest power on earth. That doesn't mean we always will be. But we are the greatest power on earth not just because of our ability to develop economies and the richness and the flows, but because we are a nation of laws, first of all, and we can self-correct like no other nation in the world. That's why we have 27 amendments to the Constitution.

So a long answer to the question, but it's a complicated question, I think, and I wanted to at least broaden the dimension of engagement.

DAVID SPEEDIE: Rita, in her introduction, spoke of your basically career-long commitment to making ethical, morally-based decisions. You have been described at different times as an "ardent internationalist" and also a "courageous dissenter."

On this question of the use of American power, you said—and I think I'm quoting you directly—in the context of Guantanamo: "It's identifiable with right or wrong, a part of America that people in the world believe is a power, an empire, that pushes people around. We don't live up always to our commitment to multilateral institutions." You also added, somewhat perhaps ruefully, "I suspect I did not make everyone very happy with that comment."

CHUCK HAGEL: I did say it, and I believe it, and here's why I believe it. I start from the premise that every institution, every organization—and you can define it. One of my offices now is at Gallup and I am a special advisor to Gallup. Gallup just came up with its annual surveys of institutions yesterday. Again, the one institution in America that still if way up here [indicating], and everyone else is way down here, is the military.

What was dramatic in the announcement yesterday about the institutions is that organized religion continues to fall further and further down, as does organized education, the very foundational pillars of who America has been and who we are and what we have believed most in, probably cherished as much as anything, and actually held ourselves out as exceptional to the world. Those institutions have now found themselves as low as at any time in the history of polling in the confidence of the American people in the institutions.

Now, we're not going to throw away our institutions, because institutions are critical for no other reason than it is the structure that holds the society together. You need institutions. And in government you have to have governing institutions. That's the problem with the Middle East as much as the historical tribal/religious problems that are the undercurrents of it.

But to your question about my comments, I believe that in the modern history of man that one of the most deciding, defining, important decisions—and there were a series of them—made by world leaders was after World War II, when our world leaders built these great coalitions of common interest, these institutions: the United Nations, IMF [International Monetary Fund], World Bank; collective security, principal among them NATO; the General Agreement on Tariffs and Trade, which is now the WTO [World Trade Organization]. The world had never seen anything like that.

It was predicated on a common interest of nations, of people. When you really strip us all down, take the religious dimension out of us, democracy versus monarchy, so on and so on, and strip it all away, we are human beings. There are certain dimensions of every human being that we require. I have found in my travels all over the world—and I have been to probably 150 countries—I'm not an expert on any of it—but I don't care what your religion is or any part of what you think philosophically, most people I have ever met everywhere in the world—and I have been to all the continents—they still value their families; there are certain things that are endearing to them that transcend everything else.

Institutions are also imperfect. That's another dynamic that I think we tend to overlook sometimes. The United Nations can't fix every problem. NATO can't fix every problem.

Great debate raging in Congress now on the IMF—is it nothing but just a rich corporate bank that does no good, so on and so on and so on. I don't have any problem with those debates going on. I think debates need to be had all the time on institutions, because if you don't make and keep an institution relevant, then it doesn't do the job it is supposed to do.

I do think that in a world of 7 billion global citizens living in the global community underpinned by a global economy, these institutions are going to play more and more of a critical role in just trying to sort problems out. If you don't have those venues, if you don't have those forums, if you don't have those abilities, those stages, to be able to deal with these big problems, then what is the alternative to remedy or getting close to a remedy? I don't think any of the alternatives are very attractive.

Just as we are seeing, as we have over the last few years, in our Congress in Washington—and by the way, the Congress in that Gallup poll was at 8 percent approval; I think that tells you what you need to know—John McCain always says, "Yeah, that's their families, the 8 percent." [Laughter]

But we have come to a point where we are so dysfunctional that we are having a hard time governing ourselves. Now, that's just but one little look inside institutions, if we do not allow institutions to work and keep them fresh and renewed.

So yes, I am an internationalist, strong internationalist, always have been. I'm more of an internationalist probably today than I ever was, and I always was 100 percent behind it. We don't have any choice.

DAVID SPEEDIE: We will get to Congress in just a minute actually.

You mentioned the Middle East. This is another area where you have spoken out forcefully and with conscience, I think, over the years. You said at one point that to be forced to choose between a relationship with Israel and those with Arab Muslims, including Palestine, is "an irresponsible, dangerous, false choice."

