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Inside Politics

Pardon Scandal Becomes a Clinton Family Affair; Prime Minister Blair Meets With President Bush

Aired February 23, 2001 - 5:00 p.m. ET


BERNARD SHAW, CNN ANCHOR: The Clinton family's pardon problems: are they more relative today to Senator Clinton's new career?

JUDY WOODRUFF, CNN ANCHOR: Also ahead: the political scene in California, where Republicans are trying to navigate a return from the wilderness.

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

WOODRUFF: Thank you for joining us.

Well, try as Hillary Clinton might to steer clear of the storm over pardons granted by her husband, the junior senator from New York may be getting pulled deeper into it.

SHAW: A criminal investigation of the pardons reportedly is exploring this question: Did former President Clinton commute the sentences of four Hasidic Jews in exchange for votes for Mrs. Clinton's Senate campaign?

Well, CNN's Frank Buckley begins our coverage of the pardon controversy.


FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Voters in the village of New Square, New York, a Hasidic Community founded in the '50s, were very clear in their support of Hillary Clinton for U.S. Senate.

Mrs. Clinton visited the village in August, courting voters as she approached the campaign's final stretch. Her opponent, Rick Lazio, also attempted to garner votes here, but he was far less successful than Mrs. Clinton. Lazio received only 12 votes; Mrs. Clinton: everyone else in the village -- 1,400 people voted for her.

Residents and others saying, Hasidic communities traditionally vote in blocs.

UNIDENTIFIED MALE: They asked me to vote for them; I vote for them.

BUCKLEY: But did New Square voters support Mrs. Clinton in return for President Clinton's granting of clemency for four members of the village serving sentences for defrauding the U.S. government? The Associated Press reports the U.S. attorney for New York, Mary Jo White, is probing that question.

Sources who attended the August event with Mrs. Clinton say, however, the subject was never raised; that there was no quid pro quo. But sources say that, in a White House meeting on December 22, long after Mrs. Clinton was elected, the first couple listened as two village leaders did present the case to have the sentences of the men commuted.

Petitions were also submitted to the Justice Department and the White House in support of clemency by attorney Sam Rosenthal: "I personally contacted the Justice Department and requested a meeting. And, while the department declined to meet with me, I was told that it would be helpful to my clients if contact were made directly with the White House, given the president's responsibility for commutations."

Rosenthal, refusing to address The Associated Press report that the U.S. attorney in New York is also looking into the men from New Square, saying: "I'm not aware of any investigation, and therefore there is nothing to comment on."

William Cunningham, meanwhile, was commenting on questions surrounding his work on behalf of two Arkansas men who received pardons. Cunningham served as Hillary Clinton's treasurer during her campaign, and is a law partner of Clinton confidante Harold Ickes. Cunningham saying he simply presented and filed the petitions for the men seeking pardons. He did not, he says, use his access to the Clintons to advocate for the clients.

WILLIAM CUNNINGHAM, CLINTON CAMPAIGN TREASURER: I did not speak with anyone at the Department of Justice or the White House about the petitions. I did not speak with Senator Clinton or anyone on her staff about the petitions.

BUCKLEY: But Harry Thomason did. The Hollywood producer and friend of the Clintons asking the president, according to a source familiar with the request, to give it a fair hearing. The result of Thomason's request and Cunningham's petitions: both men were pardoned.


BUCKLEY: Thomason said through his attorney that the men were deserving of pardons and, as far as he is concerned, the process went through the appropriate process. Mrs. Clinton, for her part, has said that she played no part in the president's decision -- in the commutations of the sentences of the men from New Square, and she had no conversations with Hasidic leaders about the subject before the election -- Bernie.

SHAW: Frank, on the question of the four men from New Square, New York, what is Mayor Rudy Giuliani saying in all this?

BUCKLEY: Well, that is a question that we were hoping we could get answered today. He was, of course, with the U.S. attorney's office at one point. But so far today he hasn't made a comment on this.

SHAW: OK, thank you; Frank Buckley in New York -- Judy?

WOODRUFF: Well, the Clintons' siblings continue to figure prominently in the pardon flap -- specifically Mr. Clinton's half- brother Roger and Mrs. Clinton's brother Hugh.

CNN's Eileen O'Connor is keeping tabs on that part of the pardon story -- Eileen.

EILEEN O'CONNOR, CNN CORRESPONDENT: Well, Judy, aides to the former president now say Roger Clinton, his brother, did submit a list of about five or six names to the president for clemency consideration, but that those names were passed to the White House counsel office and the applications were denied on the merits, the aide said. No money, they say, was given to Roger Clinton for his help nor was it promised, according to one person on that list who spoke to CNN, confirming Clinton's account.

Yet both Roger and Hillary Rodham Clinton's brother, Hugh, Hugh Rodham, have been sent letters from Republican Dan Burton's committee asking about their involvement in the pardon process. Rodham admitted taking $400,000 for working on two controversial pardons. The Clintons said they knew nothing about it and insisted he return the money. Rodham insists he did nothing wrong and refuses to comment further.

Committee members say much of the controversy over all these pardons may end up being a question of taking advantage of access and the influence garnered through campaign and library contributions, which isn't illegal.


JIM WILSON, GOVERNMENT REFORM COMMITTEE STAFF: There is an appearance problem in the eyes of many when you have relatives advocating pardons and the process being ignored. And that's -- there's nothing necessarily wrong with somebody advocating a pardon. But the real issue is, why not go through the normal process? Why not submit the papers to the pardon attorney, consult with prosecutors, do all the things that make sure that you have a comfort level with what you're doing?


O'CONNOR: Right now, there's still enough smoke there to benefit Republicans, say some analysts, by reminding people why they voted for George W. Bush and reminding others why they might once have considered it -- Judy.

