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CNN CAPITAL GANG

Is a Provisional Palestinian State in the Works?; White House Seeks Source of Leaks; Supreme Court Decision on Executions Causes Furor

Aired June 22, 2002 - 19:00   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.
ANNOUNCER: Live from Washington, THE CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG.

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Just as President Bush was getting ready to make a major statement on the future of Palestine, more suicide attacks took a bloody toll, and Israeli tanks rolled into the West Bank.

(BEGIN VIDEO CLIPS)

ARIEL SHARON, ISRAELI PRIME MINISTER (voice of translator): What Palestinian state are they intending? What Palestinian state are they talking about?

YASSER ARAFAT, PRESIDENT, PALESTINIAN AUTHORITY: It is our president message specially for our people and to the whole world that we are against any of this terrorist activities against civilians.

(END VIDEO CLIPS)

SHIELDS: President Bush postponed his speech as Israeli leaders offered him advice.

(BEGIN VIDEO CLIPS)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: As Israel defends herself, the president asks that Israel continue to remember the consequences of any actions, so that the path to peace, the political path, can also be pursued.

MAYOR EHUD OLMERT, JERUSALEM: He must draw the inevitable conclusion from what Arafat is continuing to do, and actually authorize the state of Israel to remove Yasser Arafat from center stage.

(END VIDEO CLIPS)

SHIELDS: Margaret Carlson, what are the consequences of this renewed bloodshed?

MARGARET CARLSON, CAPITAL GANG: Well, it's to delay the president's speech until next week, but not delay the peace process. You can hear Hamas and the Al Aqsa Martyrs Brigade saying, Oh, my goodness, what a terrible problem. We are about to have an interim Palestinian state. We can't have this. Let's set off some bombs.

And that puts the United States in a terrible dilemma, in that -- do you -- you don't want to reward the violence. At the same time, you don't want to give the suicide bombers the veto over the peace process. They must get Colin Powell's airline reservations, you know, for scheduling their bombs.

But Colin Powell has won the internal debate, and the president has agreed to give a speech in which there will be a provisional state, and it will go forward.

SHIELDS: Bob Novak?

ROBERT NOVAK, CAPITAL GANG: Well, I hope Margaret is correct. I hope the president sticks to that, because there are so many Republicans who are totally bought in unconditionally to Prime Minister Sharon, that he can do anything and they go ahead with it.

Obviously these people who are -- these murderers, Palestinian murderers, want to break up the peace process. But Prime Minister Sharon, he shows up at the scene of carnage, and the first thing he says, "This is the Palestinian state." Well, of course it's not the Palestinian state.

And there's very bad news this weekend. He is reoccupying the whole West Bank. Is that the end of the Oslo agreement? I think that's what the prime minister wants.

SHIELDS: Kate O'Beirne?

KATE O'BEIRNE, CAPITAL GANG: Mark, of course there is no peace process, and what these murderous suicide bombers want, of course, is concessions. And the perception will be, if the president at this point endorses any kind of state of a state, interim or otherwise, for Palestine, that is a concession.

In the past, the Palestinians had to, in exchange for land and that kind of a commitment about a future state, they had to promise (UNINTELLIGIBLE) an end to violence, security for Israel. Now they're getting land in exchange for terrorism, and it won't be criticism from Republicans. Dick Gephardt this week very quickly said, how could the president possibly be calling for an interim state while this bloodshed is going on in Israel?

There will be a bipartisan agreement, the kind -- this time President Bush is not going to like, I think, if he goes ahead and calls for interim authority for -- more authority for Yasser Arafat.

SHIELDS: Nobody has been more out front on this than Tom DeLay, the soon-to-be House majority leader and (UNINTELLIGIBLE) Republican leader and House whip, who has been lobbying openly and emphatically against any recognition, any concession, any acknowledgment of Palestine.

AL HUNT, CAPITAL GANG: Well, I think what Mr. DeLay fails to understand is there's two central tenets to American policy in the Middle East. First, Israel is our most important ally, and we are Israel's most important friend. And secondly, we try to play an honest broker role if we can. When we forfeit the second, then we're not nearly as effective with the first.

And I think that's what some people fail to appreciate, and some -- to some extent, this administration earlier failed to appreciate. I can understand the Israeli populace reaction, if it were me, I would say, Go get 'em. I mean, it's very understandable. It just doesn't work, is the unfortunate part.

And I'm afraid Sharon is going to use this as an excuse just to solidify and expand settlements. There's a difference between settlements and Israeli security.

(CROSSTALK)

HUNT: ... just one point to pick it up on what Margaret said, I mean, because I think it has to be acknowledged that those of us who have advocated a Palestinian state and do and continue to do so, and their recognition, that Hamas and Hezbollah are not out to simply undermine the peace process. They're out to destroy Israel, and...

NOVAK: And that's what, and that's what...

HUNT: ... (UNINTELLIGIBLE)...

NOVAK: ... I have to...

HUNT: ... (UNINTELLIGIBLE)...

NOVAK: ... with, with Kate. I mean, they don't want concessions, they don't want an extra meter or a hectare of land, they want to destroy Israel. Their -- that's what these people are. They don't want this thing.

