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Inside Politics

Federal Prosecutor Investigates Rich Pardon; George W. Bush Pleasing Conservatives

Aired February 15, 2001 - 5:00 p.m. ET


JUDY WOODRUFF, CNN ANCHOR: Bill Clinton at the center of a new criminal probe into his pardon of Marc Rich. What is the prosecutor trying to prove?


SEN. HILLARY RODHAM CLINTON (D), NEW YORK: President Bush supports faith-based programs, but his tax plan should not be one of them.


BERNARD SHAW, CNN ANCHOR: Hillary Clinton takes a jab at the president. Is she helping Democrats speak with one voice on tax cuts?



WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: A happy conservative; is that an oxymoron?


WOODRUFF: Bill Schneider looks behind the smiling faces of the Republican right.

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

SHAW: Thanks very much for joining us. We begin with an all- too-familiar situation for Bill Clinton and the United States: a federal prosecutor investigating the former president. This criminal probe into Clinton's pardon of financier Marc Rich was confirmed today by U.S. Attorney Mary Jo White and FBI officials.

As CNN's Eileen O'Connor reports, prosecutors are following a money trail and looking for a possible quid pro quo.


EILEEN O'CONNOR, CNN NATIONAL CORRESPONDENT (voice-over): Legal and congressional sources say U.S. attorney Mary Jo White's federal probe will focus on determining whether the pardon of oil financier Marc Rich was granted because of a $450,000 contribution made to the Clinton presidential library by Rich's ex-wife Denise. A link that will be all but impossible, say some former federal prosecutors, to prove.

JONATHAN POLKES, FORMER FEDERAL PROSECUTOR: They're going to have to prove, under the federal bribery statues, a direct link between the offer of money and the grant of the pardon, or at least that that was in Denise Rich's mind, that was in Marc Rich's mind.

O'CONNOR: Investigative sources say they could look for transfers of money from Marc Rich's account into those of his ex-wife, and the timing of her contributions. Lawyers for both Riches refuse to comment on contacts with the U.S. Attorney's office.

When asked about the probe, the former president seemed unconcerned, after issuing a statement saying, in part: "Any suggestion that improper factors, including fund-raising for the DNC or my library had anything to do with the decision are absolutely false."

Some members of Congress say this may boil down to paying back political supporters. While not necessarily illegal, they say, it is still an abuse of the pardon powers.

The former Clinton Justice Department pardon attorney says listening to friends is something all presidents do.

MARGARET LOVE, FORMER U.S. PARDON ATTORNEY: There has always been, historically, a certain amount of what we used to call "back- dooring" at the White House in pardon cases.

O'CONNOR: As for President Bush, he wants the country to move on, but won't interfere.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I do not think anybody believe the president of the United States should be the one to tell the department of justice how to conduct its investigations.


O'CONNOR: Even if making the case proves impossible, congressional sources say it will be worth the effort to shed light on the pardon process as a warning to future presidents: use the power to right injustice, but not to reward the rich and powerful.

SHAW: Eileen, question: What's the claim of people close to Clinton as to why he did this? Why he granted these pardons?

O'CONNOR: Well, they say that Jack Quinn did make a compelling legal case to him and that, also, he was very much impressed by phone calls made by Ehud Barak, by the king of Spain and others that said that Marc Rich had done great things for their countries in terms of investment and other things. They also say that there was a rush to grant a lot of pardons -- you know, that in the last month Bill Clinton packed a lot of things into that month and that, therefore, some of these pardons didn't go through -- 30 of them, as you know, went straight to the White House, not to the Justice Department, and therefore that raises a lot of questions. And they see that in hindsight, but that say that they're -- and they make this claim as a defense, that in that haste it's raised a lot of questions.

SHAW: But why so many pardons at the very penultimate moment in his administration, the last few hours?

O'CONNOR: Well, you know, interestingly, Bernie, as a Democrat -- and this a very good pardon power of the president, but yet he didn't use, President Clinton, this power very often. And a lot of his aides were urging him to do it. And so, therefore, a few months before the end of his administration they realized that they could -- they wanted to do this. And so, therefore, President Clinton made an overture to the Justice Department: find me some cases; and also just to other people -- are there worthy candidates out there?

This is what people close to the president are saying; and he wanted to grant a lot of the pardons because he does believe that it was a way -- and there are some cases where he felt it was a way to right injustice -- mandatory minimum sentences, very long for drug sentences that he felt were unfair.

SHAW: Eileen O'Connor, thank you.

Judy, over to you.

WOODRUFF: Well, Congress is continuing to investigate these Clinton pardons, although the federal criminal probe has blocked their efforts to seek immunity for Rich's ex-wife, Denise.

We are joined now by Senator Jeff Sessions, Republican of Alabama; he's a member of the Judiciary Committee, which held a hearing on the pardon this week.

Senator Sessions, thank you for joining us.


WOODRUFF: Even President Bush is saying, senator, the country should move on. Is this investigation in New York really necessary?

SESSIONS: Judy, I was a federal prosecutor for almost 15 years, and you just can't move on when there's a basis for an investigation like this. The United States attorney who was appointed by President Clinton herself -- himself, she feels that an investigation should go forward, and certainly no politician, including the president, should block it because, in my view, it's a justified investigation.

Based on my experience, I think this matter needs to be looked at. I hope that nothing will come out of it; I hope there will be no proof that the president actually had a quid pro quo, a pardon for money. But based on the facts so far, I think it must be looked at.

WOODRUFF: But even if there were a quid pro quo, senator -- we were just hearing, in Eileen O'Connor's piece, the folks who are familiar with this process say, in this instance -- in this type of instance, it is almost impossible to prove a quid pro quo, to prove that there was a direct link. Do you agree with that?

SESSIONS: No, I don't agree with that. I prosecuted mayors, judges city councilmen, county commissioners for bribery and extortion under federal statutes. It's not impossible to prove.

If money changed hands and people are interviewed who are involved with that, their conversations are inquired into; if there's no connection, the facts will so show. If the evidence shows otherwise, then you have a criminal case. Based on that argument, you'd never have a bribery case.

WOODRUFF: So what would it take? I mean, tell us what would it take to prove a connection based on your experience? Would there had to have been a conversation overheard by someone, or what?

SESSIONS: Probably; you normally have someone involved in a meeting who values their oath more than their loyalty to the persons who were involved. And frequently it will surprise you who will spill the beans, and just say what happened. And they -- maybe they weren't a part of it, but they heard it or they saw the communications and the transactions and they can report that.

I'm not saying that's going to happen; but to say you can't prove bribery is not accurate.