WOODRUFF: And Eileen, just to be clear on this, President Clinton's half-brother, Roger, was working apparently on behalf of 10 people who were trying to get a pardon. None of those individuals?

O'CONNOR: None of those individuals actually got a pardon or a commutation of sentence. It was a list, they say, of under 10 people. About five or six is what aides are saying. But again, none of those people on that list in fact got a pardon.

Now in the letter from Dan Burton's committee, there's about five names, and aides say, aides to the former president say that in fact Roger Clinton didn't even know three of them, one he hadn't seen in 15 years, and the other person, they said, was an old friend, but he was on the list but he didn't get a pardon -- Judy.

O'CONNOR: All right, Eileen O'Connor, thank you very much -- Bernie.

SHAW: Many Clinton supporters and friends continue to distance themselves from the pardons and from the former president. The new DNC chairman, Terry McAuliffe, was again asked today about his take on this flap. And we're joined now by Al Hunt of "The Wall Street Journal" and CNN's "CAPITAL GANG."

Al, you interviewed DNC chairman, Terry McAuliffe. What is he saying now about these Clinton controversies?

AL HUNT, "WALL STREET JOURNAL": Bernie, first of all, we have to understand that Bill Clinton has no closer friend or ally than Terry McAuliffe. During the post-Monica Lewinsky days, when the Clintons barely spoke with each other, they vacationed with Terry McAuliffe, because he was the only that could lighten the tension and the anger. Bill Clinton was the driving force behind his ascendancy at the DNC.

So I when interviewed him today, I asked Terry if, Terry McAuliffe, if Bill Clinton is now a pariah in his own party, and here's what he said.


TERRY MCAULIFFE, CHAIRMAN, DNC: Well, I agree with George Bush, it's time to move on. The stories are frustrating, they're disappointing, but they will move on over time. It's going to take a little bit of time now for us to move on past this, but we will get back to fighting for the things that are the most important for America's working families.

I would like the president to take some rest. We have a very important job here at the Democratic Party to build on the successes we had in 2000 and go forward. Bill Clinton will be a part of the Democratic Party forever.


SHAW: Take some rest?

HUNT: Take a rest, Bernie. You know what that means? Go away, get out of sight for at least six months. And that reflects to what virtually every Democrat I spoke to this week believes.

SHAW: Now, the Democrats are hoping the damage from Bill Clinton's exit will not be long-term. What are you hearing about Democrats concerned that their coffers, fund raising will be affected? HUNT: Right now, Chairman McAuliffe says they're going to have a record first quarter, fund raising's going great. But it's a lagging indicator, and what really concerns some Democrats is some sketchy data they're getting and some anecdotal evidence that some of the public is deserting the Democratic Party because of Clinton.

That's what happened to Republicans during Richard Nixon in '74 and Newt Gingrich in '96. If that happens this time, it will be a disaster for fund raising and for the party in 2002. And that's a real fear right now.

SHAW: Next week, the president releases first budget. What are you hearing about the Democrats' efforts to counteract this and to counter the Bush tax-cut plan?

HUNT: Well, Terry McAuliffe is planning some 60-some events in 40 states, and actually a couple of days ago the Democrats were pretty optimistic. They thought that some things were moving their way, that support for the tax cut was starting to erode, that once the budget was out there, that when it came to priorities, that they would hold the high ground.

Bill Clinton, however, is a shadow over all of that.

SHAW: Thanks very much, Al Hunt.

HUNT: Thank you.

SHAW: You can see all of the conversation with Terry McAuliffe that Al had on CNN's "CAPITAL GANG" tomorrow evening at 7:00 p.m. Eastern.

And still ahead here on INSIDE POLITICS, the governors of Arizona and Kentucky will talk with Judy about politics, presidents and their parties. Plus, challenging California's Democratic governor. Can the state's Republican Party overcome its weaknesses and win the state's top office?


WOODRUFF: This weekend, governors from around the nation will gather here in Washington for the annual meeting of the National Governors' Association. Joining us now to talk about that meeting and other matters political, Arizona's Republican governor, Jane Hull, and Kentucky governor's, Democratic governor, Paul Patton.

Thank you both. We appreciate you being here.

Let me start with a story that doesn't seem to go away. Governor Hull, I will start with you.

The controversy over the pardons that were granted by President Clinton in the waning hours of his time in office. Is this something that should be being investigated by a U.S. attorney, should be being looked at, or should we move on, as President Bush has said? GOV. JANE HULL (R), ARIZONA: Well, first of all, I tend to believe that we should move on. But certainly there are some of those pardons, the ones that are being most talked about, that possibly should be investigated. Every day there seems to be a different cause. But I am one that, in general, believes that we must get on with the important business of the state and of the world.

WOODRUFF: Which ones do you think should be investigated?

HULL: Obviously, the Rich one. The two or three that have just been involved with the Clinton relatives. I think that those are looking a little bit shaky, and you know, again, it does not leave the proper perception.

Someone just said, I believe, on your channel, that it -- that it was not illegal. But I think what we go by, is does it pass the headline test? Does it sound right to all of the people in the country? And I think there are a lot of doubts.

WOODRUFF: Governor Patton, should it be -- should there be a different standard, other than simply what's legal? Should there be a headline test, as Governor Hull was saying?

GOV. PAUL PATTON (D), KENTUCKY: Well, I think that President Bush had the best answer, I've got a state to run.

I really haven't been following it. And certainly the headlines don't look like what Americans would like, but there's an awful lot of facts behind that I don't know. So, I'll let others decide that issue and I'm going to -- be interested in working with the president on things like education and growing the economy.