Now, let me just say something. There was a terrible incident over the weekend where -- I guess it was on Thursday or Friday, where -- Friday, where a gunman, Palestinian gunman went in and killed three children and an adult. A few hours later, there was, quote, "an accident" in Nablus on the West Bank, where Israeli troops shot down three children and an adult. And there's tape of them running.

Now, you may believe that is just a fortuitous accident. I think it's an eye for eye, a tooth for a tooth. And I am very disappointed that the U.S. government doesn't attack both of them as wanton killings.

O'BEIRNE: You also thought there'd been a massacre in the Jenin refugee camp, and that completely wound up being propaganda from Palestine that you bought also. It's difficult -- it's impossible to see how terrorists can run a non-terrorist state. And as along as terrorists are running with help from Iran, Iraq, Syria, Saudi Arabia, are running the Palestinian Authority, how can they possibly be a partner?

HUNT: You know, I agree with you on that. But we -- but no policy has been tougher than Sharon's policy the last three or four months. They went in there, they said, That's going to stop it. Hasn't stopped it.

O'BEIRNE: Well, they've come back in.

(CROSSTALK)

HUNT: But it's not been a -- my fear is, every time they go in, they recruit hundreds of new terrorists.

CARLSON: And if you go -- not give the forces against the terrorism among the Arabs something to live for, it's never going to end. Force versus force is not going to get us anywhere.

NOVAK: You know, when you use the same technique that fails over and over again, doesn't get you results, that's almost a war condition -- (UNINTELLIGIBLE) -- definition of insanity, for just going over and over and over again. But I don't really believe they think that's going to bring peace. What they want to do is subjugate the Palestinians.

SHIELDS: I mean, Israel was not created as -- cannot exist as an occupying power, and there is no military solution in the final analysis.

O'BEIRNE: Unless there's sponsors. I mean, it's not just Arafat. It's not just the Palestinians. It's all their sponsors who fit into the Bush doctrine. If you harbor or aid terrorists, you share their fate. And they've got a lot of friends in that part of the world who are contributing to the terrorism in Israel.

SHIELDS: Last word, Kate O'Beirne. THE GANG of five will be back with a major leak on Capitol Hill.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Homeland security director Tom Ridge, in his first formal testimony to Congress, presented President Bush's plan for a new Department of Homeland Security.

(BEGIN VIDEO CLIPS)

SEN. CARL LEVIN (D), ARMED SERVICES COMMITTEE CHAIRMAN: The new agency isn't going to connect the dots. That would be done by an analysis inside the CIA. That will be done by an analysis inside the FBI. The trouble is, they don't connect the dots. TOM RIDGE, HOMELAND SECURITY DIRECTOR: The president's proposal assures that this department gets the series of reports, the work product of the intelligence community. They have the capacity to connect the dots the same way or protect -- potentially connect the dots in a different way.

(END VIDEO CLIPS)

SHIELDS: Meanwhile, from the closed-door congressional investigation of the September 11 intelligence failures came word that communications intercepts pointing to the terrorist attacks were not translated in time. The White House bitterly protested this disclosure.

(BEGIN VIDEO CLIP)

REP. PORTER GOSS (R), INTELLIGENCE CHAIRMAN: When the vice president calls you up and said, There is a story in a major paper that says and on a major network that is attributed to congressional sources, obviously that gets our attention.

(END VIDEO CLIP)

SHIELDS: An investigation by the attorney general was ordered.

Kate O'Beirne, did the White House seem more worried about the leak than they did about the intelligence failure?

O'BEIRNE: Well, the information about the NSA intercepts doesn't seem to have been much of an intelligence failure, I mean, it was so vague, you know, the "Tomorrow's zero day." But the specificity of the leak, certainly, certain individuals must suspect they're being listened to. In fact, they talk in code.

But now, owing to how specific this leak was, these individuals know for sure they've been listened to. And the White House reminded everybody that in 1998 there was a leak that Osama bin Laden's satellite phone had been intercepted, and of course the phone went dead, and they lost it after that.

Congressional leaks, (UNINTELLIGIBLE) very reassuring bunch. For those of who are concerned about the lack of coordination between the FBI and the CIA, the Senate and the House, Democrats and Republicans, they can't even agree how to conduct the hearings into mistakes made by the CIA and the FBI. And of course they've been responsible for a lot of these leaks, have been responsible from Capitol Hill for a lot of these recent headlines.

SHIELDS: Al Hunt.

HUNT: Those bandits who were heard on that phone have probably been blown to smithereens. Certainly whatever they had, their phones are no longer operative. This wasn't a leak that compromised any kind of security. This is the effort of Dick Cheney and others to cover up embarrassments. I agree with Kate, I don't think if the NSA had analyzed it or interpreted it beforehand would have made any difference. It would have -- wouldn't have, wouldn't have given you much of a clue they were going to run airplanes into buildings. But it is indicative of the larger question. They don't want in for -- they being this administration and starting with Cheney, they just don't want any information out.

I think there's a huge coverup going on. I don't think it's a coverup over anything that was really, really evil, I think it's a coverup over embarrassment, and that's why there ought to be an independent commission.