WOODRUFF: What do you also say, senator, to those who say we heard the former Justice Department pardons official saying there's always -- presidents have always done favors for friends. She called it "back-dooring"?

SESSIONS: Well, I heard what she said. I would have liked to have heard her complete statement because very few pardons ought to be granted without the vetting within the department of justice. If a matter is -- a person is close to the president, as some of these were, to President Clinton, and he did that pardon, or President Nixon, or Caspar Weinberger, perhaps the department of justice may not do it.

But in an average criminal case where the defendant is a fugitive who's fled the United States -- the largest tax fraud case in the United States' history involving -- dealing with Iran and that sort of thing, this is the kind of case that should not be close to being pardoned, in my view, at this point in the proceeding.

WOODRUFF: Is there any question in your mind, senator, that there -- a president's power to pardon should be preserved?

SESSIONS: I have some concern about whether we should consider reviewing that and, maybe, a constitutional amendment. But after our hearing that Senator Specter led the other day, we had three professors who thought we ought not to change the Constitution, several other senators agreed with that; so I don't see, at this point, any real movement that would justify the effort to try to change it. It is a remarkably unfettered power given to the president that he can exercise totally without review, and there are not many of those things in our government. We've got a lot of checks and balances, but this wasn't one of them.

WOODRUFF: And you're saying at this point, leave it the way it is?

SESSIONS: I don't think there will be any effort to change it, seriously, at this point.

WOODRUFF: All right; Senator Jeff Sessions with the Senate Judiciary Committee, thank you very much for joining us.

SESSIONS: Thank you, Judy.


SHAW; Now to the political fallout as this pardon controversy escalates.

Our Frank Sesno has been talking to insiders, who are keeping a running score.


FRANK SESNO, CNN CORRESPONDENT (voice-over): The more Bill Clinton and his controversies make news, the more worried and wary many on both sides of the political fence have become. And the more people engage in Washington's favorite parlor game: winners and losers. By broad consensus, the most serious setback goes to the former president himself -- his legacy and his standing.

Few Democrats are defending Mr. Clinton these days. Weary of constant turmoil, one prominent party strategist says flatly, he's not our responsibility anymore. That's been abundantly clear, as several allies have voiced once unthinkably blunt criticism.

SEN. JOE BIDEN (D), DELAWARE: I think either the president had an incredible lapse in memory or was brain-dead.

SEN. CHARLES SCHUMER (D), NEW YORK: To my mind, there can be no justification for pardoning a fugitive from justice.

SEN. JOHN EDWARDS (D), NORTH CAROLINA: I, for one, don't understand the pardon. It doesn't make sense to me.

SESNO: The party itself, now under the leadership of Clinton ally Terry McAuliffe, also has taken a hit. Many Democrats saw the former president as a prominent voice and a golden goose of fund- raising. That may be changing.

SCOTT REED, REPUBLICAN STRATEGIST: Clearly, the big loser is the new chairman of the Democratic National Committee, Terry McAuliffe, and labor boss John Sweeney who were going to use Bill Clinton as they move into these midterm elections strategically to raise money and to recruit candidates and to steer the party with a message. GEOFF GARIN, DEMOCRATIC POLLSTER: There are a lot of Democrats who still are in love with Bill Clinton and really think of him as a champion for the causes that make them Democrats in the first place.

SESNO: Hillary Clinton has suffered as well. The controversies and investigations obscure her message and her work. They are a public relations migraine.

H. CLINTON: We're scheduled to pay off...

SESNO: Mrs. Clinton's staff counts 20 public events and three news conferences in the last 10 days. But getting her story out is another matter.

GARIN: She's doing all the things now as a new senator to, I think, build a strong reputation for the long haul. So, for the short term, this obviously isn't helpful. For the long-term, I think she's going to make a very positive mark.

SESNO: It's ironic. Democrat and Republican senators alike tell CNN Mrs. Clinton deserves high marks for doing her homework and taking her job seriously. A Budget Committee colleague says Senator Clinton spends more time attending committee meetings than just about anybody else.

And how does the new president fare in all this? Aides and political allies say it cuts both ways. He wins, they say, because Clinton's controversies make the new team look squeaky clean by comparison. Adults are in charge is the way one staffer plays it. But there is only so much room on center stage.

REED: It could begin to overshadow his agenda and how he's trying to move forward.

SESNO (on camera): Winners and losers aside, it's likely the former president will continue to make news and continue make his opinions known. CNN is told he's been on the phone with some prominent Democrats, including last week the party's leaders in the House and the Senate, Dick Gephardt and Tom Daschle, explaining the pardons, weighing in on other business, just touching base.

Frank Sesno, CNN, Washington.


SHAW: Democrats rally around an alternative to the Bush tax cut plan. Next on INSIDE POLITICS: House and Senate minority leaders offer a tax cut plan of their own, and explain why the Bush plan allegedly would be too much, too soon.

Plus, President Bush stops by the State Department and he shares his vision for international policy one day before he travels to Mexico.



H. CLINTON: President Bush supports faith-based programs, but his tax plan should not be one of them. Going forward with a huge tax proposal now is like getting a letter from Ed McMahon and going out to buy a yacht. A surplus projection is not a promise, and if the past is any guide, it's not even a likely outcome.


WOODRUFF: Freshman Senator Hillary Rodham Clinton today joined those criticizing President Bush's tax cut plan. Her comments echoed those of Democratic House and Senate leaders, who said they would favor limited income tax rate reductions, but only under certain conditions.

CNN's congressional correspondent Kate Snow has the story.


KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Senate Minority Leader Tom Daschle invited Luwaunna Adams to the Capitol to illustrate a point. At a well-orchestrated media event, the single mom from Homestead, Pennsylvania said she'd get just $117 a year from President Bush's tax cut plan.

At the other end of the spectrum, Democratic senator and former Wall Street exec Jon Corzine.

SEN. JON CORZINE (D), NEW JERSEY: The Bush plan would give me a tax break of close to $1 million a year. That's more than generous.

SNOW: But while the event was high on drama, it was short on specifics, in part because Democrats aren't united on what those specifics should be. The leadership is playing down those divisions, stressing the fight is not about numbers, but about principles.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: It's not just a decision between "x" amount of dollars under this tax cut or "y" amount of dollars under that tax cut. It's a decision also of do we keep interest rates down? Do we have the funds available to take of Social Security and Medicare?

SNOW: Republicans say that's a false choice.

SEN. PHIL GRAMM (R), TEXAS: In reality, this is increasingly a debate about whether you want government to spend this money for you in Washington or whether you would rather spend it yourself in your own home town, on your own family, investing in your own future.

