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Inside Politics

Senators Question Attorney General on Investigation Into Democratic Campaign Finance Abuses; Gore Unveils Energy Plan

Aired June 27, 2000 - 5:00 p.m. ET


BERNARD SHAW, CNN ANCHOR: The attorney general is grilled on the Hill as the controversy over Al Gore's campaign fund-raising grows more heated and more personal.


UNIDENTIFIED MALE: Senator Specter's tactics last week reek of McCarthyism.



SEN. ARLEN SPECTER (R), PENNSYLVANIA: I do not take lightly the comments of the vice president's surrogates accusing me of McCarthy- like tactics.


SHAW: Also ahead...


BILL RICHARDSON, U.S. ENERGY SECRETARY: The vice president does not favor higher gasoline prices for consumers, let me just state that.

REP. DANA ROHRABACHER (R), CALIFORNIA: He has always advocated that.

RICHARDSON: That's not the case.


SHAW: In the stir over gas prices, Energy Secretary Bill Richardson goes on the defensive on the Hill.

Plus, former partners in marriage, turn rivals for seat in the South Carolina Statehouse.

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

SHAW: Thanks for joining us. Judy is on assignment today.

Attorney General Janet Reno has been down this road before, so for that matter has Vice President Gore, but this time, questions about his fund raising and her investigation of it come smack-dab in the middle of the election year in which Gore is trying to win the presidency.

CNN's Pierre Thomas begins our coverage with Reno's testimony on the Hill.


PIERRE THOMAS, CNN JUSTICE CORRESPONDENT (voice-over): Attorney General Janet Reno, again under congressional fire for her investigation of alleged Democratic fund-raising abuses.

SEN. ROBERT TORRICELLI (D), NEW JERSEY: Somehow through all these years, you've managed to have everybody disagree with you on something at some time in some way.

JANET RENO, U.S. ATTORNEY GENERAL: I don't do things based on polls, I do things based on the evidence and the law.

THOMAS (on camera): Senate Republicans asking whether Reno has for years ignored evidence calling for an outside investigation of Vice President Gore and President Clinton. Again, in focus, White House coffees, fund-raising phone calls and Vice President Gore's visit to a Buddhist temple.

SPECTER: One of the issues in sharp focus today will be why on the first four times the vice president was questioned he was never asked about the Hsi Lai Buddhist Temple.

THOMAS (voice-over): A central question that continues to haunt Gore about the Buddhist temple is whether he knew it was a fund- raiser. According to sources, Reno's new head of her campaign task force wants an outside probe, in part to determine whether Gore lied. That recommendation follows similar calls for an independent counsel to investigate campaign finance by FBI director Louis Freeh and Charles LaBella, former head of the Campaign Task Force.

SEN. ORRIN HATCH (R), UTAH: It seems to me, however, that the -- quote -- pressure -- unquote -- to appoint an outside counsel is coming from inside the Justice Department, from people she has chosen at various times to advise her.


THOMAS: Senate Democrats largely defended Reno's integrity when pointing out she sought no fewer than seven independent counsels to investigate her own administration -- Bernie.

SHAW: Pierre, what's the latest as the attorney general mulls yet another request for a special counsel?

THOMAS: My sources are telling me that already some senior members of the department had serious problems with the recommendation by Robert Conrad, the new head of the Campaign Task Force. There saying, essentially, there is no new evidence here, there's no need to go further.

SHAW: OK, thank you, Pierre Thomas.

THOMAS: Well, Al Gore went about his campaign business this day, traveling to Philadelphia to unveil his new energy strategy as planned. While Mr. Gore tried to stay out of the day's political sparring over fund-raising, his spokesman got a dig in on his behalf.

CNN's Patty Davis is traveling with Gore.


PATTY DAVIS, CNN CORRESPONDENT (voice-over): On the day Attorney General Janet Reno took the hot seat over Vice President Al Gore's 1996 campaign fund-raising efforts, Gore was trying to stay focused on his agenda, in this case, heat of another kind. Gore detailing his new $75 billion long-term policy to decrease dependence on overseas oil and cleanup the environment.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: It is a new bold way of thinking, to demand and develop new American technologies to free ourselves from gas tank price gouging.

DAVIS: It was the third and final week of Gore's Progress and Prosperity Tour. Despite Reno's grilling on Capitol Hill, Gore didn't mention it, but his aides did, lashing out at Republican Senator Arlen Specter, who released an internal Justice Department recommendation that a special counsel be named on Gore's fund-raising.

CHRIS LEHANE, GORE CAMPAIGN SPOKESMAN: Senator Specter's tactics last week wreaked of McCarthyism, that represented GOP chicanery, political thuggery, Republican dirty tricks.

DAVIS: Which in turn provoked an angry response from Specter.

SPECTER: As to the reference to McCarthy-like tactics, that is a matter which I will take up personally with the vice president to see if it was authorized. And if so, I'll take it up with him in some substantial detail.

DAVIS: For his part, Gore stayed on message. He toured Trigen Energy, a utility that produces 70 percent of thermal energy for downtown Philadelphia.

GORE: You all produce the electricity and the?


GORE: Steamed heat.