SHIELDS: Bob Novak, all admistrations hate and fear leaks, OK? And try to prevent them. But this administration, if anything, has even been more zealous in that pursuit, hasn't it?

NOVAK: I got my first government leak in 1948 for the "Joya Hill (ph) News." And when, when, when the, when embarrassing things come out about government, and this was embarrassing, whether it was valid or not, there were all front-page stories all over America. They initially started yelling about leaks. It's just -- you know, I mean, as an old newspaperman, that -- I've seen this so much before.

And I just regret, Kate, that the attorney general, with all that he has on his platter, is going to bring people up on the carpet and say, Did you tell this to some reporter? I think that's a waste of time.

SHIELDS: Margaret, a waste of time?

CARLSON: (UNINTELLIGIBLE) most disturbing thing about the leak is that how long it -- they waited before they translated this information that they'd intercepted out of Arabic into English. The second thing is, and I don't mean to be goody two-shoes here, but these members of the committee take a solemn oath not to reveal information that would put people's lives in danger or compromise national security.

It should be enforced, and they should take it. The press that gets it should publish it, because they don't take that kind of oath.

(CROSSTALK)

CARLSON: And the third thing is, is, Al -- No, not it -- not with this one, but in general, that's why they take the oath, and they're not the ones to decide which it is.

And yes, there should be an independent commission, because, you know, there are probably 100 people now on the Hill with various axes to grind and not having their act together who get information that could be sensitive. It's...

HUNT: I associate myself with Robert Novak. I'd like -- I wish John Ashcroft would catch who sent the anthrax letters before he starts investigating leaks. SHIELDS: Good point. Let me just say one thing in defense of the National Security Agency. They get over 2 million intercepts an hour, that's e-mail, Internet, phones, and everything else. I mean, their task is...

O'BEIRNE: It's actually remarkable...

(CROSSTALK)

SHIELDS: ... is enormous, (UNINTELLIGIBLE) anything...

(CROSSTALK)

SHIELDS: ... they get anything. I mean, how anybody and...

(CROSSTALK)

SHIELDS: ... digest, analyze...

CARLSON: ... filtering -- yes.

SHIELDS: ... and process that...

CARLSON: But the analysis did not happen...

SHIELDS: ... is (UNINTELLIGIBLE) their effectiveness.

CARLSON: ... on garbage in, garbage out. They don't -- they have not set up a way to tell what's coming in matters. And so they're just inundated...

NOVAK: Now, the (UNINTELLIGIBLE), the (UNINTELLIGIBLE)...

CARLSON: ... with all kinds of stuff that doesn't matter, and so they don't do the things they should do.

NOVAK: Well, the NSA is not a part of the new agency, (UNINTELLIGIBLE) department.

HUNT: (UNINTELLIGIBLE), that's right, (UNINTELLIGIBLE).

NOVAK: The FBI is not a part of the new cabinet-level department.

HUNT: The CIA.

NOVAK: The CIA is not a part of it. Now, what they -- I was trying to listen to these hearings and trying to understand from Governor Ridge exactly how this is going to work, and it -- I don't think they've quite figured it out that all this material goes into this new agency before or after it's been analyzed or it's reanalyzed.

So I'm not quite sure I understand it.

SHIELDS: But what is it -- what -- Go ahead. CARLSON: It's (UNINTELLIGIBLE) copied, but there is nothing that Tom Ridge told us that would mean that Moussaoui would have had the warrant issued against him and we would have known what he was up to and what was on the hard drive of his computer.

HUNT: There are two fundamental -- That's right, again. They don't know what this -- how this agency's going to relate, really, to the FBI and the CIA administration the NSA. And secondly, they don't know who's going to head it. And I'll tell you, every government organization that's worked, and most of them haven't, has been because they've had someone good to head it, like Bill Ruckelshaus, environment, back in the early '70s.

I think, I think this was hastily assembled, and we're now seeing the effects of it.

SHIELDS: Last word, Albert R. Hunt. That's used up your quota of agreeing with Novak for the entire season.

Next on CAPITAL GANG, America's corporate crises.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

The Senate moved toward passage of a bipartisan bill to regulate corporate accounting practices.

(BEGIN VIDEO CLIPS)

SEN. TOM DASCHLE (D), MAJORITY LEADER: Well, I think corporate accountability will be an issue in the election with or without legislation.

I think this is larger than one bill.

PAUL O'NEILL, TREASURY SECRETARY: I've asked myself the question, what other legislation would create more value than (UNINTELLIGIBLE). So far I haven't identified something else that I'm p0repared to tell the president we need legislative action on.

(END VIDEO CLIPS)

SHIELDS: Concern centered on accusations that Martha Stewart disposed of a biotech company's stock just before bad news from a government agency.

(BEGIN AUDIO CLIP)

MARTHA STEWART, MARTHA STEWART LIVING: My sale of ImClone stock was entirely proper and lawful. The sale was based on information that was available to the public that day.

(END VIDEO CLIP)

SHIELDS: At a party fund raiser, President Bush briefly addressed the issue.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If you run a corporation in America, you're responsible for being honest on your balance sheet with all your assets and liabilities.

(END VIDEO CLIP)

SHIELDS: Bob Novak, is corporate corruption about to become a major political issue after all?

