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President Bush Steps Into California Governor Race; Charity Suspected of Links to Terrorism

Aired April 30, 2002 - 16:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington. As President Bush inserts himself again into the California governor's race, I'll talk to incumbent Gray Davis.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: I'm John King in San Jose, California. I'll explain the political motivation behind the president's big speech here, and his return to the theme of compassionate conservative.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill. After sparks flew at their last meeting, I'll have the "Inside Buzz" on today's face-to-face between Senator Robert Byrd and Treasury Secretary Paul O'Neill.

WOODRUFF: Also ahead, Christian conservative leader James Dobson goes "On the Record" about topics ranging from stem cell research to the Middle East.

ANNOUNCER: Live from Washington , this is INSIDE POLITICS WITH JUDY WOODRUFF.

WOODRUFF: We want to take you now directly to Chicago, where FBI officials are holding a news conference to announce the latest arrest in the war on terrorism.

PATRICK J. FITZGERALD, U.S. ATTORNEY: Filed an affidavit under oath, under the penalties of perjury, indicating that Benevolence International Foundation had -- quote -- "never provided aid or support to organizations engaged in violence, terrorist activities or military operations of any nature.

As set forth in the complaint, the government alleges that those statements were false under oath. In particular, the complaint sets forth a background whereby Enaam Arnaout had a relationship with bin Laden dating back to the 1980s.

In documents seized last month in Bosnia, photographs and documents, indicating Arnaout and bin Laden were acquainted. Following that, a cooperating witness has indicated that Benevolence International Foundation had a relationship with al Qaeda into at least the early 1990s. And that, in fact, al Qaeda moved money through Benevolence International Foundation bank accounts in the early 1990s. In addition, links were shown between people affiliated with al Qaeda and Benevolence International Foundation. One particular example was a person by the name of Mundu Saleem (ph), also known as Abu Haser. Mr. Saleem is awaiting trial in the southern district of New York. He's awaiting trial on a charge of conspiracy to kill United States nationals. He also pled guilty recently to attempted murder.

Saleem was arrested in September, 1998 in Germany. However, some months beforehand, he had traveled into Bosnia. When he travelled to Bosnia, he traveled on a visa arranged by Benevolence International Foundation and Arnaout. His hotel was paid for by Benevolence International Foundation.

In documents signed in the name of Enaam Arnaout, it was indicated that Saleem was a director of the Benevolence International Foundation. In particular, the complaint goes on much further, but it specifies particular transactions with the Chechen Mujahedeen.

In particular, the complaint sets forth that in documents seized recently, Benevolence International Foundation provided equipment, including X-ray equipment, to a representative of the Chechen Mujahedeen. And in fact, that representative signed a receipt that said he received the X-ray machine from Benevolence International Foundation for delivery to the Chechen Mujahedeen.

In addition to that receipt, other documents showed that Benevolence International Foundation personnel, over in Georgia, met with representatives in the Chechen Mujahedeen, who asked for financial support and asked the group to provide anti-mine boots.

Also, according to the complaint, the documents indicate that the Benevolence International Foundation representative discussed this with Enaam Arnaout. In addition, the documents indicate that the representative for Benevolence in Chechnya, or in Baku, Azerbaijan, which is next to Chechnya, was also at the same time a representative for a group named Hesbi-Islami, a military group from Afghanistan, which also has a presence in Azerbaijan.

In addition, a Web site posted for the Chechen Mujahedeen asked people to give money to fund the jihad, and then indicated that later on a charity would be identified, through which people could fund money for the people fighting in Chechnya. And eventually Benevolence International Foundation, its address was posted on the Web site to receive the money.

In short, the message sent today by these charges is that the FBI and a joint terrorist task force led by the FBI, with a number of other agencies, will work with the U.S. attorneys' office, to vigorously investigate anyone who raises money for violence here or for overseas.

The equally important message from this case is that the allegations -- and they are just allegations at this point -- allege that the people involved in the Benevolence International Foundation diverted the money. This is a charge of people diverting money given by donors who thought they were giving to help poor causes.

The donors have done nothing wrong. This is a prosecution that alleges, in effect, that the donors were victims. This is a prosecution aimed against fraud and perjury. It is not aimed against charities, and it is certainly not aimed against the Muslim community.