I also want to read you something that appeared in an item of interest from a relatively new Israeli think tank, called Molad, which describes itself as "the center for the renewal of Israeli democracy." This came out at the time of your confirmation hearings for secretary of defense. I quote: "Chuck Hagel is responsible, knowledgeable, and courageous when it comes to Middle East policy. Presenting his independence and refusal to toe the radical right's party line as anti-Israel is demagoguery that serves neither the USA nor Israel."

How difficult has it been to speak out as you have done on perhaps the most emotional issue for U.S. foreign policy?

CHUCK HAGEL: When you are a member of a president's team, a member of his cabinet, and you are in an administration—some in this room have been at very high levels in administrations—Pen James, who put together the first Reagan cabinet, is sitting here, and also was a senior member in Nixon's White House; others in this room I know have served this country in high-level positions—your opinion is secondary to what the president's is in the end. Now, you can give the president your opinion privately at National Security Council meetings, but it is vastly, vastly different being secretary of defense versus being an independent senator. A United States senator essentially has no responsibilities. I say that as endearingly as I can. I mean we don't run anything. You keep your constituents happy enough to get reelected. But you take cabinet members, they run cabinet departments.

So the answer to your question is I always spoke very freely to the president at National Security Council meetings about my positions. But the president sets the course on all relationships. Regardless of what you think, if you want to stay in the cabinet, if you agree that that's the position, that's the position, and you state it as the position of the administration.

I never felt conflicted with that. For one thing, I think President Obama and I have a pretty similar view of a lot of things in the Middle East, especially our relationship with Israel. I used to say, when I would get hammered when I would speak up for the Palestinians or the Arabs, saying we ought to listen to them, that has nothing to do with whether I supported Israel or not. As I said during my confirmation hearing, you will never find in my 12 years in the Senate one vote I voted against Israel.

But not to have an opportunity to question a government's policies, there's something wrong with that. That's not a democracy. Because you question a government's policies doesn't mean you are anti-American. If I question the policies of the United States or any American, that doesn't mean I love this country less than anybody else. Same thing with any other country. If you question a leader's judgment, you question the policies of a government, that's different from questioning the people of a country.

I think it is important in democracies to get a full, fair, honest airing. I don't think any elected official should ever put themselves in a position to be held captive to another country's interest. I think you do a great disservice—in fact, you fail your own country—if you don't ask the questions you think need to be asked. Not to be critical—we've gone too far on that side in this country, I think, with the media and with Congress, and we are going to see it more and more in another year and a half when this country is going to have to go through presidential debates and so on. You do a great disservice to the country when you don't ask those tough questions. You need to bring them out. That's part of leadership.

DAVID SPEEDIE: On the Congress, obviously it goes without saying that the atmosphere seems to be almost venomously partisan at this point. Again, there are so many great quotes, it's easy to ask you questions, because all I have to do is quote you and ask for an elaboration.

But you put it really succinctly, and I think quite beautifully: "The problem with Washington is if you disagree with someone you have to dislike them too."

It hasn't always been that way, has it?

CHUCK HAGEL: No, it hasn't. I tried never, ever, ever to let any differences that I had with any of my colleagues ever get personal. Unfortunately, I think that has happened, for a lot of reasons.

When I got to the Senate in 1996, I had the great privilege and opportunity to serve with really giants, Democrats and Republicans. The ones that I admired most are now all gone from the Senate, which has really changed the Senate and the Congress.

All the World War II generation leaders are gone. The World War II generation leaders held it together in a way that now, as I reflect back daily, I see how important those World War II generation leaders were. They were always grounded by a higher responsibility to govern and to make things work.

Now, Ted Kennedy would be on the floor of the Senate at 11 o'clock at night raising holy hell. I rarely voted with Ted Kennedy. He and I became very good friends. I admired his passion, his belief. But he would walk off that Senate floor and he'd put his arm around whoever it was he was raising hell with, and they'd laugh, and he'd say: "Let's go have a drink. Let's figure this out. How are we going to make this work?"

This absolutism of our politics today is "you're always wrong and I'm always right." That has been bubbling and developing. Partly, it's also a result of now a segmented marketing option on cable television. You can find whatever TV/radio talk show fits you pretty well, whether it's Rush or it's O'Reilly or whether it's Rachel Maddow on the left. What that's done is it has polarized us, because we don't listen to each other, and you, just like robots, listen to Rachel or O'Reilly, and "you're damn right they're right—these are buffoons over here." They mock people that they don't agree with.

