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Inside Politics

Gore Tries to Ease Campaign Worries; Bush Looks to Benefit From Colin Powell's Star Appeal; What Will Rudy Do With Campaign Cash?

Aired May 25, 2000 - 5:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JUDY WOODRUFF, CNN ANCHOR: Al Gore's camp tries to persuade some key Democrats that he's still on his game, but do the presidential polls suggest otherwise?

Also ahead...

(BEGIN VIDEO CLIP)

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Obviously, if I were to win, he would be a man that I would like to talk to.

GEN. COLIN POWELL (RET.), JOINT CHIEFS CHAIRMAN: In due course, we can talk about whether or not there might be a role for me in the administration.

(END VIDEO CLIP)

BERNARD SHAW, CNN ANCHOR: Another chance for George W. Bush to face the cameras with Colin Powell and keep the cabinet questions coming.

WOODRUFF: Plus, call it, if you will, Rudy Giuliani's cash rebate. The Senate campaign dropout reveals what he'll do with his war chest.

ANNOUNCER: From Washington, this is INSIDE POLITICS with Judy Woodruff and Bernard Shaw.

SHAW: Thanks for joining us.

When the political going gets tough, Al Gore has been known to go back home to Tennessee to try to get things back on track. He's there again today, publicly talking about education and privately trying to ease doubts among some Democrats about his campaign.

Our Jeanne Meserve is with Gore in Nashville.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Wingtips and Palm Pilot notwithstanding, Vice President Al Gore ran down a YMCA basketball court Thursday to help make the case for quality after- school programs for U.S. schoolchildren. AL GORE, VICE PRESIDENT OF THE UNITED STATES: What would you be doing if you weren't here?

UNIDENTIFIED MALE: Sitting at home watching TV.

MESERVE; Gore wants to spend $6 billion over 10 years to expand after-school programs and improve them. He also is proposing a new after-school tax credit for families with children under the age of 16. Estimated cost: $5 billion. To make the case, Gore cited a recent Justice Department study showing young people were most apt to be victimized by crime between the hours of 3:00 and 7:00 p.m.

GORE: There's a tremendous opportunity here to use this time in a very constructive way, to build minds, and bodies, and character and values.

MESERVE; While Gore was making his pitch for after care, top lieutenants, including Donna Brazil and Carter Eskew, were meeting with Democratic chairmen from 34 states at Gore's Nashville headquarters, trying to quash concerns that this campaign isn't gaining altitude.

Participants tell CNN, Gore aides cited campaign research and his decisive primary victories over Bill Bradley to illustrate that the more people get to know Al Gore, the more they like him, and the party intends to give the public plenty of opportunity to know him.

A Washington fund-raiser last night raised more than $26 million. Expect some of that to be spent on advertising, which will, in part, tout Al Gore as a likable, regular guy.

(END VIDEOTAPE)

MESERVE; The Gore campaign is sure that on specific issues, the American public is with their candidate, rather than with Governor Bush, and it is issues you will be hearing a lot about in the weeks ahead. Today's after-care speech was just the beginning of a blitz on family-related issues, including health care, fatherhood responsibility,and mental health -- Bernie.

SHAW: Jeanne, will Gore himself be meeting with those state party chairs?

MESERVE; Bernie, he will. He'll be going over there in about an hour's time. He's going to spend about a half an hour talking to them, we're told. He'll be thanking them for help, urging them, of course, to do even more. Campaign officials insist there is no panic among the state party chairman.

They say that this just part of the cyclical nature of this campaign, and they insist that there is unanimity on the issues that should be stressed this election year. Those would be Social Security, education, health care and the like. Also, I should add Gore has a fund-raiser tonight. He's expected to net about a million dollars for the Democratic National Committee -- Bernie.

SHAW: In Nashville, Jeanne Meserve -- Judy.

WOODRUFF: Our new poll underscores why the Gore camp felt it had some explaining to do to party officials. Gore trails George W. Bush by seven points in our new CNN/"USA Today"/Gallup survey of likely voters nationwide. Gore was five points behind Bush at the end of April.

Our senior political analyst Bill Schneider is here.

Bill, are you seeing real danger signs for Gore on this?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, he's certainly not making any headway in the polls, as you just said, and that's what's got Democrats worried. Here we have a booming economy, and Gore can't get anywhere.

In a Gallup poll taken last weekend, two-thirds of Americans still think the economy's in good shape. But there are signs of nervousness out there. In January, over two-thirds of the public said they thought economic conditions in the country were getting better. That number has now dropped to a bare majority. Rising interest rates and the jittery stock market have got people a little spooked. They're beginning to wonder how long this good economy can keep going.

WOODRUFF: And is that affecting their choice in the presidential contest at this point?