So I think the message to be taken today is that we are seeking to make sure that people do not raise money for violence and do not do so in the United States. That they certainly do not commit perjury or obstruction of justice in the process. The message is also that we're seeking to vindicate the true intention of the people who gave the money, which is for legitimate causes, not for violence.

I want to thank the agents who worked very, very hard in this case. At this point I'll introduce special agent Tom Kneir.

TOM KNEIR, FMR. SPECIAL AGENT: I'd just like to echo that I'd like to -- the tenacious work that was done by agents of the joint terrorism task force, which is a task force made up of the FBI, Internal Revenue Service, United States Secret Service, U.S. Customs Service, Bureau of Alcohol, Tobacco and Firearms, the Department of Defense, Immigration and Naturalization Service, U.S. Department of State, along with investigators from the Illinois state police and Chicago police department.

Again, with working with the United States attorneys, these agents all did a tremendous amount of work. It was a tenacious investigation that will continue. We stand ready to investigate all aspects of terrorism here in the United States and abroad, to keep the citizens of this country safe. Thank you.

FITZGERALD: The person standing to my left is John Kikorus (ph), assistant U.S. attorney, working with us on the case. And consider him my lawyer. I'll take your questions.

QUESTION: Can you elaborate further on the relationship between Mr. Arnaout and Osama bin Laden?

FITZGERALD: The complaint alleges that photographs were received, recovered in a search about a month ago. Those photographs appear to date back to the 1980s -- not to the 1990s -- to the 1980s, indicating pictures of Osama bin Laden. Those photographs were recovered in the offices of Benevolence International Foundation in Bosnia.

In addition, there were also photographs of Mr. Arnaout apparently dating to the same time, recovered in that same search, indicating Mr. Arnaout carrying rifles, a rocket-propelled grenade launcher and other military equipment.

There are documents, as set forth in the complaint, that were recovered in that search in Bosnia, indicating correspondence between Mr. bin Laden on the one hand and Mr. Arnaout on the other hand. So that obviously indicates a relationship between the two, dating back to the 1980s.

QUESTION: Do you know if this is the first criminal action against a charity involving terrorism?

FITZGERALD: I don't know that to be the case. I'm not aware of -- I can't think of a case offhand, but I know that charities have -- different types of charities have been charged over the years. I couldn't tell you if there has been a criminal charge brought against a charity in the past.

QUESTION: Mr. Fitzgerald, would you discuss the relationship between BIF and these individuals that were attempting to obtain nuclear weapons?

FITZGERALD: OK, there is no allegation that BIF was involved in attempting to obtain nuclear materials or chemical weapons. The two persons mentioned in the complaint are Mr. Saleem and Mr. Baism (ph). And Mr. Saleem is Mandu Saleem, who I mentioned earlier.

Part of the charges against him in New York for his pending trial are that, as part of his participation in al Qaeda's conspiracy to kill American nationals, he participated in an effort to get uranium to develop nuclear weapons. That effort was a subject of testimony at a trial in New York in 2001, where it was described that he approved an effort to purchase uranium.

That effort also involved a person named Baism, also described in the complaint. That testimony showed that Mohamed Baism (ph) was part of that effort to get uranium. Those two people are referenced in the complaint because when Saleem traveled to Bosnia in the spring of 1998, he traveled with the assistance of BIF -- I say BIF, Benevolence International Foundation -- with their assistance, in the terms of they arranged the visa, they paid for the hotel. He was represented to be a director BIF.

And as to Baism, when he was traveling through San Francisco, on or about December 15, 1994, with an individual named Mohamed Kalifa, Baism was stopped and determined to be using as one of his identification documents, a driver's license from Illinois, referencing back the address of Benevolence International Foundation.

In addition, there are telephone records indicating contact between the Benevolence International Foundation offices in Palos Hills in 1998...

WOODRUFF: We've been listening to Patrick Fitzgerald, U.S. attorney in Chicago, announce the details of the arrest of the head of one of the major Muslim charities in the United States in connection with the war on terrorism.

Joining us now, our Justice Department correspondent, Kelli Arena. Kelli, what makes this particular arrest and all these allegations so important?

