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Inside Politics

Bush Appoints Three More to New Administration; Congressional Powerhouse and Ex-Convict Presented With Presidential Pardons

Aired December 22, 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: Some might call it a Christmas gift for conservatives: the president-elect taps Senator John Ashcroft for attorney general. For the moderates: Governor Christie Whitman gets the EPA chief nod. We'll have a full report on Bush's pre-holiday appointments.

Plus: a former congressional powerhouse and ex-convict is presented with a presidential pardon. And:

(BEGIN VIDEO CLIP)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Santa Claus is a pretty shrewd pal. He operates on the principle, something for everybody, and he gets very high approval ratings.

(END VIDEO CLIP)

WOODRUFF: Taking cues from Saint Nick, Bill Schneider bestows the political "Play of the Week."

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

WOODRUFF: Thank you for joining us; Bernie is on assignment.

Well, George W. Bush can check off several more names from his list of top jobs to fill. Three of his announcements today involved prominent Republicans. But by many accounts, the headliner was the nominee whose name was the last to leak: Senator John Ashcroft of Missouri. Ashcroft also is the one in need of a new job.

In Austin, Texas CNN's Major Garrett is covering the Bush transition -- Major.

MAJOR GARRETT, CNN CORRESPONDENT: Hello, Judy.

Well, Senator Ashcroft was the last to leak, but by no means a surprise to conservatives, who had been pushing him up the Bush ladder all week long. Senator Ashcroft was named, in part, because he is thought to be, by the Bush team, very easily confirmable. Just recently having left the Senate, the Bush team expects his fellow, current senators to give him a bit more deference than, perhaps, someone who he would have nominated who was to be similarly conservative, but not a member of the Senate.

John Ashcroft is known in conservative circles as a tough law and order person. He is very much an opponent of abortion rights. He was also opposed to the Microsoft breakup. All key issues the Justice Department will deal with. And this appointment comes after Governor Marc Racicot of Montana was brought down here to Austin, talked to by the governor, but declined to serve as attorney general.

Then the Bush team quickly turned; they did not want to leave a vacancy at attorney general to last over the Christmas holiday season. Wanted to fill the slot right away; did so today.

Bush-elect Bush emphasized, upon introducing Senator Ashcroft, that he is a man of high integrity. Both of them stressed the word "integrity" over and over again. A signal to conservatives and to the nation that they intend to bring what they consider a bit more integrity to the attorney generalship than, perhaps, they view Attorney General Janet Reno has brought to that post -- Judy.

WOODRUFF: Major, we know that most conservatives very pleased with this nomination. What are the concerns that have been expressed by moderates and liberals over John Ashcroft?

GARRETT: Well, they primarily deal with the issue of civil rights, Judy, and Senator Ashcroft's dealings with minority candidates for the federal bench. He was a very key player and very heavily involved in the Senate's rejection of Missouri Supreme Court Justice Ronnie White, an African American who was nominated by President Clinton to the federal bench.

Civil rights activists considered Senator Ashcroft's opposition to be wrong-headed. Ronnie White came very highly recommended by the American Bar Association and other groups pushing his nomination. And that's been the sticking point in the craw of the civil rights movement ever since; and already there have been releases from several civil rights organizations, questioning Senator Ashcroft's commitment to civil rights.

I had a chance to ask the president-elect about this case. When Senator Ashcroft was presented to the press corps earlier today, the president-elect said he reviewed the case, he talked to Senator Ashcroft about it, he underlined that it was only one case where Senator Ashcroft had opposed an African American; made it clear that, as governor of Missouri, Senator Ashcroft -- or then-Governor Ashcroft, of course, had appointed minorities to high-court positions within the state of Missouri and said on balance he was convinced that Senator Ashcroft would enforce civil rights laws for the entire country -- Judy.

WOODRUFF: Major, that's the attorney general. I understand you may also have some information about Bush's thinking for his budget director.

What are you hearing about that?

GARRETT: It's a very fascinating development, Judy. You know, when President Clinton took office, he unveiled his new OMB -- the Office of Management and Budget -- with quite a flourish, reaching into the ranks of Congress for Leon Pineta (ph) who, at that time, was the democratic head of the Budget Committee -- someone steeped in all of the politics and all the numbers of the federal budget.

While there's been -- there was an announcement today, but no one was brought to the cameras -- it was just a press release issued in Washington identifying Mitch Daniels, who currently serves as the vice president of corporate strategy and policy at the pharmaceutical firm Eli Lily. Very heavily involved in republican politics on, sort of, the political side of the ledger. Not a tremendous amount of experience in the hard numbers of the federal budget.

But the position of head of Office and Management and Budget is crucial in any White House and will be among the first tasks this administration will have to take on because, as you know, the federal budget -- the new federal budget -- must be submitted to Congress in early February. Work has got to begin on that right away.

And also the person who heads the Office of Management and Budget plays a crucial role in dealing with federal regulations. Again, President-elect Bush made it clear today he is no fan of some of the regulations propounded by this current president. Some more -- even more are expected before President Clinton leaves office; so Mr. Daniels, you can expect, will have a lot to do with, with the budget and with regulation upon taking office -- Judy.

WOODRUFF: Well, those of us who covered the Reagan administration remember Mitch Daniels very well; so we appreciate that bit of news, too. All right, Major Garrett in Austin, thanks very much.

GARRETT: You're welcome.

WOODRUFF: We will have a profile of John Ashcroft a little later on INSIDE POLITICS.

But right now, let's take a closer look at Christie Whitman.

CNN's John King reports on her career and why she is controversial within the Republican Party.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): She's both a star and a polarizing figure in her own party. Economic conservatives love Christie Whitman's zeal for cutting taxes, but social conservatives denounce the New Jersey governor's vocal support of abortion rights, a position that kept her off the list when George W. Bush was looking for a running mate.

As administrator of the Environmental Protection Agency, she would be shielded from most of the Republican Party's internal ideological battles. MARSHALL WITTMAN, HUDSON INSTITUTE: Christie Todd Whitman was chosen for one specific reason: She can appeal to moderate, suburban women who the Republicans have had difficulty with in the past few years.

KING: But it's hardly a job without controversy.

(BEGIN VIDEO CLIP, AD)

ANNOUNCER: Texas has a world-class pollution problem.

(END VIDEO CLIP)

KING: Environmental groups were harshly critical of Governor Bush's record during the campaign. The president-elect campaigned on a pledge to allow oil exploration in the Arctic National Wildlife Refuge and will face early pressure to repeal or at least ease newly issued Clinton administration guidelines requiring cleaner burning diesel fuels and vehicles.

Whitman casts herself as an environmentalist in the Teddy Roosevelt mode, and says her state is a leader in preserving its coastline and open spaces. Environmental groups say her record is mixed.

DEBBIE SEASE, SIERRA CLUB: She made drastic cuts in the enforcement budget and in the staff enforcing New Jersey's environmental laws. So I think we're going to be able to work with her, but there are some parts of her record that do give us concern.