SCHNEIDER: Yes. It is. Let's compare how Gore does among people who think the economy is getting better and those who think it's getting worse. Among those who think it's getting worse, Gore's support drops by 16 points. Even among people who think the economy is in good shape now but getting worse, Gore doesn't do any better. Pessimism hurts Gore, and it's rising. Right now, 37 percent of Americans think the economy is getting worse, and that is the highest level of pessimism we've seen in over a year.

WOODRUFF: Bill, what about in the aftermath of yesterday's China trade vote? Is any warning signs there for Gore, on the left in particular?

SCHNEIDER: Well, not right now. About 80 percent of Democrats and liberals are holding fast for Gore. Everyone expects labor to gnash its teeth and rend garments over the trade vote, and then stick with Gore in the fall. But there is one real sign of potential trouble, and that's Ralph Nader, who's running as the Green Party candidate.

Right now, Nader's only getting about 3 percent in the national polls, which is the same as Pat Buchanan, but he has the potential to do much better. Nader's favorability ratings are much higher than Buchanan's, and even Gore's. In fact, they're about as same as George W. Bush's. Ralph Nader's strength is his image as a non-politician, as a consumer activist, and that's a big constituency, particularly on the West Coast and in the Northeast, which are Gore's base -- Judy.

WOODRUFF: Bill Schneider, thanks very much. Well, a number of Al Gore's allies have been working today to limit the political fallout on the China trade issue, for the vice president and for the Democratic Party.

Our Jonathan Karl reports on efforts from the president on down to project an image of togetherness.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CORRESPONDENT (voice-over): What a difference a day makes.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I want to thank these leaders for standing with us on this important issue. This is a show of unity and a demonstration of resolve.

KARL: A day after the China trade vote that pitted Democrat against Democrat, the party's leaders staged a Rose Garden display of party unity. It was billed a "health care event," but symbolically, it was about moving beyond the divisive battle over trade. Party leaders are focused on retaking the House of Representatives and holding on to the White House.

KARL (on camera): When you were at the White House, did the China trade bill come up in any way?

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: it did. The president said we went through a fight yesterday, and we didn't all agree on it. We've got to find unity now in all of these other issues.

And across town, the head of the AFL-CIO, which lead the battle to defeat the China trade bill, reaffirmed his allegiance to Al Gore, despite Gore's support for the bill.

JOHN SWEENEY, AFL-CIO PRESIDENT: I think that the vice president stands on his commitments when we endorsed him in Los Angeles last August -- last October, and we will be working with the vice president very aggressively to mobilize our members around his election.

KARL: It's all about Democratic unity, but there may be spoilers to the party. Three of the America's largest unions -- the Teamsters, the United Auto Workers, and the Steelworkers -- are all reluctant to commit to Al Gore in light of the China vote. They are also saying Democratic House members, such as freshman Dennis Moore, who voted yes on China trade, may pay a price.

CHUCK HARPEL, TEAMSTERS UNION: Here's a guy that we did everything we could to get elected. We brought him to the dance, and he wasn't there for us on this vote, and this is a tough issue for him. He's a very good man, but I can see in knowing our membership there, I can see our members not going out and being excited about this man.

KARL: Minority Leader Dick Gephardt says he understands the frustrations of unions like the Teamsters. GEPHARDT: But I hope and believe they will also look at what it would mean to working families in this country if we were able to get a majority again in the House on all this other legislation.

(END VIDEOTAPE)

SHAW: That report from correspondent Jonathan Karl.

We're joined now by the AFL-CIO's political director, Steven Rosenthal.

How will yesterday's vote affect the labor troops in the trenches this fall in getting out the vote?

STEVEN ROSENTHAL, AFL-CIO POLITICAL DIRECTOR: Well, we've seen union turnout increase in the last few elections, and it's largely been driven by people on the ground, by union members talking to each other, visiting each other at work, talking to each other at home on the phones, and we're concerned that the people who are on the front lines, who do that work and drive the big turnout, are the ones most put off by this vote, and therefore, you know, will sit on their hands as we get closer to the November elections.

SHAW: Are they justified in being put off?

ROSENTHAL: Absolutely. This an issue that cuts very deep for union member. It's one that, to a lot of unions, isn't just another vote, it's the only vote. It tells them more which side a member of Congress is on. It's a basic jobs issue to them.

SHAW: But isn't it a shortsighted attitude? You just had your boss, John Sweeney, say in John Karl's piece -- quote -- "We'll work aggressively to mobilize our members." Yet on the other hand, you say that there are disgruntled people. And the question is: If labor sits on its hands in the election this fall, how will the Democrats regain control of the House, which you want them to do?

ROSENTHAL: Our goal is to ensure that there is a pro-worker majority in Congress and somebody in the White House who is going to stand with working people. We think Al Gore is an outstanding candidate and has consistently stood with America's working families.