DAVIS: Gore's plans to give a tax incentive to companies such as Trigen that use less energy to generate power than traditional plants. By far, the biggest part of Gore's plan, $68 billion in tax breaks and incentives for manufacturers that develop and use new technologies to produce energy-efficient products such as Hybrid Gas & Electric Cars.

Later, Gore talked Social Security and workers' rights to an audience of friendly union members.

(on camera): And despite the persistent shadow of his fund- raising problems, gore plans to step back into the campaign money fray Tuesday evening, pulling in another $850,000 for the Democratic Party.

Patty Davis, CNN, Philadelphia.


SHAW: Now, to voters' views of the vice president's campaign finance controversy. Our Bill Schneider joins us from Los Angeles.

Bill, has public opinion of Gore's 1996 fund-raising changed?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT: Well, it sure has, and in an interesting way, Bernie.

In April, just 12 percent believed Gore had done something illegal, 27 percent said he had done something unethical but not illegal. The prevailing view, held by 41 percent, was that he had not done anything wrong. And after last week's allegations? The number who believe Gore has done something illegal has gone up to 27 percent. Twice as many people, 34 percent, now believe Gore did something unethical, but not illegal. While the number who say he did nothing wrong has dropped sharply, from 41 percent to 23 percent.

So the prevailing view now is that the vice president did something unethical, but not illegal.

SHAW: And how does that affect Gore politically?

SCHNEIDER: Well, Americans are split over whether Attorney General Reno should appoint a special counsel to investigate Gore's fund-raising activities: 47 percent say she should, 42 percent, she should not. There's no overwhelming demand to have these matters looked into. The interesting category is people who think Gore did something unethical but not illegal, which, we just said, is the prevailing public view. They do not think Reno should appoint a special counsel.

Remember, they don't think he broke the law. But those same people are voting heavily for Bush over Gore, 55 percent to 38 percent. Now I'd call that scandal fatigue -- no more investigations, please, and no more Clinton/Gore, please.

SHAW: Bill, has the public's view of Attorney General Reno changed over the years?

SCHNEIDER: Well, Bernie, it has, in two different ways. One, criticism of the attorney general has grown. Back in 1993, a few months after she was widely applauded for assuming responsibility for the Waco tragedy, her ratings were 54 to 14 percent favorable. At the end of 1997, after she turned down the first request for an independent counsel to investigate fund-raising abuses, her favorability rating was just under half, 48 percent, while a third of Americans were critical of her. And now? Her ratings are 44 percent favorable, while negative opinion has grown to 41 percent.

Americans are now split over Janet Reno. Notice that Reno's positive ratings have dropped only 10 points over the years, but her negative ratings have jumped from 14 to 41. Now that is because of the second shift. Views of Janet Reno have become much more partisan. Democrats overwhelmingly like her, Republicans are 2-1 negative, and independents are split. What's happened, Bernie? She's been politicized.

SHAW: Question: What would it mean for Gore if the Attorney General Janet Reno were to name a special counsel?

SCHNEIDER: I think that would be devastating for Vice President Gore. Imagine Americans electing a new president of the United States who's already under investigation after all the country has been through over the last four years. Now it happens, of course: We remember that Bill Clinton was re-elected president in 1996 when he was under investigation over Whitewater, but he was already the incumbent president, and we had not gone through the experiences of the impeachment and the other investigations of the last four years. It's four years later, and I think Americans want this to come to an end.

SHAW: Well, let's take the "what if" scenario one step further: What would it take for gore to get over Janet Reno's naming of a special counsel?

SCHNEIDER: Well, of course he wants this to go to the court of public opinion, not to a special counsel, so that is why he -- I think in a very smart move -- released the complete transcript of his questions and his answers from the attorney general's task force the other day. What he has -- his explanation essentially is he's asking the American people to decide whether he was lying deliberately when he said that he knew the Buddhist temple event was finance-related but not a fund-raiser.

Now, that seems to me a very Clintonian distinction. We're deep into Clinton territory here, and that really is not good for Al Gore, because it means that people are going to see him as splitting hairs, the same way they saw Bill Clinton. He has to get over that and he has to get over it quickly.

SHAW: OK, Bill Schneider with the latest from Los Angeles, and the poll numbers.

Still ahead here on INSIDE POLITICS...

(BEGIN VIDEO CLIP) CHRIS BLACK, CNN CORRESPONDENT: As their constituents gas up for summer travel, lawmakers are looking for someone to blame for the highest gasoline prices in a decade.


SHAW: Chris Black on politics at the pump and the administration under fire.


SHAW: As Al Gore laid out his plan to make the United States less dependent on overseas oil, another member of the administration was also defending the vice president on the Hill. This time, it was Energy Secretary Bill Richardson on the volatile issue of high gas prices.

Chris Black reports.


BLACK: As their constituents gas up for summer travel, lawmakers are looking for someone to blame for the highest gasoline prices in a decade. Energy Secretary Bill Richardson came to Capitol Hill to defend the Clinton administration's energy policy, but ended up deflecting attacks on Vice President Al Gore.

BILL RICHARDSON, ENERGY SECRETARY: No, congressman, the vice president does not favor higher gasoline prices for consumers. Let me just state that for the record.

REP. DANA ROHRABACHER (R), CALIFORNIA: He has always advocated that. This is not...