NOVAK: It could be. That was one hand clapping for President Bush there.

(CROSSTALK)

SHIELDS: ... 250,000 contributors, I'll tell you that.

NOVAK: I think the president feels strongly about there's been a betrayal of trust by people in the corporate community. I think he has wanted to make a major speech, has been dissuaded by his staff.

And the reason they dissuade him is people like Senator Daschle saying, Well, this is going to be a great political issue coming up. There's no question -- I was just watching on Friday afternoon, the House of Representatives was in session, and they had more demagoguing.

That is about the only issue the Democrats think they have is to attack American business in the grand old Andrew Jackson tradition of the Democratic Party. And it very seldom works. People don't like that in the long run. But they're going to try it.

SHIELDS: Al Hunt, is that all it is, it's just a political issue?

HUNT: Health care, environment, they think they have a few other issues. Look but this is a gilded age of corporate corruption. Jay Gatsby was born 75 years too soon. He would love this time.

And Mark, it is -- there's a systemic problem here too. You have now so many of these managers, not creators but managers, who are paid, A, humongous salaries, B, it's tied to the stock price, so C, the gravy train is so attractive, they don't want -- they'll -- some of them will lie, cheat, or steal to stay on it.

And you have example after example. It's not just Enron and Global Crossing and Arthur Andersen. There was a story in the paper a few weeks ago, the general counsel of Tyco had a contract provision that if he were convicted of fraud, he got an extra $10 million.

Bernie Evers of WorldCom uses the company's $366 million of low interest rate loans. Who's footing the tabs for that? The CEO of Dynagy has a -- basically has a sweetheart severance deal where he gets out, and he makes more money than if he stays in. People who fail get these tremendous severance packages.

And the final thing is, CEO -- or corporate executive pay to average workers used to be 40 to one. It was the highest in the world. Now in America it's 500 to one. That's a disgrace.

NOVAK: Why don't we make it even? Just make...

(CROSSTALK)

NOVAK: ... social society.

CARLSON: ... it's finally gone too far, so there is just a critical mass where you say people usually let it go, they might be rich someday themselves. But I think now there is a certain populace revulsion, revulsion at this.

Otherwise, Martha Stewart wouldn't be looking at the decorating inside of, you know, with 100 percent all natural fibers her jail cell at Allenwood, because insider trading was not considered something that we went after with all that much enthusiasm.

SHIELDS: Was insider trading tolerated a little bit more, winked at, when the market was going up?

O'BEIRNE: Mark, I was going to make that point about this general behavior. I don't think it's news to the American public that there are bad people in corporate America, and that greed is rampant in the board room. I think what's putting this on the front pages is this is the bear market. People are concerned about their portfolios.

If that weren't the case, I think a lot of these stories would be on the back pages, even though I don't disagree that they deserve attention.

And it seems to me Martha Stewart -- the real question there ought to be, and of course this is too much to ask, because she's Martha Stewart, she's an icon of perfection, so people are just really enjoying this, although it doesn't appear she may have done very much, the real story there, it seems to me, ought to be, why is the FDA not approving drugs for desperate people? Which was the issue at stake that affected the price of that stock.

(CROSSTALK)

SHIELDS: ... say one quick thing, is that I think that the president ought to make that speech and ought to make it, make a -- draw, draw a line in the sand, because right now, the perception is growing, I can tell you this, that he is tethered to big business and to big money. And he doesn't need that politically. It's not in the public interest it's not...

(CROSSTALK)

SHIELDS: ... in his own political...

HUNT: We have joked in the past about Bob's enormous wealth, but I know darn well that you don't make 500-fold more than your staff, and you don't agree with people who have that kind of policy.

NOVAK: That doesn't bother me, because I don't live -- I don't have a socialist ideal, (UNINTELLIGIBLE) thinks that we have to measure these things. But I do...

HUNT: (UNINTELLIGIBLE) social conscience.

NOVAK: ... I do believe that -- no, I don't have a social conscience. I think that the president does feel deeply about these people, and I think his staff is serving him ill to say, Don't make that speech, because they think it will hurt the market. I think it was the lack of trust...

O'BEIRNE: Oh, yes, I agree.

NOVAK: ... in the business that is hurting the market...

O'BEIRNE: I agree.

NOVAK: ... and the sooner the better that he does more than one line at a fund-raising dinner.

SHIELDS: Margaret?

CARLSON: Yes, my point is, before we'd reached this critical mass, I think Martha Stewart could have brushed off the investigation with, you know, her accountant, her lawyer, her broker. And what we've learned recently is that everyone's in on the take, the accountants, the lawyers, the brokers.

SHIELDS: Your neighbors.

CARLSON: Yes.

SHIELDS: I would just say this, a strong president, whether it's Franklin Roosevelt or Ronald Reagan, isn't swayed and bamboozled by his staff.

We'll be back with a CAPITAL GANG classic, the Sister Souljah incident.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Ten years ago Governor Bill Clinton was running third in the presidential polls behind Ross Perot in first place and President George Bush.

Addressing Jesse Jackson's Rainbow Coalition, Governor Clinton deplored the appearance there of Sister Souljah, a rap singer.