SNOW: Last weekend, Senator Gramm joined Democrat Zell Miller in Georgia. Miller already supports the president's tax cut proposal, and Republicans are looking for more votes from the other side. White House Chief of Staff Andrew Card met with Senate centrists Wednesday night, wooing key players like Senator John Breaux.

Senator Max Baucus, ranking Democrat on the finance committee, is on the fence. Aides say he's willing to consider backing the president, once he sees how the tax cut fits into the broader budget. But while the White House may gain supports from some Democrats. there are defections in the president's own party.

As CNN first reported last week, Vermont Republican Jim Jeffords is pushing for a smaller tax cut and vows to fight the president's plan in the tax-writing Finance Committee.

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: This not the beginning of any cracks. As matter of fact, if you really look at what Senator Jeffords said, I think he left plenty of room to consider the final product before he casts his vote.


SNOW: Now, the final product coming down the road, Senator Lott says that he expects a budget resolution to be out by Easter. He says he fully expects to have a tax cut on the president's desk by July 4th.

Meantime, on the House side, the House Ways and Means Committee pushing ahead eagerly. The chairman of that committee says that after they take a break next week, he may come forward with a small part of the tax cut plan, not the whole $1.6 trillion, but the part that deals with reducing tax rates and also a child tax credit.

Back to you, Bernie.

SHAW: Thank you, Kate Snow. A little while ago, President Bush commented on today's discussion about his tax cut plan. Our senior White House correspondent John King joins us now -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Bernie, the White House stressing it is still very early. We're in the beginning stages of the tax cut debate, but there is a sense of urgency here at the White House.

The president at this hour meeting with Republicans who will be key to getting his plan through the Congress. They understand the concerns being raised by Senator Jim Jeffords and other Northeast Republican moderates. They're still hunting, as Kate Snow reported, for a few Democratic votes.

Right now, the White House knows it's a tough sell in a very closely divided Congress. The president says he's confident his odds will improve as he makes his case to the American people.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I can say that -- wait until you see our budget, you'll see that it's well thought- out, that we meet important priorities, and I -- we got a lot of work to do. I understand that. But this is a democracy; people have different opinions about the subjects.

People I want to talk to, though, first, before there's any vote, is the American people; and I will. I've taken my case to the American people about why I think tax relief makes sense. I'll remind members of both the Senate and the House that there's a lot of debt at the federal level, but there's a lot of debt at the private level. We got a lot of people struggling to pay off credit card consumer debt.

I'll tell people that, if you're a family of four make $50,000, you get an additional $2,000 to -- where you can decide what to do with your money. And so, I've got a lot of work to do, but I'm convinced that when the American people hear our plan, they will support it. And I think we got a very good chance of getting a tax package through.


KING: The president also asked, during that session there with Republican lawmakers, about the submarine accident off Hawaii. He said he's awaiting a review now ordered by the Defense Secretary Donald Rumsfeld, as to whether it is appropriate to have civilians on naval vessels during military exercises like the one during which the accident occurred. The president saying, once again, that he is, quote, "deeply sorry" to the Japanese people for the deaths and injuries that occurred in that accident.

Now, this meeting with Republicans to discuss budget matters comes on a day the president also visited the State Department to give a pep talk to employees there and he discussed his first trip outside of the country as president. It has been the tradition in recent years for U.S. presidents to go first to Canada -- but not this one; his trip tomorrow is to Mexico.


KING (voice-over): The White House bills it as a getting-to- know-you visit, a chance for the new president to open a new chapter in U.S.-Mexico relations.

BUSH: Some look south and see problems. Not me; I look south and see opportunities and potential.

KING: Mr. Bush and Vicente Fox have met before, as governors, and when Fox was president-elect. And both say economic cooperation is priority one in their first meeting as presidents. Trade between the United States and Mexico totaled $80 billion back in 1993, but skyrocketed to more than $230 billion last year, and Mexico is now second to Canada as a U.S. trading partner.

PRESIDENT VICENTE FOX, MEXICO: The U.S. can benefit from the work and the effort of the Mexican people as much as we Mexicans can benefit from working together with the American market with American investors.

KING: But all the talk won't be so positive. The U.S. government says there are more than 6 million illegal immigrants living in the United States, more than half of them from Mexico. President Fox wants an open border and amnesty for the Mexicans living illegally in the United States. President Bush opposes both of those ideas, but is eager to work with Mexico and the U.S. Congress to create a new program for migrant workers.

GRAMM: When they're through with the program, they will go back to Mexico and they will take the skills they've acquired, they will take the money they've saved, and it will give them the ability to help build the Mexican economy.

KING: Drug trafficking is another sore spot. The illegal drug trade in the United States is estimated at more than $63 billion a year, and Washington says half of that enters through Mexico. Mr. Fox promises a crack down on drug-related corruption, and there is growing support in Congress for ending, or at least suspending, a law Mexico considers insulting: a requirement that the White House compile an annual report card on Mexico's anti-drug effort.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: And that opens up a window for President Bush and President Fox, along with those of us in Congress who are interested, to come up with a new framework for how we deal with the very important issue of narco trafficking.

KING: The California crisis adds urgency to another agenda item: Mr. Bush wants more cross-border transmission lines and pipelines to make it easier to import energy, but there are a number of legal and political obstacles.


KING: It is a trip certain to produce more symbolism than substance; the first glimpse at a president who says his style on the world stage will be, build personal relationships first, and then confront any policy problems -- Judy.

WOODRUFF: All right; John King at the White House, thanks very much.

Well, there's much more ahead on INSIDE POLITICS.

SHAW: Up next: How a winning candidate brought happiness to the political right.


UNIDENTIFIED MALE: Not Reagan; but he's more in the Reagan school than he is in his father's school, which is very interesting.


SHAW: Our Bill Schneider examines what the second President Bush means to conservatives.

Also ahead:

WOODRUFF: Organized labor considers its next step, after putting it all on the line for Al Gore. I'll talk with Richard Trumka of the AFL-CIO.

And later: SHAW: Secretary Rod Paige promotes the president's education agenda. A closer look at the man and his challenges.


WOODRUFF: We'll have more of the day's political news coming up, but now a look at today's top stories.

The Navy says that a preliminary investigation into the sinking of a Japanese fishing vessel by a Navy submarine may be completed by tomorrow. Navy officials today said that the 16 civilians on the USS Greeneville in no way contributed to last Friday's accident. Two civilians were in control positions when the sub rose rapidly to the surface during a drill, hitting the Japanese ship. Both said today that they did not interfere with the sub's operation and they were backed up by Navy officials who said the crew was in complete control throughout the drill.