KING: Whitman ran a surprisingly strong Senate race against Bill Bradley in 1990, and unseated Democratic Gov. Jim Florio three years later. That made her the state's first female governor and a national Republican star.

Top advisers say Whitman knows she won't always see eye-to-eye with her new bosses, but she's counting on personal connections to make the difference. She traveled to Texas to help Bush in his first run for governor back in 1994, and has known Vice President-elect Dick Cheney for 30 years.

John King, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: David Broder of "The Washington Post" joins us now to talk more about Bush's choices for top administration posts.

Hello, David.

DAVID BRODER, "THE WASHINGTON POST": Hi, Judy.

WOODRUFF: David, as you look, overall, at the list of names that we now know, what does that tell us about this president-elect?

BRODER: It's what we used to call a balanced ticket, Judy. One to the left, one to the right and many right, straight down the middle.

WOODRUFF: This -- look at just some of the appointments -- today John Ashcroft appeasing conservatives, presumably; Christie Whitman, a bone to the moderates, if you will. Are all of these choices so far smart in and of themselves?

BRODER: Well, we'll see how they do in office. But, in terms of the politics, the internal politics of the Republican Party, and also getting these folks confirmed by the United States Senate, they couldn't be better from the president-elect's point of view.

I don't foresee any difficulty in getting any of these people named so far confirmed and into place very quickly. Senator Ashcroft is probably the one who's history raises the most problems for liberals in the Senate. But, as a colleague and a friend -- and also as somebody who, by the manner of his dealing with his own defeat in this very unusual recent circumstance in Missouri where he was running a very -- at least even with Governor Mel Carnahan -- Carnahan dies in an airplane crash. There's a great wave of sympathy for his widow. The Democrats say, if Carnahan's name prevails on the ballot, the widow will be named to the seat. An almost impossible political situation for Senator Ashcroft, and he handled it with great tact and great respect.

WOODRUFF: Well, then, should Democrats, moderates, liberals be so concerned about John Ashcroft?

BRODER: What will concern them, I think, are history of being very dogged in opposition to liberal judges, liberal by his point of view, and second, the very clear prospect that the names that he will be recommending to the new president for appointment to the bench will probably be very conservative lawyers and judges themselves. So, his appointment probably sets the stage for at least close scrutiny and perhaps some real battles over judicial appointments in the next few years.

WOODRUFF: David, coming off an election that reveals a country split right down the middle politically, do these appointments go any distance toward healing that split?

BRODER: Well, as you know, we haven't seen any Democrats yet, there's not that kind of, at least, token gesture to the opposition party which now has half the seats in the Senate and came very close to winning the presidency. He hasn't done that. But I think with the choices that he's made particularly on his fiscal team, he is taking people who have a fairly broad intellectual range; a concern demonstrated over the years in the case, now, of Mitch Daniels about urban problems; in the case of Mr. O'Neill, the new treasury secretary, for health care issues. I think he is saying that substantively, I'm putting people in place who will be prepared to work seriously with you Democrats on the policy issues that you care about most.

WOODRUFF: What are you hearing David? Do you think we will see Democrat in his Cabinet? BRODER: The jobs are getting scarcer, Judy, and we haven't seen one yet. I can't imagine that he's going to give away the education position, because that's a policy area that's very important to him personally. The Interior Department will be very important to western Republicans and conservatives.

So, we're coming down to a really, very few places where you might still find a Democrat. One I would keep my eye on is the ambassador to the United Nations. That's a job that as time has had Cabinet rank and there's a tradition, as you know, Judy, of putting somebody from the opposition party into that position, as long as they agree with your fundamental foreign policy ideas.

WOODRUFF: All right, not during this administration, but previous ones.

BRODER: Right.

WOODRUFF: All right, David Broder, thanks very much.

BRODER: Thank you.

WOODRUFF: Good to see you.

BRODER: Merry Christmas to you.

WOODRUFF: And to you. Thanks for being with us.

Well, as the president-elect prepares to enjoy the holiday himself, a bonus, of sorts, appears to be on the horizon. The federal surplus reportedly is growing even more.

CNN's Patty Davis checks out the numbers, and what they may mean for Bush's tax cut proposal.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): Amid signs of a slowing economy, the push is already on for President-elect George W. Bush's tax cut.

BUSH: It seems like to me that one of the ways to encourage the consumption, to enhance consumer confidence will be to let people have some of their own money back.

DAVIS: Now, the Congressional Budget Office is expected to project the budget surplus could grow to as much as $6 trillion over the next 10 years. The extra $1.4 trillion over the CBO's projections of just a few months ago is adding fuel to the tax cut fire from both sides of the aisle.

REP. ROBERT MATSUI (D), CALIFORNIA: There's no question that now with the surplus going up to $6 trillion or more over the next decade, that we're going to have a tax cut in 2001-2002.

DAVIS: Over the next 10 years, budget officials predict the economy will grow at an annual rate of 3 percent -- that could add as much as $1 trillion to the surplus.

STAN COLLENDER, BUDGET ANALYST: One of the big reasons people were saying we shouldn't have a tax cut is that we couldn't afford it, and suddenly a lot of additional money has just been found. The problem is you've got to ask yourself whether or not these new economic forecasts are real, and whether they're likely to be realized.

DAVIS: Congressional budget officials, however, do factor a recession into their 10-year forecast, and a tax cut, President-Elect Bush argues, could help head off a recession. It could also head off political risk to his own party.

STEVEN MOORE, CATO INSTITUTE: If Bush fails to get this tax cut passed this year and then the economy really slows down, the Republicans, I think, will pay a price at the polls in 2002.

DAVIS (on camera): The burgeoning surplus isn't just raising expectations for a tax cut, it's also opening the debate for Social Security reform, paying down the debt and new spending. But with a House and Senate so closely divided, not every politician will have every dream fulfilled this holiday.

Patty Davis, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Still ahead on INSIDE POLITICS, an early Christmas gift for the scandal-ridden former Congressman Dan Rostenkowski, as Mr. Clinton hands out some presidential pardons.

Plus, challenging Terry McAuliffe for the top post at the DNC. We'll talk to the newest candidate for party chairman.

(COMMERCIAL BREAK)

WOODRUFF: On this Friday before Christmas, President Clinton exercised his executive power and issued 59 pardons. Topping the list: former House Ways and Means Committee Chairman, Democrat Dan Rostenkowski, who was convicted in a corruption scandal in 1996.

Eileen O'Connor has more on Rostenkowski and the others pardoned today.

(BEGIN VIDEOTAPE)

EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): It was a number of former officials from both parties, sources say, who fought for a pardon for former House Ways and Means Chairman Dan Rostenkowski, accused of misusing taxpayer funds, paying staff who did little or nothing, buying personal gifts. Rostenkowski pleaded guilty to two counts of mail fraud in 1996, and was sentenced to 17 months in prison.

His one-time attorney Bob Bennett said, "It was the right decision. Rostenkowski has done a lot of great service for the country."