KELLI ARENA, CNN CORRESPONDENT: Well, first of all, I think it's the fact that the Benevolence International Foundation is one of the top five Muslim charities here in the United States. And this is an organization that brought in a lot of money for so-called charitable causes. Secondly, this is an faceless operation. The executive director, Enaam Arnaout, is charged with having a long-standing relationship, more than ten years, with Osama bin Laden. And the government says they have photos and letters to prove that. This is a man who apparently was sent to Pakistan, according to the government, to take care of one of bin Laden's wives back in 1989. This is a personal relationship.

And it goes beyond the al Qaeda terrorist network. There are also allegations that the charitable foundation funded Chechen terrorist organizations as well. So, this is a much wider net that the government is casting than has to do with al Qaeda or bin Laden himself.

WOODRUFF: And you stress these are just allegations, but a lot of detail we got here. All right, Kelli Arena, thanks very much.

When we come back, John King will talk to us about President Bush's speech today, renewing his call for compassionate conservatism. And I'll have an interview with Focus on the Family's James Dobson. We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: In California today President Bush tried to connect the dots between his compassionate conservative philosophy and his policy. Mr. Bush delivered what his aides call a significant speech in San Jose within the past couple of hours. Our senior White House correspondent John King was there -- John.

KING: No major new initiatives in that speech, Judy. In fact, unless you were out of the country or taking a very long nap two years ago, today's speech by the president was very much a flashback.

But the goal was not to be nostalgic. This was an effort on behalf of the president and the White House now, to exert Mr. Bush much more forcefully in the debate over the midterm elections, now just six months away.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We need a different approach than either big government or indifferent government. We need a government that is focused, effective and close to the people. A government that does a few things, and does them well.

KING (voice-over): The president calls it compassionate conservatism. It was his staple theme in campaign 2000, and one the president and top political aide, Carl Rove, hope helps Republicans like California gubernatorial candidate, Bill Simon, this year.

The president's popularity is not in question. But some Republicans worry that so much of his time is focused on the war on terrorism and the Middle East now, that Democrats might get the upper hand on urgent domestic concerns, like the economy, health care and Social Security.

So while in San Jose, Mr. Bush made the case he and his party have the right approach on issues from education and health care to welfare reform.

BUSH: Compassionate conservatism places great hope and confidence in public education. And by helping people find work, by helping them prepare for work, we practice compassion.

(END VIDEOTAPE)

KING: The president's party, of course, historically loses seats in the congressional elections in the midterm year. It remains an open question as to whether this president's wartime popularity helps the Republicans defy history. Mr. Bush certainly trying to help them do so.

And aides also say because his popularity here in California has gone up so much since September 11th, they have not ruled out making a much more competitive effort here in 2004. Most believe this state will be Democratic once again. But the Bush people keeping an eye on it as well -- another reason Mr. Bush was here today -- Judy.

WOODRUFF: All right, John King, with the president in southern California. Meantime, Ron Brownstein of the "Los Angeles Times" is with us now. Ron, why is the president refocusing right now on compassionate conservatism?

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, there are some political reasons to do it, and there are some broader policies. The political reason, as John said -- the indications are that the midterm election, from the polls that we see now, are primarily as they always are going to be , mostly about domestic issues. And I think he does want to reassert himself in that debate.

Secondly, you're seeing a reversion though, a little bit, to the pattern of the first months of the administration. After September 11th, his approval rating was enormous across the board -- Republicans, Independents and Democrats.

In the last few months, even Republican polling shows that while it's staying very high among Republicans and quite high among independents, it's beginning to slip again among Democrats, going down toward 50 percent. I think it was 56 percent the last poll that I saw.

So this is an opportunity to reassert some of those centrist themes that have broader appeal outside the space.

WOODRUFF: All right, given everything the president said today, what he said before, where does this put him, on the ideological spectrum?

BROWNSTEIN: This is really a systematic, probably the most I've seen in many months, from him, to do just that: place himself in the ideological spectrum. What he tried to do was separate himself from the sort of traditional, small government, conservative view that says the best thing government can do is get out of the way.

He had a line in there -- we are not a sink or swim society -- and at the same time, say he was in between big government and this indifferent government. In many ways, he said there were two basic principles for government action.

One, the federal government can act to set standards and encourage accountability while decentralizing authority to the local level. And secondly, he said government could act as a catalyst, trying to spur action by individuals, by communities. These are positive roles for government that he sees.