REAR ADM. STEVE PIETROPAOLI, U.S. NAVY: It's manned by a civilian out there with a close supervision of this who really should have to do nothing in that ascent. In that 30 seconds, their job should be to do nothing. And quite frankly, George, I would defy you under any circumstances to explain to me how anything that helmsman could have done would have materially affected the outcome of this tragedy.


WOODRUFF: Joining us now at the Pentagon for more on all this, our military affairs correspondent Jamie McIntyre.

Jamie, what, if anything, have we learned about what went wrong from the first-hand account of these two civilians?

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, one thing we've learned is that they're backing up the Navy's contention that, while they were at the controls, they really weren't in control of the submarine. In fact, at the time of the accident, there was really only one civilian at the controls, sitting in that helmsman seat, whereas the Navy said they had nothing to do.

But perhaps, more interestingly, we have heard from them their eyewitness accounts of the submarine's efforts to determine that there were no other ships in the area before surfacing. That involved multiple sweeps of the periscope which, we found out, were not only seen by captain and the crew, but the civilian observers as well, because they were displayed on flat-screen television monitors in the submarine.

So many people were watching what the periscope saw, yet they didn't see the fishing boat. That, despite the fact the submarine's supposed to make sure a 5-mile nautical mile area is clear around the sub; and we now know, from calculating the fishing boat's course and speed, that it had to be within 3 miles of the submarine at the very time the submarine was looking for it.

WOODRUFF: And Jamie, we're understanding now that there was a designated training area for the Greeneville, for the sub. What have you learned whether it was in that area or not?

MCINTYRE: Well, there's some confusion because on the maritime navigation charts for that area, there is a 14-by-four-mile box that's designated as submarine training test area. But that is just a warning to mariners that the submarines operate in the area.

This submarine was in its assigned area, which is much greater than that little area that's marked on the chart. It was outside of that area but it wasn't anywhere where it wasn't supposed to be.

That test area is just really a warning. There is no restriction on submarines to go in or out of it there's and no restriction on surface ships and it's the ultimate responsibility of the submarine to make sure that it doesn't surface without making sure that the surface is clear.

So, this submarine was where it was supposed to be and it was also clearly at fault in hitting that Japanese boat.

WOODRUFF: All right, Jamie McIntyre at the Pentagon, thanks -- Bernie.

SHAW: In Israel, the nation's outgoing prime minister has agreed to take part in his successor's government. Ehud Barak has conditionally agreed to join Ariel Sharon in a government of national unity. Sharon soundly defeated Barak in last week's elections.

The political agreement coincided with funerals for victims of yesterday's attack at a Tel Aviv bus stop. A Palestinian deliberately drove his bus into a group of people, killing at least eight Israelis.

In the United States, the tax season is here. And for the millions of earners who pay their income taxes, the following information might be disconcerting.

As CNN's Brooks Jackson reports, tax evasion is on the rise, and it's often going unpunished.


BROOKS JACKSON, CNN CORRESPONDENT (voice-over): If you cheat on your taxes, how likely are you to be caught? Turns out, not very.

DONALD ALEXANDER, FORMER IRS COMMISSIONER: I think the chances of an ordinary, individual taxpayer, a taxpayer in some of the middle brackets, getting audited are about the same as that taxpayer getting four of a kind in five-card stud.

JACKSON: And the odds of a high-income taxpayer also have reached what may be an all-time low. For individuals with income over $100,000, the odds of being audited fell to under 1 percent last year, the IRS reported Thursday; a third of what it was just four years earlier.

Businesses are getting away with fewer audits, too. For small business corporations with under $10 million in assets, the odds fell to well under 1 percent, less than half what it had been four years before. Another key indicator of enforcement, the number of IRS seizures for back taxes, plunged to a mere 174 last year; down from more than 10,000 before.

Tax experts say the decline in tax enforcement is having a predictable effect.

SHELDON COHEN, FORMER IRS COMMISSIONER: There is more cheating today than there was 10 years ago. There is less audit. There is less criminal activity by the revenue service in garden-variety areas.

JACKSON: The IRS blames the fall in enforcement activity to cuts in budget and staff. The number of revenue agents and tax auditors is down more than 20 percent in five years, while the number of high- income tax returns has gone up. The IRS also says it has had to divert substantial staff time to customer service, and to a massive reorganization ordered by Congress.

IRS Commissioner Charles Rossotti says he was deeply concerned, by the decline in enforcement, adding, quote: "Clearly, the declines we've seen in the past few years need to stop or the fairness and effectiveness of our tax system will be undermined."

But others say the system already has been undermined.

ALEXANDER: I think this is about as bad as it's ever gotten, and I hope it doesn't last.

JACKSON (on camera): The IRS warns that penalties for cheating on taxes are stiff, but the odds of getting caught are far less than they were just a few years ago.

Brooks Jackson, CNN, Washington.


WOODRUFF: Better watch out. Coming up on INSIDE POLITICS, Bill Schneider conservatives and the news president. Stay with us.



BUSH: I am getting ready to sign a birthday card to the president. My first document I will sign as the president, which is a joint resolution from the Congress...


BUSH: ... which expresses our deep gratitude and admiration for President Reagan.


WOODRUFF: President Bush phoning former first lady Nancy Reagan today just before he signed a joint resolution, as he said, commemorating her husband's 90th birthday, which occurred February 6th -- Bernie.

SHAW: As you know, as we know, President Reagan was wildly popular with conservatives, and many of them are warming up to the new president. Bill Schneider pulls up a chair with some thoughts on the conservative mind set these days.

SCHNEIDER: Bernie, a happy conservative. Is that an oxymoron? Well, if so, there is a whole convention of oxymorons meeting in Washington this week: Conservatives who are over the moon about George W. Bush.


SCHNEIDER (voice-over): It was clear why conservatives rallied to George W. Bush during the primaries. He saved them from John McCain. And why they gave Bush no trouble during the election. He saved them from Al Gore. But now that Bush is president, you'd think conservatives would be getting nervous, all this talk about bipartisanship and civility.

BUSH: America, at its best, matches a commitment to principle with a concern for civility. A civil society demands from each of us good will and respect.

SCHNEIDER: Some conservatives are not buying it. Like Clarence Thomas, who, in one of his rare public appearances this week, said, in essence, to hell with that.

JUSTICE CLARENCE THOMAS, UNITED STATES SUPREME COURT: The insistence on civility in the form of our debates has the perverse effect of cannibalizing our principles, the very essence of a civil society. That is why civility cannot be the governing principle of citizenship or leadership.

