"Building the Base" - an in-depth series of conversations with top entrepreneurs and leaders from tech, financial, industrial, and public sectors.
Our special guests are weighing in on a broad selection of topics such as: shaping our future national security industrial base, leadership in challenging times, experiences related to the intersection of business and national security, and personal anecdotes related to their positions of influence.
Building the base is hosted by our own BENS member Lauren Bedula who is the Managing Director and National Security Technology Practice Lead at Beacon Global Strategies, and BENS Distinguished Fellow, Jim "Hondo" Geurts who retired from performing the duties of the Under Secretary of the Navy and former Assistant Secretary of the Navy for Research, Development & Acquisition.
BENS Intro 00:00
The business executives for national security welcomes you to building the base here thought leaders and practitioners discuss how we can ensure our shared security and prosperity. They're shaping the future of the national security industrial base. Your hosts or Silicon Valley defense expert, Lauren Bedula, along with Ben's Distinguished Fellow and former head of acquisition for the Navy, Marines and special operators, Hondo Geurts.
Lauren Bedula 00:29
Welcome back to building the base. Lauren Bedula, here with my co host Hondo, Geurts. And we are so excited and honored to have Secretary Leon Panetta with us today. Secretary Panetta was the 23rd, United States Secretary of Defense, he was the CIA director, White House Chief of Staff served as the Director of the Office of Management and Budget and was a US representative for eight terms, I believe. So an incredible career of public service, I think there are probably no no others who have this long list of of a career. So thank you so much for joining us today. And I also like to point out that you served in the US Army as well, which is really incredible. And born in Monterey, California, and you're the son of Italian immigrants. So we're excited to get into your story. Thanks so much for joining us.
Sec. Panetta 01:18
Lauren Bedula 01:19
in your book worthy fights, you talk about how the challenges of protecting this nation safeguarding its economy, providing opportunity to its citizens and preserving its treasures have really been the mainstays of your life. Can you tell our listeners a little bit about your story? And what drove you to public service?
Sec. Panetta 01:38
Well, first of all, it's great to be with you, and to have this chance to talk about these issues and the things that are frankly, important to our country and to our future. I, you know, I've often said, as the son of Italian immigrants, I think, I've had a chance to live the American dream, I used to ask my, my father, why did he come all that distance with my mother to, to a strange land? I mean, they came from a poor area in Italy, Calabria, but they had the comfort of family and friends. And so I say, what, what made you pick up and come all of that distance to a new country? And I've never forgot his answer, which was that he says, your mother, and I believe that we could give our children a better life in this country, which is the American dream. And it's the dream that we want for our children, hopefully, for their children, to have a better life. And so I've often said, as the son of Italian immigrants, so I've kind of lived the American dream. And it was, in large measure, my parents always felt that this country had given them the opportunity to be able to, you know, to work hard, but to also succeed, and to help educate my brother and I, who were the first to go to college. But my, my parents would often say that it was important to give back to the country because what the country gave them. And that was an important incentive to get involved. I spent two years in the Army. And active duty get this is during the draft period, where I was working with people from across the country, from different parts of the country who are coming together to work on a mission to achieve a mission. And you know, what, what that meant for me was that was to see that you could bring together Americans from different parts of the country to come together on a common mission and work together, you know, giving back to the country. And then lastly, there was a young president who said Ask not what your country can do for you, what you can do for your country. And all of all of those experiences, I think, helped give me the incentive to be able to get into public service and really spend almost all of my life in one way or another giving back to the country.
Hondo Geurts 04:29
Secretary Panetta, it's good to be with you again, I worked for you. And almost a decade ago, in one of your one of your jobs and in your in your many different important positions you've seen kind of the industrial base and what's the power when we can link kind of national security and national prosperity together? And I think there's just growing sense we're doing a lot of work, looking at you know, how does the industrial base have to shift what do we need to do as a country to bring back maybe some of the capability we have what what's your view on where you think we need as a country to bring back capability to produce things and have the industrial base to be both strong and prosperous in the future?