It's similar, in some respects, to what Bill Clinton would talk about -- not as expansive in the actual vision of what government itself does, but broader than many conservatives, especially in the House, traditionally would have argued for.

WOODRUFF: All right, Ron Brownstein, "Los Angeles Times," thanks very much.

BROWNSTEIN: Thank you.

WOODRUFF: And we just learned from our Candy Crowley, our chief political correspondent, that former Vice President Al Gore will be travelling to California this week. Thursday night he'll be taking part in a fund-raiser for the incumbent governor, Gray Davis, facing Republican opposition from Bill Simon.

James Dobson and his Focus on the Family are coming up next. We will ask the Christian conservative leader for his take on President Bush's push for compassionate politics.

He appeared in the shadows in the film version of "All the President's Men." But are we any closer to learning the identity of the real deep throat?

And later, find out what brought tears to the eyes of Governor Jeb Bush. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: On a day President Bush returned to his longtime theme of compassionate conservatism, we go "On the Record" with Dr. James Dobson. He's the founder and president of Focus on the Family. He's with us from New York.

Dr. Dobson, I don't know if you were able to hear a moment ago. We described some of what President Bush had to say. Is his philosophy pretty much your philosophy, would you say?

JAMES DOBSON, PRES., FOCUS ON THE FAMILY: Judy, I certainly agree with the conservative aspect of what he is saying. And who can argue with being compassionate about it? I think that there are many people that hope that the president doesn't try to become centrist in his views, and therefore abandon the things that he campaigned on a year and a half ago. But, generally speaking, I think there is a lot of satisfaction with the way he's doing his job.

WOODRUFF: What would you -- if you had to tick off the top three or four things that you identify that he campaigned on, what would they be?

DOBSON: Well, the Mexico City policy, which he supported, you know, that allowed the restriction of funds, with regard to abortion internationally. Other aspects of the pro-family movement, generally, about life, what he's had to say about cloning. There are a number of things that many of us are very excited about.

WOODRUFF: Dr. Dobson, let me ask you about cloning. As you know, there's a debate going on under way in the Senate among senators right now, about whether to permit any sort of therapeutic cloning. And today, Utah Republican Senator Orrin Hatch had this to say in announcing his support for therapeutic cloning. If you would listen to this just a moment.

(BEGIN VIDEO CLIP)

SEN. ORRIN HATCH (R), UTAH: I come to this issue with a strong pro-life, pro-family record. But I also strongly believe that a critical part of being pro-life is to support measures that help the living.

(END VIDEO CLIP)

WOODRUFF: Senator Hatch, Dr. Dobson, says he is pro-life, has always been pro-life. Is this consistent with that?

DOBSON: I think it's not consistent, Judy. And his comment bothers me a great deal. You know, you can't support something, in my view, that allows a human being to be created for the express purpose of cannibalizing that life, and either killing it or experimenting with it. That's not life. And I'm very disappointed by what he had to say.

WOODRUFF: How do you respond, though, to this letter today from, I believe it's 40 Nobel laureates. They signed a letter saying that if you ban all forms of cloning, including therapeutic cloning, it would foreclose what they call the use of this nuclear transplantation technology, for research and therapeutic purposes. In other words, impeding progress against some of the most debilitating diseases known to man.

DOBSON: Well, I would understand why scientists would support money for cloning or any other research, because some of them stand to receive some of that money. But you know, science has always been limited by ethics, except in the Nazi era. And so I just think that that would be a mistake.

I think this is going to be one of the most important issues that's been voted on in the Senate for a long, long time. There is a reason why more than 70 percent of the American people don't want this to happen, and why cloning was banned by the House. And I just hope and pray that the Senate does not make that mistake.

WOODRUFF: Let me turn you quickly to the Middle East. As you know, a number of Christian conservative leaders have criticized President Bush for part of his policy toward the Middle East, saying that he should not be negotiating with PLO leader Yasser Arafat. What is your view?

DOBSON: Well, Judy, you take me out of my expertise there, to a degree. I'm certainly not an expert on foreign policy. I can tell you that, as I look at the map, I see Israel surrounded by those who hate it and would like to either drive it in the sea or deny its right to exist.

And that's why America has always supported Israel. And I know that there are many of us in the conservative Christian community that hope the president will stand firm in that regard. I believe that's what the president believes. He's trying to find his way out of a morass.