Also pardoned, Archie Schaffer III, a Tyson's Chicken executive caught up in the independent counsel investigation of former Agriculture Secretary Mike Espy. Espy was acquitted of accepting gifts from corporations, but Schaffer was sentenced to a year and one day.

Coincidentally, it was Robert Ray who argued the case against Schaffer. The same prosecutor is now considering a perjury charge against the president. The president followed the case closely, and issued a statement saying that what happened here was wrong.

JAKE SIEWERT, WHITE HOUSE PRESS SECRETARY: The president believes that from time to time it's important to allow people to get a fresh start, to move on with their lives, to assume the rights -- full rights of citizenship.

O'CONNOR: And symbolic of his opposition to sentencing discrepancies for crack cocaine versus powder cocaine offenses, the president commuted the sentences of two women who had been serving long prison terms for helping drug dealers, while the ring leaders in those cases got more lenient sentences.

SIEWERT: And the president has addressed some of these cases where mandatory minimum caught someone in a much deeper prison sentence than some of the people that were involved in that very same offense.

(END VIDEOTAPE)

O'CONNOR: Under review, but not on the list: Susan McDougal and Web Hubbell, convicted on charges stemming from the Whitewater investigation, and Leonard Peltier, a Native American Indian, who is convicted of murdering two FBI agents in 1975. White House officials say just because they're not on today's list doesn't mean they still are not under consideration. They say it's just because no decision has been made yet -- Judy.

WOODRUFF: Eileen O'Connor, reporting from the White House. Thank you, Eileen.

Well, President Clinton has publicly supported his party's fund- raiser, Terry McAuliffe, to be the next chairman of the Democratic National Committee. But today, long-time member of the DNC Executive Committee, the former mayor of the city of Atlanta, Maynard Jackson, announced that he will challenge McAuliffe for the post.

Maynard Jackson joins us now from Atlanta.

Maynard Jackson, good to see you.

MAYNARD JACKSON, FORMER ATLANTA MAYOR: Judy, it's good so see you, again. Atlanta misses you.

WOODRUFF: Well, thank you. That was quite some time ago. Let me start by asking you: People thought Terry McAuliffe was a done deal. What's going on here?

JACKSON: The done deal is the problem. The Democratic Party needs to be democratic far more so than it has been. Coming out of Florida, where every vote counts, where we now have learned a lesson, we cannot be a part of an apparatus where every vote doesn't count. I believe that it's important that the system and the process be open. And the process was not. Now it's going to be. And my candidacy, by the way, is not a protest campaign. I don't run protest campaigns. This is campaign to win and to lead.

WOODRUFF: When you say the process was not open, what do you mean?

JACKSON: I mean, in a Democratic Party Executive Committee conference call on Tuesday, when it was discovered that Joe Andrew was not going to run -- I was prepared to support Joe Andrew. Many other Democrats around the country were also. There was then a kind of hand-off to Terry McAuliffe, who is a great guy. This is nothing personal against him: The prestigious fund-raiser in party's history.

But there was no process that allowed another candidacy. It was if there was going to be a coronation and not a campaign. Many people object to that. I'm among those. But I'm running not just to say that I object to the process. I'm running because I want to lead the party. And I believe I'm the best one to lead us to victory in 2002 and 2004.

WOODRUFF: But with all due respect, Maynard Jackson, you're going up against President Bill Clinton -- even though he's a lame duck, he's still going to be around -- Hillary Rodham Clinton, the senator-elect. You're going up against: Dick Gephardt, the leading Democrat in the House of Representatives; Tom Daschle the leading Democrat in the Senate. All these people have endorsed Terry McAuliffe.

JACKSON: I'm not running against them. I'm running against Terry McAuliffe. Those are great Democrats. And all of those are friends of mine. And I have had the pleasure of talking to most of the people -- as a matter of fact -- directly in the last two or three days. I just made a final decision yesterday morning. And I hope all the people around the DNC will give me -- I'm getting to them as quickly as I can.

But let's remember that every one of these Democrats you named favors a democratic Democratic Party, a more democratic party. And my four for the future, my program is going to be: a more democratic Democratic party, a stronger party, a more grassroots party that is going to respect state chairs and state parties, that will have a coordinated campaign that actually works, that is going to include the mayors in a specific way. And number four -- these four for the future -- it will be a winning Democratic Party.

WOODRUFF: Has the Democratic Party taken African-Americans for granted?

JACKSON: For so long, it's almost impossible to count. But this is a very complex issue. It does not mean the Democratic Party is unfair or that we are going to leave, or whatever the case may be. We are the most loyal constituents. It is almost a natural human factor to say: Well, we know they're with us, so we don't have to spend time over there. Let's go spend time over here. We feel, however, that it is important to use the crown jewels of the Democratic Party.

And that's not the few. That's the many. We'll organize from the grassroots up. We are going to win in 2002 and win in 2004. Terry McAuliffe is a great guy and can raise money like nobody I've ever seen. But I'm a better organizer. I've never lost a campaign since I was 30 years old. And we'll win these campaigns coming up.

WOODRUFF: I guess I'm just puzzled by some of what you're saying, Maynard Jackson, because we look what happened in the election: Al Gore got 90, 91 percent of the African-American vote. We're told that Bill Clinton is beloved by African-Americans. And yet you are saying their party has taken African-Americans for granted.

JACKSON: Well, I have already answered that question. But let me be sure we understand that this is not protest campaign. This is going to be a campaign to serve all Democrats: black and white, rich and poor, young and old, gay and straight, every cross-section of our party. We are particularly going to be sure that we correct the coordinated campaign flaws, because that had not worked well.

We are going to respect and work with and communicate with state- party organizations and their chairs in a way that has not happened before -- and with the mayors in city halls across the country. We are going to win the campaign. And I respect these Democrats you mentioned. They respect and they care for Terry McAuliffe. He's a great guy, has done a fantastic job for the party. But this is not his cup of tea. His strongest suit is raising money. My strongest suit is organizing from the grassroots up. We are going to win this thing.

WOODRUFF: All right, Maynard Jackson, we're glad to have you on the program. And it's good to see you again.

JACKSON: Thank you. Good to see you again. All the best.

WOODRUFF: Thank you. Thank you. Same to you.

JACKSON: Merry Christmas.

WOODRUFF: And merry Christmas.

There is much more ahead on this edition of INSIDE POLITICS. Still to come: another election battle, but this one half-a-world away. What's at stake in tomorrow's Serbian election? Plus, still staring at ballots in Florida: the latest on the news-media examination of those dimpled chads. And later: the Christmas gift you won't find in any store. Bill Schneider unwraps his "Political Play of the Week."

(COMMERCIAL BREAK)

WOODRUFF: I'll have more of the days political news coming up, but now a look at some other top stories.

It's time to head home for the holidays, as travelers in record numbers crowd air and train terminals, as well as the highways. High volume and bad weather could make it touch-and-go this weekend. While minor delays are reported in Chicago's Midway Airport, travelers in New York, Boston and Philadelphia are stacking up inside the terminals. The airlines say they expect to fly more than 39 million passengers over the holiday period.

