WALLACE: Terrific. Let's get to the issue at hand. The Crimean parliament has scheduled a referendum for next Sunday on whether or not to split off from Ukraine, and Russian leaders say they welcome the annexation of Crimea against the will of the government in Kiev. Secretary Gates, this would be the first time this has happened in Europe since World War II. How serious a development?

GATES: Well, Chris, I think it's part of a long-term strategy on Putin's part to recreate a Russian sphere of influence and a Russian bloc where Russia has economic, political and security relationships with these countries that make them all lean toward or do the bidding of Moscow. And we saw it first in Georgia in 2008. We've seen it in him breaking off the E.U. discussions with Armenia. We've seen him do the same thing in Belarus, so, you know, he'll -- he may retreat tactically from time to time, but this is part of a longer term effort to -- to stop the expansion of NATO, but more importantly, bring the states of the former Soviet Union back under the influence of Moscow, and frankly I don't think that he will stop in Ukraine until there is a government in Ukraine, in Kiev that is essentially pro-Russians.

WALLACE: But, of course, this is more than just that and more than what he's done in other countries because here they are talking about actually taking part of Ukraine and making it part of Russia. Former Prime Minister, Ukrainian Prime Minister Tymoshenko calls this a referendum under Kalashnikov and she notes that the U.S. and Britain agreed to protect Ukraine's sovereignty back in 1994. What is our responsibility here?

GATES: Well, I think that, first of all, we have to look at the reality of the options. There really aren't any direct military options that we have. I think that some of the sanctions that are being discussed and the actions being taken, whether it's limitations on visas or travel, on potentially freezing assets of specific individuals, frankly I don't believe are going to be any deterrent for Putin. I think -- I think our greatest response is to have our own strategy for countering this long-term strategy of Putin's to gather the states back under Moscow's control. I worry a lot about the Baltics. I applaud the dispatch of additional fire aircraft for the air patrols in the Baltic States, Lithuania, Latvia, Estonia. I think that's the right thing to do and we ought to be exploring doing more militarily with Poland. I think the Europeans, with our support, should now press ahead very aggressively with the southern pipeline that would get gas to Europe outside of Russian and Ukrainian territorial space. What we need to do is to show Russia that there are long-term consequences to this aggressive behavior on their part. Our tactical options are pretty limited.

WALLACE: Earlier this week, and I want to focus on this possible annexation of Crimea, because earlier this week you said you did not think that Putin wanted to take part of Ukraine with all of its economic problems. As you said today you thought that he wanted a Ukraine that looks toward Russia giving the possible annexation. Have you underestimated Putin's ambitions here, and is Crimea already gone?

GATES: Well, first of all, I don't -- I don't think I've underestimated his ambitions. I think the strategy, is as I have described, I don't think that he wants to recreate the Soviet Union precisely because he doesn't want to have responsibility for economic basket cases like Ukraine is at the president time. What he wants is for those governments to look to Moscow and basically subject to whatever Moscow wants without having responsibility for them. And -- and so I think a pro-Russian government like Yanukovych, the ousted president meets Putin's needs in terms of what he's after, whether something like that can happen in the near or medium term, I don't know. But there's no question that the seizure of Crimea is an aggressive and an illegitimate act. And I think what you're seeing here is a tactic where, you know, the history of Crimea and the relationship with Russia and Ukraine is a complicated one in the sense that Crimea was part of Russia until Khrushchev gave it to Ukraine in the early 1950's.

Basically it didn't make any difference then, and so I think the Russians see this as taking back territory that belonged to them or that's the way they will portray it, territory where the population is significantly Russian, very pro-Russian, and I think Crimea has strategic importance for Russia because of the Soviet or the Russian naval base, and it's also their only warm water port. So no question it's an aggressive, illegitimate act. The question is whether anybody can do anything about it. I think he does not want to send troops into eastern Ukraine. I think that he would prefer to achieve his goals without that kind of blatant use of military force outside of Crimea and frankly I'd be surprised if he did do that.

WALLACE: Secretary Gates.

GATES: But I do not believe -- I do not believe - we're going (INAUDIBLE) that Crimea will slip out of Russia's hands.

WALLACE: You think Crimea is gone?

GATES: I do.
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