(BEGIN VIDEO CLIPS)

GOV. BILL CLINTON (D), ARKANSAS: Her comments before and after Los Angeles were filled with the kind of hatred that you do not honor today and tonight.

JESSE JACKSON, RAINBOW COALITION: If this plan that was used Saturday, to use our platform to embarrass us to prove he was tough, that is no way to inspire support.

(END VIDEO CLIP)

SHIELDS: THE CAPITAL GANG discussed this development on June 20, 1992. Our guest was the then-Senate minority whip, Republican Trent Lott of Mississippi.

(BEGIN VIDEO CLIP, June 20, 1992)

Bill Clinton stands accused of having spoken the truth. The only way for him to overcome the doubts that voters have about his personal character is to -- by a forceful, relentless display of public character, of taking on groups and interests and speaking, being a truth-teller, he's got to do the same now to the senior citizens, to insurance companies, and to the big money (UNINTELLIGIBLE).

NOVAK: There's no question that Jesse Jackson was right, he wanted to show how tough he was standing next to him. But Mark actually said what is the problem for Clinton, that you have to do it to every group...

SHIELDS: That's right.

NOVAK: ... you have to -- In other words, take apart this whole pandering liberal special interest coalition that Democratic presidents have been running on...

SEN. TRENT LOTT (R), MISSISSIPPI: I thought Bill Clinton did the right thing. And I think it was the smart thing. But what strikes me about this issue and the "Murphy Brown" issue is, it shows how superficial, unfortunately, the media coverage has been of this campaign.

HUNT: Michael Dukakis and Walter Mondale tried to placate Jesse Jackson. It certainly hurt them.

MARGARET WARNER, "NEWSWEEK": Absolutely, Al. And I think, you know, we're all talking about, Could this hurt Clinton? But I think Jackson's got to wonder, could this hurt Jackson?

(END VIDEO CLIP)

SHIELDS: Al Hunt, did we fail to understand what a coup this was politically by Bill Clinton then?

HUNT: Mark, I think we were pretty prescient for us, at least. It showed how brilliant Bill Clinton was, because, I'll tell you, the aftereffects of that was that to those who wanted a New Democrat, they were pleased by him taking on Sister Souljah, and he ended up having more support among African-Americans than any white politician since Robert Kennedy. NOVAK: And where you and I were wrong, Mark, is, he didn't have to do it to anybody else. He got away with the -- just -- he kept pandering to every other group. Margaret Warner was right, it did hurt Jesse Jackson. And I think that we really appreciated that that was a turning point in the (UNINTELLIGIBLE) '92 campaign.

SHIELDS: Margaret Carlson.

CARLSON: I'm glad to see there's always going to be a Margaret on this panel. And in fact, one can stand for the many. And George Bush should make Ken Lay his Sister Souljah.

HUNT: Ooh.

O'BEIRNE: I have to say, I was a little disappointed all of you bought that spin. I would have questioned what kind of a display it is of public character to dare to criticize a rap singer who thinks it's a cool idea for black people to kill whites. I don't think you're a profile in courage of you criticize that.

SHIELDS: Well, I think, I think Bob and I were at the time, not speak for him, but were impressed by the platform, that he went into the lion's den. He didn't do it at a safe distance. But I would also conclude that any time you and I agree, we're both in trouble.

We'll be back for the second half of THE CAPITAL GANG. Our Newsmaker of the Week is Dr. Donald Palmisano, the president-elect of the A.M.A. Beyond the Beltway goes to Minnesota to talk about the political exit of Governor Jesse Ventura with policy analyst Mitchell Pearlstein. And our Outrages of the Week. That's all after the latest news following these significant messages.

(COMMERCIAL AND NEWS BREAK)

ANNOUNCER: From Washington, THE CAPITAL GANG.

SHIELDS: Welcome back to the second half of THE CAPITAL GANG.

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Our Newsmaker of the Week is Dr. Donald Palmisano, president- elect of the American Medical Association.

Dr. Donald Palmisano, age 62, residence New Orleans, religion, Roman Catholic. Undergraduate and medical degrees from Tulane University, founding member of Physician Professional Liability Company, clinical professor of surgery and medical jurisprudence at Tulane. Elected to A.M.A. board of directors, 1996.

Earlier this week, our own Al Hunt interviewed Dr. Palmisano from Chicago, the site of the A.M.A. convention.

(BEGIN VIDEOTAPE)

HUNT: Dr. Palmisano, we hear that doctors are besieged by arrogant and uncaring insurance companies, by government regulations and cutbacks, by malpractice suits. What would you advise a young person today contemplating going into medicine?

DR. DONALD PALMISANO, PRESIDENT-ELECT, AMERICAN MEDICAL ASSOCIATION: Well, medicine is a wonderful profession full of ethics, compassion, caring. And what we have now are problems that do besiege medicine. And so we need to fix the lottery that happens in the juries, the medical liability system. We need to fix the problems where promises are made in government programs, and then not enough funding is given to pay even the doctor's expenses for the office.

HUNT: You are a widely respected vascular surgeon, as you've said, yet you wrote in this regard, and I quote, "The law does not require the best medical care. It requires a minimally acceptable level of care," end quote.