RICHARDSON: That's not the case.

ROHRABACHER: That's not even debatable, Bill.

BLACK: But the blame went both ways, Democrats tying George W. Bush to the massive profits reaped by oil companies.

REP. GARY ACKERMAN (D), NEW YORK: The rest of the politics blaming the Clinton-Gore administration for high oil prices is also absurd. Or haven't we taken a look at where all the Texas oil money is pouring into whose campaign?

BLACK: A Texas Republican pointedly asked Richardson about Bush's culpability in the current gas crisis.

UNIDENTIFIED MALE: Mr. Secretary, is Governor Bush responsible for our current high fuel prices?

RICHARDSON: No. George Bush? No.

BLACK: Richardson continued to come under fire from the other side of Capitol Hill. Republican Senator Rod Grams of Minnesota called for Richardson's resignation, saying the energy secretary demonstrated -- quote -- "dangerous ineptitude."

But Richardson came to the Hill with some good news, saying gasoline prices have dropped by 3 cents in the last week, 7 cents in the hard-hit Midwest, and called it a hopeful sign.

(on camera): But gasoline still costs more in the United States than at any time since the Persian Gulf War. So members of Congress will continue to try to show their concern to appease angry motorists in this election year.

Chris Black, CNN, Capitol Hill.


SHAW: And now to live coverage of Texas Governor George W. Bush campaigning in Michigan, Wayne, Michigan to be specific. He's taking questions from supporters.


GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: ... or forget an earlier position he had. This is an administration that has had no energy policy. It's an administration that is -- that is hoping the issue goes away. And I'm going to continue talking about the need to have an energy policy. We need to have more domestic exploration.

And I want to remind you all again that in the Northwest -- here's a classic example. I'm going to give you a classic example of an administration without an energy policy. There are hydroelectric dams that generate, obviously, electricity, renewable sources of energy. The vice president would not tell us whether or not he would breach those dams. I've made it clear that as president I will not breach the dams in the Pacific Northwest. And yet, he won't tell.

If there's an energy policy in place, it seems like to me, if there's a need to become less dependent on foreign sources of crude oil -- which there is -- it doesn't make any sense to breach the dams in the Pacific Northwest.

My point is that there doesn't seem to be a plan.


BUSH: It's OK. It's a violation of the phone rule.


QUESTION: Governor, today, in describing his energy goals, Vice President Gore talked about zero emission vehicles and hybrid fuels, things that he believed Detroit is almost ready for, but it would dramatically reduce consumption of oil and gas. Is that something...

BUSH: That's fine. That doesn't bother me in the least. But I want to see the marketplace evolve. I certainly hope that the progress made toward cleaner-burning vehicles continues. I believe it can happen without raising CAFE standards. And you know, all of us hope for the day in which we're no longer dependent on foreign sources of crude.

We've got -- the idea of importing over 50 percent of our energy needs from overseas puts us at -- puts us at risk. And so the less foreign crude we consume, the better off America will be.

Secondly, by the way, another area of -- another area of energy where we can become less dependent on foreign sources of crude oil is more use of natural gas, which is hemispheric in nature, and it's not -- the gas prices are not controlled by what happens in OPEC. It's a cleaner-burning fuel. There's more -- larger gas fields to be found in our hemisphere. It's an optimistic source of energy for America.

And one of the things that's important is as we deregulate the electrical plants around the country, deregulate the electrical grids, more and more plants will turn to natural gas. That's the -- that's the case in our state. And I think that is very important.

QUESTION: Governor, some of the House Republican leaders are talking again about repealing the whole 18.5 cent federal gas tax. Are you for that?

BUSH: We'll just see how it progresses. I wasn't for it the first time around. The whole 18 cents? No, I though actually -- what was the first time around? The first, as I remember...

QUESTION: Well, the first time it was just the 4 cents...

BUSH: Four cents, yes. I think it's important before we do that to fully understand what it's going to mean to the transportation budgets of the states and how it will affect the infrastructure plans and infrastructure development.

QUESTION: Governor, I think Michigan being one of the more deeply affected states with the high gas prices would like to know what -- give us a concrete example of something you'd as president to keep gas prices affordable.

BUSH: Well, first thing is, is that the reason why gasoline prices are high overall is because the price of crude oil is high. And I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply so the price of crude, which is the stock price, which is the integral part of the price of refined product, drops. Use the capital that my administration will earn with the Kuwaitis or the Saudis to convince them to open up the spigot.

That's the immediate -- that's where you're going to get immediate relief.


QUESTION: (OFF-MIKE) Strategic Petroleum Reserve?

BUSH: No, I wouldn't. I would keep that for a national emergency. QUESTION: (OFF-MIKE) '91, the United States went out there, bailed out Saudi Arabia and Kuwait in a war, and now you've got to convince them.

BUSH: Well, it's just an interesting comment, isn't it? You know, I think that is an interesting point that ours is a nation that helped Kuwait and the Saudis, and you would think that we would have the capital necessary to convince them to increase the crude supplies.

But -- yes. Sorry.

QUESTION: (OFF-MIKE) capital. Is it diplomacy or is it muscle? Is it threats?