WOODRUFF: And I want to ask but that. But on whether there should be an investigation or not, do you have a view?

PATTON: I don't really, I haven't been following it. I'm not an attorney, I really wouldn't have an opinion. I'd let others make that opinion.

WOODRUFF: Governor Hull, you are here for the governor's meeting, and in a way you're meeting with one of your own. Governor Bush was in office for more than five years before he moved to the White House last month. How's he doing so far?

HULL: Well...

WOODRUFF: As somebody who knows him well, what do you think?

HULL: As a long-term supporter, I think he is doing beautifully. The first 35 days have gone well. I think you've seen him reach out at a number of meeting that he has had, he's been to the -- he's met, obviously, with Republican governors and Democrat governors on education several times. He's met with the African American caucus. He's met with the Democrat caucus.

I believe he has really brought his message of being a uniter, not a divider out and it shows, because he is everywhere.

WOODRUFF: How is it coming across to you, Governor Patton?

PATTON: Very well. I am very, very impressed with the president's emphasis on education. I was one of the group of governors that met with him on the fourth day in office to talk about education.

That impresses me, but then he has been proactive in a lot of different areas -- his emphasis on the military and the other things that he's doing in his first month or so in office. He is exercising leadership, focusing the nation's attention on those things that he thinks are important, and I would have to give him very strong opening grades.

WOODRUFF: Governor Hull, we all know he's pushing probably foremost his $1.6 trillion tax cut. Is there any concern on the part of the governors, Republicans or Democrats, that this may take money away from money of the states or other important causes we're counting on getting from the federal government?

HULL: I'm strongly supportive of this tax cut. I'm from a state that has now cut taxes 10 years in a row. And our economy has continued to grow. Each time we've cut taxes, it has helped. We have particularly -- up until a couple or a few years ago, concentrated on cutting income tax. And every time we've cut income tax, we have included -- we have increased the federal take of our own income tax.

So, certain things might affect the states, but we will live with it. It's important people get their own money back.

WOODRUFF: Are you as enthusiastic, Governor Patton?

PATTON: No, not quite. For one thing, basing the tax cut on what might happen 10 years from now is awfully risky. I think we need to take it one year at a time. I would say that as far as currently, we can draw up a tax cut.

I would give it more to the working people, the people that really need it. I would be particularly critical of the elimination of the inheritance tax. I think that would lead to too much concentration of wealth in this country, but I think that we could absorb a moderate tax cut this year, based on what we can afford this year, based on what would help the working Americans get more money into the economy quickly.

WOODRUFF: Governor Hull and Governor Patton, we are going to have to leave it there, but we wish you well as you start this meeting that gets under way -- is it tomorrow?

HULL: Tomorrow.

PATTON: In Washington.

WOODRUFF: Looking forward to it. Once again, Governor Jane Hull, Governor Paul Patton. Thank you both for joining us on INSIDE POLITICS.

HULL: Thank you.

PATTON: Good to be with you.

WOODRUFF: Thank you, we appreciate it -- Bernie.

SHAW: Thank you.

There's much more to come here on INSIDE POLITICS. Just ahead: the president and the prime minister meet at Camp David. President Bush and Britain's Tony Blair talk politics and policy in their first face-to-face meeting.

Also ahead: Secretary of State Colin Powell heads overseas. We will preview his first mission to the Middle East since taking office.


SHAW: The next governor's race in California is of great concern to the Republican Party. But winning the top spot in that state may prove difficult since Democrats overwhelmingly control state government and GOP faces are few and far between.

CNN's James Hattori is in Sacramento, where state Republicans are gathering this weekend to try to regroup.


JAMES HATTORI, CNN CORRESPONDENT (voice-over): Political conventions are often love fests, but California Republicans face a rare contested election for the party chairmanship, a challenger who acknowledges voters have fled the GOP because of its -- quote -- "extreme right-wing posture." It's a sign of how badly things have gone lately for California's Grand Old Party.

JOHN MCGRAW, CALIFORNIA GOP CHAIRMAN: Whoever the next party chairman is going to have to do everything they can to broaden the party, increase its appeal to the largest number of voters so we can win some more elections here in California.

HATTORI: This should be an encouraging time with a Republican in the White House. But the fact that George W. Bush lost the Golden State last November despite a big campaign effort was a wake-up call for party activists. How did California Republicans get into this predicament?

BRUCE CAIN, POLITICAL PROFESSOR, U.C. BERKELEY: Most people believe that the reason is that the party is totally out of sync with the California electorate on social issues -- by which I mean gun control, tobacco, and abortion -- that if you run on the wrong side of those issues in California, you are going to get into trouble, because this state is socially moderate.

HATTORI: Republican strategists say the roots of their problems in California go back years. DAN SCHNUR, REPUBLICAN CONSULTANT: After the 1994, Republicans controlled five of the seven statewide offices in California, as well as the majority in the state Assembly. After the 1998 election, there were only two statewide Republicans. Now there is only one. So one bad election year can set you back an awfully long ways.

HATTORI: Now looking ahead 2002, there are few political stars in the California Republican skies to challenge incumbent Democratic Governor Gray Davis.

(on camera): Among those that may throw their hats in the ring: California Secretary of State Bill Jones -- who some describe as low- key -- Los Angeles philanthropist and businessman William Simon Jr., son of a former treasury secretary, plus one potential political terminator.

(voice-over): Actor Arnold Schwarzenegger, who has long been a Republican supporter, told a newspaper columnist he might run for California governor next year. It's hard to tell how serious he is. Plus, he may not necessarily be the ideal candidate.

CAIN: The real problem: that he may be pro-choice. And if he's pro-choice, that may not sit well with the party as it's currently governed.