I didn't see that. That's not the way I was grounded when I got to the Senate. John Warner and John Chaffee, Moynihan, Kennedy, Byrd, Republicans and Democrats—Dole was coming out—they were just a different, different breed. I would always marvel in our Tuesday luncheons—each caucus has a Democrat and Republican luncheon—some of the younger senators would get up in the Republican caucus—it happened in the Democratic caucus too—and they'd start raising hell about some wild thing they wanted to do, and "let's show the president," or whatever they were going to do.

Ted Stevens or John Warner or one of these guys would listen. Then they'd get up at the end and say, "Now, we ought to just think about this a little bit. Now, do you really want to do that? Now, think about where all that's going to go." Everybody would calm down and the almost-crazy idea would get derailed.

That doesn't happen these days. The crazy ideas are the prominent ideas now, the ones that hold forth, because there is no leadership that is strong enough, in the sense—not that there aren't good people; there are good people in this business—but the respect of the World War II generation leader was significant. We don't have that same kind of thing today.

It's not anybody's fault who's there now. And you've got expectations now that drive things—the media technology. This breakdown in just good manners—our mothers and fathers always taught us about good manners. We don't listen to each other; we turn our transmitters on and our receivers off. As I said, this absolutism has really polarized everything and our people. The American people look at it and shake their heads and say, "My god!"

We'll come out of this, I really believe. I think we are defining a new world order. That's going on right now in the world. We will have a role in that. We can't dominate that, we can't dictate that, we can't control that, like we did after World War II. That's another problem.

I'll end with this point on your question. Most people alive today in America, the 320 million Americans, were born after World War II, the vast, vast majority.

I was born in 1946. My father had been in the South Pacific for two and a half years, so after the war was over he came home earlier than most, because the longer you stayed the earlier you got home. He got back in September of 1945. My parents were married on Valentine's Day 1946. Nine months later I was born. I've checked the nine months. You don't get into office—and I'm a citizen, I've got a birth certificate. [Laughter]

DAVID SPEEDIE: Your secret's safe with us.

CHUCK HAGEL: Thank you.

The point being all of us, the great majority of Americans alive today, grew up in a world where America dominated everything. There was no country on earth that was even in our universe.

Okay, the Soviets had nuclear parity. But they didn't have an economy like ours, they didn't have the innovation—they didn't have anything, quite frankly. Their military wasn't near as good as ours. They still don't have an NCO [non-commissioned officer] corps. And their nuclear parity was about right.

Now here's the point. It's confusing to most Americans that "Well, why can't we just figure out the Middle East? Why can't we just go over there and knock some heads around and figure this out? Let's get some people back on track here. What's happened to America? Our power has eroded. Our respect around the world has eroded."

Well, at the same time this is all going through everybody's minds in America, expectations, here is what's happening over there, everywhere else but America: The very thing we fought wars about and we have advocated, we have helped build—no country on the face of the earth has done as much as us to build democracies, to do everything we could to give people more freedom, more opportunities, more education, better economic possibilities, hope—that's all starting to happen. It's imperfect, sloppy, so on, but it's starting to happen. With that comes expectations from South Korea, from Japan, from every country in the world: "I don't need the Americans telling me what to do. I don't need the Americans looking over my shoulder." We're confused by this.

Therefore, the front cover of The Economist magazine this week comes out and says: "Who's losing the Middle East?" Well, wait a minute. Who's losing the Middle East? The Middle East was never in America's portfolio that I'm aware of. The colonial powers had that up until after World War II.

So you get all these wild accusations that the world is out of control, America has lost power, lost respect, we don't control anything anymore. Well, no, that's right.

But the world has been built in our image. And America surely doesn't like anybody telling us what to do. That's why we have America. Old King George had a little different approach to that.

So I throw all those dimensions out into the ether here, at least in my mind, that I think have perpetuated all this crazy talk out there and this irresponsible wild talk.

I was talking to a couple of congressmen flying in here today who were just coming back to their districts. We were talking about the trade legislation and what's going on, and ISIS [Islamic State of Iraq and Syria/the Levant, ISIL] of course. They were laughing. They had just been to a number of think tanks and all the experts. But, you know, it's interesting, all the experts who want to admire the problem by writing about it all the time, very few of them every come up with how do we fix it. Okay, you tell me how you fix it. Now, there are variations—"Well, let's put another 50,000 American troops in Iraq and we'll fix it." Well, that didn't work out too well.