BUSH: I think it's diplomacy, Gail. No, I don't think threats. I think -- I think it's a very good question. I think it's diplomacy, but diplomacy earned as a result of respect. And it's a very interesting question the man asked.

QUESTION: Why do you think (OFF-MIKE) go ahead and do it?

SHAW: Texas Governor George Bush talking to reporters, taking their questions, in Wayne, Michigan. Michigan Governor John Engler at his side. The governor campaigning on the subject of welfare-to-work programs, but as you can see, many of the questions from the press corps traveling with him deal with national issues.

Joining us now Mary Matalin and Bill Press of CNN's "CROSSFIRE."

Rising gas prices beginning to trickle down a little bit somewhat, and in the midst of this week, Vice President Al Gore launches his new energy policy and proposals, and we hear his opponent criticizing that policy.

MARY MATALIN, CO-HOST, CNN "CROSSFIRE": Well, he wasn't criticizing that policy. As a matter of fact, he was agreeing that we all hope for the day that we can have lower -- we can have cars that don't emit as much pollution as they do. What he was saying is that the vice president has been in office, and this is his -- one of his signature issues. For eight years he's shown absolutely no leadership.

This energy secretary, in fact, said at one point that this administration was caught napping and that it had -- it was clearly caught unawares by OPEC's increasing the prices. The reason we're having this problem we have today is because there's no energy policy and the environmental policy, which is pushed by this vice president to add costly additives into the fuels, is what spiked the thing up.

BILL PRESS, CO-HOST, CNN "CROSSFIRE": Bernie, I want to step aside from politics for a second. I started out with this issue in 1973 when I was an environmentalist lobbyist in Sacramento talking about the need for a national energy policy. We had one once under Jimmy Carter, where there were credits, tax credits for alternative sources of energy, like wind, like solar, like energy conservation. I built a house, Carol and I built a house in California, a solar house, using those federal tax credits. They were undone by Ronald Reagan, and we haven't had a national energy policy since. And the problem is...

SHAW: Republican or Democrat?

PRESS: Republican or Democrat. The problem is the American people just want everything for nothing. They want gasoline at a dollar a gallon. They want to drive the big cars, the energy- inefficient cars. Nobody does anything about it. And every time the gas prices go up they blame the other party for not doing anything.

I mean, I think the worst way to try to fix this is to do what both sides are doing today, is pointing a finger at the other.

We need to get independent of OPEC oil and we need to do something about alternative sources of energy and energy conservation. Until we do we are still going to be screwed.

SHAW: Mary, you're wagging your head in disagreement and taking a deep breath over here.

MATALIN: No, I'm not. He's suggesting that, as he often does, that Bush is attacking Gore. He is not. He's saying that we should develop alternative options, we should become independent, but that this administration, having had eight years to do that and this vice president in particular being Mr. Environmentalist, has done nothing. He's talking about leadership.

SHAW: When he says this is an administration that has had no energy policy, what is that but an attack?

PRESS: No. Exactly. Of course it's an attack.

MATALIN: That he's not attacking the vice president's plans that he laid out today. He's saying that the record is -- why should we believe anything he says today...

SHAW: Point well-taken.

MATALIN: ... when they've done nothing for eight years.

PRESS: No, it's not a point well-taken, if I may, because there is an -- there is an energy bill that Clinton and Gore have put into the Congress, which is an energy conservation measure. It was put in there two years ago, a whole series of steps. This Republican Congress hasn't acted on it.

And by the way, if you talk about energy policy, what energy policy exists in the state of Texas? None, except to let the oil companies do whatever they want.

Again, if you want to point the finger, then we'll start. But I just suggest that all Americans are at fault because we want to guzzle, guzzle, guzzle gas at a dollar a gallon. MATALIN: Just making accusations and just making them loudly and over and over does not make them true. The oil -- the oil is based in Texas, and the refineries are in Texas. And under George W. Bush, toxics have been taken out of the air at a rate greater than all the other 49 states combined. That is just a fact.

PRESS: Look, this...

MATALIN: You can say whatever you want, but that is the fact.

PRESS: The fact is Texas has the dirtiest air in the country. Houston has the dirtiest air in the country under George Bush. Now explain that if you will.

SHAW: I'm going to have to move us along. The explanation will have to come later.

Attorney General Reno, another request for a special counsel. She appeared on the Hill before the Senate Judiciary subcommittee. What do you see happening to this latest request?

PRESS: Well, I'll start, jump in. I think Janet Reno will do what she's done before. She'll look at the facts, she'll listen to both sides. She has conflicting advice obviously in front of her: as we know, Mr. Conrad saying there ought to be a special counsel. Obviously, some others are saying there's no new evidence.

I think that's the key: If there is significant new evidence or any of new evidence on top of what she's seen before, she'll do what she's done before: She'll call a special counsel. If she sees no new evidence, she won't.

I've read the transcript. I haven't seen any new evidence.

MATALIN: This is so odd, because this is an entirely new line of questioning. Under every previous campaign finance task force -- and this is why the Republicans on the Hill were complaining -- the vice president had never been asked about the Buddhist temple event where $65,000 was raised illegally. How it could not be new evidence if it's a whole new line of questioning?

PRESS: What is the new evidence? What is the specific new evidence?