HATTORI: Without big-name candidates, Republicans have seized on the biggest issue racking the state right now: the power crisis. The state party is even buying radio time to slam Governor Davis.


UNIDENTIFIED FEMALE: Now, government is in the energy business, setting the price? And then the power cops find you if you use too much? Who's bright idea was that?

UNIDENTIFIED MALE: Governor Gray Davis, that's who. He's putting more energy into saving his political hide than solving this energy crisis.


HATTORI: The radio spot omits the fact that the power deregulation bill was passed under a Republican governor and supported by Republican legislators. Still, it's too good an issue to pass up.

MCGRAW: Yes, absolutely. We -- it's a completely fair political shot. Especially when you control -- when you're Democrats and you control all three branches of the government, you're going to be forced to act or pay the consequences.

SCHNUR: The electricity crisis has been horrible news for California. But if there's a political silver lining for Republicans, it's that it's created the first vulnerability for Davis. And we see an opportunity there.

(END VIDEOTAPE) HATTORI: The electricity crisis in California is more than just a political opportunity for California Republicans. At this convention this weekend, it is on the agenda for a number of workshops. But the reality is, with Democrats in control of both houses of the state House, as well as the governor's office, the Republicans themselves are pretty powerless.

Let me also mention that the two men who are vying for the state party chairmanship, one a moderate, one a Republican, will stage a debate at dinner this evening, so the sparks should be flying at a couple of different fronts -- Bernie.

SHAW: Quick question to you: How can President Bush help California Republicans?

HATTORI: Well, first and foremost, he can come out and raise some money, as we saw Bill Clinton do so successfully over the past years. He can come out and make visits to the state, lead by example, get out in the community and show Republicans here the kinds of issues and the kinds of connections they need to make; lead by example.

And, incidentally, he has taped a message for this group to air at one of the events. So far, he has not made a public appearance or a personal appearance here in California.

SHAW: James Hattori with the latest from the Republicans in Sacramento, thanks very much -- Judy.

WOODRUFF: And coming up in just a moment: new information about that submarine accident off Hawaii -- our Pentagon correspondent Jamie McIntyre will join us -- and a preview of Secretary of State Colin Powell's trip to the Middle East.


WOODRUFF: There have been some new developments in the investigation of that collision two weeks ago between a U.S. Navy submarine and a Japanese fishing ship near Hawaii.

CNN's military affairs correspondent Jamie McIntyre joins us now with the latest -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, a couple of developments, Judy.

First of all, we've just learned that the Navy is dispatching its number-two admiral, the vice chief of naval operations, Admiral William Falon, to Tokyo in an effort to try to begin -- repair some of the relations that have been frayed between the United States and Japan as a wake of this accident. He'll travel there over the weekend and meet with Japanese officials next week.

Meanwhile, the Navy's preliminary investigation into the accident -- which has not been released, but we have learned what's in it -- faults the crew of the submarine. And despite what the Navy has said earlier, it also says that the presence of civilians on the submarine may have contributed to the accident.

Specifically, it criticizes the failure of one of the crewmembers to inform the skipper that a ship that turned out to be the Ehime Maru was within two miles, violating a standing order from the captain. It also concludes that the captain of the submarine should have raised the sub higher when he was doing his periscope search to get a better view over the high waves. And it does conclude that the number of civilians, 16, crowded into the control room, may have been a factor in that it inhibited communications and made it a little harder for the submarine crew to do their job.

So a somewhat critical report. This report, again, was not intended to be made public. It was the basis on which the admiral out in Hawaii made the decision to have a full-fledged formal court of inquiry to find out what happened here.

Three of the submarine's top officers face possible criminal charges. And because of this report, it's possible that also one of the enlisted men, the man who was manning that sonar and supposed to pass that information to the skipper -- he may also be facing some problems down the road as well -- Judy.

WOODRUFF: And, Jamie, just to clarify that, the crewmember detected the other ship, the fishing vessel, through sonar and then did not tell anyone what he was seeing?

MCINTYRE: Well, apparently, what happened was, just before the submarine surfaced, he calculated, based on the sound of the engine, that this ship was about two miles away. The submarine surfaced. He apparently passed along the fact that there was a ship, but not how far away it was. The skipper was looking through the periscope. Right about that time, he figured out it was maybe about a mile away.

But when he heard that they had done a visual search and that no ship was found, he began to doubt himself, apparently, and thought that he had miscalculated and so didn't speak up. So he didn't say anything at that point. The captain announced everything was clear, went back down, they did their emergency surfacing drill and we know what happened. It hit that Japanese boat and it cost nine lives.

WOODRUFF: All right. Jamie McIntyre, reporting from the Pentagon, thanks.

President Bush and British Prime Minister Tony Blair are meeting at Camp David through tomorrow. Within the past hour, they held a news conference with reporters, where they talked about a variety of issues,, including U.S. and British policies on Iraq and the proposed U.S. missile defense shield.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I thought it was interesting that Mr. Putin talked about missile defenses. I know there are some concerns in Europe about Russian reaction to the development of defenses that will make the world more peaceful. And Mr. Putin has started talking about the need for folks to develop -- think about developing systems that will intercept missiles on launch, for example, theater-based systems that will keep the peace. We found that to be a -- a breakthrough of sorts.

TONY BLAIR, PRIME MINISTER OF THE UNITED KINGDOM: ... understand and share the concern of the president and the American administration about weapons of mass destruction and nuclear proliferation. And I think it's very important in that context that we discuss all the ways that we can deal with this threat, which is a real threat and a present threat, both in relation to offensive and defensive systems.

And I said to the president and I want to repeat to you that I welcome very much the approach that the administration has taken, which is to be very open about this, which is to talk to people about it, to make sure that allies are consulted properly. These are very, very big and important issues.