The actual answers to these complicated problems are difficult to find. Everybody's got an opinion and everybody's got a criticism. That's okay. But help me, help the president, help the Congress, help the people who have responsibility. You come up and tell me how we can do it better.

When you've got complicated, combustible, interconnected problems that we've never seen before in a world of 7 billion people—demographers tell us we're going to get to 9 billion—when the pope issues an encyclical on climate change—I mean, you step back just for a moment and think of all that's going on out there and what the world is dealing with—California, what's going on out there with drought and water—that's pretty serious stuff, very serious. You can inventory about a dozen of these big defining dynamics in the world today—you can do a lot more than a dozen of them, but just take about a dozen—and that in itself starts to tell you the complications of the kind of world that we live in.

I'll end with this. With all that complication, I think it also represents the greatest capacity and potential to do more good for more people than the world has ever known. We have it within our grasp, the leading nations of the world, beginning with the United States—technology so much, health care—to do more for more people and to make a better world. That is possible. I believe it is absolutely possible.

So it's like my Grandpa Hagel's old green ledger book in his lumberyard in Ainsworth, Nebraska. I asked him one day back in the 1950s, "What is that book?" He says, "It's my ledger book." I said, "What is that?" He said, "It's pretty simple." My grandfather kept his own books, like all these guys did. He opened it up, and he had an asset column and a liability column. We all do in our own lives, and every corporation does, every institution does.

So we've got to review our green ledgers more often than we do, because there are assets, and offsetting assets especially, to every liability. If you've got a loan on a house or a car or whatever, you have a corresponding asset too with that. Now, how do you work that? So I'm very optimistic.

DAVID SPEEDIE: I'm delighted. [Laughter]

My only problem is we've covered so much ground and there is so much left to do. If anyone from the audience wants to ask about Russia or Iran or the troop withdrawal question for Iraq and what's happening there, please feel free to visit that.

QUESTION: Thank you so much for the presentation. My name is James Reinl. I'm a journalist with Al Jazeera.

You started by talking about the problems that President Obama inherited when he took office. It sort of begs the question about the problems that he will leave behind when he leaves office, because that's approaching now.

I guess the question I'm going to ask you is about the Islamic State. While it started out as an operation designed to degrade and destroy them, which you helped design, it is increasingly looking like it's a containment strategy and perhaps the president is trying to run out the clock and pass this problem on to his successor. Is that a problem, do you think?

CHUCK HAGEL: Well, first of all, I don't think the president's intention is to run out the clock and then leave it to his successor.

You're exactly right—I said it too—every president inherits problems. As far as I know, from my reading of history—I wasn't around for all of it, but I occasionally read—every president has inherited a bushel basket full of problems. Each successive president's problems become more and more complicated. I don't think anybody is surprised by that.

I often heard this president say that he always intended, wants to—and he would say this in regard to many different dimensions of policy—to leave his successor with as few problems as he possibly could.

And by the way, I don't doubt any president feels that. I think every president wants to leave his successor with a lot of these things cleaned up and with a new balance sheet. But it's impossible to do.

And obviously, there's a legacy issue. I get all that. But I never saw this president in all the times I was with him in pretty close, private ways ever even imply or hint or kind of skirt around something or do the least he should do just so he can run a clock out.

These are difficult problems. ISIS didn't just appear. There's a historical dimension to ISIS. How did all of this happen? Where did they come from? What was the genesis? What were the genetics of this?

I think we all know enough about that part of the world, that it is a complicated part of the world on a good day—the history of that part of the world, the traditions, the religion, the ethnicity, the tribalism. Go back to 1923, when the British and the French arbitrarily just carved up the Middle East; the fall of the Ottoman Empire after World War I; then it further changed after the end of World War II—these are historical dimensions that are significant to what has happened in that part of the world, the monarchies, the dictatorships, the dynamics and the dimensions of governance that evolved from that. And by the way, I don't think you can assign blame to any president or prime minister. This was years and years in the making.

Now, you can go back, I think, each one of us in this room, and say, "Well, if we had not invaded Iraq in 2003, maybe that would have made a difference," or Libya. They all made a difference. There are consequences to every action and there are consequences to inaction.