Sec. Panetta 05:16
Well, I've always felt that this country cannot be a world leader. And I believe we have to be a world leader. Because if if the United States doesn't provide that leadership, very frankly, nobody else will. And because of our responsibility, as a world leader, I think it's very important that United States have not only the strongest military on the face of the earth, but that we also build strong diplomacy in the world as well. And I, I really believe that we cannot be the strongest military power on the face of the earth. Without having an industrial base in this country that supports what we're doing. There's no way that we can, we can do what we have to do, whether it's with regards to weapons or technology, or the kind of systems that we absolutely have to have, when we're trying to protect our national security. There's no way we can do this without having an industrial capability within our own country. That gives us what we need in order to be able to address these issues. We can't I mean, no, and look at it, this is a globalized world, I realized that. And there are going to be areas that you know, we'll get help from in a globalized world. But when it comes to a crisis in the future, we may not be able to depend on those kinds of resources. And for that reason, it's very important that we have that base in this country. I mean, we learned that in World War Two, we've learned that in every crisis, we've been a part of that if we don't have that industrial base, we simply are not going to be able to mobilize and prepare ourselves, or whatever enemy we're going to have to confront. So I think that is part and parcel of the strength that this country has when it comes to our national security,
Lauren Bedula 07:35
and core to the Ben's mission. And I was doing the math, it was 10 years ago, last month that you receive the Eisenhower award from business executives for national security. And you gave a speech that really got a lot of attention. You talked about the possibility of cyber Pearl Harbor. And here we are 10 years later, and with the most notable national security expert here on our show, can you tell our listeners your take on the challenges the world faces today?
Sec. Panetta 08:08
I was I said it then, and I say it today, again, that fiber is the battlefield of the present and the future. And we haven't, frankly paid a lot of attention to what's happening on that front. And part of it is I think we have a tendency to take cyber for granted. We all have iPhones, we all have our computers, we all kind of exist with it, but we don't. We don't really focus on it as something that could be a potential threat to our way of life and it can be what I came to recognize is that you can actually use a sophisticated virus and deploy it from a computer anyplace in the world. And you can use that virus to basically paralyzed another country. I saw it firsthand is director of the CIA because Iran deployed a sophisticated virus called the shamoon virus against Aramco oil in Saudi Arabia. And using that virus, they literally destroyed 30,000 computers, they shut down Aramco, well, you take that same kind of virus and deploy it against our, our systems in this country, our infrastructure, our security systems, our financial systems, our electric grid, our chemical systems, our water systems or transportation systems, and you could literally paralyze this country. and create that Pearl Harbor that I talked about. We've seen the reality of that we saw an out, you know, hacking that actually went after our infrastructure in this country, shut down oil supplies to the east coast. So we've seen it happen. But what I worry about is whether or not we really are fully aware of the threat that this constitutes and whether we're taking steps, not only to defend ourselves from that kind of cyber attack, but also to have the offensive capability to strike back when that happens. I mean, you know, we, we were the victims of a very bold cyber attack by Russia, going after our election systems, and it's happening today as we speak. And Russia never paid a price for that. I think it embolden Putin to do some of the things he did. So it really is important that not only do we develop the defense that we need to protect against it, but that we be willing to strike back so that others know that we can make them suffer the same way we can
Lauren Bedula 11:09
be on cyber, just to pull the thread a little more. What's keeping you up at night these days?
Sec. Panetta 11:16
Well, you know, I, I think we live at a time when we really are facing a number of what I call dangerous flashpoints. You know, as a kid I came up in, in World War Two as a young kid, and kind of understood what it meant to kind of fight, go to war with, with the enemies that we had. And then we confronted the Soviet Union, obviously, in the Cold War. So I've seen this country have to take on, you know, various adversaries. But we're living at a time when there are a lot of dangerous flashpoints. Almost any place, you look on the world. Obviously, we're facing the threat from Russia, and Putin. And that's playing out now, in Ukraine, where, you know, United States and our NATO allies, thank God have come together in a unified way to be able to support Ukraine and their courageous fighters to do everything they can to stop a Russian invasion. I mean, I imagine, you know, World War Two, I remember what one tyrant did, and taking advantage of that. And now, here we are, in the 21st century, and another tyrant, has basically invaded a sovereign democracy, and said that you don't have a right to be able to be a democracy. I mean, that's incredible. So that certainly is a huge danger point. And where we are, in effect, deciding in the Ukraine, what happens with democracy in the 21st century. It is a very pivotal war that we're fighting. Add to that China. I mean, we've just had President Xi, basically, define what total autocracy is all about. No freedoms, no rights, no ability to influence government, just nothing but him as emperor, and the Communist Party deciding what that country will do. I talk about autocracy. And the threat from China is real as well. And particularly with regards to Taiwan. So that's another area that I think is, is is a significant challenge for us. We're confronting North Korea, even as we speak, North Korea sending missiles into the air almost every day. Kim Jong Un is interested in kind of getting the attention of the world by being a bully. And that's what he's doing. But that's a threat. It's a threat to the Pacific region, it's a threat to the United States of America. Iran is a destabilized and a destabilizing country in the Middle East, and is one of those countries that also is close to developing a nuclear weapon. And so that remains another threat we have to confront. Add to that terrorism, which is still a threat. It's not over an 11 is not over. There are terrorist groups across the world, particularly now with Afghanistan being under the Taliban rule. They're providing a safe haven for terrorism again. And then you have various elements of terrorism, located in North Africa and in the Middle East and elsewhere that have one goal which is to attack United's dates an attack West. And then you have the cyber world that I just talked about. So you add all of that up. And we are confronting a huge number of danger threats. I mean, in the Middle East with failed states, those states are becoming breeding grounds for terrorism for the future. So no matter where you look, we are confronting different crises. Different autocrats, different tyrants, different threats. And it puts an even greater responsibility on the United States to develop our capabilities, so that we can respond to those kinds of threats.