For a look at what to expect from the weather this holiday weekend, let's check in with Chad Myers in Atlanta -- Chad?

(WEATHER BREAK)

WOODRUFF: All right, Chad, thanks very much, indeed.

Well, Americans appear to be keeping a tight grip on their wallets, at least they were when the last accountings were taken. A volatile stock market and rising fuel costs seem to be feeding the Grinch. The Commerce Department says spending rose by just .3 of a percent in November, the weakest pace since May. And retailers are reporting less than robust holiday sales.

One of the world's most public celebrities is taking the private route to her second wedding. Several hours ago, limousines started arriving on the grounds of a Scottish castle for the wedding of Madonna to director Guy Ritchie. With the uninvited kept away, it is not yet known for sure if the couple has tied the knot. I'm sure we'll hear before long.

The founder of CNN gives a multimillion dollar present to the United Nations. We'll talk to the U.S. ambassador to the U.N., Richard Holbrooke, about Ted Turner's gift in a moment.

And Serbians look forward to the gift of freedom as they head to the ballot box. Those stories when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: Tomorrow, in Serbia, voters head to the polls to elect a new parliament and potentially a whole new government. Opinion polls indicate the voters plan to use their ballots to erase all traces of the former regime of Slobodan Milosevic.

CNN's Belgrade bureau chief Alessio Vinci looks at the possibilities and pitfalls of starting over with a clean slate.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN BELGRADE BUREAU CHIEF (voice-over): The Proud Democracy Alliance, DOS, is expected to win a clear majority in the Serbian parliament, paving the way for the reformist forces in Serbia to consolidate their control over the economy, police and judiciary in Yugoslavia's dominant republic.

In an interview with CNN, the reformist candidate for prime minister, Zoran Djindjic, said the first priority of his government would be to reform the interior and justice ministries.

ZORAN DJINDJIC, DOS PRIME MINISTER CANDIDATE: To make us stronger, we must fight against corruption in this institutions, and it will be most dangerous part of this program to fight against special interests, against Mafia groups connected to politicians.

VINCI: Among those politicians, Djindjic says, is former President Slobodan Milosevic, wanted by the U.N. War Crimes Tribunal, but more likely to face a trial in Serbia over charges of election manipulation, embezzlement and tax evasion.

(on camera): But Milosevic himself is not the biggest issue facing a new administration. If, as expected, the democratic forces win the elections, they will also had have to deal with some of the old problems Milosevic had.

(voice-over): Among them, ethnic Albanian separatists in southern Serbia. They want the Presevo Valley, mainly populated by Albanians, to be reunited with Kosovo, and have launched a series of attacks against Serb police. The future status of Kosovo itself also remains open.

U.N. Resolutions speak about substantial autonomy for the province, but within Yugoslavia, and Kosovars demand outright independence. Another problem, Serbia's relations with Montenegro. The tiny coastal republic wants independence, and President Milo Djukanovic has promised a referendum by June next year.

Djindjic says the two republics should remain together and establish a loose federation.

DJINDJIC: I think our interests is to be part of European Union and not to order our internal relationship without to be connected to mainstream in Europe, and mainstream in Europe is integration, not disintegration.

VINCI: And then there is the economy. If promises of reforms fail to materialize, many people say they are ready to take to the streets again.

UNIDENTIFIED MALE (through translator): We are watching them. We are observing what they are doing. So far, we are satisfied, but if they do not perform well, we will express our feelings in the future like this.

VINCI: And Djindjic knows that, ultimately, it is the will of the people that counts.

Alessio Vinci, CNN, Belgrade.

(END VIDEOTAPE)

WOODRUFF: The founder of CNN, Ted Turner, has offered in an unprecedented move to make up the difference between the dues the United States owes the United Nations for the year 2001 and the amount the U.S. Congress is willing to pay. The offer is a -- worth $35 million, and it is aimed at ending a dispute over what the U.S. should pay every year.

Well, the U.S. ambassador to the U.N., Richard Holbrooke, joins us now to talk about the controversy and the contribution.

Richard Holbrooke, Mr. Ambassador, thank you for being with us. And is this as unprecedented as it sounds?

RICHARD HOLBROOKE, U.S. AMBASSADOR TO U.N.: I can't think of any precedent. What Ted did was really remarkable. About six weeks ago in a meeting he and I and some other people were having, I outlined the budgetary crisis we were facing, and I told him that the distance between the 25 percent of the regular budget we paid and the 22 percent that the Congress was willing to pay under the Helmes-Biden Amendment, was only $34 million. That's only 1 percent of the $3.5 billion we give the U.N. every year, and Ted said, well, I will make that money available for one year only in order to help the other countries adjust, but only if you get a deal.

So, it has been slightly misreported by many of the media. It wasn't a gift to the U.N. It was a gift to the United States Department of State. Madeleine Albright accepted it this afternoon in the exchange of letters with Turner in return, and only on contingent on this deal. We made the deal this at 5:00 this morning, Judy. So, we're very pleased and I think what Ted did was truly visionary.

WOODRUFF: What does said, Ambassador Holbrooke, about the U.S. relationship with the U.N. that a private citizen through his foundation ends up making up this enormous difference?

HOLBROOKE: Hey, it's the American way, Judy. Thank God we have people who have the vision to have -- to use the money that Ted Turner has to make a difference.

This isn't just money that goes for a worthy cause. This unlocked the door, because other countries had already set their national budgets in place and they couldn't make up the difference until 2002. This gives them a year to adjust.

What does it say about the U.S.? It's a great country. What does it say about the Helms-Biden law? It enables us to comply with its key provision. I see nothing wrong with it, and I think everyone who cares about the U.S. foreign policy or the U.N. -- and I hope I don't sound like a paid ad for CNN, but everyone ought to be grateful to Ted Turner today. I can tell you that Kofi Annan, Madeleine Albright, all of the rest of us certainly are.

WOODRUFF: Where does this leave the U.S. and it's obligation to the U.N.? The U.S. has been paying, what, 25 percent of the administrative budget of the United Nations. That numbers -- percentage has now been negotiated down to 22 percent. Is that the end of the story here?

HOLBROOKE: On the regular budget, that's it. We have complied with the key provision of the Helms-Biden Act, named after Senators Helms and Biden. On the peacekeeping budget, we didn't quite reach the Helms-Biden benchmark. We've been paying 31 percent, we were asked to go down to 25 percent. Quite frankly, no amount of jiggering around, no amount of manipulation of the numbers to get us where -- to 25 percent. We think, when the final analysis is done later tonight, we think we'll be at about 27 percent and change. That's a little short of the...

WOODRUFF: Will that satisfy Congress?

HOLBROOKE: You're asking the -- how should I put it -- you're asking the $800 million question. And the answer to that will reside in the Congress of the United States. Secretary Albright and I have talked about this endlessly in the last few days.