Do you think many Americans would want to go to a surgeon that says, I may not give you the best, but I'll give you the minimally acceptable level of care?

PALMISANO: You know, what I've always advocated, you do the very best for the patient, and I've written about that for years. What people are referring to is the law prana (ph) that points out what the law says. The law says you must act reasonable and you must jump over a certain level of care. And if you don't, like a little hurdle, if you knock it down and cause injury to a patient, then that causes harm to the patient, and you could be liable under the court system.

HUNT: Malpractice costs surely are severe for some doctors, but economists note that there are less than 1 percent of national health care costs. That's a record low. Does that indicate that, relatively speaking, that's not a major problem?

PALMISANO: Well, professional liability costs are a serious problem by -- evidenced by the fact that physicians are leaving Nevada, moving to California, where there's an effective tort law. People are leaving Pennsylvania and Mississippi.

HUNT: Your convention this week endorsed rules that would limit medical residents to working 80 hours a week, starting a year from now. Today, do sleep-deprived doctors in training pose a health risk?

PALMISANO: We don't want them sleep deprived. We are recommending 80 hours average per week, averaged over two weeks. And we want to make sure we balance safety with training.

HUNT: The affordability of drugs is a major issue, yet generic drugs, which are cheaper, are very underutilized. Is that because they're less reliable, or is it because of the political and financial clout of the pharmaceutical industry?

PALMISANO: Generic drugs have to be individualized, so what we're saying is that the physician and the patient should decide whether or not a generic drug can take the place of a drug with a trade name. And in some instances, physicians don't believe that the generic drug has the same therapeutic effect, even though it has the same chemical formula.

HUNT: Senator Edward Kennedy proposed this week to require all employers with 100 or more employees to offer health insurance coverage. Good or bad idea?

PALMISANO: Well, an employer mandate is something that is not part of our policy. It was part of our policy in years gone by, it's not part of our policy now.

HUNT: Doctor, the A.M.A. is a very influential organization, yet last year you lost 12,000 members, fewer than 30 percent of physicians are members. Why?

PALMISANO: Well, that's a great question, Mr. Hunt. We think one of the most important things we need to do is enhance communication. So we're now talking about studying an organization of organizations type approach if it turns out to be fiscally responsible to do that, where all members of all organizations would be members of the A.M.A.

HUNT: Ten years from now, what will be the most dramatic difference or change in American medicine?

PALMISANO: I'm not a crystal ball reader, but I am excited every time we have one of our experts talk to us about genetics. And I tell this to the medical students and the people in premed. Imagine being a physician and seeing a young woman come to you who has cystic fibrosis, and you say, You must have gotten through the screen. And we need to fix the system that allowed you to get through the screen. We're going to fix you, give you an attenuated Cola (ph) virus, give you a patch to your genetic structure. You will no longer have cystic fibrosis.

(END VIDEOTAPE)

SHIELDS: Al, did Dr. Palmisano come across as a pessimist or a realist about the future of his medical profession?

HUNT: Mark, I think more of a realist, though I do disagree with him on one issue. I think medical malpractice cost as a percentage of health care cost has actually been dropping, and now about 0.5 percent of all costs.

Given the range of problems in health care in America, access, affordability, HMOs, coverage, I think that's a really minor one.

SHIELDS: Kate O'Beirne?

O'BEIRNE: Well, the issue of medical malpractice reform is tops on most doctors' agendas. And the relevant number is not the percentage over health care costs, it's -- that's not how doctors view it. It's percentage of their income. For certain specialties like OB/GYN, it is exorbitantly expensive, leading to a lack of those doctors.

I think now the A.M.A.'s going to emphasize medical malpractice reform over patient's bill of rights, which is a big switch for them.

SHIELDS: Limiting residents, Bob, to 80 hours a week doesn't exactly sound like an enlightened humanitarian policy, does it?

NOVAK: I don't think 80 hours for a young man or woman is too much to work. Maybe it's too little, I don't know. But I would say this, that I was real glad to hear the A.M.A. has abandoned employer mandate. It's maybe they're finding their way back to the true faith.

You know, 30 years ago, the A.M.A. was an integral part of the (UNINTELLIGIBLE) conservative coalition, it was strongly Republican. They decided that, to survive in the era of Kennedy health care, they had to move to the left, started buttering up to the Democrats, endorsing Democrats. They're still doing that. They have, life for doctors is worse, it's not as good. The A.M.A. membership is going down. And that's what happens when you move left.

SHIELDS: Is that right, Bob? Go ahead.

CARLSON: It's disturbing that Dr. Palmisano is going around the country, and there are others like him, not teaching doctors how to be better doctors but how to be better defendants.

SHIELDS: It's a good point. Bob, and anything, any time that right wing group starts to grow, you're happy, right?

(CROSSTALK)

NOVAK: When it, when it, when it starts to betray its principles...

HUNT: In the old days...

NOVAK: ... it usually suffers.

HUNT: In the old days, when they opposed Medicare, which has been, of course, been a terrific boon to doctors.

SHIELDS: That's right. I don't think of doctors as right or left, I think of them as humanitarians.

NOVAK: Oh, please, will you?