Hondo Geurts 15:43
It's a it is certainly a complicated and challenging world out there. Another flight, I'm going to, I'm going to circle back a little bit to what I think your most interesting jobs must have been. That was director of OMB. And while being SecDef, and director of CIA, or are great titles, being the director of OMB is a powerful position. And at that time, you really pushed hard for this balanced budget, and trying to get a little hold of the deficit as what's your view of, you know, another Flashpoint to our economy and and other interest rates, going into maybe an economic cycle? What's your view on kind of the how economics are going to influence how we deal with all the threats, and maybe how we reshape our industrial base going, going forward?
Sec. Panetta 16:32
Well, obviously, it's critical. It's critical to our ability, not only to have a strong national defense, but to have a strong industrial base, that we have a strong economy in this country, we can't survive as a democracy without having a strong economy. So that plays a huge role. And my concern is that when we face challenges in our economy, it isn't enough just to turn to the Federal Reserve and say, It's your job to try to take care of this. What we need is a balanced approach to dealing with our economy, which means not only do we have a Federal Reserve policy, but we need to have a fiscal policy that also discipline disciplines, our spending and our approach to the budget. And when I was the OMB director, when I before that I was chairman of the House Budget Committee, we were working on efforts to try to reduce the deficit and ultimately move towards a balanced budget. And because there were leaders on both sides, Republicans and Democrats who are willing to confront that issue, and put everything on the table, we were able to pass a very significant budget deals to really one under Bush, President Bush and one under President Clinton, that literally put it put us on a track towards a balanced budget. And I had thought as OMB director at the time, I thought, once we get a balanced budget, there's no way we're going to go back to deficit spending. And I was the chump for thinking that because it only took a few years. And we were back in deficits. And now we're talking about a country that has a $31 trillion debt, largest debt in our history. And what really concerns me is that the budget process is in many ways broken. It's broken on Capitol Hill, neither the Republicans or Democrats really want to make serious decisions about what we do with regards to the budget, so they ignore it. And we wind up doing CTRs and continuing resolutions and not really making decisions about where we're going. And I think that's hurt our economy. I really do. I mean, I, I think the fact that we were able to balance the budget Center have really important signal to our economy, that we're willing to exercise fiscal discipline, and it created a booming economy in this country. And I think the fact that we that we are in this huge debt, especially now with growing interest rates, and the fact that it's going to consume huge amounts of resources for the future. I think in some ways, it's crippling our ability to have that strong economy we need.
Lauren Bedula 19:25
And a bit of a wake up call to I know, for the private sector, we've seen a shift in terms of trust and a post Snowden world, maybe hesitancy to work with the national security community. But we're seeing that that gap come together now, which is encouraging and something Ben's cares quite a bit about. Well, Secretary, you're known for working across the aisle and getting things done being really results oriented. Do you have any tips on how to work together and one of the things you said at the top I really liked coming together to achieve a mission.
Sec. Panetta 19:59
You I know it's, it's critical to our democracy, it really is. You know, our forefathers understood that ultimately, if our democracy was going to work at it would really require people of different viewpoints to be able to be willing to express themselves, their thoughts and what what this country needed. But then to come together, and to find consensus to find compromise, in order to be able to resolve issues that goes to the heart of what a democracy needs to be all about. I've often said that in my over 50 years of public life, I've seen Washington at its best, and Washington at its worst. The good news is I've seen Washington work. I saw Democrats and Republicans. I mean, I first went to Washington, after the Army in 1966, and was legislative assistant on the Senate side. And there were Democratic leaders and Republican leaders who are willing to work together on major issues, that they have their political differences, of course, when it came to big issues, they work together. When I got elected to Congress, Tip O'Neill was the Speaker of the House, Democrats Democrat from Boston. But he had a great relationship with Bob Michael, who was the Minority Leader. They had their political differences, but when it came to big issues, they work together. during the Reagan administration, it was the Democratic Congress. But on a bipartisan basis, we were able to pass immigration reform, comprehensive immigration reform, something he can't do today, we pass social security reform, something that nobody wants to touch today. We pass tax reform, comprehensive tax reform, again, another tough issue. We passed budgets, we were willing to work together in order to do what was right for the country. Today, because of the partisanship, the divisions, the polarization, there's an inability of both sides to be willing to listen to one another, to work together to respect each other's views. And to try to find consensus. Somehow, we have got to get back to that, or our country, our democracy is going to suffer as a consequence.