MATALIN: It's new -- there -- it's new -- he's never been asked about the temple before.

PRESS: But being asked a question is not evidence.

MATALIN: It's a new charge?

PRESS: A charge is not -- a charge is not evidence.

MATALIN: He's never been asked about it before.

PRESS: A charge is not evidence. What is the evidence? MATALIN: Here's -- here's the evidence. He is providing once again, it appears, false testimony to the FBI and the Department of Justice, saying he didn't know it was a fund-raising event when in fact his own e-mail referred to it as a fund-raising event. The issue is not what he did but what he said in the aftermath in both the calls from his office and this Buddhist temple event.

You can't lie to the FBI. That's why these prosecutors keep recommending a counsel.

PRESS: A charge is not evidence.

SHAW: Moving to another subject. Yesterday in this town, the highest court of the United States of America took a look at blanket primaries, especially California, and said, no, not constitutional. A guest on IP yesterday mentioned your name when you were heading the state Democratic Party out there.

PRESS: Well, I would say the uninformed Mr. Rosengarten got it totally wrong yesterday. As a matter of fact in 1996, John Harrington, who was the Republican state chair at the time, and I, who was Democratic state chair, campaigned up and down the state against proposition 198, saying this is unconstitutional.

You know, if you've got a football game, you don't invite the UCLA team in to the Trojans' locker room to say, we'll tell you who you ought to put out on the field. It doesn't work in football, shouldn't work in politics either. Republicans should choose Republican candidate, Democrats choose Democratic candidates in the primary, and then they go head-to-head.

So the Supreme Court finally did the right thing. I think it's -- I think it's a smart move.

SHAW: And you're saying that at the time, when it was on your watch, you were against the blanket primary. And so...

PRESS: Both the Republican Party and the Democratic Party, Bernie, and both chairs -- I was one of them -- campaigned against it, urged people to vote against it. And they were the two parties that brought suit in the United States Supreme Court.

Frankly, I don't think Mr. Rosengarten knew what he was talking about.

SHAW: Back to national politics, there is a belief in the minds of some people that whoever is leading in the national polls come Labor Day, generally, according to history and percentages, goes into the White House, the victor. George Bush continues leading Vice President Gore. Are the Gore people sweating?

PRESS: Well, do they want the polls to be different? Sure. Are they sweating? I don't think so. I mean, there's a lot to happen between now and Labor Day. We're going to have the nomination of the vice presidential running mate and the conventions, and we've always seen the polls change at the conventions. I really don't think the polls today are of concern to Gore or a source of much glee for George Bush.

MATALIN: Well, if they're not concerned, then they're not running a good campaign. It's not just that he's been down consistently and increasingly so. It's who is he down among. He is down six to eight points amongst women. Clinton was up 15 points among women in '96, up eight points among women. He's not -- he has not pinned down his base.

And furthermore, as Bill Schneider said earlier, people are looking at these fund-raising issues in -- that they're more unethical, but more importantly, 42 percent say that they're relevant to picking a good president.

SHAW: In exactly two hours, give or take a few seconds, you folks will be on the air on CNN with "CROSSFIRE." Who are your guests tonight?

PRESS: Senator Specter is coming over to talk about his interrogation of Janet Reno today. I think we'll have some good questions for him.

MATALIN: His investigation, his proper investigation of Janet Reno.

PRESS: Third time around, make no difference.

SHAW: Well, he took umbrage to being accused of engaging in McCarthyite tactics, and he said today in Pierre Thomas' report he's going to talk to Gore personally to find out whether Gore authorized that statement. So...

MATALIN: Another sign of a bad campaign -- that press secretary stepped all over Gore's message today and his energy policy by calling the senator a McCarthy.

PRESS: Yes, I agree. Shouldn't have gone there. Not necessary. We'll do it without going that far.


SHAW: And we'll be watching.

MATALIN: I doubt it.

SHAW: And we'll be watching "CROSSFIRE" tonight at 7:30 p.m. Eastern.

PRESS: Thanks, Bernie.

SHAW: Thank you, Bill Press, Mary Matalin.

There is much more ahead here on this edition of INSIDE POLITICS. Still to come...


MAJOR GARRETT, CNN CORRESPONDENT: President Clinton is making one last bid to add drug coverage for seniors to his legacy.


SHAW: Major Garrett on the issue that could shape President Clinton's final budget battle. Plus, a senior snapshot: John King on how these voters view the issues and the presidential candidates.

And later...




HINSON: And it's a very negative campaign.


SHAW: Divorce and the campaign trail: a look at an unusual face- off in the "palmetto state," South Carolina.


SHAW: We're going to have more of this day's political news coming up, but now a look at some other top stories.

WorldCom and Sprint put plans to merge on hold. The $129 billion deal fell apart after the Justice Department filed an antitrust lawsuit.


JOEL KLEIN, ASSISTANT ATTORNEY GENERAL: Despite significant progress toward increased competition, many important markets are still dominated by the big three: WorldCom, Sprint, and AT&T -- and critical telecommunications markets. This merger would reduce those big three to a big two. Too few. And the elimination of an important competitor would lead to higher prices and fewer choices for America's consumers.