I don't have the answer for that. But we must not abandon Israel. And if the president should move in that direction, he'll have a lot of opposition.

WOODRUFF: So you're saying -- I guess what I'm asking is, is it consistent with that, to be negotiating with Mr. Arafat?

DOBSON: I get uncomfortable when he does that. I don't think you can trust Mr. Arafat. I think he has showed himself to be untrustworthy in the past. And I wish that the president and Colin Powell would not be doing that.

But I also -- you know, I don't have all the information he has. And so I'm reluctant to be critical.

WOODRUFF: All right, Dr. James Dobson, who is the president and founder of Focus on the Family. We thank you very much for joining us.

DOBSON: Thank you, Judy.

WOODRUFF: And hope to see you again. We appreciate it. Thank you.

Two sponsors of key Senate bills, Mary Landrieu and Dianne Feinstein, discuss cloning right after the "Newscycle."

Up next, new developments in the Middle East and the standoff at the Church of the Nativity.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines in our "Newscycle": President Bush today fleshed out his philosophy of compassionate conservatism, calling for a government that is -- quote -- "focused, effective and close to the people." Mr. Bush said America does not need more big government, but a government that, in his words, does a few things and does them well.

The director of an Illinois-based charity has been charged with lying about his links to associates of Osama bin Laden. Enaam Arnaout is a 39-year-old naturalized American from Syria. He runs the charity Benevolence International Foundation. The government alleges that Arnaout has contacts with bin Laden associates dating back more than a decade.

In the Middle East, 26 people walked out of the Church of the Nativity in Bethlehem today. About 20 gunmen labeled terrorists by Israel are among those who remain inside the church. Also today, Israel's Security Cabinet voted not to cooperate with a U.N. team assembled to investigate the Israeli military offensive in the Jenin refugee camp.

Today's decision by Republican Senator Orrin Hatch to support human cloning for research illustrates some of the unusual political alliances in the cloning debate.

Joining me now from Capitol Hill are two Democrats who co-sponsor competing Senate bills. They are Senator Mary Landrieu, who supports a complete ban on human cloning. Her bill is backed by President Bush. And Democrat Dianne Feinstein's legislation would allow some cloning for medical research.

Senator Feinstein, I am going to begin with you.

And I just want to cite to you what Senator Landrieu has said. And that is that her legislation doesn't bar any type of what she calls stem cell research. It permits embryonic research on stem cells and, therefore, this should be sufficient for the kind of medical research you are advocating.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Well, actually, I don't believe it does. I think her bill would prevent embryonic stem cell research.

What we have done in our bill, and our bill says it is illegal to produce another human being by cloning, in other words to replicate the body image of an individual. But it would not be illegal for the unfertilized egg cell sack to be utilized to produce stem cells, to be able to produce regenerative research, which I think has the hope of really helping a large number of people, people with diabetes or cancer or spinal cord injuries, because, through this, one is able to produce tissue which has no rejection factor in it. And, therefore, a great deal can be done with it.

I think it's a mistake to say cloning is what we're doing, because we're not really doing cloning. What we're doing is taking the unfertilized egg, removing the nucleus, and putting the DNA of the patient inside of it, and then stimulating that to divide to produce the stem cells, and then making the stem cells from that tissue.

WOODRUFF: Senator, how do know, though, by permitting even this procedure, that you are not opening the door to human cloning? FEINSTEIN: Well, because the birth of a baby or the cloning of a human being begins with the injection of the fertilized egg in the woman's uterus. And this is prohibited. It is punishable by 10 years in prison, by a $1 million fine. And very strict ethical rules, regulations, a board to oversee all stem cell research is established by this legislation as well.

WOODRUFF: But doesn't this make it easier, Senator, for -- isn't this one step along the road toward human cloning?

FEINSTEIN: No, not at all. I think, right now, there's nothing in play. There are no restrictions. That could certainly take place. There's a moratorium, kind of a self-described moratorium that's been put into play. But our bill, or whichever bill is passed, would really be the first legislation to control it.

I think it's really too bad if -- we lose live cells all the time. We lose live cells when we take a shower. Women lose eggs monthly. Those eggs, one can say, "Well, those are life." They're unfertilized. Many of us do not believe they're life. There's no nervous tissue in them, nervous cell tissue. There are no organs at all.