SCHNEIDER: Is that typical of how conservatives feel? Actually, no. Most conservatives know what Bush is doing, and they like it. What is Bush doing? He's saying to conservatives, I endorse your positions, but I embrace your adversaries.

Here's Bush, endorsing their positions.

BUSH: I don't believe Dick and I would be sitting here had we not taken strong positions on key issues, and I told the American people if I had the honor of being president, I would submit those positions I was campaigning on to the legislative branch, and that's exactly what I've done.

SCHNEIDER: And here's Bush embracing their adversaries.

BUSH: It's important for me to hear others' positions. It's important for me to understand where there's resistance and why. But it all happens with good, honest discussion.

SCHNEIDER: Conservatives have no problem with that.

DAVID KEENE, AMERICAN CONSERVATIVE UNION: He's comfortable enough with himself that he can go and sit down with people who disagree with him.

SCHNEIDER: As long as he sticks to his principles.

KEENE: The first thing he does is he goes to the Hill and he says I'm sticking with my campaign promises. And conservatives not only found that admirable, they were rocked back on their heels a bit because ideologues, as you know, always sort of expect that whoever gets elected is going to turn their back on them. He hasn't done that.

SCHNEIDER: What about the fact that Bush is surrounded By Washington deal makers, like Dick Cheney and Andrew Card and Don Rumsfeld and Paul O'Neill. Is that a sign of, uh, oh, pragmatism? Yes, and so what?

KEENE: Ronald Reagan compromised all the time. That's the nature of politics. But keep your eye on the ball, and I think that the strength that Bush has had to this point is that they really do think he has his eye on the ball.

SCHNEIDER: Wait a minute. Are conservatives saying Bush is another Reagan? Not exactly. But close.

KEENE: He's not Reagan, but he's more in the Reagan school than he is in his father's school, which is very interesting.


SCHNEIDER: My goodness. He's saying conservatives see President Bush as more of a Reagan conservative, a man of principle, than a Bush conservative, a sell-out. That is very interesting -- Bernie.

SHAW: Also interesting your phrase, a convention of oxymorons.

SCHNEIDER: That's right. Happy conservatives.

SHAW: Bill Schneider, thank you.

Well, as conservatives celebrate a White House win, organized labor is dealing with defeat. Up next: The impact of union efforts to help Al Gore win the White House, and how big labor plans to handle life under a Republican president.


WOODRUFF: The union vote in Election 2000 proved organized labor remains a crucial element in future Democratic Party success. But with a Republican in the White House, labor's next political steps are unclear. The AFL-CIO executive council held its winter meeting this week in Los Angeles, and yesterday, I spoke with the group's secretary treasurer, Richard Trumka. I began by asking him if the AFL-CIO is discouraged by the Al Gore defeat and the election of a Republican- dominated House and divided Senate?


RICHARD TRUMKA, SECRETARY-TREASURER, AFL-CIO : Not at all. It was one of our best efforts. I mean, we have registered 4.3 million voters, new voters sine the last election. As you noted, we got more voters out.

We were 26 percent of the turnout in the last election and we think the issues that we advocated were supported and continue to be supported by the vast majority of the American people, and so we're encouraged by that.

We'll continue advancing those issues. Issues like election reform, issues like a minimum wage increase, quality education for all Americans, a prescription drug benefit for seniors and for all Americans, help in the health care area so that affordable health care is available to all Americans; we'll continue advocating those and we think the last election validated those issues on a very, very large basis.

WOODRUFF: But your candidate still didn't make it to the White House?

TRUMKA: He did not.

WOODRUFF: President Bush is seeking on a number of fronts now to undo some regulations that are important to organized labor. With regard to campaign finance reform, Republicans are pushing so-called paycheck protection, something the AFL opposes. Do these things concern you?

TRUMKA: Absolutely they do. A lot of progress was made over the last eight years in helping to bring America a little closer together, encouraging us to work with our employers to seek the global competition, meet it and beat it out in the global economy, and we're sort of, I guess preparing on two fronts.

We are hopeful that the rhetoric that we hear about changing the tone in Washington is actually meaningful and is adopted, but we're also preparing to defend and advance those things and issues that are important to working people.

WOODRUFF: Well, today, your union at the winter meeting in Los Angeles heard from the new labor secretary, Elaine Chao, what -- which side of the message were you hearing from her?

TRUMKA: It was a very, very interesting meeting. Secretary Chao came in and said that she had great trust and respect for the labor movement, that she was there to listen and learn, that she wanted to have an open door and a listening ear. And I think she convinced the people around our executive council that she was truly serious about listening to us and she said that she would be an advocate or a liaison to the president for the issues of working people.

I think she meant that. She was sincere about it, and to that extent, I think we came away from the meeting with Secretary Chao saying this is a very good start and we hope that it continues.

WOODRUFF: And when it came...

TRUMKA: The real issue will be her standing at the table, at the Cabinet, and whether she is able to advance issues that are important for working people, and we hope that she is successful in that and we'll aid her in that effort.

WOODRUFF: Well, when it comes to the president's most important initiative, or certainly one of his most important initiatives, tax cut, the AFL is opposing that. You, yourself, yesterday proposed an alternative. I believe, you called it a tax dividend where you would give back, what is it, $300 to every American family. How is that better, Rich Trumka, at what $25 a month, that what the president is proposing, which would be more money, would it not, for working families?

TRUMKA: Well, first of all, we are looking at several options. The dividend was just one of them, and it got focused on, unfortunately. There were two of three others and we will release those later this week from our executive council.

Here is what you have. You have a surplus out there that the American people say they really want to use for several things. Yes, they would like to get some money back, because they need money in their pocket and we want to help them do that.

Two, they say we want to you take care of Social Security in a meaningful way; and three, we want you to provide a drug benefit for seniors because there are so many seniors that are suffering because they don't have one. What we don't want to see is all the surplus used up and have none left over.

Now, what the tax cut that is being proposed does, it's like a corporation saying today, we're going to declare dividends for the next 10 years based on projections in our income. Now, no corporation in America would do that. But that's what this tax break does.

It gives 43 percent of the money to the top 1 percent, and the people at bottom don't get anything out until the end years, the fifth, sixth years of it or very little. What we're saying is a thing like a dividend would put $400 in their pocket immediately. It could help with a perceived recession. You are not precluded from doing it next year or the year after or the year after that, but it gives them something immediately.

WOODRUFF: Let me just quickly...

TRUMKA: We've also... WOODRUFF: I just want to quickly, finally ask you about former President Clinton and all of the controversy with regard to his leaving the White House. Does that damage his ability to lead the Democratic Party in a way -- in the years to come?