BUSH: A change in sanctions should not in any way, shape, or form embolden Saddam Hussein. He has got to understand that we're going to watch him carefully. And if we catch him developing weapons of mass destruction, we'll take the appropriate action. And if we catch him threatening his neighbors, we will take the appropriate action. A change in the sanction regime that is not working should not be any kind of signal whatsoever to him.


WOODRUFF: Prime Minister Blair met earlier today with Vice President Dick Cheney. Later tonight, the two leaders and their wives are scheduled to have dinner and remain overnight at Camp David.

SHAW: Secretary of State Colin Powell left Washington this afternoon on a four-day trip to the Middle East, the Persian Gulf and Europe. This trip includes short stops in several countries, and a meeting in Israel with Prime Minister-elect Ariel Sharon.

Now for a preview of what awaits Powell in the Middle East, here's CNN's Jerrold Kessel.


JERROLD KESSEL, CNN CORRESPONDENT (voice-over): Israelis line up to be issued new gas masks following new threats from Saddam Hussein that Iraq will take the lead in Arab battles against Israel. This, after the five months of continuing Palestinian-Israeli confrontations -- confrontations which many Israelis see as raising questions about their country's very survival.

UNIDENTIFIED MALE: Every day, 20 to 50 incidents a day. It's an unbearable situation. Israel is facing now a serious threat.

KESSEL: That mood of deep worry, the backdrop as Ariel Sharon, the man Israelis elected to restore their sense of security, welcomes a delegation of U.S. senators.

ARIEL SHARON, ISRAELI PRIME MINISTER-ELECT: No doubt, the policy of my government will be to strengthen the relations with our greatest ally, the United States and to try to work in their full cooperation in order to reach security.

KESSEL: Regional security, says Mr. Sharon, confident he'll hear from Secretary of State Colin Powell a shift in Washington's Mideast emphasis, very different from the Clinton era's preoccupation with the Oslo peace process with the Palestinians.

DORE GOLD, SENIOR SHARON ADVISER: There's a greater recognition that if you want to stabilize the Middle East, you have to deal with this wider regional environment and not just focus on the Palestinian issue alone. When we focused on every little detail of the Israeli- Palestinian negotiations, we tended to neglect our overall strategic relations with the United States; some of that also must be brought into focus in this meeting.

KESSEL: Mr. Powell will find an Israel worrying, also, about a lethal attack by Hezbollah guerrillas from South Lebanon; the kind of attack which threatens, says Israel, to expand the conflict with the Palestinians into a confrontation with Lebanon and Syria. The new sense of Israel's vulnerability led to the election of Ariel Sharon.

(on camera): Now the perception that Israel's existence is under threat could become a critical factor in the new Israeli leadership's reassessment of that delicate balance between restraint and deterrence.

Jerrold Kessel, CNN, Jerusalem.


SHAW: And coming up: oh, the price of patriotism; a look at the Smithsonian's struggle to keep this portrait of America's first president.


SHAW: Each year millions of people see the first United States president through the eyes of renowned painter Gilbert Stuart. Well, one of Stuart's most famous portraits of George Washington has been on loan to the Smithsonian for three decades, but it will take $20 million to keep this painting hanging in the Washington Museum any longer.

CNN's Skip Loescher reports.


SKIP LOESCHER, CNN CORRESPONDENT (voice-over): The Smithsonian is in a race to keep perhaps the most recognizable painting ever done of George Washington.

MARC PACHTER, NATIONAL PORTRAIT GALLERY: This is the Washington from life, and this is the one that we must always keep among us. It belongs in Washington with the Constitution and the Bill of Rights. It's that important.

LOESCHER: The life-size portrait of the nation's first president was created in 1796 by Gilbert Stuart. For most of the past 33 years it's been on loan to the National Portrait Gallery in Washington. Currently, while the gallery is being renovated, it hangs in the Museum of American History.

(on camera): Late last fall, the owner notified the Smithsonian that he wanted to sell the painting. Fund-raisers went to work, trying to raise the $20 million-or-so it would take to buy it. Thus far, they have been no takers.

LORI MICHAEL, TOURIST: I think it's a national treasure, and I really would feel that it would be very disappointing if it were to leave.

LOESCHER: The Smithsonian has until April 1 to buy the painting, so tourists like Lori Michael may not have much time left to see it.

HARRY RUBENSTEIN, MUSEUM OF AMERICAN HISTORY: I have great confidence in our administration, and hopefully they'll find a donor who's willing to come up with the money.

LOESCHER (on camera): Otherwise?

RUBENSTEIN: Otherwise I guess it goes to the highest bidder.

LOESCHER (voice-over): Everyone at the Smithsonian agrees that would be a big loss, and hopes a white knight will come along to save the day.

Skip Loescher, CNN, Washington.


WOODRUFF: There's even more INSIDE POLITICS ahead in the next 30 minutes -- the latest on the Bush-Blair meeting and the Clinton pardon controversy.

Plus, Florida's plan to ensure 2004 won't look like a replay of election 2000. Bernie will talk with the executive director of the Sunshine State's Election Reform Task Force.

INSIDE POLITICS will be right back.



BUSH: Ours will be a strong and good personal relationship, and an alliance that will stand the test of time.


WOODRUFF: The president and the prime minister try to advance the special tie between the U.S. and Britain.

SHAW: And amid those questions about the Clinton pardons, did the former president help grant "The Political Play of the Week"? ANNOUNCER: From Washington, this is INSIDE POLITICS, with Bernard Shaw and Judy Woodruff.


Well, the Bushes and the Blairs will dine together this evening at Camp David as the two leaders continue to get to know one another and their views on global policy. President Bush and Prime Minister Blair racked up a joint news conference just about an hour ago.