SHAW: The companies also withdrew from a European review of the merger.

On Capitol Hill, House leaders agreed today to lift a food and medicine embargo against Cuba. The House could ease the 40-year-old embargo by the end of this week.

(BEGIN VIDEO CLIP) RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: The president's policy is an appropriate balance between his constitutional responsibility to conduct foreign policy and the need to minimize the costs of economic sanctions to the United States including American farmers. So, I think as Mr. Lockhart suggests, at the White House the president believes food and medicine should not be used as a tool of foreign policy except under extraordinary circumstances.


SHAW: Experts say powdered milk, soy and rice are likely be among the first products sold. United States farm sales to Cuba could total more than $25 million the first year.

A lawyer for the father of Elian Gonzalez is asking the U.S. Supreme Court to let the two return to Cuba. That's in response to a request by the six-year-old boy's Miami relatives to keep him in the U.S. If the Supreme Court does not act, an earlier appellate court ruling would allow Elian to leave the U.S. tomorrow.

U.S. Secretary of State Madeleine Albright is in Israel, hoping to arrange a peace summit among the U.S., Israel, and Palestinian leaders. To help that effort, Israeli Prime Minister Ehud Barak is pushing his coalition partners to OK more concessions to the Palestinians.

Baseball Commissioner Bud Selig says he's confident security will be adequate when Atlanta Braves pitcher John Rocker travels to New York City this coming weekend. Rocker and the Braves are scheduled for a series with the Mets. Many New Yorkers still take exception to disparaging remarks Rocker made in a "Sports Illustrated" interview. Commissioner Selig says the city and the Mets will keep things under control.


BUD SELIG, BASEBALL COMMISSIONER: I'm comfortable that we have not only taken precaution, there have been ongoing discussions. And I think that you will find that we are not going to have any off-the- field distractions.


SHAW: Rocker has vowed to ride the No. seven subway train while he's in New York. That's the train whose riders he insulted in the interview.

A former New York police officer is sentenced to 15 years in prison for his role in the torture of a Haitian man. Charles Schwarz was convicted of holding Abner Louima down while officer Justin Volpe sexually tortured him with a plunger. Volpe has been sentenced to 30 years in prison.

A comb, a hamburger, a telephone -- they can all turn an ordinary person into a dangerous driver. The Network of Employers for Traffic Safety says drivers who read the paper, who snack on food, who use cell phones, and who put on make-up are distracted. And they could be a highway menace. The group says such distractions are responsible for at least 4,000 auto accidents a day.

The Federal Emergency Management Agency says one-fourth of coastal structures in the U.S. are threatened by erosion. FEMA says if uncontrolled development continues and sea levels rise as predicted, tens of thousands of homes will wash away in the coming decades.

When INSIDE POLITICS returns, the president pulling out the stops before a vote on prescription drug benefits.


SHAW: The election-year battle over prescription drug benefits comes to a head on the Hill tomorrow when the House is due to vote on a Republican-backed measure. President Clinton is planning some last minute lobbying in the form of a news conference, his first since late March. That didn't stop him or House members from firing some shots today.

Here's CNN White House correspondent Major Garrett.


GARRETT (voice-over): President Clinton is making one last bid to add drug coverage for seniors to his legacy. And he has high hopes of cutting a deal with Republicans, even going so far as to accept one of their favorite tax cuts.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I hope that we can make an agreement with the Congress now for a good prescription drug program and appropriate tax relief. Despite the president's plea for an agreement, House Republicans will forge ahead with their own drug plan for seniors.

REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: We will pass a pharmaceutical drug plan that takes care of the people who are the neediest in our society, that can include everybody.

GARRETT: President Clinton has offered to trade with Republicans his Medicare drug plan for their plan to abolish the so-called "marriage tax penalty." The key difference on drug benefits is who provides coverage. The president wants to use Medicare. Republicans want to rely on private insurance companies. Democrats argue that private sector will never provide affordable, universal coverage, which they say Medicare would provide.

REP. PATRICK KENNEDY (D-RI), DEM. CONGRESSIONAL CAMPAIGN COMMITTEE: Not only is it empty promises, but it's empty pill jars.

GARRETT: Senior GOP sources tell CNN that to accept the president's offer, Republicans would have to set aside their free philosophy, anger their drug company allies and create a massive entitlement that would crowd out other tax cuts for years to come. They also fear shaking hands with a president most of their supporters dislike.

Privately, many House Democrats fear a deal. Losing the drug issue would undermine their push to regain control of the House.


GARRETT: For now, House Republicans will press ahead with their Medicare and tax plans, and the president will turn up the heat for a compromise on his terms, and then Republicans will wait to see if the public turns against him. Only then will they decide whether to cut a deal -- Bernie.

SHAW: Thank you, Major Garrett at the White House.

Many senior citizens around the United States are watching the political wrangling over prescription drug benefits with very considerable interest.

Our John King talked to older voters in Pennsylvania about this issue and how it may influence them on Election Day.


JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): They play for pennies here, because for most, money is fairly scarce. So it's a relief that checking the vitals at this clinic cost nothing but time, and a little friendly banter.

UNIDENTIFIED FEMALE: You're ticking right along.

KING: But not everyone is so lucky.