TRUMKA: Well, I don't think any of it helps us, and I think that when you look at all of this turmoil that's out there and the focus that's on it, it really detracts us from the problems that are facing the country.

You have a new administration who says that they want to change the tone. I'd like to -- we hope that that's true, and we'd like to join them in fixing problems that are facing Americans out there. You have growing layoffs. You have a global competition that we have to face.

There's a number of things out there and to spend virtually all of our time and effort looking backwards, to me, is -- could be better spent looking forward and figuring out ways to solve problems. But the answer succinctly, I mean, it's not going to help him in his efforts, obviously.

WOODRUFF: All right, Richard Trumka, secretary-treasurer of the AFL-CIO. We thank you very much for being with us.


SHAW: Still ahead, we'll take a closer look at the man President Bush has entrusted with one of his top priorities, education.


SHAW: The new education secretary made his Capitol Hill debut today before the Senate Health, Education, Labor and Pensions Committee. Secretary Rod Paige was questioned by Democrats about how President Bush could pay for his education package given his commitment to a huge tax cut. Paige said preliminary figures on the education package will be released by the end of this month.

CNN's Kathy Slobogin takes a closer look at Paige and problems.


KATHY SLOBOGIN, CNN CORRESPONDENT (voice-over): Secretary of Education Rod Paige didn't have long to wait to get his marching orders. The president put education reform front and center day two of his administration.

BUSH: In this great land called America, no child will be left behind.

SLOBOGIN: Those are words that mean something to Rod Paige, a man who went to a segregated school in rural Mississippi; whose parents taught him an education was his best hope.

ROD PAIGE, EDUCATION SECRETARY: Early on, my parents taught us this, my brothers and sister. In fact, we saw that as the only way out. That's all we talked about, all we knew about in our environment, that the way to achieve was through education.

SLOBOGIN (on camera): To parents out there who have their children in failing schools and are hopeless about the situation, what would you say?

PAIGE: We should apologize to parents whose children are in failing schools and we should fix that right away, and we should not tie them to failing schools.

BUSH: When schools do not teach and will not change, parents and students must have other meaningful options.

SLOBOGIN: Bush's proposal to let students in failing schools use federal money to move to private schools, sometimes described as vouchers, may be Paige's biggest headache. Opposition to vouchers on Capitol Hill is entrenched.

(on camera): What do you say to the people who are concerned that vouchers will siphon money away from the schools that need it the most?

PAIGE: We already know monopolies don't work well in enterprises. We know this, and so this is just a little opening up so that we can have some control of choice. The idea is to make the system better, not to make the system worse. In fact, the greatest danger to the system is to continue to do what we're doing now.

SLOBOGIN (voice-over): Paige is the first education secretary to come directly from a local school district. As superintendent of Houston schools, he made his mark creating what some have called a "performance culture," where schools were held accountable for student test scores.

But in Washington, Paige says his most daunting task is consolidating the dense maze of federal education programs that have proliferated for years.

PAIGE: The philosophy of a specific program for every specific problem accumulates into a pile of programs, and how do you take all these good ideas and organize them so you have a comprehensive approach to school reform is, I think, our biggest challenge.

SLOBOGIN: Another challenge may be beyond the reach of an education secretary: How to instill in young people the message his parents instilled in him, that education is worth the effort.

PAIGE: That may be one of the parts of school reform that we've achieved less with, and that is the amount of effort we're getting from young people. We should make sure the schools work. I think this nation is capable of that.

SLOBOGIN: Paige says he's determined to keep up his end of the bargain.

Kathy Slobogin, CNN, Washington.


WOODRUFF: And there's plenty ahead on INSIDE POLITICS, including the latest on former President Clinton's troubles over his pardon of a billionaire financier.

And we'll hear from the freshman senator some call "Give 'em hell, Zell."


SHAW: Bill Clinton in the sights of a criminal prosecutor. What's next in the probe of his pardon of Marc Rich?


MILLER: I think it was a tremendous mistake on his part and I think it's something that will never go away.


WOODRUFF: Senator Zell Miller talks to Bernie about the pardon, and his disagreements with fellow Democrats. And:


BRUCE MORTON, CNN CORRESPONDENT: Just when they think this time we've got him, he gives them a head fake, a hip fake, an Arkansas two- step, and walks away laughing.


SHAW: Bruce Morton, on the continuing battle between the former president and Republicans.

WOODRUFF: Welcome back to INSIDE POLITICS. Bill Clinton said today that he feels good about the newly launched criminal investigation into his pardon of financier Marc Rich. And, to drive home his response to reporters' questions, he flashed a thumbs up as he entered a building in New York. Clinton has denied any wrongdoing in connection with the pardon. But, a federal prosecutor confirms that she is looking into possible violations of the law. Sources tell CNN, investigators are trying to determine if financial contributions played a role in Clinton's 11th-hour pardon of Rich.

CNN's Kelli Arena and Bob Franken are covering the pardon story. Let me turn first to Bob on Capitol Hill.

Bob, what's new in the congressional investigation of the pardon?

BOB FRANKEN, CNN CORRESPONDENT: Well, the House Government Reform Committee headed by Dan Burton has sent letters to Marc Rich and ex-president Clinton, asking that they waive all legal privileges, privileges such as attorney client privilege, executive privilege. When it comes to documents, memoranda, any communications that have to do with this pardon matter, no response from either side. Also, Burton's committee is planning a March 1 hearing. Among the witnesses, Bruce Lindsey, who was a deputy White House counsel and is a close confidante of Bill Clinton. John Podesta, the former chief of staff; Beth Nolan, the White House counsel. When the administration ended, and Jack Quinn, who, of course, was the attorney representing Rich, who was also a former White House counsel.

WOODRUFF: So, Bob, it sounds like even with the federal investigation now under way, the controversy isn't getting less intense on the Hill.

FRANKEN: No, there's still going to be some efforts to hold hearings. However, a federal investigation -- a criminal investigation means, that witnesses that might feel sensitive about this have cause to say that they don't want to be publicly grilled about something in which they may be legally exposed, so it could have the paradoxical affect of actually toning things down a little bit.

WOODRUFF: Now, let's bring in our Justice correspondent Kelli Arena.

Kelli, what is the Justice Department's role in this new criminal investigation?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, the main Justice will not really be playing a role in the investigation. That really is within the jurisdiction of the U.S. attorneys office in the southern district of New York, and the field office in New York for the FBI. What Justice is mainly concerned with at this moment is the immunity issue for Denise Rich and whether to grant that immunity so that she can testify freely at Congressional hearings.