ISIS is not going to get destroyed, fixed, resolved, however way you want to categorize it, by the military. The military is a part of it.

I mentioned The Economist magazine this week, their cover story. The opening editorial—and if you have not read it you should read it—talks about containment. It's an honest evaluation, I think. It's one of the best and most honest evaluations I've seen in any publication of the situation with ISIS in the Middle East.

One of the points that they make in this editorial in The Economist is the best the United States and our allies can hope for is a responsible containment of the problem because in the end—history is full of this; history is replete with this—in the end it must be the people of that region who define their future. We can't impose our will on countries. We tried that in Iraq, quite frankly. We went in and destroyed the Baathist party, we destroyed their military, we destroyed all their governing institutions, and they had to rebuild. Well, they can't rebuild, nor do they want to rebuild, in the likeness of America or any other country.

"Containment" is a bad word. I know that. Politicians are afraid of it, they shake and break out in hives on containment. But it's a realistic term, because the alternative to that is you just let things go or you go to war.

If I've helped answer your question at all in its different dimensions—I know that it's not as crisp and precise as you'd like, but I don't think this is a crisp, precise problem. I think this is a damn difficult, complicated problem. And you're right, the next president of the United States will be dealing with this, that's exactly right, and maybe the next president will be dealing with this.

QUESTION: I am Tyler Beebe.

In your view, do you think we are dealing effectively and should we be dealing more forcefully with (a) the Chinese in the South and East China Sea and (b) with Vladimir Putin in Ukraine and the Russians near or abroad?

CHUCK HAGEL: I'm going to give you a general answer to that right up front because I know we've got other questions here too.

But I have said often that the one relationship the United States has to get right as we get deeper and deeper into this new century is the China relationship. This is going to continue to be a complicated relationship, for the reasons you all know.

I am not one who believes that China is the emerging dominant, great power of the 21st century, that everyone will cower in the wake of the big dragon. It is a great power. It will continue to be a great power for all the reasons we know. China has immense problems, internal problems—immense. I talked about balancing your books. Come on! There is no transparency in that place. What they have done to their country in the last 50 years—the environment, there's no rule of law, there's no incentive for innovation, there's corruption at the highest and lowest levels, and so on. That's my point about the little green book—assets and liabilities.

But here's what you don't want, in my opinion, in the United States—fundamentally, every president has to be careful with this—don't let the small problems become big problems. Don't let the big issues get out of control.

We have differences with China. I dealt directly with the Chinese. I was in China for eight days last year. I had meetings with Xi and all of them and spoke rather plainly about the East China Sea and South China Sea. This has to be handled smartly, but it also is fundamentally an issue where the Chinese or any other potential competitor—and they are a competitor, or certainly a potential adversary—has to recognize the strength of America.

The country only has one real fundamental strength, and that's the economic strength. Now, fortunately, America has something stronger than that—and most Western democracies do—that we are a nation of laws. So people aren't trying to get out of the United States to go live in China or anywhere else in the world. People are trying to get into the United States and out of China and everywhere else in the world. That tells you something.

But strength, our economy—because you can't have a strong military or a strong anything without a strong economy. We know that. Look what happened to the Soviets.

So my point is we have to be wise in how we handle the Chinese on these issues.

The other part of this is allies. I mentioned I had been in the Asia-Pacific six times in two years. I told you what I was doing over there. I spent a lot of time with those leaders—strengthen our allies so that they have confidence in what we're doing. We give them more capacity to deal with it themselves.

China is a huge, monolithic country that they all have to live with. We're 5,000 miles away. We're a Pacific power, yes. But something you said earlier about you cannot put countries in a position with this simplistic qualifier "you're either with us or you're against us; you're either for us or you're against us." Oh boy! We might be a little surprised. You start talking about that, when you start telling people that, especially when it comes to China in that part of the world—they don't trust China, they may not like China, they have had to live with them them for centuries, but they're pretty clever operators in trade and all the rest.

So don't let the big things—East China Sea, South China Sea—get out of control. We'll handle it. We are handling it. But the Chinese have got to know we're going to have our military assets in there. We do. Again, what I was doing in the last two years—building up those rotational bases in Singapore, Australia, the Philippines, having our capacity to have our strength there so that it reassures our allies.