We have a disagreement on this issue, but as President Sweeney said earlier today, we're going to do everything we possibly can to put the kind of organization in place we need to ensure that there is a very big union participation in the fall. The problem around a vote like this is that as the activists decide not to get involved, to tone things down, it makes it tougher for us to ensure that union members will register and turn out.

SHAW: Do you foresee having to expend unexpected millions of dollars to drive your troops to the polls?

ROSENTHAL: What labor unions bring to the table really isn't the money. Corporations outspent labor 11-1 in the 1996...

SHAW: No, I mean internally.

ROSENTHAL: Yes.

SHAW: Just to mobilize your troops.

ROSENTHAL: Sure.

SHAW: You have a problem on your hands now?

ROSENTHAL: Yes. The problem though is going to be getting our activists excited and mobilized to ensure that they do the kind of things necessary. Politics has become so impersonal and campaigns are so focused on electronic communications that nobody does the kind of one-on-one contact anymore that we do.

The strength of our program for the last few years is that we've had a unified labor movement and we've had activists who are going out and talking to people again. We're going to put the machinery in place to do that. I think there will be a huge union participation. This vote made it much tougher for us.

SHAW: Steven Rosenthal, do you fear globalization?

ROSENTHAL: We don't fear globalization at all. In fact, we've put together many, many programs over the last few years aimed at ensuring that American workers are treated fairly in the global economy. The problem with globalization right now though and the problem with this deal is that there need not be a race to the bottom. There should be a race to the top. We need to be looking at ways that we can raise workers' living standards around the world to ours, not lower ours to theirs, and lose good American jobs in the process.

SHAW: Technically, do President Clinton and Vice President Gore have a responsibility in helping you re-energize your base?

ROSENTHAL: Absolutely. It's going to be extremely important that the vice president for the next several months go into union halls, talk to union members, put out an agenda that working families connect with. We're convinced that he has that agenda, that he will be out there, and that as we go through the next several months, we'll see an Al Gore who is a very -- gets an enormous amount of support from America's trade unions.

SHAW: Let's look at this a little closer, specifically, what does Al Gore -- what does Bill Clinton have to do -- I sense that your attitude is, you guys got us into this mess, help get us out. Specifically, what ought they be doing between now and November 7?

ROSENTHAL: Well, first off, this isn't a fight that the labor movement wanted to have and certainly didn't want to have it right now. The president put the issue forward and it's created we think an awful problem as we get closer into the election season. What do they need to do?

They need to come out with a reindustrialization policy, they need a policy that will connect with American workers and Vice President Gore needs to go out and talk about that program. He needs to go into Michigan, Ohio, Pennsylvania, Wisconsin, Missouri, the key battleground states in this presidential race and talk about the issues that really matter to America's working families.

SHAW: You think Gore and Clinton are listening?

ROSENTHAL: I know they must watch your program.

SHAW: One last question: How many jobs will be lost by presumed passage by the Senate of this trade bill?

ROSENTHAL: I don't know the exact number of jobs, I do know that there have been studies done that show that there will be an enormous job loss, and that, as I said earlier, what we're seeing here is deterioration of decent American jobs, wages, benefits, rights and overall living standard for American workers.

That's what we think was at stake by this the vote and that's why we're doing so much -- that's why we did so much to try to stop it and, frankly, why we're now in a position where we've got to go out there and convince American workers that there are a lot of candidates who have a policy that connects with them and urge them to register and vote.

SHAW: I fibbed a little bit. This is my last question: Richard Gephardt, the man from Missouri, wants to be speaker of the House. Vice President Gore wants to be president of the United States. Given yesterday's vote, which is more important -- electing Gephardt as the next House speaker or?

ROSENTHAL: What we're going to try to do is help shape this -- the election so that it's an election about issues that matter to workers. We'll be out talking about Social Security, Medicare, pensions, health care, and we'll put the issues before union families. We'll let them see the -- where the candidates stand for president, for Congress, up and down the ballot, and we'll let them decide how to vote and what the most important issues are to them.

SHAW: But, sir, you are the political director of your union, a very powerful and influential union, you mean to say that you are not zeroing in on the speakership and saying, we want Gephardt up there and we're going to work to do it?

ROSENTHAL: Well, actually, the AFL-CIO is an umbrella organization for 68 unions, and each union has its own program in place aimed at trying to look at the candidates and to mobilize voters, union voters on behalf of those candidates. So as we go through the season, certainly it's important to us to see Al Gore in the White House. That is critical, and to have a pro-working family majority in Congress. I don't think I could pick one above the other.

SHAW: Steven Rosenthal, AFL-CIO political director, interesting, thank you.

ROSENTHAL: Thank you.

SHAW: Quite welcome.

And still ahead here on INSIDE POLITICS: another meeting for Colin Powell and guess who? George W. Bush.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): A legend, a hero and something more -- a superstar. Politicians like to be seen with him.

(END VIDEO CLIP)

SHAW: Bruce Morton takes a look at the retired general's star appeal.