Our senior White House correspondent John King is covering their meeting -- John.

KING: Judy, certainly fair to call these two a political odd couple, if you will. Prime Minister Blair, of course, a left-of- center Labour government in Great Britain, a very close personal relationship with former President Clinton. The new president of the United States, Mr. Bush, a conservative Republican, operates to the right of center, wants to cut taxes.

Philosophically differences between these two men when it comes to domestic agendas, but they were determined today after their first meeting at the Camp David retreat to show that they would stand shoulder to shoulder as much as possible on the world stage.

Remember, it was just a week ago today that U.S. and British pilots struck Iraqi air defense sites just south of Baghdad. One objection Mr. Bush raised after that was evidence, he said, that the Chinese government had perhaps been helping Iraq modernize those facilities, putting U.S. and British pilots at risk.

Mr. Bush had filed an inquiry with the Beijing government, asking if the Chinese were indeed helping the Iraqis, and Mr. Bush at the news conference with Prime Minister Blair today said the United States had received a quick response.


BUSH: The Chinese responded to our inquiry. And they -- you're going to have to ask Condi Rice what specifically they said, but if I could paraphrase, it was, you know, if this is the case, we'll remedy the situation. But we did get a response, as we told you yesterday, that we filed a -- a -- a complaint, and they responded this morning.


KING: Now, Condi Rice, of course, the president's national security adviser. Both men billing this as a getting-to-know-you visit, but both also came to the table looking to get something from the other.

One thing Mr. Blair wanted, he wanted Washington to embrace the idea for a new European security force, a European defense force. Some in the Congress have questioned that, wondering whether this would somehow undermine the NATO alliance. But President Bush said he had many questions about this for the prime minister, and he came away from their meeting and ready to support the new European force.


BUSH: He assured me that NATO is going to be the primary way to keep the peace in Europe and that the United States -- and I assured him the United States will be actively engaged in NATO, remain engaged in Europe with our allies.

But he also assured me that the European defense would in no way undermine NATO. He also assured me that there would be a joint command, planning would take place within NATO.


KING: Now, we are, of course, just a week removed from those airstrikes in Iraq, and in the coming week, there will be a debate in the United Nations over the economic sanctions against Saddam Hussein's government. Since the end of the Persian Gulf War, both President Bush and Prime Minister Blair making clear today they believe the Iraqi people suffer too much from those sanctions and they're willing to consider a new sanctions regime. But both also making clear -- and Mr. Blair using very tough, muscular language -- that if they ease the sanctions against the Iraqi people, they will in no way reduce their military surveillance of the government of Saddam Hussein.


TONY BLAIR, PRIME MINISTER OF THE UNITED KINGDOM: We're all conscious of the fact that our quarrel is not with the Iraqi people, who in many ways suffer under the yoke of Saddam Hussein. But -- and therefore, it's important that we make sure that the sanctions hit him, Saddam, as effectively as they possibly can. But you know, we need to contain that threat, and that's why the action that we took is right and justified.


KING: Mr. Bush also reassuring Prime Minister Blair that if his help was necessary in the Northern Ireland peace process, that Mr. Blair should just pick up the phone and call. Clear, though, that Mr. Bush does not envision as much of a hands-on role as President Clinton had.

And of course, a lot of questions about the personal relationship, given the close ties between Mr. Blair and Mr. Clinton. Mr. Bush joking about that, saying he believes they can work as allies together, that one would always be on the other end of the phone if the other had a problem. And Mr. Bush even making note that they happened to use the same toothpaste -- Judy.

WOODRUFF: Very good, John. Just a question about national missile defense, to what extent are the British on board with the enthusiasm that the new American president has for a national missile defense system? KING: It is certainly very clear that the British by no means have the same enthusiasm for this plan that President Bush has. But if you look at the British position as opposed to, say, the French or the Germans, it is clear Mr. Blair wants to try to broker a compromise here, if the United States went ahead with such a program. And we are years away from having the technology, Mr. Bush said, just to put a proposal on the table, a specific proposal on the table.

The United States envisions putting radar stations in Great Britain. Mr. Blair would not answer that question.

But he did say that he was willing to discuss this with the other European allies and with the Russians. The Russians put a new proposal on the table as well in the past week. Mr. Blair essentially positioning himself to perhaps be the middle man in this debate, not as critical as many of the other European allies, saying he understands the rationale for such a system, accepts the threat, of course, of perhaps a rogue missile launch.

So he's trying to put himself in the middle here as he tries to build a relationship with this Republican president of the United States -- Judy.

WOODRUFF: So, John, do I understand you to say that Prime Minister Blair is saying he does understand and accepts the U.S. or at least the Bush administration rationale behind this idea?

KING: He says he accepts the idea that there is indeed a threat of rogue missile launches. Now, the United States would identify countries such as Iran and North Korea, perhaps Libya down the road, as the potentials for those. The prime minister saying he accepts indeed that there is a threat of a potential rouge missile launch.

What he has not done is accept any specific plan to deal with it. And President Bush was asked, if you could not convince the allies, including the British or perhaps the other Europeans to go along with this plan, would you go it alone? The president refusing to answer directly. He chuckled a little bit and said that he believed in the end he would be persuasive. And he also made clear that he couldn't ask them to either agree or disagree with any specific plan right now, because he conceded the administration doesn't have one yet.

WOODRUFF: All right, John King, reporting from near Camp David. Thanks -- Bernie.

SHAW: Prime Minister Blair declined to answer any questions about the Clinton pardon controversy, saying -- quote -- "Bill Clinton is a friend of mine and will remain a friend of mine" -- unquote.

