Is Rene Russo actually speaking German in the interrogation scene?

Yes she is, and French, while fishing to see where the guys were from. If you were curious as to what she was saying in the exchange:

---

First Catherine asks him in French: "Vous aimez les Etats-Unis?" ("Do you like the United States?")

..to which he doesn't reply, so she asks in German: "Sehen Sie gerne Gangsterfilme...mit Edward G. Robertson?" ("Do you like gangster movies.. with Edward G. Robertson?")

He snickers, so she continues: "Seine Familie stammt aus Rumänien" (His family is from Romania).. He answers, "Ich will einen Rechtsanwalt" ("I want a lawyer") to which Catherine replies:

"Aber Sie sind doch kein Staatsbürger.. ("But you are no U.S. citizen")

Da gibt's keinen Prozess.. ("There won't be a trial")

Sie werden ganz einfach deportiert.. ("You will simply be deported")

Rumäner ohne Ausweise machen uns nervös... nervös.. ("Romanians without ID cards make us nervous.. nervous..")

Die könnten Securitat sein.. ("They could be Securitat [from the Romanian Secret Service]")

Deine Regierung nimmt Geheimpolizei.. ("Your government takes Secret Police")

Was die mit dir machen... hm?" ("What will they do with you... hm?")