(COMMERCIAL BREAK)

WOODRUFF: Today in Austin, George W. Bush and retired General Colin Powell stood side by side for the second time this week. They were together to highlight a mentoring program, but such a picture also brings speculation of a Powell role in a Bush cabinet.

Our Candy Crowley was in Austin.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): When a man of stature with stratospheric poll numbers shows up in the same frame as a man who wants to be president, it says something.

POWELL: I think what I would like this picture to say is that these two concerned Americans have a commitment to young people. The only picture I want to come out of this -- obviously, other pictures will come out.

CROWLEY: Fair enough. Colin Powell heads an organization which mobilizes volunteers and gathers resources to help children. But Powell, a man who shuns elective politics, understands well the other take on this.

POWELL: I stand with this man. I support him for president.

BUSH: I am glad that you asked that question.

(LAUGHTER)

POWELL: I didn't know there was a doubt.

(LAUGHTER)

CROWLEY: For George Bush, this is about image enhancement. Powell is the kind of centrist Republican who eases the sharper edges of the GOP, a moderate who disagrees with Bush on the antiabortion plank in the Republican platform.

BUSH: I think the plank ought to stay the way it is. CROWLEY: And disagrees right in front of him, too.

BUSH: I would work to remove it, but good friends can disagree on issues. So I don't see that there's, you know, any big fight over that.

CROWLEY: Though Powell has ruled himself out of the vice presidential pool, there is pervasive talk about Pennsylvania Governor Tom Ridge, another abortion rights supporter. For Republicans, who see the issue as a bedrock GOP value, this borders on horrifying. They have advised Bush to select an anti-abortion number two. His public response can't be comforting.

BUSH: I appreciate advice, and I am getting it from all corners, but I am a pretty independent thinker.

CROWLEY: The answers are deliberately imprecise, a recognition of this delicate spot. Bush needs to reach out to moderates and independents without showing the back of his hand to the party's core conservatives.

Beyond the vice presidential machinations, there has been chatter for weeks that Bush might roll out a cabinet-in-waiting at some point to take advantage of some of the star power of a Colin Powell.

BUSH: I haven't won the presidency yet, so it's a little premature to be discussing different slots.

CROWLEY: Still, Bush has made it clear all along he's inclined to ask and Powell is inclined to listen.

POWELL: In due course, we can talk about whether or not there might be a role for me in an administration, but we're not in the personnel assignment business this morning.

CROWLEY: For the Bush campaign, the beauty of all this is that even if Bush never seriously considers the premature naming of cabinet officials, just having Colin Powell standing there is a plus.

(on camera): A top Bush source says the idea of a cabinet in waiting has never been actively discussed, and in fact, the possibility may be more appealing than reality. To name top officials before an election might create a splash, or it might make Bush look like he needs propping up.

Candy Crowley, CNN, Austin.

(END VIDEOTAPE)

SHAW: What is it about Colin Powell that makes him such an asset for the Bush campaign? Well, our Bruce Morton explains.

(BEGIN VIDEOTAPE)

POWELL: This is your first time here?

UNIDENTIFIED MALE: Yes, it is, sir.

MORTON (voice-over): He is an authentic American legend, born to immigrant parents in the Bronx. He fell in love with soldiering, was chairman of the joint chiefs of staff and one of the architects of the Allied victory in the Gulf War.

POWELL: Operation Desert Storm is over, and almost all our troops are home.

MORTON: A legend, a hero, and something more: a superstar. Politicians like to be seen with him.

POWELL: I support the governor. I look forward to his becoming president.

MORTON: Who wouldn't want to be seen with him? The most recent Gallup poll gives Powell a favorable rating of 78 percent, 78. Just 8 percent had an unfavorable opinion of him. 78-8? Eat your heart out, Mr. Governor, Mr. Vice President, no politician comes close to that, and it's lasted. During his book tour back in 1995, the signing here in Washington started at noon, but the first customer showed up earlier.

UNIDENTIFIED MALE: 6:20 this morning.

MORTON: They sold over 2,000 books. People waited in line. Camera crews waited in line, 54 camera crews at this one event, and that was when people thought he might run for president and his popularity dipped down to the high 50s. Now, at 78 percent, he's about where the pope is, and they're both a few points behind St. Louis Cardinal slugger Mark McGwire -- 87 percent favorable, 3 percent unfavorable. He's having a great season. So of course the general would help as a running mate, but he always says no.

POWELL: I have no desire for political office.

QUESTION: That includes the vice president?

POWELL: Wait a minute, now. We've still got three questions. I'm still working my way down here. Yes, since last I heard, the vice presidency is an elected office.

MORTON: What he has not ruled out is some kind of appointive job: cabinet officer, whatever.

(BEGIN VIDEO CLIP, FEBRUARY 15)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: He can serve anywhere he wants to in my administration.