WOODRUFF: So, is Justice likely to go ahead and grant or say that immunity is all right to be granted to Denise Rich?

ARENA: The educated guess at Justice is that yes, they will green light her immunity; that's because we -- the whole point here is not to prosecute and put Denise Rich in jail. The two people here are Marc Rich and former president Clinton. That's the receiver and the giver of any alleged illegal funds. That's who they are focused on, giving her immunity doesn't actually jeopardize any goal that they would have long term.

And also, they really would like to see this, get over and done with. President Bush, as you know, had urged Congress to try to put this to bed. If the immunity is granted, she can testify, do her part; it moves over to the Southern District; they do their part. Either they have a case or they don't have a case.

WOODRUFF: Speaking of which, what more should we know about the U.S. attorney Mary Jo White and the Southern District of New York?

ARENA: Well, as people in main Justice like to say, it is the sovereign district of New York, and that is because it is a very independent office, and it has been for decades. It does attract the top lawyers in the country, it is, from top to bottom, the most well staffed elite group of prosecutors from the nation.

And this is an office that really does tell main Justice what it's doing. It is less likely to consult, and more likely to make a decision, and then inform main Justice and really does work independently, and has taken on a variety of very high-profile cases, including -- if you remember -- they prosecuted the bombers in the World Trade Center incident; and they also went after Russian organized crime in some and penny stock and white collar issues.

Very sophisticated cases, especially because they are so close to Wall Street, and very high profile cases as well, and they have been very successful. So, this follows a very long tradition and Mary Jo White fits right in with a very hard-nosed independent character that has been a part of each and every U.S. attorney general from that office since the 1950s.

WOODRUFF: Finally, let me bring Bob Franken back in.

Bob, I know you talk to people on the Hill all the time. Do they think this federal investigation will produce anything?

FRANKEN: Well, at the moment, the investigations, plural, are more in the formative stages. The critics would call them fishing expeditions. What you have is some evidence or really some indications that there might be something fishy here, so the investigations are ratcheting up. And I said investigations, plural, because you really have the parallel investigations: criminal investigation being conducted through the Southern District in New York, and of course, the Congressional investigations. They're often complimentary, because often times, the Congressional investigators find material which they will then turn over to the criminal investigators.

WOODRUFF: All right, Bob Franken at the Capitol; and Kelli Arena here in our Washington bureau, thank you both -- Bernie.

SHAW: It's hard to find an elected Democrat willing to defend the Marc Rich pardon and some are as tough as any Republican in their criticism. Yesterday, I spoke with Senator Zell Miller of Georgia. I reminded him. He once said Jimmy Carter brought honesty and decency to public service, and I asked if he thought Bill Clinton did the same by pardoning Marc Rich.


SEN. ZELL MILLER (D), GEORGIA: No, he did not. I'm sorry to say, he did not. I think it was a tremendous mistake on his part, and I think it's something will never go away.

SHAW: Do you think Mr. Clinton should go before the committees of Congress and explain his actions on this pardon?

MILLER: I don't know that he should go before Congress and do that. I think somewhere along line he needs to give a thorough explanation and his side of story of why he did it.

SHAW: What does this pardon controversy do to the presidency and your party, to his stature?

MILLER: It hurts it. It hurts it tremendously. Because, until he speaks and says why he did it, we can only think the worst.

SHAW: What's the worst?

MILLER: Well, the worst is that this was somehow done because of contributions that were made to the Democratic Party or made to the library or things like that. I think that needs to be explained a little bit further.

SHAW: President Bush is urging to Congress, get on with the people's business. How far should Republicans go with this pardon investigation?

MILLER: I agree with President Bush that we ought to get on with our business and we ought to put this behind us, but I do think, at the same time, that the president probably owes the American people some kind of explanation.


SHAW: A fuller Zell Miller interview is next right after the break. We will hear his reasons for crossing party lines and supporting the George Bush tax cut plan.


SHAW: Now, the rest of our conversation with Senator Zell Miller of Georgia. Aside from the Clinton controversy, I asked the former governor about his work in the United States Senate and his break with Democrats over the Bush tax cut plan.

And I also asked him how he earned the nickname, "Give 'em hell Zell."


MILLER: I don't know, probably because "hell" and "Zell" rhyme.

SHAW: You co-sponsored President Bush's tax plan; you came out forcefully for the Ashcroft nomination. Some of your fellow Senate Democrats say they are frustrated by your actions. And you say...

MILLER: I'm sorry that they're frustrated. The people back in Georgia are not frustrated by my actions. I think they're pretty used to it.

When I was governor of Georgia, time and time again I reached across the aisle, and I could not have passed my legislation without the help of Republicans in Georgia. And I met with Republican leadership and Democratic leadership on a regular basis. SHAW: The leaders of your party in the Senate say some senators don't understand. Back in 1981, when Democrats, almost en masse, voted for Ronald Reagan's tax cut, they got burned because of the rising deficits. Implication: you don't understand.

MILLER: Well, maybe they think that, but I'm a governor who served eight years and dealt with surpluses and dealt with budget shortfalls. I've dealt with both of them. I'm a governor who cut taxes three times. Each and every time that I tried to cut taxes I had all these people saying, it's too risky, that you can't do it, that it's going to bankrupt the state, that it's not fair.

I took the sales tax off of groceries and I had people tell me that that's not fair, because you're taking it off caviar as well as pork and beans. But I went ahead and did it. Georgia's thrived, we still run surpluses, and people don't have a state sales tax on food.

SHAW: And so, to your party leadership in the Senate, you say?

MILLER: I think I'm right, and I think they're wrong. I think the Democrats, right now, are wrong as far as monetary policy, and I think they're wrong as far as where the people of America are.

I think it's a big mistake for the Democratic Party to look like that we are against tax cuts. Here we are, we've got the largest budget surplus in our history, and we've got the highest taxes in our history. And it's just common sense to me that you deal with those high taxes by using some of that tremendous surplus.

SHAW: Your party leader, Senator Daschle, still is miffed that you did not consult your party's leadership in the Senate before deciding and announcing that you would co-sponsor with a Texas Republican, Phil Graham, the president's tax plan. You didn't consult with the leadership. They still are miffed.

MILLER: You think they are? No, I think they are ready for me to help them out on something else on down the road. And a lot of times I'm going to be opposed to some of things that President Bush wants to do.

For example, I'm for the McCain-Feingold campaign finance bill. It was the first thing that I signed onto when I came up here last summer. I'll be opposite from where President Bush is on that, and I'll be where Senator Daschle is.

SHAW: The United States Senate is very special, and in some instances can be dictatorial. Question: Have you experienced any of the subtle forms of slights and punishment that the leadership can impose and inflict on wayward members?