So, you're taking the cell before it's been fertilized, essentially, and you're able to utilize it to extract the nucleus and replace it with the DNA of another individual, and then divide it, and then produce the tissue of that other individual to be able to help the other individual.

WOODRUFF: All right, Senator Dianne Feinstein, we're going to leave it there.

And now we are going to turn to your Democratic colleague, Senator Mary Landrieu.

Senator Landrieu, I believe you were able to hear Senator Feinstein say this is not cloning; it is something far short of that; and it is something that won't lead to cloning.

SEN. MARY LANDRIEU (D), LOUISIANA: Well, let me say that I couldn't more strongly disagree.

And, with all due respect to Senator Feinstein and all the others that are supporting a different approach, let me say that the method that she's described in cloning is accurate, where an egg is taken, and the nucleus is taken out, and then a full cell with 46 chromosomes is placed inside of that egg. If left to develop, it would in fact develop into a human being. And that's the whole basis of human cloning.

We're all trying to say where that line should be drawn. I think that it's immoral and unethical to create what could potentially be a human being for the purposes of destroying it, having research conducted on those cells, simply put. And it should be illegal. Senator Feinstein says that that process should be allowed, but then you shouldn't implant it into a human uterus. I think it is a very slippery slope and one we should not go down.

WOODRUFF: But, Senator, you heard her say, I believe, that they believe they have strong safeguards, criminal penalties, clear ethical guidelines that, in her words, would prevent the sort of thing you're talking about happening.

LANDRIEU: Well, I would hate to see women be subject to a jail term or to a $1 million fine for taking what was legal and implanting it in their own bodies. I think we're getting into a very tough area. So, Senator Brownback and I say, let's stop it before it starts.

In addition, we can have great research, Judy, and very promising research. It does allow for stem cell research. Not this bill -- this bill doesn't ban stem cell research. And anybody just has to read it. So, we can have stem cell research. We can have some great other options for research, but not the creation of human life for the purposes of destroying it.

WOODRUFF: But, quickly, Senator, they say what you're proposing would in effect criminalize scientific research that leads to promise of life and longer life and health for literally millions of people.

LANDRIEU: Actually, we're doing the opposite. Actually, we're doing the opposite, Judy.

We are, by putting up some speed bumps and some road signs, by making sure and acknowledging that ethics always has a role in science, that we draw the line to say creating what could potentially be a human being for the purposes of research should be illegal. It's immoral and it's unethical.

That doesn't mean that we can't conduct ethical stem cell research, adult stem cell research, any number of research opportunities that are ethical, that are right, and that will lead to very many promising cures for cancer, diabetes, etcetera. So, ours is a pro-research bill getting that money directed in very positive ways and respecting the rights and the dignity of human beings.

WOODRUFF: All right, Senator Mary Landrieu, we thank you very much for joining us. Thanks to you and to Senator Feinstein.

And when we return: a follow-up to this tense moment on Capitol Hill.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, TREASURY SECRETARY: I don't cede to you the high moral ground of not knowing what life is like in the ditch.

(END VIDEO CLIP)

WOODRUFF: The treasury secretary vs. the senator revisited: Did fireworks fly between O'Neill and Byrd again?

(COMMERCIAL BREAK) WOODRUFF: Now the "Inside Buzz" on a clash of political titans: Think back to February, when Treasury Secretary Paul O'Neill appeared before the Senate Appropriations Committee and he and chairman Robert Byrd got into an emotional tit-for-tat over their impoverished backgrounds.

(BEGIN VIDEO CLIP)

O'NEILL: Senator, I started my life in a house without water or electricity. So, I don't cede to you the high moral ground of not knowing what life is like in the ditch.

SEN. ROBERT BYRD (D), WEST VIRGINIA: Well, Mr. Secretary, I lived in a house without electricity, too, no running water, no telephone, a little wooden outhouse.

O'NEILL: I had the same.

BYRD: I started out in life without any rungs in the bottom ladder.

(END VIDEO CLIP)

WOODRUFF: Well, Treasury Secretary O'Neill appeared before Byrd's committee again today.

Our congressional correspondent Jonathan Karl is on the hill -- Jon, were there fireworks this time?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, it was clear from the start that this remains an icy relationship.