BUSH: He's a great man, no question.

MCCAIN: Anywhere he wants. He's the 800-pound gorilla.

(END VIDEO CLIP)

MORTON: It's early to talk about a Bush administration, but it's hard to imagine the 800-pound gorilla wouldn't get an offer.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: And much more ahead on this edition of INSIDE POLITICS.

Still to come, what to do with Rudy Giuliani's campaign cash, Frank Buckley on the mayor's decision and how it affect the new GOP candidate.

Plus...

WOODRUFF: Politics and money, a look at fund-raising beyond the star-studded galas.

And later...

(BEGIN VIDEO CLIP)

PAT NEAL, CNN CORRESPONDENT (voice-over): The candidates for Florida's open Senate seat are revved up and ready to go.

(END VIDEO CLIP)

SHAW: From a biker to a House impeachment manager, Pat Neal on the candidates vying for a chance in Florida.

(COMMERCIAL BREAK)

SHAW: We'll have more of the day's political news coming up, but now a quick look at some other top stories.

Armed investigators flashing fake I.D. badges managed to bypass security and get into the secure areas of airports, the Justice Department, the Pentagon, the State Department, CIA and FBI offices. According to a report by the Government Accounting Office, undercover investigators were waved around metal detectors, they took weapons aboard planes, they got a van into the courtyard at the Justice Department and they reached top cabinet offices.

(BEGIN VIDEO CLIP)

REP. BILL MCCOLLUM (R), FLORIDA: The bottom line is that we have learned that far too many of our secure facilities, where top-secret and sensitive information is kept, have an open-door policy. At as of this week, that's beginning to change.

(END VIDEO CLIP)

SHAW: Undercover agents used fake I.D.'s they found available on the Internet.

WOODRUFF: Defense Department top public affairs officials Kenneth Bacon and his main deputy have received letters of reprimand from Defense Secretary William Cohen. He says they violated Linda Tripp's privacy. Cohen admonished both men for telling a reporter back in 1998 that Tripp was arrested while still in her teens. Tripp sued the Defense Department for releasing information in her personnel file.

SHAW: Two gunmen remain at large after murdering five workers at a Wendy's restaurant in Flushing Queens, New York. Tow other employees remain hospitalized from gunshot wounds. Police say the men robbed the restaurant at around 11:00 last night. Officers arrived two hours later, after one worker, despite his wounds, untied himself and called 911.

WOODRUFF: NASA will decide tonight whether to leave the space shuttle Atlantis linked to the International Space Station one extra day. Ground controllers received bad data from one of the new batteries installed on the orbiting outpost. They want to determine if it was a bad communication connection before Atlantis undocks. If all is well, Atlantis will return to Earth tomorrow.

The Miami relatives of 6-year-old Elian Gonzalez are preparing to move out of their Little Havana home. They will be moving into this house, a two-bedroom, two-bathroom home in West Miami, possibly within the next month. The relatives say they are no longer comfortable in their old home because they say there are so many memories of Elian. Meanwhile, another move is on the horizon for Elian. He and his family apparently have left their temporary Maryland home for a place closer to their lawyer in Washington.

And when INSIDE POLITICS returns: campaign money -- raking it in and giving it back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON (D), N.Y. SEN. CANDIDATE: Since the Republican takeover of Congress in 1994, there have been more than 100 votes to limit abortion rights. We do not need another Republican in the Senate who would stand with Republicans to limit the rights of women, and so I am very proud that I will be the person in the way of that happening in the Senate for New York.

(END VIDEO CLIP)

SHAW: Hillary Rodham Clinton accepting the endorsement today of the National Abortion Rights Action League of New York. The group had refused to choose sides when Rudy Giuliani was in the New York Senate race because of his support of abortion rights.

NARAL says Mrs. Clinton's new GOP rival, Rick Lazio, falsely portrays himself as an abortion rights supporter, when he in fact has backed some restrictions on the procedure. Meantime, Lazio still isn't entirely sure today how much he may benefit from Giuliani's campaign war chest.

CNN's Frank Buckley has an update on the cash question. (BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): Rudy Giuliani was running for a U.S. Senate seat, but he was raising money at the rate of a candidate for president. His Web site said: "I need your help." And he got it. The campaign revealing today it raised an estimated $22.5 million.

MAYOR RUDOLPH GIULIANI (R), NEW YORK: They gave a lot of their time and energy and money and support. So it's a very difficult set of decisions.

BUCKLEY: Now that the mayor has decided to get out of the race, he faces decisions about what to do with the donations. Today, the first of those decisions: to return, as required by law, all monies to donors who designated their contributions as general election donations, an estimated $2.8 million.

GIULIANI: I will include a letter requesting or suggesting that the people donate the money to Rick Lazio, but they have to make that choice.