But the economic strength, what the president is trying to get through the Congress now on the trade issue, is a huge part of that. If that would fail, that would be one of the great disasters of our time, because that's part of dealing with China too.

I think Russia—let me put it this way—I think Putin is driving Russia into a ditch. He is isolating Russia. He is doing great damage to Russia. This eventually will come out.

But let's not let things get out of hand here where we get ourselves into a situation where essentially it's a showdown. We don't need to do that.

It isn't a matter of waiting him out. You have to respond. We are. I think it's the right thing. I suggested last year that we start stationing more of our equipment along that border. The Defense Department is now going to suggest that for NATO, having more of our NATO allies be reassured.

I started new exercises over there last year, more exercises than we had done since the middle of the Cold War, on our training, our battalions, in their training with the Poles, with the Baltic countries, the things that we need to do to reassure them and to make sure Putin understand where we are.

Article 5 of NATO is pretty clear. There are 28 nations in NATO and we all signed on to it. If one country is invaded, all 27 other countries in NATO will come to its rescue. I don't think Putin wants to cross that line.

But he is doing some things that don't make a lot of sense. Eventually, this is going to get to a point, I think, where it is going to really cause tremendous damage. You know the numbers today—the reserves are down, the ruble is down, inflation is high, unemployment; capital flight, nobody's going in there to invest. The sanctions have had a pretty significant impact.

Let me just mention one last point on that. I've talked about the interconnected world that we all know about being complicated. Well, if you start sanctioning across-the-board everything, then you start hitting American interests and allies' interests. We already are. By the way, most Europeans are paying a pretty high price for these sanctions, they're getting hit pretty hard by these, and they're staying with it.

We're not getting hit that hard because our trade with Russia is nothing and we are bountiful in energy. The Western Hemisphere—you talk about a golden era for the Western Hemisphere, it's the 21st century. There isn't any place else in the world like it.

QUESTION: Susan Gitelson.

Secretary, you have been so realistic and so candid. So let's toss you another one. How about Iran? We're coming up to the deadline in negotiations with Iran. What do you think will happen? And what are the implications, not only for nuclear weapons in Iran, but also for the balance of power in the Middle East, and Saudi Arabia, other countries—a whole history that you know very well—that could complicate matters even more?

CHUCK HAGEL: You just identified, I think, as everyone in the room knows, one of the real complicated, dangerous, combustible, and I think defining, issues of our time, for all the reasons you mentioned. You catalogued a pretty good range of the dimensions, dynamics, and consequences of the Iranian puzzle.

First, I think the odds are probably in favor of an agreement. It may take some time beyond June 30. This president, President Obama, will not sign a bad agreement. He has said that. I know that. I'm convinced of that. I was, right up until a couple of months ago, right in the middle of these things. I know what the deal is. I know where the Iranians are. The Iranians are bargaining, like the Iranians always do. That's not a surprise. Whether we can make this work enough to get what we need out of it, and with our other five partners, we'll see.

The other thing is you have to always remember in deals that both sides have to get something out of the deal.

The third thing you always want to remember in deals—and, like everybody in this room, I've done a few deals, and I've made a lot of mistakes, and if I had some to do over, I'd do them over—is you always have to think about the long-term consequence of deals. You'll make a huge mistake if you think about the short term.

If we can get an agreement that makes some sense here, what we need out of it—don't worry about what the hell the Iranians want; worry about what we want, worry about what we need to get.

I think Kerry's points yesterday I happen to agree with, on let's not get hung up over "you lied to us 25 years ago." Well, the Iranians lied, of course they did.

But Ronald Reagan said something a long time ago, and he was exactly right then and he's even more right today—"trust but verify"—when he was doing the thing with Gorbachev. Now, you think about Reagan and Gorbachev in 1986, when Reagan said what he did. They actually talked about let's get rid of all nuclear weapons. Now, only Ronald Reagan could have said that without being laughed off the stage, because he was about as hardline a president as we'd had. But he said that. But, even then, people said, "Oh my god, you can't trust the Russians." Well, of course you can't trust the Russians, that's not the deal—"trust but verify."

The issue is on a deal how are you going to verify, how are you going to ensure that everything that you've agreed to is going to be carried out the way the deal in the agreement was made? How do you do that? Unfettered inspections at all times and you have access to those facilities. There are ways to do this. Maybe they can't get there.