And, by the way, Judy, this is the first time that those two men have talked to each other in any way, face-to-face or over the phone, since that altercation back in February. But this time, no major fireworks -- the meeting started out with a firm handshake and some pleasantries, but clearly an all-business relationship, one that is icy.

The two men sparred over security at the border, something that comes under Treasury Secretary O'Neill's portfolio at Treasury Department. And they disagreed about that. At one point, O'Neill was responding to Byrd, who said we needed more people at the border. O'Neill said: "If we had a million people holding hands going from all across the border with Canada, it wouldn't improve security, necessarily" -- but no replay. This is professional at this point, all business.

WOODRUFF: Jon, Senator Byrd has been calling for some time for Homeland Security Director Tom Ridge to come testify. Any resolution on that?

KARL: Absolutely no resolution. As a matter of fact, one of the more interesting things about today's hearing is that Senator Byrd actually asked Secretary O'Neill's help in getting Tom Ridge here to testify before his committee -- the administration standing firm and Byrd standing equally firm.

To give you a sense of the way of his rhetoric today on this, it was very hot. Here's what he had to say at the hearing.

(BEGIN VIDEO CLIP)

BYRD: I've made no threats. I've made no partisan statements. I simply cannot understand this arrogancy on the part of an administration that will not assist the Congress in dealing with the budget of the president of the United States. We need Mr. Ridge.

(END VIDEO CLIP)

KARL: Now, the Democrats still hold out the possibility that they would subpoena Mr. Ridge to force him to appear before that committee.

But, in the meantime, Judy, Senator Byrd is bringing in almost the entire Cabinet to testify about homeland security, everybody except for Mr. Ridge. I mean, we had today Secretary Veneman of Agriculture, Secretary Colin Powell of State, and, of course, Treasury Secretary O'Neill. On Thursday, the attorney general is going to be up here. Next week, we're going to have Don Rumsfeld up here.

All the major Cabinet secretaries are going to be up here talking about homeland security. But the one person that Bob Byrd wants is, of course, Tom Ridge.

WOODRUFF: Jon, finally, there were some tears at today's hearing. What was that about?

KARL: Well, at the very beginning of the hearing, Bob Byrd, Senator Byrd surprised a lot of people up here by talking about his dog. This may be the most famous dog in Senate history, or one of them, certainly the dog spoken about on the Senate floor more than any that I've ever heard of. His dog, Billy Byrd, 15 years old, died this morning.

And Senator Byrd announced this at the hearing very emotionally, apologizing. He was a few minutes late for the hearing, he said, because of this. And it was actually a very moving moment before the hearing. This was a dog that Senator Byrd got on his 50th anniversary. He's about to celebrate his 65th anniversary. The dog had just turned 15. And Senator Byrd earlier this year had won a lifetime achievement award from the U.S. Humane Society, in large part because of all that he has talked about on the Senate floor about his dog, who he often called his most trustworthy and loyal friend.

And you know, of course, that it was Truman who said that, if you want a friend in Washington, Judy, you have got to buy a dog. And that was certainly the case with Robert Byrd.

WOODRUFF: Well, all those who have ever lost a loved pet will share, I know, Jon, in the senator's feelings.

Thanks very much, Jon Karl, at the Capitol. Well, meanwhile, in Tallahassee, Florida, today, Governor Jeb Bush choked back some tears of his own. It happened as he thanked people attending a drug summit for their prayers and support after his 24-year-old daughter Noelle's arrest on drug charges. A little later, he talked to reporters about it.

(BEGIN VIDEO CLIP)

GOV. JEB BUSH (R), FLORIDA: I don't know. I just -- I get emotional sometimes.

QUESTION: That's a tough topic for you?

BUSH: Yes, it is. This is not easy.

QUESTION: How is your daughter doing?

BUSH: She's doing all right. But it is not easy to always be worried that someone's who addicted to substances -- as a dad, I love her very much. I want her to be able to live a healthy, fulfilled life. And we've been struggling with this for a long time.

(END VIDEO CLIP)

WOODRUFF: The governor's daughter Noelle has been undergoing treatment since her January 29 arrest on charges of trying to buy the anti-anxiety medicine Xanax with a fake prescription.