UNIDENTIFIED MALE: My wife takes a lot of prescription drugs, and those are out of sight, the prices they charge for those things.

KING: It's cliche but true that older voters are among the most informed, and the talk here at the Erie Center on Health and Aging turns frequently to politics these days. Bob Peterson is 63, two years shy of Medicare, frustrated at the high cost of health care.

BOB PETERSON: I get a decent pension, but it hurts when you have to pay $570 a month for one thing.

KING: Most in this group trust Democrats more when it comes to dealing with prescription costs.

The president's proposal to add a new prescription drug benefit to the Medicare program gets better reviews than a competing plan congressional Republicans are bringing to a vote this week. The GOP plan offers incentives to insurers to offer the prescription coverage.

PETERSON: I'm kind of leery about insurance companies.

KING: The prescription drug debate is a subplot as these older voters weigh their election-year choices. (on camera): Voters over the age of 65 supported president Clinton by comfortable margins in 1992 and 1996, but they broke for Republicans in the 1998 congressional elections, and are viewed as a critical swing block in the race for the White House this year.

(voice-over): The latest CNN/"USA Today"/Gallup poll shows George W. Bush running ahead of Al Gore, 47 percent to 41 percent, among likely voters age 65 and over.

NEIL NEWHOUSE, GOP POLLSTER: The bottom line is Al Gore, I don't think can win without senior citizens. They always vote. They will be 25 percent, if not higher, of the electorate.

KING: Erie tends to lean Democratic, and a show of hands suggests Gore has the early advantage in this group. But the conversation offers glimpses into why the vice president is struggling in Pennsylvania and other major battleground states.

JOHN RENSEL: I'm a Democrat, but he is a very liberal Democrat.

KING: John Rensel has been a registered Democrat for 53 years, but he objects to the vice president's plan to use government subsidies to support supplemental retirement savings accounts.

RENSEL: I think it is something that the individual should look at, not the government.

KING: Pete Peterson voted for President Clinton twice, but shakes at the mention of the vice president.

PETERSON: Gore doesn't get anything automatically. I haven't heard Gore say a thing yet.

KING: It's not that support for George W. Bush is wildly enthusiastic. Ask about the Texas governor, and even loyal Republicans like George Klenk have to stop and think.

GEORGE KLENK: If I voted for Bush in this election, the biggest reason would be because I admire his father.

KING: These folks have been around longer than most, watched a lot of presidents.

UNIDENTIFIED MALE: I think I voted for Eisenhower, yes.

KING: It's experience that makes them look at more than policy positions.

KLENK: I don't see Vice President Gore as president. I could see Bush before I see Gore as president. I don't think he's got the stature for it.

KING: And experience that makes them remind a visitor the economy can go down as well as up.

UNIDENTIFIED MALE: We have good times, we don't have a war, and it's going to be tough on the next president to keep that going.

KING: As they mull their choices, these folks worry the country and the candidates are too caught up in this period of prosperity and blind to the notion that they might not always be dealt a hand this good.

John King, CNN, Erie, Pennsylvania.


SHAW: Up next, soft money spending in the presidential race. A look at the ads and the dollars with David Peeler.


SHAW: Returning now to Texas Governor George W. Bush on the campaign trail in Michigan, where just a few moms ago he spoke about Attorney General Janet Reno's appearance on the Hill today.

Let's go down to CNN's Jonathan Karl on the road with the Bush campaign -- Jonathan.

JONATHAN KARL, CNN CORRESPONDENT: Well, Bernie, the governor refused to weigh in on whether or not Janet Reno should appoint a special prosecutor to investigate the alleged campaign finance violations by Vice President Gore, as the Senate Republicans were doing earlier today. The governor saying that he was not going to weigh in, that it was up to the attorney general whether or not he actually appointed a special prosecutor.

But the governor did respond to a statement by Chris LeHane, Al Gore's press secretary. LeHane had said that these hearings were part of a "scandal industrial complex," one in which Governor Bush is the CEO.

Here's what Bush had to say about that:


BUSH: If they want four more years of Clinton/Gore, and you know, mindless name calling like this person just did, then I am not the right person. But if they want something different, a new attitude, and they ought to give me a chance to be president. This is absurd what this man said.

It's going to be up to the attorney general to make that decision.


KARL: Governor Bush is here in Michigan visiting a private organization that uses public money to help welfare recipients find work. It provides job training and job placement.

Again, the governor working on his theme of compassionate conservative. His aides saying that he is trying to stress that he is a different kind of Republican, one that is interested in issues that traditionally Republicans have been perceived as ignoring. Governor Bush saying here today that he believes that the job of welfare reform is not done, and even if everybody were eventually off welfare, there would still be people who would need a helping hand. Also here in Michigan with Governor Engler, and of course Michigan is a state in which Governor Bush lost during the primaries, but which his campaign views as very much a battleground state in the campaign, one they would very much like to win in November -- Bernie.

SHAW: Jonathan Karl in Wayne, Michigan with Governor Bush.

The Republican and Democratic parties are using soft money to the benefit of their respective presidential candidates. For nearly three weeks now, the Democratic National Committee has aired ads touting the views of Vice President Gore. The Republican National Committee is doing the same for George Bush with ads praising his plan for Social Security.