Now, one component of all this too is not part of the deal, and that's the delivery capability of what the Iranians have, the missiles. They've got pretty sophisticated missiles.

But something else I learned over many years of experience in different things I've done is take one thing at a time. Always look forward, but don't try to get it all done in one deal, in one bite. Keep moving to a higher platform, to a higher ground, higher ground, higher ground, to get to the next big deals you've got to do.

I see this, yes, in itself as a huge thing if they can do it for the nuclear piece. But also it gets us to higher ground on the other pieces too. For example, Iran is the major state sponsor of terrorism in the Middle East and what they're involved in. Their tentacles are wrapped around everything.

You saw The Wall Street Journal today. Prime Minister Abadi of Iraq was just in Tehran, sitting down with the supreme leader, and he said—there was a big story in The Wall Street Journal about this—that "We need Iran in Iraq to defeat ISIS."

Iran probably has more influence in Iraq than anybody does. Well, that shouldn't come as a surprise. There are four Shia-dominated nations in the world—Iraq is one, Iran is one. Bad history too, but the bad history cuts more to the Iranian influence, as we are seeing. So that's a reality and we've got to understand that reality.

But again, I just repeat, when the Iraqi prime minister—where we're training Iraqi forces, we have over 3000 people there, the largest embassy the world is our embassy in Iraq—the Iraqi prime minister goes to Iran and he says to the ayatollah: "We need you in Iraq. We can't defeat ISIS without you." Well, you think about that. You talk about "these old times are a-changing." They are changing.

And the Shia militias in there, who are actually doing some pretty good work against ISIS, they were fighting us, they were some of our biggest problems when we were in Iraq. I mean the whole jumble and mix of this part of the world by that one illustration.

So consequences yes, complications yes. But keep your eye on the ball, get one thing at a time, keep moving to a higher level, a higher plane. The Iranians need some deals here too. They can't continue the way they're going. Eventually something is going to come unwound for them, if for no other reason than generational change always dictates everything—it's the history of man—and technology is now accelerating that generational change in every country in the world.

Think of this—just a last point. What happened over the last four years in the Middle East? All the magazines have all figured it out and they have their cover stories—the "Arab awakening" or "the reemergence," or whatever it is. Where did this start? This started with a Tunisian fruit vendor setting himself on fire. That's where it started. It wasn't about ideology. It wasn't about religion. It was about the humanity of what I was talking about earlier. He confided in friends and said, "I'm going to do this," knowing probably no one will ever notice; "maybe this will do something to jolt the government, my country, into allowing my son to have a better future, or some kind of future, not locked into a cycle of despair." That's how it started, and it just erupted from the Egyptian Revolution.

Does anybody in this room think that that would not have occurred if there had not been cellphones, people taking pictures of the brutality and what was going on in the streets, and they were texting back and forth, and they were being able to communicate and coordinate and organize different rallies at different times, and these pictures were then satellited out to news media around the world? All the technology is driving this too, plus the pent-up frustration that so many of those people had been living with.

The troubled parts of the world today are easily identifiable. Why are they easily identifiable? A lot of reasons, but one primary reason: they were the ones left behind after World War II. They didn't benefit from this new world order. The Middle East, certain parts of Africa are coming back up, North Korea—they were left behind. Most other parts of the world started to develop because of the world order that the United States led and we built after World War II.

So we have an opportunity, as I said earlier, to help build—not dictate it, but help build—another world order. But Iran will be a big part of that.

QUESTION: Hello, sir. My name is Ryan Torres. I'm a midshipman at the United States Merchant Marine Academy. On behalf of all the midshipmen here, I'd like to thank you for your service to the country in Vietnam, the Senate, and also as the secretary of defense.

My question—I know everybody has been asking about what is America's leadership—but going to ethical leadership, what was your kind of leadership style; what were your tactics; what was your personalized view on leadership from Vietnam all the way to being the top man in the military? Thank you, sir.

CHUCK HAGEL: First of all, thank you for what you do, all of you in this room. We're very proud of you guys. Thank you. [Applause]

My style, approach, is pretty fundamental, pretty simple. First, always be straight up. When I say that, that means with everybody around you—honest, open, transparent.

Involve everybody. I used to say when I'd go to different bases around the world—and I'd go back in the kitchens and I'd talk to the drivers—everybody's job in the military, every job in the military, is important, there is not one unimportant job, if for no other reason—and you guys understand this, and those who have been in the military do, but it transcends all institutions—if you have one weak link in that chain, you've got a weak chain.