We have reported to Colin Powell; he knows what's been going on. He's been very supportive. That decision will have to be taken by the Congress. All I can say is, we achieved 3/4 of the key benchmarks which would allow us to turn over to the U.N. another $800 million, and it is a tremendous achievement.

WOODRUFF: Let me just quickly ask you a question about Middle East negotiations. We know Palestinian, Israeli negotiators meeting with Madeleine Albright at Bolling Air Force Base; and yet the Palestinian negotiator Saeb Erakat quoted late today, saying the gaps are still there, the situation very difficult. Is there any headway being made?

HOLBROOKE: Well, you're asking the wrong person, Judy. The last time I talked to Madeleine, she was on her way to Bolling and she did not know what to expect. And we were focusing almost entirely on this issue and also on...

WOODRUFF: Are you optimistic?

HOLBROOKE: About the Mideast?

I will tell you, frankly, as we end our tenure, that of all the issues that I have dealt with here at the U.N., and all the issues I've ever dealt with, with the separate category of Bosnia and Serbia, this is the nastiest, and it brings the worst out of people. And this is not a time for optimism, but it is a time for determined effort and resilience.

WOODRUFF: Well, the U.S. Ambassador to the United Nations, Richard Holbrooke, we thank you very much for joining us.

HOLBROOKE: It's my honor.

WOODRUFF: Have a good holiday.

HOLBROOKE: Thank you.

WOODRUFF: If you thought the days of dimpled, dented or dangling chads were over, you can think again. Those notorious undervotes are get the once over once again. We'll see why when we return.

(COMMERCIAL BREAK)

WOODRUFF: At a time when many Americans are out looking for holiday gifts, in Florida many people are looking at some ballots again.

CNN's Charles Zewe explains why.

(BEGIN VIDEOTAPE)

CHARLES ZEWE, CNN CORRESPONDENT (voice-over): Peering at punch cards.

Reporters and lawyers are tediously inspecting thousands of disputed Florida ballots on which counting machines registered no vote for president.

UNIDENTIFIED MALE: We are simply showing public documents for them to make their own determination.

ZEWE: Dimples, hanging chads, marks of any kind are being cataloged to determine if voters had made partial holes in the punch- card ballots in an attempt to vote for president.

Democrats claim defective Vote-o-Matic machines prevented ballots from being properly punched. The conservative legal group, Judicial Watch says it's expectation of Broward County ballots shows many ballots judged by the county canvassing board to be dimpled in favor of either George W. Bush or Al Gore are not dimpled at all.

LARRY KLAYMAN, JUDICIAL WATCH: It's a mess. What we've seen is that the standards employed by Broward County are extremely specious.

ZEWE: What Judicial Watch has not discussed is its methodology in making that finding.

Twenty-two media and public interests groups, using differing standards, are taking part in the inspection effort.

ZEWE (on camera): Could this not add to the confusion over the election?

MURRAY GREENBERG, MIAMI-DADE CANVASSING BOARD ATTORNEY: It certainly is possible that it could add to the confusion.

ZEWE (voice-over): A dozen news organizations, including CNN, "USA Today," "The New York Times" and The Associated Press are trying to form a consortium to examine ballots with a uniform standard.

DOUG PARDUE, "USA TODAY": I think one thing we wanted to try to avoid in this was having a mad-media dash to find out what happened. It could look just as bad as the election looked.

ZEWE: "The Miami Herald," however, chose to inspect ballots on its own.

MARK SIEBEL, ASSISTANT MANAGING EDITOR, "THE MIAMI HERALD": I see nothing wrong in having several different groups and organizations look at the information and thinking about the information in as many different ways as we can think about it because it is a complicated thing, it's an important thing.

ZEWE: Florida Governor Jeb Bush calls the media recount an attempt to rewrite history.

GOV. JEB BUSH (R), FLORIDA: We're on slippery slope here; and unless you do it in the most objective way, with really tight standards, I don't think it's going to prove anything.

ZEWE (on camera): News executives counter that what they're doing is simply trying to show what the ballots looked like and, perhaps, ultimately what the vote results might have been, had those thousands of discarded ballots been included in the vote totals.

Charles Zewe, CNN, Miami.

(END VIDEOTAPE)

WOODRUFF: Well, what do we think of President-elect Bush's Cabinet so far? Bill Schneider certainly has some thoughts on it, and he'll share them when we come back.

(COMMERCIAL BREAK)

WOODRUFF: Every passing day brings new appointments to the Bush Cabinet. The president-elect has made some choices that are obvious. Others bear a little explaining. And who better to explain than CNN senior political analyst Bill Schneider -- Bill.

SCHNEIDER: Well, you know, that Santa Claus, he is a pretty shrewd pol. He operates on the principle, something for everybody. And he gets very high job approval ratings. Looks like President- elect Bush has learned something from old Santa.

Bush's Cabinet choices reflect the same principle, something for everybody, including a political "Play of the Week."

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): There's some very smart politics behind Bush's Cabinet picks. The president-elect's first task was outreach.

BUSH: I look forward to the chance of healing a nation that has been divided as a result of an election.

SCHNEIDER: Outreach to groups that didn't support him and felt aggrieved by his victory, like African-Americans...

BUSH: General Powell is an American hero, an American example and a great American story.

SCHNEIDER: ... and women.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER-DESIGNATE: I grew up in Birmingham, Alabama. I did not go to integrated schools until I was in 10th grade.

SCHNEIDER: Moderate Republicans are getting not just Powell but also Christine Todd Whitman as head of the Environmental Protection Agency. Both of them support abortion rights. But their jobs don't have much to do with abortion.

Bush speaks a little Spanish, but Hispanic voters went strongly for Gore. So here's something for Mexican-Americans...

BUSH: I'm proud to announce that Al Gonzalez, Supreme Court justice of Texas, has agreed to become my White House counsel.

SCHNEIDER: ... and something for Cuban-Americans.

BUSH: I also have also picked a secretary for housing and human development, Mel Martinez from the state of Florida.

SCHNEIDER: That's Florida, the recount state. Republicans are in a deep depression in California. So Santa Bush brought them an agriculture secretary.

BUSH: She was also the secretary of California's Department of Food and Agriculture. She was the first woman to hold that post.

SCHNEIDER: For the key post of treasury secretary, Bush needed someone politically connected, say, a close personal friend of Federal Reserve Chairman Alan Greenspan and others.

PAUL O'NEILL, TREASURY SECRETARY NOMINEE: Secretary Cheney and I go back many years, and so it's also a pleasure to have a prospect of working closely with him again.

SCHNEIDER: Wait a minute, conservatives protested. What's Santa bringing us? We were good all year, never gave the ticket a minute of trouble. Ho, ho, ho, said Santa. I got you just what you wanted, an attorney general with deeply conservative views on social issues and close ties to the religious right.

SEN. JOHN ASHCROFT (R-MO), ATTORNEY GENERAL NOMINEE: What doth the Lord require of thee but to do justly and to love mercy and to walk humbly with thy God.