For the latest on the pardons, let's go back to Eileen O'Connor -- Eileen.

O'CONNOR: Well, Bernie, now it's Roger Clinton's turn to speak out. The former president's brother told "The L.A. Times" he personally appealed for about a half dozen clemency applications. He gave a list to his brother, but Roger says those appeals were denied. "I couldn't understand why none of my requests for pardons for my friends were granted," he told "The L.A. Times." He felt they all deserved it, he said. Clinton insisted he had his friends fill out applications through the Justice Department. "I did everything legitimately," Roger Clinton said. "I took no money."


O'CONNOR (voice-over): One of the men Roger Clinton promised to help, Joe McKernan, confirms Clinton's account.

"There was no talk of money, absolutely not," he told CNN.

Still, Republican Dan Burton's committee has sent a letter to Roger Clinton, asking him about his involvement in the pardon process. They also want to hear from Hugh Rodham, the president's brother-in- law, who admitted taking $400,000 in legal fees to help with two other controversial clemency applications. But Rodham says he did nothing wrong. Nevertheless, he has returned the money.

HUGH RODHAM, HILLARY CLINTON'S BROTHER: I have nothing to add, folks. You've got my statements.

O'CONNOR: Hearings on these and the controversial pardon of fugitive Marc Rich are scheduled for next week. But investigators insist they are not on a fishing expedition.

JIM WILSON, HOUSE GOVERNMENT REFORM COMMITTEE COUNSEL: It's not the intent of the committee to go and look at every single pardon that's granted.

O'CONNOR: After all, while this is clearly a case of taking advantage of access, even family relationships, it may not be illegal.

WILSON: The committee has not gotten into the business of trying to determine what the criminal justice system thinks of all this. I mean, clearly contingency fees for pardons along the lines of the money Mr. Rodham took are very peculiar.

O'CONNOR: With the Clintons continuing to deny there is anything illegal involved, some analysts believe there will come a time when Republicans should heed President Bush's advice and move on.

CHARLES COOK, "NATIONAL JOURNAL": But when they look like attack dogs just out to get Clinton, that's where Republicans look bad, and there's a danger there.


O'CONNOR: But with all these recent revelations there's still enough smoke there to satisfy many Republicans who say they like how well these scandals highlight the change of tone in Washington under George W. Bush -- Judy.

WOODRUFF: All right; Eileen O'Connor, thanks very much. Well, still on the subject of the pardons: convicted drug dealer Carlos Vignali was released from prison after Hugh Rodham pushed for his clemency. Vignali's father, who's a wealthy political donor -- excuse me -- also reportedly played a role in trying to get his son freed by urging Los Angeles leaders to write letters on his son's behalf. The father, Horacio Vignali, commented on the furor yesterday.


HORACIO VIGNALI, CARLOS VIGNALI'S FATHER: I'm very, very grateful that the president find it in his heart to release my son, and I'm very, very sorry that I caused all this problems for the community.


WOODRUFF: Horacio Vignali was sent a letter by the House Committee on Government Reform, seeking information about his efforts to get clemency for his son.

SHAW: Ahead on INSIDE POLITICS: the Florida ballot revisited; the latest on efforts in the Sunshine State to update and modernize the voting process.


WOODRUFF: An aide to South Carolina Governor Jim Hodges confirmed today that Hodges viewed a videotape in which Senator Strom Thurmond said he would resign if Thurmond's estranged wife were appointed to succeed him. The aide said that Nancy Thurmond visited Hodges in early December and brought the videotape. Hodges' office says the governor refused to accept the deal. Thurmond has had no comment on the tape, but he reportedly told a South Carolina reporter in November that he might leave office two or three months early if his wife could succeed him and, quote, "if that would make her happy." Thurmond and his wife separated in 1991 after 22 years of marriage. There has been recent concern about the health of the 98-year-old Republican Senator, whose term expires in January 2003. But his office says Thurmond has no plans to step aside.

SHAW: Now to Florida, where a 40-person task force today released an early draft of the ways the state can improve its system of voting. The formal recommendations will be released on Monday and will focus on areas such as technology, election law and voter education.

Joining us now from Tallahassee, the man who runs the task force, Dr. Mark Pritchett.

Dr. Pritchett, I will begin this interview by doing something odd, different. I want to quote something to you from the task force: "Lessons learned from November 2000: Florida's lack of consistent and clear standards for recounting ballots in close statewide and regional elections raise serious equal protection issues under the Florida Constitution and the United States Constitution."

And another point: "Florida's inconsistent process for counting absentee ballots of overseas military personnel and nonmilitary voters prevents some absentee ballots from being counted properly," unquote.

What are the three most basic recommendations from your task force?


First, the task force worked very well together. We were a bipartisan group that had almost unanimous decisions on each one of our recommendations. The three most important recommendations are, No. 1, we're putting people first; we're very concerned about voter education, poll worker training and those types of things. Another thing we're worried about is voting technology and making sure that Florida has a unified system of voting technology so it makes our standards equal per county, per person. And then, finally, I think the most important is getting some of our election laws straightened out so we have very clear standards for the things that you mentioned previously.

SHAW: A unified technology, the phrase you just used; a desire to use optical scanners?

PRITCHETT: That's correct. In Florida right now we have basically one option to go forward with, and that is the optical scanning technology. A lot of people have asked us why we aren't using the touch screen technology as a recommendation -- we're opening that door, or leaving it open, but right now the touch screen technology is not certified in Florida. So that leaves optical scanning. And, actually, optical scanning had the lowest residual rate, or over-vote, under-vote rate in the whole state, so it's actually a very good technology.

SHAW: Let's get to the bottom line: cost. I've been reading through this document; why is it better to lease these optical scanners than to buy them outright?