SHIELDS: Next on CAPITAL GANG, Beyond the Beltway looks at Jesse Ventura calling it quits in Minnesota. We'll talk to Minnesota policy analyst Mitchell Pearlstein.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Beyond the Beltway looks at Minnesota Governor Jesse Ventura, bowing out without warning in a public radio interview.

(BEGIN AUDIO CLIP, MINNESOTA PUBLIC RADIO) GOV. JESSE VENTURA, MINNESOTA: I'm going to announce on your show right now that I am not seeking reelection again. I hold my head high, I did it to the best of my ability, I don't look back.

(END VIDEO CLIP)

SHIELDS: Joining us now is Mitchell Pearlstein, the founding president of the Center for the American Experiment. Thanks for coming in, Mitch.

MITCH PEARLSTEIN, AMERICAN EXPERIMENT: Thank you for the invite.

SHIELDS: Mitch, in the end, was the Ventura experiment in amateur government a failure?

PEARLSTEIN: Not entirely. The state remains alive and well, the Republic remains alive and well. Jesse, to his credit, appointed as commissioners and other senior folks very competent people.

The question to ask, has anything changed fundamentally? The answer is no. And I think people at the end of the day, at the end of this day, are just tired of the rudeness and the crudeness and rest.

SHIELDS: OK. Bob Novak?

NOVAK: Mitch, apart from the rudeness and the crudeness, isn't this an affirmation of Bill Buckley's contention that the first few pages of the Boston telephone director can handle government as well as the Harvard faculty? I mean, people like my friend Mark, who just loves the professional politicians, disappointed. But almost anybody can govern. the state of Minnesota still stands, doesn't it?

PEARLSTEIN: It surely does. It's unfortunate, and I've always enjoyed that, the Buckley quote, the problem is, there's been noise in this system, in this situation, and that is, Jesse's personality, the very personality that got him elected.

But I think over time, I talk about the rudeness and the crudeness, also the pestle -- the petulance, he couldn't separate the personality from the substance. He did some nice things. The state was run responsibly. But the personality got in the way.

SHIELDS: Margaret Carlson.

CARLSON: Mitch, it seems like the brouhaha over the mansion brought all of this to a head and made the petulant, whiny Ventura hastily resign. What is the story? He fired the staff, calling them incompetent. They never said a word. Then the press went to them recently and asked questions, and they said, Well, you know, his son did use it like a bachelor pad, having parties, drinking the liquor, doing all this.

And then Jesse flew off the handle.

PEARLSTEIN: It wasn't the first time.

CARLSON: What's the story?

PEARLSTEIN: Well, we've had a -- like most states, many states, budget problems, and in the negotiation, and you should know the house is run by Republicans, the Democrats run the senate. And they ignored Jesse completely. Jesse had not one single member of his party elected to the legislature during his time in office. And we have a lot of legislators, we have 200 in one (ph).

So they were ignoring him at the end, and he got upset that there were some cuts proposed in his security detail. He said, Let's close the mansion. The mansion was closed. People got upset. The mansion was opening up.

And then some of the folks who had been fired who worked there, I don't know if they went to the press, but the press went to them, and they reported that his son had been having these parties at night, and people were getting sick in hats, and they had to clean up, and it wasn't very attractive, and Jesse again, as Jesse has frequently done, blamed others, and got very defensive, and got mad.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Mitch...

PEARLSTEIN: Yes, ma'am.

O'BEIRNE: ... it seems to me a big part of the story in 1998 was the decay of liberalism in its heartland of Minnesota. With Jesse Ventura winning, running on some conservative issues, and the DFL candidate coming in last...

PEARLSTEIN: Correct.

O'BEIRNE: ... how fares liberalism now, and what does that mean for Paul Wellstone running for reelection?

PEARLSTEIN: I think the proper description of politics here and the population here really is more populist than liberal, otherwise you couldn't explain Paul Wellstone and Jesse Ventura and Rod Gramm (ph) several years ago, all representing Minnesota in the Senate and in the governor's office.

Jesse ran as a conservative in some ways but a liberal in others. There was no theme there, there was no ideology there. I think where Paul Wellstone is concerned, his numbers are not very good for a person seeking a third term, and Norm Coleman (ph), the Republican, has an exceedingly good chance of defeating him.

SHIELDS: Al Hunt.

HUNT: Mitch, I think Jesse Ventura was an ego-driven irrelevancy, and I think it -- I think building on some of the things you said earlier. But there's talk that an experienced politician, I think you need someone in the political -- in the political, you need to be in politics just as you need a doctor to engage in brain surgery. But people talk about Tim Penny (ph), the former Democratic congressman, as a potential independent candidate this year. My sense is if that should happen, he should win, he could really make a huge impact, both in that state and nationally. A, I want to know if you agree, and if he will run.

PEARLSTEIN: Reading his body language in the papers, I haven't seen him, and he's a good friend, but I just read his comments, I would guess that he will run. What's interesting, Jesse portrayed himself as somebody in the middle. Tim is being portrayed that way, in many respects portrays himself that way. But in terms of personality, he is 179 1/2 degrees different from Jesse.

HUNT: From Jesse.