To find out how much the RNC and DNC are spending, we turn to this man, David Peeler of Competitive Media Reporting -- David.


SHAW: Hi there.

PEELER: Well, let's take a look at what's going on. You know, both the DNC and the RNC are spending heavily in what we call 15 battleground states. So far, we've seen the DNC -- which got about four days in advance of the RNC -- spend about $4.5 million in those key states. The Republicans have countered with their own spending: $3.8 million in those states.

And from a media standpoint, as we get down toward campaign season what you'll find is that all of these are really a series of small, statewide races. You know, you use a swing-state strategy even though it's a national campaign. Some of these states will fall in, some will fall out as the race tightens. But these are the states where both the parties and candidates are going to spend their media dollars as we get down to the elections.

SHAW: Now, former presidential hopeful John McCain is back on the air in Michigan. He is on the air with an ad for Republican Senator Spencer Abraham.


SEN. JOHN MCCAIN (R), ARIZONA: You know we have a saying about the United States Senate. We show horses and work horses. Spence Abraham is a work horse.


SHAW: McCain won the Michigan Republican primary and still has high favorability ratings in that state. Senator Abraham is running for re-election in a very competitive against Democratic Congresswoman Debbie Stabenow.

David, how much is the Abraham campaign spending on this McCain ad?

PEELER: Well, this is a unique one, Bernie. Here's the first time, I think, we've seen a candidate that lost ultimately in the primary is the guy who's got the coattails. So Abraham is very, very comfortable with John McCain in the state of Michigan. He spent $110,000 dollars against this very particular ad which only broke last Tuesday. I suspect we're going to see some more of it in some other states.

John McCain is still very, very popular in the Northeast and states like Connecticut and some other states around the country. So I suspect that we will see more John McCain ads popping up as we go through the election process.

SHAW: Yes. Now let's move over to another competitive Senate race: New York. The National Abortion and Reproductive Rights Action League is planning a $500,000 campaign against Republican Senate hopeful Rick Lazio. NARAL has already endorsed Hillary Rodham Clinton's candidacy. Now the organization's campaign against her opponent may include phone banks, mailings and other ad agencies.

David Peeler, how much are Rick Lazio and Mrs. Clinton spending in this race?.

PEELER: Well, Bernie, we took a look at this from June 1st on and June 1st on is when the race changed from Giuliani to Lazio and both candidates have spent over half a million dollars since that period of time. Rick Lazio at $520,000, Hillary coming in at $500,000 also.

But what's unique about the New York -- and which is why we except it to be one of the most heavily, from a media standpoint, races is all of the outside groups, like NARAL. We've seen on the Lazio side, the Republican Leadership Counsel weighing in with $90,000 and the New York Conservative Party weighing in with $30,000. NARAL is now going to step up to the plate. I suspect that you're going to see more spending from outside the state groups in this race than we have ever seen before. And that's what's going to make it a very, very competitive, very tight race right down to the very end.

SHAW: David Peeler, Competitive Media Reporting. Always good to have you on. Thank you.

PEELER: Thank you.

SHAW: You're quite welcome.

SHAW: And next here on INSIDE POLITICS, ex-bedfellows make for strange political opponents in South Carolina.


SHAW: And finally, you know a political contest don't get much more personal than a certain GOP primary runoff in South Carolina.

CNN's Bruce Morton has the messy details of the State House race: Hinson versus Hinson.



SHIRLEY HINSON, SOUTH CAROLINA STATE REPRESENTATIVE: As you might know, my husband's running against me.


S. HINSON: And it's a very negative campaign.


BRUCE MORTON, CNN CORRESPONDENT (voice-over): Well, it would be, wouldn't it? Two-term State Representative Shirley Hinson, in a runoff with her husband of 32 years, Jimmy Hinson, in the middle of an ugly divorce. He says she was unfaithful with a colleague, State Representative James Law. She and Law say that's a lie. He has an affidavit from an investigator. She and Law passed a private lie- detector test. He once sawed the dining room table in half. You want half of everything? She once got a restraining order against him, said he was stalking her at the Statehouse in Columbia.

This conservative state just isn't used to this kind of stuff. But everyone agrees, it's the issue.

S. HINSON: He's not running for the right reasons.

JIMMY HINSON, SOUTH CAROLINA STATE REPRESENTATIVE CANDIDATE: We'd like to bring a little bit more dignity to the Statehouse seat 92.

S. HINSON: Most people are very embarrassed for me that it's going on. I think they understand that I have been victimized by character assassination. He's just doing this to hurt me.

MORTON: Oh, yes. He first urged her to get into politics, then told her to get out. If he wins, he'll serve with Representative Law, the man he says was his wife's lover. Well, he says, we'll disagree about family values.

Stay tuned.

Bruce Morton, CNN, reporting.


SHAW: And that concludes this edition of INSIDE POLITICS. You can go online all the time at CNN's

And this programming note: Senate Judiciary Committee member Arlen Specter of Pennsylvania will discuss Attorney General Janet Reno and Vice President Al Gore's fund raising activities on "CROSSFIRE," starting at 7:30 p.m. Eastern.

I'm Bernard Shaw. "WORLDVIEW" is next.



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