Taking a look now at our "Campaign News Daily": Governor Jesse Ventura vows to shut down the Minnesota governor's mansion despite an opinion from the state attorney general. Ventura says budget cuts leave him no choice but to close the 20-room mansion. He calls the attorney general's opinion just that, an opinion. The independent party governor has feuded with the state legislature over how to handle growing budget deficits.

Another third-party player, New York billionaire Thomas Golisano, is considering a third run for New York governor. Golisano plans an announcement tomorrow at the state Capitol. He ran in 1994 and 1998, picking up 8 percent of the vote in his second run.

Jim Ryan, Republican candidate for Illinois governor, says the current governor, George Ryan -- no relation -- should consider resigning. Jim Ryan is also the state attorney general. He says Governor George Ryan, a fellow Republican, suffers from a -- quote -- "extraordinary erosion of trust" because of bribery scandals in his administration.

The big Watergate mystery is up next. Three decades after Richard Nixon left office in disgrace, are there new leads on the identity of Deep Throat?

(COMMERCIAL BREAK)

WOODRUFF: Former Nixon White House counsel John Dean apparently wants to spill more beans about Watergate. After studying 20 years of archives and tapes, Dean now says he can identify Deep Throat. And he reportedly will do just that in an online book that will be available June the 17th.

Our Bruce Morton has had some deep thoughts of his own.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): They met, Woodward and Bernstein wrote, in parking garages, probably much like this one. And the source they called Deep Throat whispered hints.

Here's how it went in the movie.

(BEGIN VIDEO CLIP)

UNIDENTIFIED ACTOR: Just follow the money.

(END VIDEO CLIP)

MORTON: They did follow it and found that the Watergate burglars had been paid with cash donated to Richard Nixon's Committee to Reelect the President, universally called CREEP. The reporters have never said who Deep Throat was, only that he was a man, not a composite, a smoker -- many were back then -- a scotch drinker, fond of gossip.

John Dean, who now says he knows the truth, once thought it was Nixon Chief of Staff Alexander Haig. Woodward said it wasn't back when Haig ran for president in 1988, said it wasn't FBI Chief L. Patrick Gray when a CBS news documentary named him, said it wasn't former Nixon staffer John Sears, when another former staffer, Leonard Garment, named Sears in his book.

One Nixon supporter claimed it was TV's Diane Sawyer, but nobody believed him. So now will we know? Dean will just be guessing. Only Woodward, Bernstein, then-"Washington Post"-editor Ben Bradlee and Throat himself know for sure. Henry Kissinger? Ex-FBI man Mark Felt? It's almost the only secret Washington's ever kept.

And the most interesting thing about it is that we are still fascinated, not by Throat so much as by the man whose presidency Throat helped end: Richard Nixon, hater, detente-seeker, the man of 1,000 faces.

(BEGIN VIDEO CLIP)

RICHARD NIXON, PRESIDENT OF THE UNITED STATES: I'm not a crook.

(END VIDEO CLIP)

MORTON: Deep Throat could be your grandmother. The heart, the character of Richard Milhous Nixon, man, there's a mystery.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE) WOODRUFF: And you can bet we'll be online on June 17.

Well, there's more INSIDE POLITICS coming up, but first let's check in with Wolf for a preview of "WOLF BLITZER REPORTS" at the top of the hour -- hello.

WOLF BLITZER, "WOLF BLITZER REPORTS": Hi, Judy.

We're following several major developments in the war on terror. In New York, there has been a legal setback in the federal government's efforts to hold so-called material witnesses. And in Illinois, a man accused of having ties to Osama bin Laden has been arrested. We are also following late-breaking developments in the Middle East. And I'll also talk live with Lyndon Johnson biographer Robert Caro about his new book.

It's all coming up at the top of the hour right after INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: We go to college on tomorrow's INSIDE POLITICS. I will be on the campus of Emory University, as Congress and the White House prepare to grapple over ways to fund college educations. We'll consider higher education as a political issue and the political battle lines emerging over student loans. We'll also examine the money crunch facing families trying to send their kids to college and the spiralling costs of four years on campus. And it's not just expenses climbing higher. We'll take a look at grade inflation as a growing problem at some of the nation's most elite schools. That's tomorrow on INSIDE POLITICS.

Our coverage continues now with "WOLF BLITZER REPORTS." Thank you for joining us. I'm Judy Woodruff.

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