BUCKLEY: Lazio, the congressman from Long Island, now running in place of Giuliani, who hopes Giuliani will hand over whatever's left in the campaign kitty to Republican state officials to be used in his effort against first lady Hillary Clinton.

REP. RICK LAZIO (R), NEW YORK: I'm going to trust the mayor to make that judgment call. He'll do what's right.

BUCKLEY: Giuliani campaign officials say it may be two to three weeks before the accounting is in place to allow the mayor to make that call.

BRUCE TEITELBAUM, GIULIANI CAMPAIGN MANAGER: The first priority is to do an accounting, figure out how much money we have left. Then we have to reconcile debts, there are still debts that we have to pay and obligations that are outstanding, we'll do that. Once we do that, then we'll determine exactly how much money is left and then we of course have to return general election money, then the mayor can make a decision about what to do with the rest of the money.

BUCKLEY: The last official reporting period ending March 31 showed $9 million on hand. A knowledgeable campaign source says an estimated $4.5 to $5 million will probably be what's left at the end. State Republican Party officials say they're not pressuring the former Senate candidate for the money at the moment in deference to Giuliani's health decisions.

WILLIAM POWERS, NEW YORK GOP CHAIRMAN: When he gets done, he knows, I believe, what's the right thing to do, and I believe that the mayor will do the right thing.

BUCKLEY (on camera): In your view, what is the right thing?

POWERS: Well, it would be to help the state party with the campaign.

BUCKLEY: Giuliani says he'll help Lazio's campaign by stumping for the congressman, but some voters are apparently hoping Giuliani isn't out of it quite yet. Campaign aides telling CNN more than $100,000 in donations have come in since Giuliani announced he was getting out, a few with notes attached encouraging Giuliani to remain in the race.

Frank Buckley, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: Now to other campaign money matters, beginning with the Democrats and their record-breaking hall of cash.

(BEGIN VIDEOTAPE)

GORE: And if I remember my Bible correctly, the last time that Moses listened to a bush, his people wandered in the desert for 40 years.

WOODRUFF (voice-over): Al Gore skewering NRA President Charlton Heston, rhetorical red meat to go with the barbecued ribs at Wednesday night's DNC gala. In return, Democrats donated a cool $26.5 million.

GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: What a nice welcome.

WOODRUFF: Meanwhile, across town, former President Bush headlined a Republican fund raiser, raising $14 million, and the candidate, his son, wasn't even there. Add that to the $22 million GOP fund raiser last month. The total for the two events: $36 million.

But away from the glare of these high-profile fund raisers, there is an even more controversial money machine at work: so-called 527s, independent groups known mainly by their tax code designation.

These groups, including the Coalition to Protect Americans Now, which is behind this attack ad, are entirely unregulated.

(BEGIN VIDEO CLIP, COALITION TO PROTECT AMERICANS NOW AD)

NARRATOR: But America has no defense against missile attacks, Clinton and Gore have left us unprotected.

(END VIDEO CLIP)

WOODRUFF: They can raise and spend unlimited amounts, and unlike the political parties and campaigns, 527s are under no obligation to reveal their donors. The ads are everywhere. The Sierra Club is using $8 million in 527 money to finance its ad campaign, including this new one featuring Texans complaining about George Bush's environmental record.

(BEGIN VIDEO CLIP, SIERRA CLUB AD) UNIDENTIFIED FEMALE: We're in a crisis situation.

UNIDENTIFIED MALE: We contacted George Bush's office, and he has the attitude that he's not interested.

(END VIDEO CLIP)

WOODRUFF: Most 527s, however, are conservative, and their ads are tough, including this one from Shape the Debate, a group associated with former Governor Pete Wilson of California.

(BEGIN VIDEO CLIP, SHAPE THE DEBATE AD)

UNIDENTIFIED MALE: He promised never to cut Medicare but cast the deciding vote to cut Medicare by $55 billion.

UNIDENTIFIED MALE: Who is Al Gore?

UNIDENTIFIED MALE: Correct.

UNIDENTIFIED MALE: Political hypocrites for $600.

(END VIDEO CLIP)

WOODRUFF: While most 527s claim to be independent and not connected to any official campaign, some are directly allied with politicians. House Whip Tom DeLay's Republican Majority Issues Committee reportedly plans to spend $25 million in two dozen congressional districts this year. Democrats have filed a lawsuit against DeLay in federal court.

With that complaint still pending, the FEC opened debate today on a proposal requiring 527s to register as political committees and to disclose their donors. FEC commissioner, Karl Sandstrom, who authored the proposal, likened 527s to "slush funds," engaged in a "audacious circumvention of the law." He wrote that regulating the groups would be the "first step in restoring the integrity of our campaign finance laws."

(END VIDEOTAPE)

WOODRUFF: But Sandstrom's proposal is still in its earliest phase and is extremely unlikely, it's like, to pass before the fall election. And on Capitol Hill today, House Republicans blocked an effort by Democrats to require disclosure of the financial backers of 527s.