Hondo Geurts 22:19
One of the other principles besides working together that that you've been outspoken about his public service, and you've cited that as a principle to a democracy is people serving whether you and I served in uniform and then served in government, but there's lots of ways to serve, which can you tell our listeners kind of your views on why you think public service in whatever form it takes, is so important one for the country, and then for the individual, who's providing that service somewhere in their in their career?
Sec. Panetta 22:51
No, I'm, I'm a believer in giving back to the country. And my wife and I established an Institute for Public Policy, of the Panetta Institute, that our mission is to try to inspire young people to live some public service. Why because, you know, in both my wife and I, because of our parents, because of kind of the values of the country at the time, felt it was important that we had to give back to the country. We had a duty to do that. When I went back after one of my Washington experiences, I think it was being Chief of Staff and went back and started working with students, what I found was that there wasn't as interest in getting involved with the country. And even today, at the Panetta Institute, you know, when I sit down with students that are selected from different campuses to come there, I'm astounded that they don't have education, in how our democracy functions, our history, the kind of basics of that you need to know. I mean, you know, I often hear him talk about here in Washington about regular order on Capitol Hill, which i i remember what regular order was all about. I don't think there are members of Congress that know what the hell regular order is anymore. And so the ability to try to make young people understand that they have a responsibility in our democratic system, to be part of that process to give something back is critical. And that's why I really believe that we've got to establish a national service system in this country that gives young people the responsibility to serve this country for two years in some some way. Whether it's education, conservation, health care, education, I don't I don't give a damn what area it's in including In the military, but serve this country in some way, and then provide, you know, so called GI Bill, you know, benefits that can return that. But what they need to understand is, is the ability to come together to work on a common mission, to learn the discipline of what that's about to accomplish that mission. That's something that's paid off for our country. And in many ways, from past service, particularly for those in Ontario. I think we've got to extend that now. And I think young people are kind of lost right now, if you want to know the truth coming out of the COVID period. I think they're struggling trying to figure out what they should do. We took a poll at Panetta Institute took a poll. And for the first time, this year, a majority of students said they did not think they would have a better life than their parents. And that's kind of a frightening figure. And so I really think we need to pay attention to how do we get young people, this new generation of leaders that we're going to need in this country to be able to take over our democracy, that's something everybody ought to be concerned about.
Hondo Geurts 26:16
Yeah, I think, um, I feel the same thing. And again, you and I were probably lucky, we probably didn't understand all the benefits of service in the military for, you know, everybody comes in for different reasons. Are you seeing, I am starting to sense maybe it's with the Ukraine conflict, and some of these other things, which are more tangible views of the threat that there is now a more willingness or interest in trying to figure out how to serve, I think we need some mechanism to facilitate that and celebrated as opposed to kind of interesting, just kind of, you know, how it might happen is the tech companies tendon are also now you know, more of the Silicon Valley kind of out in your neighborhood, or getting more interested in national defense, you think that's also an opportunity to help make better connections and, and show how you can actually work in interesting jobs and still serve your country at the same time.
Sec. Panetta 27:17
You know, there's nothing like a good crisis, to capture the attention of people. It's in some ways, that's unfortunate, because we ought to be smart enough to be able to do it without the necessity of a crisis. But a crisis focuses the mind. And that certainly was true in 911, coming out of 911, having to take on terrorism and those who attacked our country. We had a lot of people who volunteered, became part of the military, served in the military, and a lot who put their lives on the line in order to protect our country. And I think with Ukraine, we see the larger message that's coming out of autocracy versus democracy, and the need for democracies to stand up and be able to fight back against the pollutants of the world. And that is critically important to the inspiration that we need to understand that not only do we have to serve this country, but it's both public and private sector, that have a responsibility to face that kind of crisis. If we work together if we, if we pull together. I think we can be the arsenal for democracy, that we were in World War Two, we can be that arsenal of democracy for the future.
Lauren Bedula 28:49
Well, sir, on that note, because it's such an important message we're trying to send thank you so much for telling your incredible story today and really emphasizing the importance of public service and strong public private partnerships. So thank you so much.
Sec. Panetta 29:01
Thank you very much. Great to be with.
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