SCHNEIDER: But can a nominee with Ashcroft's controversial views on abortion and gay rights and affirmative action get confirmed by the Senate? No problem. He's finishing his term in the Senate. He's in the club.

Good presents make good politics. It works for Santa Claus and for the president-elect. So we have something nice for him, too: "The Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: Now, what about the Democrats? Don't they get anything? Or are they being punished for leaving Florida in such a mess? Well, we still have a few more days until Christmas, and Santa does not want to tick off all those Democrats in Congress. I think he may come up with a little something for them, too -- Judy.

WOODRUFF: Do you have any names in mind?

SCHNEIDER: Oh, I don't want to tell. It's not Christmas yet.

WOODRUFF: All right, all right. Well, if you do, let us know.

SCHNEIDER: I will.

WOODRUFF: Bill Schneider.

SCHNEIDER: Sure.

WOODRUFF: Thanks very much.

A little controversy comes to the Bush Cabinet courtesy of, as Bill just suggested, the president-elect's choice for attorney general. But just who is John Ashcroft and why would some groups object to him heading up the Justice Department? Major Garrett offers some answers next.

Then later, a Tennessee company's fate is sealed when it gets a big job from the Bush administration.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: As a gift, I will spare you from having to ask me any questions. God bless.

(END VIDEO CLIP)

WOODRUFF: With a holiday nod to reporters, George W. Bush caps a series of job announcements. We'll review the names and what's next.

Plus...

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, MSNBC ANCHOR: ... W. Bush, the governor of Texas.

HOWARD KURTZ, CNN CORRESPONDENT (voice-over): It was television's version of Dewey defeats Truman, an election night fiasco that few will soon forget

(END VIDEO CLIP)

WOODRUFF: Howard Kurtz with the inside story on what went wrong.

And we'll check out the new Bush White House logo and its link to Al Gore.

ANNOUNCER: From Washington, this is INSIDE POLITICS, with Judy Woodruff and Bernard Shaw. WOODRUFF: Welcome back to this extended edition of INSIDE POLITICS. President-elect Bush has put the process of announcing his Cabinet choices on hold for the holidays, after reviewing three more high-profile choices today. He capped this day by officially tapping New Jersey Governor and Republican moderate Christy Whitman to head the Environmental Protection Agency, a post that Bush is elevating to Cabinet level.

(BEGIN VIDEO CLIP)

GOV. CHRISTINE TODD WHITMAN (R-NJ), EPA ADMINISTRATOR NOMINEE: I have never underestimated the importance of environmental protection, just as I have never overestimated the ease in achieving it. That perspective will help me work with our states as we meet the challenges ahead of us.

(END VIDEO CLIP)

WOODRUFF: Bush also nominated conservative Senator John Ashcroft of Missouri to be attorney general, a move expected to please the right wing of the GOP. Ashcroft says his embarrassing defeat last month by Mel Carnahan, who died in a plane crash just weeks before Election Day, has renewed his call to public service.

(BEGIN VIDEO CLIP)

ASHCROFT: Quite simply, we will strive to be guardian of liberty and equal justice. For freedom, as president-elect Bush has noted, can flourish only in a culture defined by the rule of law, a rule of law that knows no class, sees no color and bows to no creed.

(END VIDEO CLIP)

WOODRUFF: Bush also appeared before the cameras today with the governor of Virginia, Jim Gilmore, formally tapping him to be the next chairman of the Republican National Committee.

CNN's Major Garrett joins us now from Austin with a look at what is ahead for the president-elect -- Major.

GARRETT: Well, as you said, Judy, the president-elect and his family will take a little bit of time off to celebrate the holidays. And come next Thursday, when he arrives in Washington, we are expecting a few more Cabinet nominations.

Among those that may be on tap that day: the leader of the Department of Health and Human services expected to be Wisconsin Governor Tommy Thompson. No other word what other appointments may be made, but there are a couple of key slots that conservative Republicans are certainly looking at very closely, one being Defense Department. Former Indiana Senator Dan Coats still remains the leading candidate there. But there appears to be a little bit of infighting within the Bush team about whether or not that appointment will actually be made.

Also another one conservatives are looking at very closely is the education secretary. There haven't been any particular names rising to the top of the surface yet, although there are several names that have been mentioned. Those would be two other ones key. Also CIA director, head of the Department of Transportation and Labor are among other ones -- and also the ambassador to the United Nations. A name that's been frequently mentioned in the past 48 hours: Elizabeth Dole, who ran for president, you'll remember, in 2000 on the Republican side, and is the wife of the former Senate majority leader, Bob Dole -- Judy.

WOODRUFF: Major Garrett in Austin, anything else we can look forward to? That's a pretty full list you just gave us.

GARRETT: That's a pretty full list. Let me give you a little bit of sense of what the president-elect and his family will be doing over the holidays. They are in Crawford, Texas at the ranch right now, coming back to Austin tomorrow to pack up the governor's mansion. On Sunday evening, they will attend Christmas Eve services, spend Christmas Day here in Austin, and then join up with former President Bush and his wife, Barbara, and fly on to Florida to Boca Grande, where he will join the entire Bush clan down there for what is described as a working vacation.

Senior staff members of the president-elect's team will be with him. You can bet they'll be going over lot of different records on lots of different people who are vying for positions in the Bush administration -- possibly making some phone calls, doing some interviewing over the phone -- and then, as I said, heading up to Washington for Thursday for what we expect to be a heavy day of announcements -- Judy.

WOODRUFF: All right, Major Garrett, thanks very much. We appreciate it.

And now a closer look at Senator John Ashcroft: And what would he bring to the Bush Cabinet?

CNN's John King is covering the presidential transition.

(BEGIN VIDEOTAPE)

ASHCROFT: OK.

KING (voice-over): For John Ashcroft, it has been a year remember -- to say the least.

ASHCROFT: Thank you for helping us.

KING: He considered running for president, then decided instead to seek reelection to the Senate. He will be remembered in history for losing to a dead man. Missouri Governor Mel Carnahan was killed in an October plane crash, but his name remained on the ballot. And his widow Jean was then appointed to the seat. Ashcroft decided against a legal challenge and was preparing to head back home to Missouri. Then president-elect Bush called.

BUSH: Today, it's my honor to send to the United States Senate the name of Senator John Ashcroft to become the attorney general of the United States.

KING: Ashcroft is a former state attorney general and governor, an outspoken abortion foe.

GLORIA FELDT, PRES., PLANNED PARENTHOOD: Because the attorney general argues for the administration before courts -- and certainly that includes the United States Supreme Court -- he could aggressively pursue overturning Roe vs. Wade.

KING: Ashcroft opposed legislation to penalize tobacco companies if they didn't crack down on teen smoking, accepted an honorary degree from the conservative Bob Jones University, and called on President Clinton to resign because of his relationship with Monica Lewinsky.

(BEGIN VIDEO CLIP)

ASHCROFT: I believe this president has compromised the integrity of the presidency. And he has done it in a way which makes him incapable of continuing to represent the national interests effectively. And as a result, I think he should resign.