PRITCHETT: Well, that's a good question. We didn't want to hand-tie the legislature in recommending a certain type of funding mechanism. What we wanted to do was to give them several options, and one of the cheapest options is leasing the equipment for the 2002 election and then revisiting our system after that, in the 2004. And maybe by 2004 there will be some new technologies out there that will far surpass optical scanning or touch screen technology.

SHAW: Last quick question: If you lease these optical scanners, how much would it cost?

PRITCHETT: I verified this information with three different vendors yesterday, and we're looking at the area of $20 to $24 million.

SHAW: That's a lot of money, isn't it? PRITCHETT: It's a lot of money, but it's worth not embarrassing Floridians anymore.

SHAW: Dr. Mark Pritchett, thanks so much for joining us on INSIDE POLITICS; and we'll cover what you do on Monday, too.

PRITCHETT: Thank you, Bernie.

SHAW: Quite welcome, sir -- Judy.

WOODRUFF: And up next: paparazzi, presidents, and the political play of the week.


SHAW: The pardon controversy has accelerated, with the former first family at the center. This week, reports of Hugh Rodham's involvement in pardon applications surfaced, not on television or the Internet, but, as our Bill Schneider points out, in the supermarket checkout lane, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, you know, the Clinton presidency started in the tabloids and ended in the tabloids. But in between, there's been a big change, not so much to the Clintons -- to the tabloids!

Who gets this week's "Political Play of the Week?" "Enquiring minds want to know."


SCHNEIDER (voice-over): What was the first thing the national audience learned about Bill Clinton back in January, 1992 -- before the New Hampshire primary? It was a story broken by the tabloids about his relationship with Gennifer Flowers.


GENNIFER FLOWERS: Yes, I was Bill Clinton's lover for 12 years.


SCHNEIDER: In 1996, it was the tabloids that broke the story about the relationship between President Clinton's political adviser Dick Morris and a call girl with whom he shared sensitive political information. On the toes of that story came another tabloid revelation: that Morris had a mistress with whom he fathered a child.

UNIDENTIFIED FEMALE: Monica, look here. Monica!

SCHNEIDER: The tabloids feasted on the Monica Lewinsky story for more than a year. If they found the dress, he must confess.


WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Indeed I did have a relationship with Ms. Lewinsky that was not appropriate. In fact, it was wrong.


SCHNEIDER: Critics lamented the tabloidization of American politics. One Washington wag has called the "National Enquirer" -- quote -- "the newspaper of record of the Clinton years." Just last month, the "Enquirer" broke the story that Jesse Jackson had fathered a child out of wedlock with an employee of his civil rights organization.

PATRICIA SHIPP, "NATIONAL ENQUIRER": We just went ahead and started interviewing people and shaking some trees. And, eventually, the truth fell out and we went with it when we got everything in line.

SCHNEIDER: This week, the "National Enquirer" revealed that Hugh Rodham, Hillary Clinton's brother, was paid $200,000 for his role in obtaining a controversial pardon for Almon Glenn Braswell, a convicted swindler, a pardon that did not go through standard Justice Department procedures. There is no question that is a legitimate news story and a matter of serious concern.

SEN. HILLARY CLINTON (D), NEW YORK: I was heartbroken and shocked by it and, you know, immediately said this -- you know, this is a terrible misjudgment and the money had to be returned.

SCHNEIDER: The "Enquirer" got the story the old-fashioned way: through solid investigative reporting, something the mainstream press failed to do.

STEVE COZ, EDITOR, "NATIONAL ENQUIRER": But what we did is we threw everything we had at it. We looked at all the pardons. We narrowed it down to 10 pardons that we thought didn't pass the smell test. And we investigated the heck out of those 10.

SCHNEIDER: The "National Enquirer" discovered that politicians can now be covered like movie stars, especially if they behave like movie stars.

COZ: But what's happened is, politicians have become celebrities, particularly Bill Clinton. Everybody in America is talking about Bill Clinton, Washington corruption, and now the pardons. So it's become part of the water-cooler discussion in America. And that's the kind of stories the "National Enquirer" goes after.

SCHNEIDER: That's not the tabloidization of American politics. It's the legitimization of the tabloid press.

COZ: This story has definitely elevated our reputation in the media. However, our readers know what we're all about. And we're going to continue to follow the Washington political landscape.

SCHNEIDER: That's a warning, Washington. It's also the "Political Play of the Week."

(END VIDEOTAPE) SCHNEIDER: When the "National Enquirer" does respectable journalism, it should not pass without notice. And, by the way, there's something else that should not pass without notice: my last "Political Play of the Week" with Bernie Shaw as anchor. Now, we've had a rollicking time with this feature, now in its eighth year in INSIDE POLITICS.

And I'm sorry to lose you as a playmate. But I'm sure you will go on to more high-minded pursuits. And I'm sure you will be able to keep your name out of the "National Enquirer."

SHAW: Actually, I'm on the cover next week.


SCHNEIDER: I'm looking forward to that.


WOODRUFF: Breaking story, we want to break it now. But Bill can't send you away early. You have got three more days with us, Bernie.

SHAW: Three more days until Wednesday.

WOODRUFF: That's right. That's right. And we're going to savor every moment

SHAW: Thank you. I hope I can get through the last moments. That's all for this edition of INSIDE POLITICS. But, of course, you can go online all the time at CNN's, AOL keyword: CNN.

WOODRUFF: And this weekend programming note: Senators Chuck Hagel and John Kerry will be among Wolf Blitzer's guests Sunday on "LATE EDITION." That's at noon Eastern.

I'm Judy Woodruff.

SHAW: And I'm Bernard Shaw. "

"MONEYLINE" is next.



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