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CNBC's Maria Bartiromo Interviews Lieutenant General Ray Odierno On "Closing Bell With Maria Bartiromo" (Transcript Included)

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DATE: March 27, 2007
NETWORK: CNBC
PROGRAM: "Closing Bell with Maria Bartiromo"
TIME: 4:30PM ET

The following is the unofficial transcript of a CNBC exclusive interview with Lieutenant General Ray Odierno on "Closing Bellwith Maria Bartiromo" today at 4:30PM ET. All references must be sourced to CNBC.

In the interview, Lieutenant General Odierno discusses a variety of topics including the Iraqis ability to handle their own security, the capability of the extremists, the U.S. troops needs, the capture of the British naval forces by the Iranians, oil prices and when he expects the U.S. troops to leave Iraq.

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Lieutenant General RAY ODIERNO: In what we're seeing so far, we've just begun a small search here and we are seeing some changes. We're seeing changes with the Iraqi people. We are trying to, first and foremost, protect the Iraqi people. And by doing that, we are really starting to make some progress as we move forward. But we still have a long way to go, and the key is to be able to sustain this over a very long period of time so the Iraqi people gain confidence in the ability of the Iraqi army, Iraqi police, to provide them security. But so far, so good.

BARTIROMO: So when would you expect the Iraqis to be able to handle their own security then?

Lt. Gen. ODIERNO: Well, it's unclear. Clearly, that they are playing a much major--much bigger role now than they ever have been. They are in charge of this security plan. They have moved over 9,000 soldiers from outside of Baghdad into Baghdad and they have over 26,000 soldiers, over 25,000 police now operating. So they have some capacity. The concern is their ability to sustain this over time. We have to continue to equip them, they have to continue to equip themselves, which is more important, and they have to continue to build their training programs. They now have officer and noncommissioned officer academies all over Iraq, so we have to allow those to continue to grow. I believe that within five to six to eight months, we'll be able to make a good assessment of where they are in building their capacity, and based on that, we'll be able to make a decision on how long this surge will go.

BARTIROMO: Back in February, when you were addressed the country, you said that you had a chance to tour various parts of Iraq. You said you learned and found evidence of certain preparations, whether it's suicide bombings or artillery. Can you characterize today how aggressive the extremists are and really, how capable they are today?

Lt. Gen. ODIERNO: Yeah. First off, I continue to go around the country every day. And first, let me tell you is we're being extremely aggressive all over the country, not only in Baghdad. We're seeing some significant progress out of Anbar province, where we have the Iraqi people themselves, the tribes, joining with the coalition forces to fight al-Qaeda, while in the past, they have had some safe havens and strongholds where they were able to generate these VBIDs and SVBIEDs that you've seen. They still are attempting to do that but we've uncovered many, many more than we have in the part. So far, in the last 30 days, we've uncovered over about 50 percent more explosive device factories, cache sites with VBIDs and IEDs, and these are because we're getting the assistance of the Iraqi people, who are rejecting al-Qaeda. They are still trying to find these safe havens around the country, so with the surge of coalition forces as well as the Iraqi security forces, we are very slowly going after these networks.

I'm somewhat encouraged, but again, they are still attempting to do very heinous acts such as the release of chlorine bombs, the first time that this country has been gassed since Saddam Hussein did it in the early '90s, and it shows the extent that these terrorists are willing to go to to hurt the Iraqi people.

BARTIROMO: What else do the troops need, including the additional troops? In March of 2003, the White House estimated that the Iraq war would cost $50 billion, and of course, today, we're closing in on 10 times that amount. The budget is hard to scrutinize because of the emergency funding, equipment repair, and of course, the additional troops. Tell us what the military on the ground needs now and are you expecting to see more money on our efforts?

Lt. Gen. ODIERNO: Well, it's clear that in order to maintain our effort, we will need the supplemental funding that is in front of the Congress today. That supplemental funding is to support the war effort and the surge effort throughout the rest of this year. It's clear that we'll need this. I'll allow those in Washington to answer the specific numbers but it's clear that we will need that support in order for us to continue on the campaign that we're attempting to execute. That will be something that will have to be worked out in Washington. If we do not get those dollars then we're going to have to relook our mission and we'll have to be given different guidance on what they expect us to accomplish because we will not be able to accomplish the mission we're currently under in terms of what we're trying to achieve with this surge of forces.