Former FEC chairman Trevor Potter joins us now.

Mr. Potter thanks for being with us.

TREVOR POTTER, FMR. FEC CHAIRMAN: Thanks.

WOODRUFF: You agree with Commissioner Sandstrom who said today these are audacious circumvention of law? POTTER: They're clearly contrary to the whole spirit of the post-Watergate laws, which were disclosure of money that's being spent in politics, as well as ensuring that corporate and labor money is not spent to elect federal candidates, and that's clearly what a lot of this is clearly being used for.

WOODRUFF: How did they come into being? If that was the spirit, if that was the intent, how do we have this situation?

POTTER: Well, what we have are a series of court decisions dating back to the Supreme Court some 20 years ago now that has tried to specify what can be regulated by federal law and the Federal Election Commission, and they've excluded from it issue ads, ads that talk about issues but don't specifically advocate the election or defeat of a candidate.

What we're seeing now, of course, is that groups say were going to target, we're were going to do it in a primary, we're going to try to defeat them, but they don't use the words vote for, vote against. What's happening now is those groups have figured out a way under the tax code not to have to disclose anything they're doing at all, including essentially, even their existence.

WOODRUFF: Those examples that we showed, are those pretty representative, in your view, of what's out there?

POTTER: For the what I would call the edge-of-the-envelope groups, yes. One of the problems here is you have issue groups that are in fact genuinely talking about Social Security or Medicare, and then you have groups that are using that to go at a candidate, and the ad is targeted specifically at the candidate and isn't really interested in changing votes in Congress or anyone's mind, except on the election.

WOODRUFF: Yes, we're hearing the names of these candidates in ads. Trevor Potter, what should be done about this?

POTTER: Well, almost everybody across the spectrum agrees we ought to at least have disclosure of the point spent in politics, so I suspect what will happen either in Congress or at the FEC is there will be a compromise that tells us who this money comes from and what it's going to. Whether It then puts it back into a regulated system and limits the amounts, I doubt, but I think you will see an agreement on at least disclosing where the money is coming from.

WOODRUFF: All right, Trevor Potter, formerly FEC commissioner, former FED chairman, thank you very much for joining us.

POTTER: Thank you.

WOODRUFF: Thanks.

And just ahead, a dozen candidates and one open Senate seat, a look at the Florida race and the candidates to beat.

(COMMERCIAL BREAK)

WOODRUFF: In Florida, a dozen candidates are competing in the race to replace retiring Republican Senator Connie Mack. Democrats are targeting the state, hoping to pick up a seat.

Pat Neal takes a look at how the race is shaping up.

(BEGIN VIDEOTAPE)

NEAL (voice-over): The candidates for Florida's open Senate seat are revved up and ready to go. In all, twelve candidates registered to run for the seat currently held by retiring Republican Connie Mack.

Democrats are betting they can take the seat with Bill Nelson, the state's treasurer and insurance commissioner. Prior to that, he served in Congress for twelve years.

Nelson served on the space subcommittee and flew on the shuttle Columbia in 1986. He is well-known statewide and faces minimal competition.

BILL NELSON (D), FLORIDA SENATE CANDIDATE: How are you doing?

UNIDENTIFIED FEMALE: Good.

NELSON: Good to see you.

NEAL: But the GOP race is something different. Polls show the two lead Republicans are neck-and-neck in their fight for the primary in September.

MCCOLLUM: I believe in less taxing, less spending.

NEAL: Congressman Bill McCollum's economic and social conservatism may appeal to Republican primary voters, but polls show the more moderate Tom Gallagher could be a stronger candidate against Nelson, the likely Democratic nominee.

TOM GALLAGHER (R), FLORIDA SENATE CANDIDATE: I think the real difference between me and my opponent is no one really believes he can win the general election.

NEAL: Gallagher has been elected statewide three times. He's currently in the state cabinet, serving as commissioner of education. Previously, he was elected insurance commissioner. This is McCollum's first statewide race, so he started early getting his name and message out.

McCollum is a 20-year veteran of Congress, and a former jag, or Navy prosecutor. He gained prominence as a House manager, leading the charge in the impeachment of President Clinton. That's something Democrats are likely to remind voters.

NELSON: Clearly, there was a negative, visceral reaction against the overzealousness, the mean-spiritedness that came out of that impeachment trial. NEAL: McCollum's negative numbers are the highest of the leading candidates.

Rounding out the top four, but way behind in the polls, is Democrat-turned-independent Willie Logan.

WILLIE LOGAN (I), FLORIDA SENATE CANDIDATE: I think that there's too much partisan politics in our government.

NEAL: Logan is a former state representative who dumped his party and backed Republican Jeb Bush for governor. He's armed with the media consultants who helped elect Jesse Ventura the governor of Minnesota. To get attention, he's on a statewide motorcycle tour, hoping for some of that Ventura magic.