MILLER: No, I have not. I can say that in all honesty, Bernie. I have not seen that.

They have treated me just as well as if I had never done this. I'm sure that some of them question whether it was the right thing to do or not, and I respect their opinion. But I think it was the right thing to do. I am sorry that some of them thought that I should have consulted them earlier than I did.

I talked to Senator Daschle the day that I made that announcement. I wanted to talk with him before the announcement was made, but unfortunately, as the press does sometimes, they got a hold of it and put it out there before I was ready for it to be put out there.

SHAW: I'm curious, why didn't you go to your party's national convention last summer in Los Angeles?

MILLER: Well, it was not because I'm not a loyal Democrat and it's not because I didn't have a high regard for Al Gore. I had just been appointed to the United States Senate the week before.

And I had been in Young Harris, my home up in the mountains, for 18 months. I'd hardly gone anywhere except Athens, Georgia and Atlanta to do some teaching. I had retired. I had gone back to the mountains of north Georgia, and I had told some people that I wasn't going out of there unless I needed salt.

And then, all of a sudden, here I was thrust into this Senate race and into this Senate position. And I don't think I would have gone to the Democratic Convention under any circumstances with just being appointed and having to get out and see some of the people that I had not seen for a long, long time.

SHAW: In your efforts to change Georgia's Confederate flag, you said, "Help me now to give bigotry no sanction and persecution no assistance." And you said, "The flag exhibits pride in the enslavement of many of our ancestors." Regionally, what should the South do about the Confederate flag?

MILLER: I think the way that South Carolina has dealt with it, the way that Georgia dealt with it just a week or so ago, and the fact that Mississippi is having a referendum on it, I think they're going about it the right way, of trying to put this symbol that offends a lot of people behind us but at the same time not destroying the heritage that is important to a lot of people.

The thing that I've always not quite understood is that the Civil War was only one small part of South's history. Four years out of over 200 years. It's not -- it's not all that important, when you look at the whole history of the South. But some people have tried to make it that way.

But I applaud the way that Governor Barnes dealt with it in Georgia. He dealt with it forthrightly; he dealt with it the right way. I tried to deal with it probably in the wrong way. And I applaud him; it's a reasonable compromise and it's a beautiful flag.

SHAW: What is the difficulty, on the one hand, respecting people's sensibilities, on the other hand, respecting the dead? Wherein lies the clash?

MILLER: I don't know. That's one of the enigmas, one of the great mysteries of maybe how the South, to a large extent, thinks. (END VIDEOTAPE)

SHAW: He's from Georgia, he's a senator. Zell Miller, interviewed at his office on the Hill -- Judy.

WOODRUFF: Fascinating stuff.

Coming up, why this man confounds many Republicans, even after leaving the Oval Office.

But first, Willow Bay has a preview of what you'll find tonight on "MONEYLINE."

Hi, Willow.

WILLOW BAY, CNN ANCHOR: Hello Judy, thank you.

Tonight on "MONEYLINE," a barrage of bad news after the bell. Is it an SOS from an economy in trouble?

We'll tell you about the job cuts at some of the tech world's biggest names, including one that has never had to use the word "layoff."

And meet the boomerang bosses: top executives back at their old jobs to help companies in crisis.

All of that on "MONEYLINE" at 6:30 p.m. Eastern, 3:30 here on the West Coast.

INSIDE POLITICS will continue right after the break.



MAYOR RUDOLPH GIULIANI (R), NEW YORK: That a pardon was given for which now there have been two different hearings and there's no reasonable explanation that has emerged for why this pardon was given. In fact, as it gets explained it seems to get more complicated and it seems to raise more as to, why would anyone have given a pardon to a fugitive? Including the pardon attorney and others. No one seems to understand why this pardon was given; no one has given a good reason for this pardon.


WOODRUFF: New York Mayor Rudy Giuliani.

Former President Bill Clinton has left Washington, but he's, in many ways, still the talk of the town, at least among Republicans who consider him democratic enemy No. 1.

Our Bruce Morton looks at the highlights and the low points of this long-running feud.


MORTON (voice-over): A hearing; it hardly matters which one. A hearing in a long series of hearings on what many congressional Republicans see as the sins of Bill Clinton, of "Slick Willie," the man they love to hate. The story goes back to Whitewater, when he was a candidate, not even president yet. Then-Senator Alfonse D'Amato chaired hearings on that.

W. CLINTON: I would like just once to see someone acknowledge the fact that this Whitewater thing was a lie and a fraud.

MORTON: All the stories, all the hearings and press releases and grumbling in the cloakrooms -- years of it.

W. CLINTON: When I was in England I experimented with marijuana a time or two, and I didn't like it, and didn't inhale.

MORTON: Clinton and campaign finance -- hearings. Clinton and Gennifer Flowers and Paula Jones and Monica.

W. CLINTON: I did not have sexual relations with that woman, Ms. Lewinsky.

MORTON: The deposition about Monica Lewinsky and the lawsuit Paula Jones brought: had he lied?

CLINTON: It depends upon what the meaning of the word "is" is.

MORTON: Hearings, press releases weren't enough then; the House impeached him. The Senate acquitted him, but that was not the end of it. He pardoned Marc Rich, among others, on his way out.

W. CLINTON: I did what I thought was right; and I still think that, on balance, it was probably the right decision.

MORTON: Hearings and a question: Couldn't they, maybe, impeach him again? And then the furniture; were they taking stuff meant for the permanent White House -- a kitchen table, chairs?

H. CLINTON: Were considered gifts to us; that's what the permanent records of the White House showed, and that's what the people who run the White House who were there before we came and are there still reflected in their records. But if there is a different intent, you know, we will certainly honor the intent of the donor.

MORTON: Political parties need villains, of course. The Clintons may have replaced Edward Kennedy as the GOP's best fund- raisers. But it's more than that. A lot of Republicans flat can't stand Bill Clinton; he just plain riles them. They want to get him; and just when they think, "this time we've got him," he gives them a head-fake, a hip-fake, an Arkansas two-step and walks away laughing. He's out of office now, but this feud just keeps rolling along.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE) WOODRUFF: And that, it does.

SHAW: Yes.

WOODRUFF: Well, that's all for this edition of INSIDE POLITICS. But, of course, you can go on-line all the time at CNN's, AOL keyword, CNN.

SHAW: And this programming note: Senator Arlen Specter will discuss the Clinton pardons controversy tonight on "LARRY KING LIVE." That's at 9:00 p.m. Eastern.

I'm Bernard Shaw.

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



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