BARTIROMO: General Odierno, what about spending on improving the fighting capabilities of the Iraqi army? Of course, this has been a major objective of the US. How much progress has been made in terms of the fighting capabilities of the Iraqis in the last six months?

Lt. Gen. ODIERNO: Yeah. It's been fairly significant. We continue to have a great influx of equipment for the Iraqis as well as individuals that are joining the army and the police. But more importantly, now, we have the Iraqis investing their own money into their army and police. And so it's now just not the US providing the funds for this. Iraqis are now contributing significantly. And their percentage of that will continue to grow as we move into this further and further. So I would say that with the investment that the Iraqis are making, along with the final investments that we are making, we are seeing great increase in the capability of the Iraqi security forces. And that's why I believe is we're able to create some time by providing security and stability to the people of Iraq, that over time, that they will be able to have the capacity to fund their own army and their own police force in such a way that they will be able to sustain their own security over the long period of time.

BARTIROMO: General, what light can you shed on the capture of the British naval forces by the Iranians? How dangerous is this hostile--hostage situation?

Lt. Gen. ODIERNO: Well, it's a bit out of our lane. I mean, it happened outside of my area of responsibility. But it's something that's always concerning when you have another country take hostage 15 military individuals that we believe were in international waters. There's some work that still has to be done, so that is, in fact, concerning.

It's also concerning that we're seen that Iran is involved in providing money and weapons and training to extremists here in Iraq. And so they're clearly trying to play a role here in influencing what goes on here in Iraq. I think it's important that we understand that. I think that it's important that we deal with it inside of Iraq to make sure that they know they cannot operate freely inside of Iraq, and that's the strategy that we've been following.

BARTIROMO: Does the surge plan, the additional troops, have vulnerability as a result of this latest twist in Iran?

Lt. Gen. ODIERNO: Well, again, I think--I think the surge is really aimed at us being successful here in Iraq. And I think what that does is that enables us to provide security for the Iraqi people. I think the most important thing for us is to make sure that through Iranian influence, we have to make sure that they don't try to interfere with this surge and don't try to increase the level of violence here in Iraq as we continue to surge forces into Iraq.

BARTIROMO: Do you think that this capture, do you perceive this as a result of basically additional willingness by Iran to challenge the American and British forces?

Lt. Gen. ODIERNO: No. It's unknown. I really don't know the reasoning behind it. I'm not willing to comment on that. I really don't know what precipitated this and we'll have to figure that out as we move forward. It's unknown at this time.

BARTIROMO: Well, what is the talk on the ground concerning Iran?

Lt. Gen. ODIERNO: Well, again, what we're concerned about here is the influence and interference that they have in Iraq, and the fact that we know that they're supplying weapons, money and some training. And we want that to stop and we want to interdict that as they come into Iraq. And that's really what I'm focused on is that piece of that, that we can't allow them to continue to interfere with funds and weapons here in Iraq.

BARTIROMO: Just prior to the invasion, General, oil prices were at $30 a barrel. During this subsequent three years, of course, the price of oil has doubled. Let me ask you your thoughts on this. Some people attribute it to demand out of China and elsewhere, and others believe it's because of a disappointment of oil flow out of Iraq, and of course, because of worries of disruption as a result of this war. Do you believe this war is keeping oil prices elevated?

Lt. Gen. ODIERNO: It's hard to say. I'm not an expert in that area. I don't know. What I do know is Iraqi production has now been fairly even over the last couple of years. I think what I would say is as they continue to grow as now an elected government, that I believe the potential for their oil exports to grow is significant, but it's going to take some time. But I don't think this has affected at all--Iraq specifically has affected the oil prices in terms of Iraq's production. I think their production levels have been somewhat even here for the last couple of years. And the hope is that in the future, they should be able to increase that as their government develops. But I'm really out of my lane on that one, so I won't comment any further.

BARTIROMO: General, what's your gut? Realistically speaking, when do you and your troops believe that you'll actually be leaving there?

Lt. Gen. ODIERNO: Well, I don't know. I don't know. I think it'll take some time. I think the real issue is when we'll be able to reduce the size of the force once we begin the surge. But I need to get the full surge on the ground first before I can make an assessment of what I think we'll be able to reduce from the initial surge. And so it's going to be a few months yet before I can really assess and make a recommendation to General Patraeus and the leaders back in Washington of when we think we'll be able to reduce this surge. So I've got to wait for it to get finished first, see what the effect is we're having on the ground and then make a recommendation.

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