Always respect everybody and listen carefully to everybody. I don't care how smart you think you are, you're not near as smart as you think you are, and you will be proven that over and over again. Know that you've got something to learn from everybody.

But I think really it's so important to bring everybody into the process. Everybody has a say. Everybody feels like they have a role. You let people manage, that's the other thing. That's a fundamental tie.

Pick good people, because everything starts with people. I don't care how fancy an institution is or how many degrees or any of that. I tell kids all the time when they can't get into a school—"Oh, I can't, I can't get into this fancy school"—I say, "That doesn't make any difference. It's what you do with it. It's what you do with your degree, wherever you go to school. That's up to you. That's not up to Yale or Harvard or Rice or anyplace else. It's you, my friend, you."

But a fundamental I've always found is you trust people. You pick good people, you trust them, let them do their job. Now, they're accountable, you hold them accountable, because we're all accountable. There's nobody not accountable in the world. We're all accountable to somebody, or a board.

As secretary of defense, people would say, "That's complicated." I said, "Well, it's the most complicated institution in the world. It's the largest enterprise in the world, the Defense Department, by any measurement." I said, "What was really complicated is that I had a board of directors of 535 people (100 senators and 435 House members), then I had a chairman of the board down at the other end, wasn't even in the same office as me or the board (the president)." So you talk about complications!

But hold people accountable, let them do their job, have confidence in them, listen to them, and treat people with respect. Those are fundamental. They're as old as probably anything. But they are tried, tested, proven, and you can never go wrong with them.

DAVID SPEEDIE: I'm very sorry to say that has to be the perfect note on which to end. The secretary's schedule is such that we had to finish precisely at 7:30.

CHUCK HAGEL: Could I do this? Can I, as we used to say in the Senate, take personal privilege here, because this gentleman has been standing there, and so has she. If you give me a very quick question, both of you, I'll give you very quick answers. I don't want you guys to walk away here tonight.

QUESTION: I'm Nicholas Arena. I'm a lawyer. I served in the Philippines in the Second World War.

CHUCK HAGEL: Thank you, sir, for your service.

QUESTIONER: Based on your experience in the executive branch, could you tell us what qualities a president should have, two or three important qualities? And, assuming you're not throwing your own hat in the ring, can you name—

CHUCK HAGEL: You don't see a hat, do you? [Laughter]

QUESTIONER: —can you name two or three people in this country, whether announced or unannounced at this point, that might make a good president?

CHUCK HAGEL: I'm going to give you a very short answer to all of your questions.

Character, courage, judgment, that's what you want in a president. That's what you want in every leader. That's what you look for—character, courage, judgment.

As to who's out there, hat in the ring, not in the ring, the American people will sort that out. I'll leave it to the good judgment of the American people.

QUESTION: Thank you, Mr. Secretary.

My question is that you just mentioned the countries in those areas don't trust China. So I wonder how do you like the Asian Infrastructure Investment Bank led by China?

CHUCK HAGEL: First of all, I don't think anyone should be surprised by that. Great power will reach out, as the Chinese are doing, and I think it was a very smart thing for the Chinese.

I think the United States, quite frankly, mishandled it. I don't think we should have handled it that way. Most of our allies went with the Chinese.

I said something earlier about don't let things get personal. Be smart. This is an economic infrastructure issue. This is in the interest of the people of Asia-Pacific. Now they'll have to sort out whether the terms are right or whether they like them.

I think the approach we took, to try to kill it, played right into the Chinese hands. I think it was diplomatically a dumb thing to do. I think it made no economic sense. Hell, we're the ones who invented market economies. So why are we pushing the Chinese back and saying, "You can't do that?"—"Jump in the pool. We need infrastructure, absolutely. You want to put some money into these places, so on and so on? Good."

DAVID SPEEDIE: I think that hardly any summary is needed here. I go back to my days as an English student and the line in Shakespeare from one of his weakest characters, Polonius, to his son: "To thine own self be true." I think that certainly is the case with you, sir. You have spoken with great candor and honesty and ethical judgment.

The last thing I want to say, to prove the individuality of this guest of ours, is that he was made, I believe, an admiral in the Nebraskan navy. [Laughter] Think that one through and please join me in thanking him.

CHUCK HAGEL: Thank you all very much.