(END VIDEO CLIP)

KING: Senate Democrats will have tough questions. Some African- American leaders worry the new Republican administration will be lax in enforcing civil-rights laws and in investigating allegations of voting improprieties this year in Florida and elsewhere. And Ashcroft took the lead role in defeating the nomination of Ronnie White for a federal judgeship. White was the first black to serve on the Missouri Supreme Court.

ASHCROFT: Well, Ronnie White was not confirmed by the United States Senate because he was soft on crime. He had a poor record of voting to expand loopholes.

KING: But Ashcroft is generally well liked by his Senate colleagues,, one of four members of the Singing Senators.

(on camera): Those Senate connections were a major plus. Top Bush advisers have believed from the beginning that the Democrats would be tough on whoever was nominated as attorney general. But they think the Senate is highly unlikely to reject one of its own.

John King, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Let's talk more now about all these names surfacing this week. We are joined now by Stuart Rothenberg of the "Rothenberg Political Report" and Charlie Cook of the "National Journal."

Gentlemen, let's talk about John Ashcroft first.

Stu, a smart pick on the part of Governor Bush?

STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": Absolutely, Judy.

It think it's a very good pick, particularly coming after all these other names that he either announced or have surfaced since. You have to see Ashcroft in the context of Christie Whitman and Colin Powell and the like. And conservatives were getting edgy. They were starting to become vocal, looking for some conservatives at key positions in the administration. And they got one. So I think, overall, it's a good pick the way it fits in with the other members of the Cabinet.

WOODRUFF: Charlie, are moderates and Democrats -- liberals -- are they right to be worried about John Ashcroft?

CHARLIE COOK, "NATIONAL JOURNAL": Well, I mean, liberals ought to be really, really upset with the John Ashcroft pick. But guess what? George Bush won. And they lost the election. I mean, one way of the other, they lost. And the thing is, there was not a solid conservative in this whole Cabinet put in so far. And so, if George Bush had not come in with a solid conservative pretty soon, he would have been in big, big, big trouble. And he certainly is. But so far, this has been a very moderate to mainstream Cabinet. He had to do something for conservatives here.

ROTHENBERG: And I would simply add this: that, ultimately, this is the Bush administration. And while Ashcroft, of course, has an important role in forming policy as an adviser to the president, ultimately the buck does stop with George W. Bush. And if he -- whatever he wants, in terms of aggressive handling of civil-rights cases, for example, is going to happen. I don't think there's any doubt about that.

COOK: And if he goes after the abortion issue, for example, he will not do anything on that issue without George Bush's permission.

WOODRUFF: Well, speaking of abortion, in Christie Whitman, the governor of New Jersey: someone who is pro-choice. She has been put at the Environmental Protection Agency.

Stu, is this enough to make conservatives relax?

ROTHENBERG: Well, they'll...

WOODRUFF: Pro-life conservatives.

ROTHENBERG: They're never happy when you mention Christie Whitman, particularly in a sentence that has to do with an Republican administration. They could see her in a Democratic administration. But the fact of the matter is, this is another good choice. And, interestingly, you know, there are all these questions about George W. Bush and how politically sensitive he is -- and how politically savvy.

So far, this Cabinet is a terrific mixture, people well placed. And basically, the president-elect has put Governor Whitman in a position where she can't do a lot of harm for conservatives. Now, could -- would an aggressive environmental program upset members of the business community? Of course it might. But, again, this is going to be the Bush agenda, not the Whitman agenda. He has put her in a place where she can't do a lot of trouble for conservatives.

COOK: Bush could not put Christie Whitman in a job that was -- that had social, cultural-issue overtones. And HHS, anything like that would have driven them nuts. But at Environmental Protection Agency, she's fine.

WOODRUFF: All right, let's talk about pure politics: governor of Virginia Jim Gilmore, head of the RNC, the Republican National Committee. Smart...

ROTHENBERG: Well, again, a conservative. Judy, notice how many governors, office-holders, former office-holders are involved.

WOODRUFF: Yes.

ROTHENBERG: Clearly, the president-elect is going rely on people with extensive political experience. And with Gilmore, you have someone who is very partisan, who is articulate and who can raise money. And that's what the committee chairman does. And, ultimately, again, the RNC is an extension, really, of the White House political operation..

WOODRUFF: And Karl Rove is going to be at the White House.

(CROSSTALK)

ROTHENBERG: The White House political operation is in charge. And Gilmore will be there for, in this case, George W. Bush. This is not -- this is a very different case than the party not having the presidency. When the party has the presidency, you really know who is running the political operation.

COOK: There is one other name that hadn't come up here. And that's Mitch Daniels as the director of the Office of Management and Budget. Mitch is a -- I mean, Mitch is not a bean-counter. He's not a policy guy. But as a former chief of staff to Senator Lugar, executive director of the Republican Senatorial Committee, assistant to President Reagan and a very senior executive with Eli Lilly. This guys knows the world. He knows the politics. He knows the process. You can hire bean counters. I think it's a very, very smart pick for director -- for head of the budget.

WOODRUFF: Quickly switch over to the Democrats. Terry McAuliffe, hand-picked, chosen by outgoing President Clinton, Senator Hillary Rodham Clinton, Al Gore signed off on it.

COOK: I think it's a good pick because, I mean, Democrats have had a luxury -- they've had the White House, they've been able to raise more money in the last eight years than they've ever raised before. Now, they've lost the White House. Money raising was going to be a huge problem. So bringing in basically the best fund raiser in the party, Terry McAuliffe is a very, very smart choice. And besides, Dick Gephardt and Tom Daschle, they're going to be the spokespeople for the party, not the chairman.

ROTHENBERG: He is a terrific moneyraiser. In that regard, it's a good pick. On the other hand, we have seen it has made some Democrats a little nervous about who's making the choices within the party. That's understandable. There's always going to be a fight for influence in the out party because they don't have the standard bearer.

WOODRUFF: We interviewed Maynard Jackson a little while ago, a blip -- does he have a chance?

COOK: No. Zero.

WOODRUFF: All right, with that final word, perhaps...

(CROSSTALK)

COOK: Well, you said quickly.

WOODRUFF: Charlie Cook, Stu Rothenburg, thank you both.

ROTHENBERG: Happy Holidays.

WOODRUFF: Have a great holiday to both of you. Happy Hanakkuh, Merry Christmas to you both.

And still ahead on this expanded edition of INSIDE POLITICS, examining the news media's election night mistakes with Howard Kurtz.

(COMMERCIAL BREAK)

WOODRUFF: The 2000 presidential election was like none other on record, from the dispute over Florida ballots to the news media mistakes on election night. Since November 7th, the Voter News Service, or VNS, which provided exit poll information, has conducted an internal review to try to determine just what went wrong.

Howard Kurtz of CNN's "RELIABLE SOURCES" takes a look at what is in its report.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): It was television's version of Dewey defeats Truman, an election night fiasco that few will soon forget. Now, a confidential report by Voter News Service explains just how CBS, NBC, ABC, CNN and Fox were misled by bad data, and the findings aren't pretty.