SHIELDS: Now, Mitch, following that up, what Jesse did do in 1998 to his credit was, he evoked enormous support and got a great turnout among younger voters.

PEARLSTEIN: Yes.

SHIELDS: In the state, I mean, the turnout in Minnesota was, I think, led the nation that year, in a year of not particularly exceptional turnout.

Are they turned off as well?

PEARLSTEIN: I don't know of any constituency out here, frankly, I've been reading the papers, I've been reading letters to the editor especially. I don't know of anyone, any group that is particularly upset that he is bowing out and not running again. His time has come. I thought it was a very good thing at some level. He wasn't my candidate, certainly, in 1998, but I made the point perpetually that the people have spoken, the Republic will survive, stop me before I cliche again.

I think it is a good thing every once in a while for rank and file folks to stick it to the establishment, to stick it to elites. Unfortunately, the very personality that led to his victory has led to his completion.

SHIELDS: Bob Novak.

NOVAK: Mitch, I have to stipulate that I've always been amused that when Al and Mark talk about comparing politics to brain surgery, you know, politics ain't brain surgery. Anybody can do politics, very few people can do brain surgery. So that is a ludicrous comparison.

But that wasn't a question to you.

(CROSSTALK)

NOVAK: No, no, no, no, no.

(CROSSTALK) NOVAK: To give Jesse his due, he, he did go after the education lobby, didn't he, which I don't believe any Republican or Democratic president has done.

PEARLSTEIN: Challenge the education lobby, have you said?

NOVAK: Yes.

PEARLSTEIN: Yes and no. He came aboard, and he was absolutely in keeping with the education lobby. He made it clear right from the very start that he was opposed to vouchers. He had a caveat. I knew, I was at least reasonably confident, that at some point he would break with the educational establishment, because every single governor here since 1970 has at some point, it's very difficult working with these people.

But the fact of the matter is, even though he started talking about vouchers at the end, he never moved on it. Yes, indeed, to his credit, he challenged them on a number of financial issues and other questions toward the end. But my big issue, frankly, is school choice, and he never supported it, and I'm sad about that.

SHIELDS: OK, Mitch, Mitch Pearlstein, thank you very much for being with us.

THE GANG will be back with our Outrages...

(COMMERCIAL BREAK)

SHIELDS: Now for the Outrage of the Week.

Republican House members patriotically and proudly voted to bust the federal budget by backing Mr. Bush's $1.5 billion tax cut, and then by boosting defense spending. But now it is time to pay the piper. Washington, with red ink as far as the eye can see, is about to run out of money it needs to write Social Security checks for seniors and to pay for the war against terrorism, unless the House Republicans vote to raise the federal debt limit.

Why do House Republicans lack the courage of their alleged convictions?

Robert Novak.

NOVAK: The Supreme Court is up to its old tricks, finding invisible writing in the U.S. Constitution, this time saying execution of mentally regarded persons is unconstitutional. Dissenting Justice Antonin Scalia says the decision has nothing to do with the law. It's just the personal opinion of six justices.

The majority opinion, by Justice John Paul Stevens, cites 18 out of 38 death penalty states prohibiting execution of mental retardates (ph) as a trend guiding the court. I thought the court followed the Constitution, not state legislatures.

SHIELDS: Margaret Carlson. CARLSON: Mark, at dinner Wednesday, Republicans took in tens of millions of dollars from drug company fat cats. That was just as House Republicans were marking up a prescription drug bill the pharmaceutical industry hates. The committee even shut down early so that they wouldn't be late to eat filet of beef, drink a Merlot, and collect money from Pfizer, Merck, Eli Lilly, and the rest.

Give Republicans $10 million to save $100 million? That's a good deal. Republicans might as well hang a sign on the Commerce Committee door saying, Leave your cash in a plain brown envelope.

SHIELDS: Kate O'Beirne.

O'BEIRNE: A recent poll showed 70 percent of respondents didn't think America represented superior values. A majority cited U.S. policies as somewhat responsible for September's attacks. Sixty percent believed a better understanding of other cultures is more likely to prevent future attacks than a strong military.

A majority could identify Yasser Arafat but not Donald Rumsfeld or Colin Powell. The poll, released by Bill Bennett, was of American college students, who also have no interest in joining the fight they know so little about. Thirty-seven percent would evade a draft, while another 21 percent would only serve stateside.

SHIELDS: Al Hunt.

HUNT: Mark, in South Carolina, it's deja vu all over again. two years ago, the Bush-supporting Republican establishment and Christian right maliciously smeared John McCain's family and public record, even accusing the Vietnam war hero of being anti-veteran.

Some of the same elements now are smearing former Congressman Mark Sanford in his gubernatorial primary against Lieutenant Governor Bob Peeler. Sanford is accused of being against veterans and being for breast cancer.

Mark Sanford is very conservative. He's also very sincere, and he's very honest, something that cannot be said of his opponents.

SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG. If you missed any part of our show, get in off your legs (ph), don't despair, there is hope. You can catch the replay at 11:00 p.m. Eastern and 4:00 a.m. Eastern.

Coming up next, "CNN PRESENTS: DEADLOCK -- RUSSIA'S FORGOTTEN WAR."

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