(on camera): Analysts say Florida could provide Democrats with their best chance of picking up a Senate seat. They leading contender is in an enviable position, with little competition and a hefty war chest. Meanwhile, Republicans have more than three and a half months to duke it out before their primary.

Pat Neal, CNN, Miami.

(END VIDEOTAPE)

SHAW: And up next, is that retiring Florida senator a possibility for the Republican ticket? We'll ask Bob Novak for the latest.

(COMMERCIAL BREAK)

WOODRUFF: Joining us now with his "Reporter's Notebook," Bob Novak of "The Chicago Sun-Times."

All right, Bob, let's start off, elections more than five months away, but what are you learning about the mood inside the Bush and the Gore camps?

ROBERT NOVAK, "THE CHICAGO SUN-TIMES": The Bush people are absolutely giddy. One of their top advisers, a Washington-based advisers, in fact a senator told me that he thought the people had made up their mind in May, and that this election was going to be won by Bush and it wasn't going to be that close.

Now, I think that's a little absurd considering it's only May, but what the Bush people in Austin back that up is that after 33 days of Gore attacks and two weeks after the Social Security proposal by Bush was unveiled, Bush is rising in the polls, including the statewide polls in states with high retirement communities like Arizona and Florida.

Now, the Gore people say that this is nonsense, it's much too early, they believe they're going to stick to the negative attacks, because they think it worked against Bradley and they think it's going to eventually whittle Bush down. But, Judy, talking to other Democrats, they are a little worried about the negativism, they wonder if it's going to work. I've even had some people who are Gore supporters say that they wonder whether the attack on Social Security is not working and that maybe for the first time the Republicans are going to have the advantage on Social Security.

WOODRUFF: You mean the attack on the Bush proposal on Social Security?

NOVAK: Yes.

WOODRUFF: Now, I understand you have a little bit of news in the Bush vice presidential thinking?

NOVAK: Well, entering this very complicated crowded field seems to be Senator Connie Mack of Florida. Everybody had kind of thought he was out of the picture. If you remember, a lot of people thought that Bob Dole was going to pick him before he picked Jack Kemp in 1996.

And Senator Mack has retired from the Senate, he's retiring from the Senate, he looks like he's retiring from politics, but he's a conservative, he's not confrontational, he's Catholic, he's pro-life, and the -- he says he doesn't -- he's not interested in vice president, but there is a group of Florida Republicans who are going to go to him and urge him to tell -- if asked, to say that he would accept it. I think he is in the picture. A lot of people are very interested in Connie Mack.

WOODRUFF: All right, switch gears a little. Yesterday, House passed the permanent normal trade relations with China. What's the political reaction to this?

NOVAK: One of the things that the establishment Democrats, including some cabinet members who were working for passage of this bill, feared was that it would be passed by such a big Republican majority that you really didn't need the Democrats, and that would kind of nullify Democratic support in the very important high-tech and corporate communities.

That's exactly what happened. You really didn't need the -- Democrats only got -- what was it -- 73 votes out of 111, but they could have gotten a lot less. They were marginalized. And so that is something that really worries the fund raisers for the Democratic Party, saying we're not important anymore.

The interesting thing in the future, Judy, is that if there's a Republican president, if there's a Republican President Bush in the next administration and there's a trade bill, he can't count on anything like 70 Democratic votes. Would there be enough Republican votes to compensate for that? Nobody knows.

WOODRUFF: All right, and finally, Bob Novak, anything new on the effort to pass campaign finance reform legislation? NOVAK: Yes, there is a continuing effort by some of John McCain's supporters, Senator Chuck Hagel of Nebraska, Senator Lindsey Graham of South Carolina, to try to make a deal with the Bush people where there is a Republican reform. I know the Bush people like that very much.

We had John McCain taped today, it's going to show this weekend on "EVANS, NOVAK, HUNT & SHIELDS," and Senator McCain didn't seem very interested in a compromise, he said that he and Governor Bush had agreed to disagree on campaign finance reform. So I see a little bit of distance between Senator McCain's supporters, who really want to make a unified Republican position, and Senator McCain who says, gee, I don't think I can get together with George Bush on this.

WOODRUFF: All right, Bob Novak, always fascinating looking in that notebook, thanks a lot, appreciate it.

NOVAK: Thank you.

WOODRUFF: And that is all for this edition of INSIDE POLITICS. We'll see you again tomorrow when our Bill Schneider will have his "Political Play of the Week." And, of course, you can go online all the time at CNN's allpolitics.com.

SHAW: This programming note: Congressmen Bob Barr of Georgia and Robert Wexler of Florida will be the guests tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

I'm Bernard Shaw.

WOODRUFF: And I'm Judy Woodruff. "WORLDVIEW" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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