The networks have an almost mystical faith in the VNS exit polls and kept assuring us how careful they are in making their projections.

(BEGIN VIDEO CLIP)

DAN RATHER, CBS ANCHOR: Let's get one thing straight right from the get-go: We would rather be last in reporting returns than to be wrong.

(END VIDEO CLIP) KURTZ: But wrong they were, thanks in large measure to VNS. The news service had no clue how many absentee ballots there were in Florida. The group thought it would be 7 percent of the total vote, but it turned out to be 12 percent.

Why didn't VNS do some telephone polling to check? Too expensive, says the report. At 10 minutes to eight in the East, Al Gore had a comfortable lead in Florida, or so VNS thought. But there were problems with the exit poll samples.

Gore's lead was inflated by 16 percent in Tampa, for example, and VNS used Florida Governor Jeb Bush's victory two years ago as a model in predicting how his brother would do this time around -- another mistake, the news service now admits. But these numbers prompted the networks to roll the electoral dice.

(BEGIN VIDEO CLIP)

PETER JENNINGS, ABC NEWS ANCHOR: ABC News projects that Al Gore wins the state of Florida and its 25 electoral votes.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

WOODRUFF: A big call to make, CNN announces that we call Florida in the Al Gore column.

(END VIDEO CLIP)

RATHER: Al Gore wins the big one in Florida, 25 electoral votes.

(END VIDEO CLIP)

KURTZ: As everyone now knows, the vice president's so-called victory didn't last long.

(BEGIN VIDEO CLIP)

RATHER: Bulletin: Florida pulled back into the undecided column.

(END VIDEO CLIP)

KURTZ: As the night wore on, the VNS problems continued, not just with exit polls, but with basic math.

(on camera): At 2:00 in the morning, VNS estimated that 179,000 votes in Florida were still outstanding, meaning that Bush's big lead would surely hold up. But 359,000 votes came in after 2:00 a.m., meaning the news service was off by -- let's see now -- carry the one -- 100 percent.

And thanks to reporting problems in certain counties, Bush's 51 000-vote lead over Gore quickly dwindled to almost nothing. (voice-over): But the fuzzy math prompted the networks to go out on a limb a second time, this time for all the marbles. Fox went first, at 2:16.

(BEGIN VIDEO CLIP)

BRIT HUME, FOX NEWS ANCHOR: We are now calling -- Fox News is now projecting George W. Bush the winner in Florida and thus, it appears, the winner of the presidency of the United States.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JENNINGS: ABC News is now going to project that Florida goes to Mr. Bush. Unless there is a terrible calamity, George W. Bush, by our projections, is going to be the next president of the United States.

(END VIDEO CLIP)

KURTZ: The calamity, of course, was a VNS system so flawed that it failed to catch a report that Gore had won 95 percent of the vote in Duval County, an obvious impossibility. The internal report also says that VNS overstated the size of the black vote and underestimated the size of the Cuban vote.

But VNS blames the networks for jumping the gun, saying they make their calls, quote: "at the minimum acceptable tolerance for risk, with very little allowance for error." And there was no shortage of errors, as America's superstar anchors had to acknowledge.

(BEGIN VIDEO CLIP)

TOM BROKAW, NBC ANCHOR: What the networks giveth, the networks taketh away.

(END VIDEO CLIP)

KURTZ: The networks created Voter News Service a decade ago for one reason: to save money. But it's hard to put a price tag on the humiliation that all the networks suffered on election night. They rushed to declare a winner based on horribly faulty information and have no one to blame but themselves.

This is Howard Kurtz of CNN's "RELIABLE SOURCES."

(END VIDEOTAPE)

WOODRUFF: And effective this week, moving to another story, longtime columnist Jack Germond is leaving "The Baltimore Sun": 72- year-old Germond, who announced in January that this would be his last presidential campaign, told CNN Howard Kurtz that politics has changed since he began his career.

(BEGIN VIDEO CLIP) JACK GERMOND, "BALTIMORE SUN": I thought the 2000 campaign was -- they have been trending in this direction. I thought it was particularly insulting to the voters, and I thought full-grown people shouldn't be covering it. And they -- you're embarrassed to be covering it.

The reason is the campaign is totally made up of positioning for sound bites on the evening news, television evening news shows.

KURTZ: Dominated by TV.

GERMOND: Dominated by TV, and not only that, the candidates are totally controlled, contrived, and we have the story becomes an exchange of accusations back and forth by flaks. Why do we care if a flak for Bush says something nasty about the flak for Gore? That's not news. It didn't used to be. Now it is.

(END VIDEO CLIP)

WOODRUFF: You can see the rest of Jack Germond's interview with Howard Kurtz and Bernard Kalb on "RELIABLE SOURCES," Saturday at 6:30 Eastern here on CNN.

Up next, on paper, a new look for a new administration.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: As the McCains, the Gores and the Clintons, as you just saw, sent out their holiday wishes, printers are working overtime for George W. Bush. As Ashley Webster of CNN affiliate WZTV reports, one company in an unlikely place is busy preparing the new stationary for the president to be.

(BEGIN VIDEOTAPE)

ASHLEY WEBSTER, WZTV REPORTER (voice-over): Chuck Creasy likes to keep a close eye on his work, especially when it's for a very important customer.

CHUCK CREASY, DYE VAN MOL & LAWRENCE: You get a call from a representative of the president of the United States it's pretty exciting.

WEBSTER: Now that the presidential election has finally been resolved, the Nashville public relations company Dye Van Mol & Lawrence has been asked by the Republican National Committee to quickly design a logo for George W. Bush's presidential inauguration in Washington next month.

CREASY: They really wanted a logo, a mark that was understated, elegant, and that really carried an official look and feel to it.

WEBSTER: And this is the final design. Local illustrator Jim Heish (ph) drew the White House, and one by one a Nashville printing company is producing the logo letterhead and envelopes, complete with gold-foil stamping.

CREASY: This is, you know, a pretty serious event, and they wanted to portray that through the graphics and the logo.

WEBSTER: So when the invites go out for the big day, a little bit of irony cannot be ignored. That's because a little piece of Al Gore's home state will be a part of George W. Bush celebration.

(END VIDEOTAPE)

WOODRUFF: And that was Ashley Webster of WZTV.

And that's it for this edition of INSIDE POLITICS, but of course, you can go online all the time at CNN's allpolitics.com.

This weekend on CNN, retiring U.S. Senator Daniel Patrick Moynihan joins "EVANS, NOVAK, HUNT & SHIELDS." That's Saturday at 5:30 p.m. Eastern.

Saturday at 7:00 Eastern, comedian Mark Russell will bring some holiday cheer to the "CAPITAL GANG."

And Sunday at noon Eastern, former Israeli Prime Minister Benjamin Netanyahu is a guest on a special two-hour "LATE EDITION."

I'm Judy Woodruff. "THE MONEYLINE NEWS HOUR" 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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